Facebook’s big Libra announcement certainly gave everyone in crypto and everyone who deals with money — okay, just everyone — a lot to discuss. The tech giant released more than a couple dozen documents and files covering everything from the basic white paper to the details about “state machine replication.”
There was one main question both in and outside the crypto world, including on regulator’s minds: How would Facebook, which has made several major privacy blunders — and, especially early in the company’s history, has sometimes had a cavalier attitude toward privacy — handle users’ financial data? On this week’s Unconfirmed, I put these questions to the Libra Association’s Dante Disparte. Be sure not to miss this episode!
Meanwhile, the crypto community, including Andreas Antonopoulos, viewed the effort as competing with the banks. But the impact on Bitcoin and Ethereum seemed less clear. Many, including Facebook’s David Marcus, view Libra as staking out a separate niche from Bitcoin. (Marcus headed up the team that created Libra and is now in charge of Calibra, the wallet service Facebook is building on top of Libra.) Meanwhile, the Ethereum community can’t help but note the technical similarities between Libra and Ethereum, which seems to be validation of Ethereum’s technology. However, that made sentiment more mixed on Ethereum’s long-term ability to compete against Libra. The community leaned more pessimistic on the prospects of Ripple and Stellar to compete, since they’re targeting similar markets to Libra. I’ve rounded up the best of the various takes below.
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This Week’s Crypto News…
- Scroll down to the end of this page for several of the details on the Libra Association, the blockchain, the reserve, etc.
- Wired gives some of the back story to how it came together.
- USV gives a rather unenthusiastic explanation for its investment in Libra: “we don’t really know what path will take us to a decentralized future and therefore have to try many things.”
- Does it work yet? Nope.
- Jameson Lopp breaks down the technical details.
- Regulators raise concerns here and in France.
- In big news that came out after I recorded Unconfirmed with Dante, the Bank of England intends to allow non-banks to store funds at the central bank, according to the FT. (Twitter recap here.)
- Eric Wall breaks down four ways the showdown between regulators and crypto will play out — and how any of these outcomes could impact Bitcoin.
- Jerry Brito of Coin Center raises questions about how it will go from permissioned to permissionless: “Perhaps I lack imagination, but I don’t see how one decentralizes control of the Reserve, or (alternatively) how a DAO legally opens, owns, and manages accounts at financial institutions. As long as it’s centralized, the Association will retain outsized power.”
- Bitcoin maximalist Saifedean Amous gives an interesting take on why Bitcoin and Libra don’t compete (which seems reasonable), eventually concluding that Libra will need to rely on Bitcoin to succeed (which seems farfetched).
- Meanwhile, Amir Taaki throws cold water on Bitcoiners trying to spin this as a positive development.
- Also — glad James Foust at Coin Center raised this — how in the heck are people supposed to calculate their taxes on this?
- Jill Carlson wraps up the analysis of Libra succinctly.
According to Toronto litigator Evan Thomas, “The biggest bombshell, foreshadowed in earlier reports, is that Cotten set up fake accounts, funded them with hundreds of millions of dollars of fiat and crypto that didn’t exist, bought real crypto from users and then moved the crypto off Quadriga.” Paul Vigna’s WSJ give this recap.
After its first token auction, Algorand’s market cap was just behind Ethereum’s, reminding some people of 2017. But a year from now, they may end up having to give a lot of that money back, as Matteo Leibowitz of The Block points out.
However, Coin Center is concerned about the vagueness of some definitions.
In alpha; available on iOS and Android.
This is one of just several moves the Finnish company has made recently to appease regulators.
Gemini vs. Libra … (and don’t forget about LEO). Plus, Libras gru mble about Facebook’s choice of name.