Roger deVadoss—a leading evangelist for NEO, former general manager at Microsoft, and an organization expert with a focus in machine learning and neural networks—shared his expert insights from analyzing and investigating Facebook's Libra.
“Facebook is attempting to build a global bank and is trying to establish a worldwide financial system. And it’s certainly possible, with usage across billions of individuals and the support of a vast number of institutions. It's an effort to reinvent the global banking infrastructure.”
deVadoss elaborated further:
“Libra is an attempt to build a global (central) bank that piggy-backs on existing central banks' monetary policy, with the goal of eventually superseding and diminishing them.”
“A shift in monetary policy from public officials to private corporations has a profound impact on consumer rights and privacy. This raises serious questions about global commerce and trade.”
“I'd argue, it’s more Venmo-like. For example, Calibra, the wallet that holds the cryptographic keys for the users—Facebook can move assets around for users. For now, it’s a walled garden—it’s old school—and with the Libra Association, Facebook can expand its reach beyond that walled garden.”
He continued by describing how Libra is not currently decentralized, nor would he classify it as a true blockchain:
“It's not much of a decentralized ledger. It's more of a distributed database. You have this distributed system to transfer assets, as indicated by its 'Move' programming language. But decentralization may not be the goal. They want to control this end-to-end.”
In conclusion, deVadoss theorizes that Facebook may not have a desire or an objective to decentralize or to go beyond the business use cases:
“That is not their goal. The goal is not to build a blockchain, but to build a solution—one more Facebook app, or perhaps it is better to think of Libra as one more set of Facebook features.”
“Libra is clearly competition for stablecoins. Bitcoin isn’t so much threatened, but stablecoins will have to ask themselves some difficult questions.”
He goes on to explain how Libra could help not just Bitcoin, but the entire cryptocurrency ecosystem:
“Libra provides new options for on-ramping. You can imagine scenarios where, for example, you sell your old car on Facebook Marketplace—are you able to convert this directly to Libra? If so, this could enable mass adoption. This is great for Bitcoin and great for NEO.”
“You can argue that WeChat pioneered the combination of a social network and a massively scalable payment system. Facebook is openly mimicking WeChat. But, Facebook’s ambition is much, much larger. The big question for Facebook is how they will get regulators and other players to cooperate.”
Additionally, it seems that Libra was built by adopting many of the best features developed in the last 10-12 years in the cryptocurrency ecosystem, according to deVadoss.
“No new ideas were presented in the whitepaper. It’s all a recapitulation of the same cryptocurrency ideas we already know and love,” he continued.
He then suggested that Facebook borrowed and cherry-picked the core elements from various projects:
“Lack of real technical innovation. This was clearly catalyzed by business needs. They should do more by giving back and contributing and pushing the industry forward in this new space. They’re not.”
deVadoss continues by suggesting Libra was architected and built by the business side rather than the technical “geeks” at Facebook.
“Libra was architected and built by the suits and ties rather than the geeks. The business use case has been thought through; they want to become the global banking system for the world, and they went across the [cryptocurrency] ecosystem to bring together the features to make it happen.”
Nevertheless, because of Facebook’s scale and influence, Libra is still huge news for cryptocurrency.
“If someone else did this, it would not be big news. It would be a me-too project and one more stablecoin with a grand ambition. But because of who’s doing this, and what they’re capable of, this is surely very big news.”
