Jameson Lopp analyzes Facebook's Libra project: "It's not a blockchain"

18 Jun, 2019
by Richard Allen
Jameson Lopp analyzes Facebook's Libra project: It's not a blockchain

Facebook’s Project Libra has been officially unveiled and already reactions to the upcoming stablecoin are mixed. Jameson Lopp, CTO of Bitcoin security company Casa, has analyzed the whitepaper and suggests Libra may be facing some long-term challenges.

In a post he published on Medium, Lopp suggests Facebook is making use of a Poof-of-Stake algorithm but adds that they’ll likely run into the same problems facing Ethereum. The whitepaper goes on to say that Libra will slowly make the shift towards a permissionless system. Lopp remained sleptical:

“I’m pretty sure that would be a world first of a distributed network transitioning from permissioned to permissionless,” stating Libra is missing some of the obvious characteristics of a blockchain. He added, "Perhaps the network as a whole can switch to PoS, but in order for the stablecoin peg/basket to be maintained, some set of entities must keep a bridge open to the traditional financial system. This will be a persistent point of centralized control via the Libra Association."

Peter Todd, Bitcoin Core developer also wasn’t blown away by the whitepaper. “I would not be surprised if the tech companies involved think they have sufficient power to get away with it this time,” he tweeted earlier today. A short while later he said:

Aside from the challenges the coin is facing from a developmental perspective, central banks haven’t been too keen on the idea of Libra either. As Kremlin economist Vladislav Glinko noted, Russia won’t be allowing its citizens to use Libra by blocking Facebook, WhatsApp and Instagram. Glinko stated, “Facebook’s Libra will have no alternative but to face being blocked on Russian territory.”

This sentiment was echoed by French finance minister Bruno Le Maire. In a radio interview, he stated that there is no chance Libra will be seen as a sovereign currency, saying “it can’t and it must not happen.”

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