Article by Forbes: Lance Eliot
Yesterday, Facebook released its official white paper describing their newly being formulated cryptocurrency, called Libra, which is akin in some ways to what you might think of when you hear about “bitcoins,” essentially leveraging the use of blockchain technology and offering a global currency untied to any specific country, and will be guided by a non-profit entity known as the Libra Association (based in Geneva, Switzerland).
The founding members of the Libra Association offers a rather impressive set of organizations, showcasing that perhaps this won’t just be a Facebook-only initiative, which is how Facebook is pitching the endeavor, namely that Facebook is at the forefront for the moment, via their regulated subsidiary Calibra, and yet they assert that they will revert to a membership role rather than a leadership role, coming in the first half of 2020 when the cryptocurrency launches.
Here’s the initial set of founding members, and it is stated that a total of about 100 members is being anticipated by the formal launch:
• Payments: Mastercard, PayPal, PayU (Naspers’ fintech arm), Stripe, Visa
• Technology and marketplaces: Booking Holdings, eBay, Facebook/Calibra, Farfetch, Lyft, Mercado Pago, Spotify AB, Uber Technologies, Inc.
• Telecommunications: Iliad, Vodafone Group
• Blockchain: Anchorage, Bison Trails, Coinbase, Inc., Xapo Holdings Limited
• Venture Capital: Andreessen Horowitz, Breakthrough Initiatives, Ribbit Capital, Thrive Capital, Union Square Ventures
• Nonprofit and multilateral organizations, and academic institutions: Creative Destruction Lab, Kiva, Mercy Corps, Women’s World Banking
Going whole-hog into the let-freedom-ring blockchain perspective (perhaps better worded as Distributed Ledger Technology or DLT), the white paper declares that Libra will be based on Open Source code (rather than being proprietary programs that only Facebook could see or change), its underlying Libra network will be open to everyone, it will allow and encourage that others build additional software and services on top of the Libra framework (these other add-ons will be part of the Libra ecosystem), and overall that they hope it spurs the stated goal of “building more inclusive financial options for the world.”
Some Salient Points About Libra
Obviously, this new entrant into the cryptocurrency realm will live-or-die based on its ability to be secure, otherwise few will be willing to use it for their funds and their financial data. Indeed, the white paper indicates that their basis for deciding to build something from scratch rather than using an already existent cryptocurrency is threefold:
(1) Need for scalability to accommodate an envisioned billions upon billions of accounts (once it takes hold), fast transaction processing (an at-times limitation about some DLT implementations as to being too slow), low latency (people won’t be willing to wait if their monetary transaction has delays in processing), and an efficient and high-capacity storage mechanism (imagine how large the dataset will grow over time, logging billions upon billions of accounts and billions upon billions of transactions).
(2) Highly secure (something that many will likely take a wait-and-see attitude, since we’ve already witnessed other entrants that have had hacks and other break-in’s and digital coinage thievery happen).
(3) Flexible to adjust over time and meet the needs of expanding financial services.
Some already in the realm of cryptocurrency are a bit chagrined to have it suggested that Facebook and the other founding members couldn’t have chosen an already existent cryptocurrency, and are perhaps ticked-off about getting a back-handed swipe by the suggestion that nothing else could handle this grand vision, but in any case, one would have to say that Libra will undoubtedly become a 500-pound gorilla against which all other cryptocurrencies will ultimately get measured.
For those of you further interested in trying out Libra, there is a developers site known as the testnet (available right now for Mac OS and Linux), plus you’ll want to come up-to-speed with the new programming language being introduced for Libra, known as Move.
The Move programming language and scripting allows for developing customized transaction processing logic and is a key to enabling the so-called “smart contracts” capability that robust versions of blockchain are known for. Especially interesting, I believe, involves the ability to undertake “automatic proofs” to try and verify that a given transaction, such as a payment, presumably is being charged to solely the appropriate payer account and receiver account, and has no other inadvertent or indirect undesired and unintended consequences. That’s an important mathematically hearty feature that is not routinely available by all entrants in this space.
There’s a lot more to be said about the technical elements of Libra, which I’ll cover it later posts, but the key business insights right now is to realize that:
• Facebook has around 2.38 billion active users, and thus if even a fraction of those users decides to embrace Libra, it will vault Libra into the cryptocurrency heavens.
• With Facebook and the other already declared founding members being supporters of Libra, it has a push and energy-driving force unlike any that other entrants have ever seen.
• Given the backers and the prominence of Facebook, many consumers and businesses that have sat on the sidelines about using a cryptocurrency are bound to feel safer now to take a leap of faith and try it out, along with the likely ease of doing so via Facebook itself.
• In spite of what might seem like a potential dragon slayer in terms of knocking out other cryptocurrencies, it is conceivable that the legitimization and popularization due to Libra might actually help others, doing so in the classic saying that boats rise by the rising of the tide (though it certainly seems to be the case that Libra will suck-up a lot of the air in the room, you can bet on that).
• Recognizing the qualms that many have about by-faith-alone believing in many of the existent digital currencies that no particular backing in gold or some other kind of tangible asset, and appears to be a floating digital mirage, there will be a Libra Reserve, containing a “basket of bank deposits and short-term government securities” to underlay the intrinsic value of the digital coinage (just to mention, some purists in this realm would decry this assets-backing approach as unpatriotic to the “true” vision of cryptocurrencies).
Self-Driving Cars And Blockchain And Cryptocurrencies
Amidst all the excitement about Libra, you might not have noticed that some of the founding members included entities that at initial glance might seem surprising to you, such as founding members of Uber and Lyft.
How did they get in there, you might be wondering?
The answer is pretty straightforward. If you are running a ridesharing or ride-hailing service, and you want to make life easy for your end-users that ride in your cars, providing them with a viable and reliable cryptocurrency couldn’t hurt. Indeed, one might say it could help quite a bit. There are many riders that are bound to prefer using a cryptocurrency such as Libra, especially if it is easy to do.
Let’s also consider the future, one composed of driverless autonomous cars.
I’ve long predicted that we’ll see autonomous cars heavily leveraging blockchain and cryptocurrencies.
For a cryptocurrency, the uses are rather apparent, such as being able to pay your bill for having been a passenger in a driverless car. Another obvious example involves the autonomous car being able to pay tolls on roadways and bridges, doing so by electronically communicating with the toll taker, using V2I (vehicle-to-infrastructure) protocols.
For blockchain, upon which cryptocurrencies are built, the foundational platform can be used for other purposes besides just minting digital coins. The underlying blockchain could be used to keep track of the ownership record of the autonomous car, making it relatively easy to find out who bought the driverless car, when they did so, and who owns it now. Rather than keeping around tons of paperwork, this could be electronically stored and much more easily found and retrieved.
Another use of blockchain or DLT would be to keep track of the V2V (vehicle-to-vehicle) electronic communications. Conveying messages from driverless car to driverless car can be very handy, such as an autonomous car ahead of you that warns there is debris in the roadway or indicates that traffic is heavy, and you might want to pursue a different route.
The AI of autonomous cars will be carrying on electronic dialogues during the driving journey, hopefully aiding each other in the process. Rather than these messages being amorphous and floating in the air, they could be codified into a DLT and then more readily shared or used (plus, you could add the cryptocurrency into this to offer financial incentives for having your driverless car share roadway statuses).
These examples and other “smart contracts” usages would all be spurred via using a blockchain or DLT capability.
Any ridesharing or ride-hailing service can see the writing on the wall, namely do whatever you can to keep close to your end-users and customers. Libra might be such a vehicle (pun intended).
I am anticipating that the automakers and tech firms that are developing autonomous cars will be likewise considering how to blend blockchain and cryptocurrency into their on-board systems, rather than letting others decide how to do so and either messing up the AI driving systems or creating a Rube Goldberg-like convoluted contortion.
From a zodiac sign perspective, the word Libra tends to mean something that is focused on symmetry, seeking to embrace equilibrium and doing so in terms of beauty, love, and money. Might the upstart, the Libra Association, be a Venus that brings us the symmetry and equilibrium that sparks a true breakout for wide adoption of cryptocurrency?