Thoughts on Decentralization and Libra
Open any news site and there it is, Libra. Besides happy Facebook shareholders, I’m seeing anxiety and uncertainty coming from both small and large organizations.
I spent some time looking into the construction and economics surrounding Libra and didn’t have to dig very deep as there are plenty of studies and research all over the web. Some notable ones include the following:The Founding Members of the Libra Association
Libra is an independent, non-profit organization and many of their members are sizable, public companies that could potentially threaten retail and central banks. However, it appears that association members also need to work closely with banks. Limiting participants instead of decentralizing to make “unstoppable” features will come back to bite them.As Andreas M. Antonopoulos states in his tweet:
Sources: https://twitter.com/aantonop/status/1140937902081417216 https://twitter.com/aantonop/status/1140926913193660416Why do people care about Libra and why should you care?
There are different perspectives.
Are you in the blockchain business? Then you probably have mixed feelings. Depending on which blockchain protocol you are working on, some of you might worry that the Libra blockchain will take over a significant portion of the demand and market share. Given their massive user base (2.38B MAU Q4–2018 *Source) they can definitely grow faster than any other project. Why is it worrying? The reason is because many blockchain projects issue utility tokens and they serve a function: Proof of Work (PoW), Proof of Authority (PoA), Proof of Stake (PoS) or proof of…whatever. To incentivize token holders and network participants, you need sufficient usage, otherwise you won’t be able to create the self-sustaining network effects and the project can naturally become obsolete.
Whether you are a large, established company or a startup, you will face the same challeng...