After publicizing the upcoming cryptocurrency Libra (Libra), Facebook has received a lot of criticism. Just this week, some members of the US Congress have asked Facebook to stop its cryptocurrency program.
Some thought leaders in cryptocurrencies believe that Libra violates the principle of Bitcoin, a decentralized cryptocurrency. Andreas Antonopoulos, author of Mastering Bitcoin, wrote on Twitter:
"I have five basic questions: Is it open? Is it neutral? Is it borderless? Is it decentralized? Is it anti-censorship? The answer is no, no, no, no, and Do not!"
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- Six key issues in front of Facebook and Libra
- Elite club or decentralized organization? A picture reveals the relationship between members of the Libra Association
- How did Libra fail today, and how can it succeed in 2020?
- The five most noteworthy aspects of the Facebook cryptocurrency white paper
Bitcoin came out shortly after the 2008 financial crisis, and its original intention was to subvert the control of companies and governments. The Bitcoin blockchain is designed so that it is not easily reviewed or controlled by any powerful organization. However, the structure of Libra is quite different. Libra uses a licensing chain that includes some of the world's most powerful companies. To make matters worse, some of these companies are untrustworthy, at least in the United States.
A privacy advocate posted an ironic tweet and then rumored on Twitter:
The more serious problem is that many Americans have lost their trust in Facebook. In recent years, the platform has been devastated by scandals, including Russia’s attempt to intervene in the 2016 US presidential election.
Facebook has a lot of user data, but the history of data protection is not satisfactory. Last year, the Americans learned that a political company hired by the Trump campaign team had successfully obtained private data from millions of Facebook users. Facebook has become so powerful that some people think the company should be dissolved.
The original intention of the blockchain is to help subvert centralized companies like Facebook. But with the introduction of Libra, blockchain technology may make Facebook even stronger.
We interviewed Christina Smedley of the Facebook blockchain division and hope she can answer the controversy surrounding the launch of Libra. Smedley is responsible for Calibra's branding, and Calibra is a Facebook subsidiary that will launch Libra's digital wallet.
In order to make this article more concise, the following interviews have been subtly edited.
LongHash: One of Libra's biggest criticisms is that it's not decentralized, so it gives Facebook more power.
Facebook: Facebook will be one of the 28 companies that make up the Libra Association. The Libra Association was created to create a blockchain and then govern the blockchain.
Now, about the decentralization problem you mentioned. If you want to create a global currency that doesn't exist so far. This currency is supported by a reserve and is linked to a basket of currencies. To make sure it's stable, it doesn't fluctuate as much as most other cryptocurrencies, and we need to make sure it works efficiently before it is completely unnecessary.
The association will be responsible for turning the Libra network into an unlicensed network, which will begin in five years. Facebook is just a company in the association. Our responsibilities, powers or decision-making powers are no different from the other 28 companies that join the association.
LongHash: Next I will talk about the various other controversies that Libra is currently facing. The second point is that some people think that Libra is not a real blockchain.
Facebook: I don't agree with this. Maybe Libra is not a blockchain without a license, but it will eventually be. We created a programming language called "Move" using the HotStudd consensus protocol. We have seen the existing blockchain, and in order to make this currency global and to help the world in the way it is needed to achieve financial inclusion, the Libra blockchain must be able to run very fast, so we Very different blockchains were observed very carefully.
We observed the Bitcoin network, we also observed Ethereum, and finally we decided that the best solution was to develop our own blockchain. I think our engineers will think that it is the real blockchain.
One of the facts that people are confused about is that it is open source, and one thing people should not overlook is that they can view transactions on the public chain. You don't need to use the Facebook wallet we are developing. This wallet is private, which is great for people like me who can't remember the password. You can build everything on the open source blockchain.
LongHash: What about privacy? Now everyone is not sure how much customer information Calibra will have, and what it means for those who are worried about their identity.
Facebook: Calibra will be a private network, a wallet running on the network. Regarding the user's data on the network, we will do our best to ensure that the user's social data and financial data are independent of each other. We also posted a guide on the website… The guide actually outlines our privacy principles and guidelines. We haven't made a final conclusion because we haven't developed a product yet. So now it’s not right to promise everything. But people can clearly understand what we want to do.
As in any blockchain, your trade is public. But someone will develop something on the blockchain, allowing users to decide whether or not to hide their identity. Basically, this is what we expect.
LongHash: Do you need to complete any KYC/AML to purchase Libra?
Facebook: As far as the Calibra wallet is concerned (this is the only thing I can discuss at the moment), in countries where Facebook does business, we are fully regulated and compliant. In countries and regions where cryptocurrency is banned, or outside of Facebook's business, we do not place Calibra wallets. In this case, regardless of where the user is, they must complete KYC according to their own national guidelines.
LongHash: In other words, Calibra will not enter China at present, because Facebook has not yet entered China?
Facebook: Blockchain can. Libra's network can.
LongHash: If a government finds Calibra and wants to get user information, does Facebook have the right process?
Facebook: Just like any financial services institution that is regulated and must comply with anti-money laundering or crime-fighting regulations, you will set up different processes and you will have different rules to follow. We will not be any different from those institutions because we are also in the category of financial services.
LongHash: A big part of Libra's vision is to give people who don't have a bank account more power. But is there some contradiction, because you still need to complete the KYC/AML process?
Facebook: We have discussed a lot about this in the company. In the early stages of the project, we were unable to help those areas that were the poorest in banking services. Because everyone must abide by national guidelines. Considering where we are now, we will take every step. I can imagine that people who enter the open source network will gradually think about identity issues from different angles.
You know, it's worth noting that if we use WhatsApp as an example, some people don't have their own bank account, even though they have a WhatsApp account. We will help them. We will also consider how to complete KYC and give these people quick access to this financial network.
LongHash: At least in the US, Facebook is facing a crisis of trust. There have been a lot of scandals on Facebook. And now people are connecting Libra and Facebook.
Facebook: We have always been honest and openly acknowledged that we have played an important role in technology development, but all of this is open source and has been handed over to the association. I think that as more and more companies are making more public about what they are doing, and their plans for the network, people will no longer see Libra as something that is only associated with Facebook.
I think on the other hand, it's important to remember that Facebook has gained a high level of trust in many countries around the world. If you go to a region like the Philippines, we are very valued. So we believe that people will have good feedback on the Calibra wallet because it will be a solution they have never had.
I think the company is taking everything very seriously. We are doing our utmost to show that we respect and value the trust people give us when we use our services.
LongHash: When developing Calibra, did you use any special lessons learned from the past?
Facebook: I don't think there is any experience for us to learn because we are a young team. But the way we do things is different. For example, we usually don't prematurely disclose information about the products we plan to launch. But this time we did this because we know people have questions: What is the benefit of this project for Facebook?
So we clearly tell you that we plan to develop a wallet, it will look like this. We even revealed what it would look like, which is unusual for Facebook.
This is a journey. I am really proud to work for Facebook. There are so many people who are doing their best to do the right thing for our users.
LongHash: Do you think Facebook will shake the central banks of all countries?
Facebook: There is still a long way to go before us. I don't think anyone will expect global currency to change tomorrow or overnight. We want to talk to people, we want to learn, and we are open to it. One of the reasons we went online to test the network Libra Network so early is that developers and communities can develop, test, and see what it looks like on this network. And this is only part of our journey.
LongHash: So what are you worried about now?
Facebook: I joined this team because I believe in this mission. I joined Facebook's Libra team since the first day, because I personally think it's time to do so. Now, you can send an image in 10 seconds without paying any fees. I think this fact should also apply to currency. This is the only thing that has not really evolved.
So my biggest concern is that it doesn't get a fair chance, and I'm worried that it has been rejected before it reaches our true service goals. This is why I have recently lost sleep.
LongHash: But as you said, things outside the US don't seem to be the case.
Facebook: Yes, I know, but we need people who send money, and many people who need to send money are in a place like the United States. They have to send money back home, so they have to spend another sum of money. For them, this is a solution. But they must be willing to do this themselves.
LongHash: I think these problems are unpredictable.
Facebook: Yes, but equally unpredictable is the greatness of the things we will create. I don't think we can understand what happens on the open source network in the eternal future.
LongHash: This raises another criticism. Some people think that Facebook and its CEO Mark Zuckerberg are arrogant because they are trying to accomplish this big event.
Facebook: Ok, first of all, he is not arrogant. Secondly, I hope that our performance proves that we are not like this…. In fact, the Libra project also includes community participation. We are listening. We are very focused on listening to the sounds of platforms like Reddit and listening to the community's thoughts on this project. And this is worth it! People have already developed on this network. This is very exciting.
LongHash: Before you open this project, why do you want to be ignorant of this project?
Facebook: This is actually because we know it will be misunderstood, we know that people will not understand. You can also see people's misunderstandings in the early stages of our official release… We hope to be prepared before we actually begin to explain.
LongHash: What do you think people are most misunderstood?
Facebook: I think it should be that they think Libra is a centralized Facebook currency, but it is not.