The Analysis blasts Libra and highlights a lot of the faults of Facebooks new Cryptocurrency project.
Lopp’s main point of criticism is the governing body that is in charge of maintaining and validating the Libra ledger. As the Whitepaper for Libra states:
“The Libra protocol allows a set of replicas — referred to as validators — from different authorities to jointly maintain a database of programmable resources.“
Lopp continues to point out the use of programmable resources, hinting at more functionality than just the announced Libra cryptocurrency down the road.
As Lopp continues, he highlights Libras plans to open up membership eligibility of the Libra association based only on the members’ holdings of Libra, pointing out the similarities to Ethereums Proof of Stake and the issues that come with the Proof of Stake approach.
While the Libra Whitepaper clearly states that “The association has published reports outlining… the roadmap for the shift toward a permissionless system.“, Lopp points out that the connection of the Libra Cryptocurrency to central bank reserves makes an entire permission less system almost impossible to achieve and represents a persistent point of centralization for the network.
From Lopp’s point of view, Libra has more similarities with Ripple or Ethereum than it has with Bitcoin. Indeed, there are parallels to be drawn between the Libra Association and Ripple Labs or the Ethereum Foundation.
Other concerns raised by Lopp are Facebooks notorious privacy infringements and their approach to third-party developers.
Is Libra a Blockchain?
Lopp gets more technical, showcasing how Libra is similar to a Blockchain but is, in fact, not a Blockchain at all. From a top-level view, a Blockchain is a System State that updates with executed transitions to a new System State, verified by all participants of the network.
With Libras permission-based approach, it circumvents the need to batch transactions, achieving much higher throughput than Bitcoin through a more efficient consensus algorithm.
This would come as a huge security sacrifice to a permissionless Blockchain like Bitcoin. However, Facebooks Libra Cryptocurrencies transaction history is much less likely to be rewritten because of its permission-based consensus algorithm, controlled by the Libra Association.
The concerns raised by Lopp echo within the cryptocurrency space and are similar to earlier concerns, raised by Bitcoin evangelist Andreas M. Antonopoulos or the French Minister of Finance, Bruno Le Maire.
Libra is looking like a digital currency that has more similarities with FIAT than Bitcoin and that is trying to create functionalities similar to Ethereum, all in an environment that is prone to censorship by members of the Libra Association.
Read the full post by Jameson Lopp here.