Libra, Facebook's new cryptocurrency - better sit that one out
Facebook is really making an effort to make Libra appear legitimate. Not buying it.
Ok, Libra is an open standard. That’s good. Even better, there will be up to 100 partners offering the cryptocurrency. So it looks like we would neither depend on Facebook nor even need to have a Facebook account in order to make payments with Libra. Sounds great. Where’s the catch?
Well, let’s talk about Blockchains for a moment. When you ignore all of the crypto stuff, the basic idea of a blockchain is a distributed list. That is, every node in the system holds a copy of that list. Whenever a node appends a new entry, every other node has to copy that entry (no one may delete or edit entries). How access control works is a question for another day. The important thing here is that the list is global and every node knows what every other node added.
See the problem?
Facebook doesn’t tire to point out that it’s own node, “Calibra”, well just be one among many, not system relevant and actually only exists so Facebook can integrate Libra in it’s own services. Sure, you can believe that (in the same sense that you could believe, Facebook would stay away from the Whatsapp data after buying the company). It’s not the problem, anyway. The problem is that Calibra, being a node in the system, will necessarily have access to the underlying blockchain and see all of the transactions. Even those not processed by Calibra itself.
Congratulations! If Libra becomes a success, Facebook will effectively be able to peek into everyone’s bank account. No matter if Facebook member or not. Well played!