Libra, not a cryptocurrency – Jean-Baptiste Prunel
First, Libra is not a cryptocurrency, nor a replica of WeChat Pay. Libra is a universal infrastructure designed to create, store and operate financial assets.
International money transfers? Libra can do it.
New asset or product definition? Libra can do it.
Complex financial mechanisms? Libra can do it.
Insurance contracts? Libra can do it.
Inter-banking infrastructures? Libra suppress the need for it.
Reassurance on assets ownership? Libra do it better.
Thus, resources allow you to create assets which characteristics and behaviours are described in modules. Assets are defined with an object-oriented programming language (Move), providing them with unmatched capabilities. You can virtually recreate anything (savings accounts, insurance contracts, company shares, etc) and imagine much more.
Libra Coin is the first asset defined on this infrastructure, it’s just the tip of the iceberg.
Second, Libra will not be owned nor controlled by Facebook. The Libra Blockchain is open-source and independent of any Facebook infrastructure. Governance of the Blockchain will be delegated from the very beginning to The Libra Association, an international non-profit and non-governmental organisation.
It implies that assets creation and transfer (including Libra Coin) could happen outside Facebook scope (eg. an insurance firms create a contract they sell for Libra Coin to individuals, without using Facebook Calibra app).
Also, because of the technology used and the governance split among numerous geographically distributed actors,
once Libra launched and active, unplugging it will be realistically impossible (even if governments decide to brake up Facebook).
Third, Libra can not handle low fee instant transactions. Capacity is of “ 1,000 transactions per second with a 10-seconds finality time between a transaction being submitted and committed.” Which is far form the 7,000 low latency transactions per second the Visa network can support.
That’s why the — chatty but comprehensive — technical white paper, states “we anticipate that many payment transactions will occur off-chain [
ie. they will not be recorded on the blockchain], for example, within a custodial wallet or by using payment channels“.
Using Libra as an end user, will therefore suppose you delegate the management of your coins to a third party — most likely through an app on your phone. Actual Coin transfers will only happen between custodians under a clearance mechanism, a bit like the one currently used by banks.
Published at Thu, 04 Jul 2019 09:24:09 +0000