Facebook’s “The Libra Blockchain” whitepaper has created quite a frenzy, not only in the cryptocurrency ecosystem, but also with U.S. government officials. Some people claim that Libra is not a blockchain, while others claim that it is going to kill Ripple, XRP and other similar blockchains. However, Jameson Lopp had a different view, claiming that the Libra blockchain has not solved massive problems that Ethereum has.
Lopp in his Medium article dissected the whitepaper and stated that the Libra Blockchain will be controlled by a set of authorities in a top-down fashion and that it will eventually move from a permissioned to a permissionless blockchain. The blockchain will offer a global currency – Libra coin, which will be backed “with a basket of bank deposits and treasuries from high-quality central banks.”
Since the whitepaper mentions that it will eventually move towards a permissionless and an open system, Lopp speculates that it “sounds an awful lot like Proof of Stake” and like Ethereum, it will face the same problems. He said,
“Apparently the plan is to open up membership after 5 years and hopefully they’ll have figured out Proof of Stake by then… I expect they’ll run into the same problems as Ethereum!”
Lopp added that “Calibra Wallet,” which is used to store the Libra coins, is the only wallet that can hold the coins for now and that it will require strict KYC/AML compliance. Since the blockchain conveniently replaces “stablecoin” for “resources,” Lopp speculates that it will concentrate more on smart contracts since it is built on a custom smart contract programming language called “Move”.
In addition to facing similar problems as those faced by Ethereum, the Libra Blockchain is facing more issues from a political and a regulatory standpoint. There was a lot of speculation even before Facebook dropped the whitepaper.
According to Reuters, United States House Financial Services Committee Chairwoman Maxine Waters issued a statement to halt/pause any and all developments on the project, until and after the Congress and other regulatory bodies have finished reviewing it. A senior Republican, Patrick McHenry, is also calling for a hearing on Facebook’s new cryptocurrency.