Ethereum’s Co-Founder Says Facebook’s Libra Cannot Be Trusted

Joseph Lubin is not a big fan of Facebook’s new cryptocurrency. In recent comments, Ethereum’s co-founder has said that the Libra is a “centralized wolf in a decentralized sheep’s clothing.” These harsh words have been echoed by others in the cryptocurrency space who claim that Libra is not even a blockchain.

Facebook’s Trust Problem

Lubin agrees that sending money across the globe should be simple and inexpensive. Financial infrastructure, to this end, should serve as a public good. However, Libra distorts this need towards enriching itself and playing with our privacy. According to Lubin, Facebook has not given us a reason to trust its currency nor its government bond backing. Libra is said to be backed by a “basket of currencies” along with government bonds. However, as Lubin points out, Facebook will need to prove that it can transition Libra to a more permissionless model with actual decentralization. Currently, the criteria to be a validator is squarely in the hands of only 28 multi-national firms. The network is more comparable to a consensus model by corporate entities rather than anything remotely comparable to decentralization.

More Cryptocurrency Exposure through Facebook Expected

However, Lubin did identify some positive factors. For example, the Libra will inevitably expand the growth of users in the cryptocurrency space. It will also make financial payments much easier. With this in mind, “talented UX designers could reduce the friction of using cryptocurrency” Lubin said. “Managing private keys, understanding gas payments and installing crypto browser plugins could be as simple as pressing ‘send’ in WhatsApp.” The Libra is definitely not the end-all, but it could be a catalyst for actual decentralized solutions. Ultimately, it all comes down to trust. Facebook has made a poor attempt at remedying the public’s dislike of the social media giant in the wake of the Cambridge Analytica scandal. The fallout of that scandal has exposed the extent to which Facebook mines our data. With Libra, the social media giant will also be able to track our payment history. Therefore, Lubin is right to say that Facebook’s biggest problem today is trust. Hopefully, the Libra will merely bring visibility to the cryptocurrency industry rather than take over global payment systems. Do you believe Lubin’s assessment of the Libra is correct? Let us know your thoughts in the comments below.