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Is Libra Really A Cryptocurrency?

by Pragati Shrivastava
, Is Libra Really A Cryptocurrency?

When Libra was announced by the Facebook team, with its ambition to disrupt the finance world, blockchain experts poured over the technical details of the Libra protocol testnet and government entities began to hold hearings about safety concerns. Crypto experts have not been very impressed with Libra’s claims of being a stablecoin; people like Bitcoin developer, Tamas Blummer, having assessed the Libra protocol had concluded that Facebook is abusing its position to muscle into the blockchain world.

Blummer said, “Trying to buy leadership in a cutting edge technology is very expensive and likely futile. I am pretty certain that this will be a very expensive failure, but a great door opener for Bitcoin.”

Speaking of Libra’s blockchain, Blummer said that it has more in common with Ethereum than Bitcoin because it shares many of the same features as Ethereum such as sharding and a form of Practical Byzantine Fault Tolerance (PBFT). Indeed, it may even kill Ethereum and Ripple, Blummer claimed. In addition to implementing all KYC and AML requirements, Libra has seemingly replicated most of Ethereum’s features like its account model, generic language, gas, on-chain scaling with sharding, and some BFT consensus.

A renowned bitcoin engineer and educator, Jameson Lopp shared a deeper and less biased analysis of the Libra protocol. In a lengthy and incisive Medium post, he agreed that the protocol shares more with Ethereum than Bitcoin. On comparing Libra’s data structure, it is clear that it is similar to Ethereum and Ripple. In addition to sharding and PBFT features, Lopp thinks the Libra protocol is aiming for a Proof of Stake model, similar to Ethereum’s plan. However, there is a lot of skepticism around the project’s ability to solve the problems that have plagued the Ethereum team. Facebook may not have solved Ethereum’s problems and simply replicated the model for Libra.

Libra may not be the ideal implementation of blockchain, but the protocol is proficient and impressive. After going through the details, crypto experts have concluded that there is no actual blockchain data structure in the Libra protocol. This means that the project doesn’t qualify as a real cryptocurrency. Facebook is not proposing a cryptocurrency. Project Libra doesn’t have any of the fundamental characteristics of cryptocurrency. It doesn’t stand on the five pillars of an open blockchain. In fact, Libra may not be a blockchain by technical standards.

Facebook introduced Libra to the world as a cryptocurrency and this has brought legitimacy to the industry. Though the technology may be similar to Ethereum, it has helped the crypto market and given it a much-needed boost.

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