Home / Capital & Crypto / ‘A Very Expensive Failure’: Blockchain Experts Slam Facebook’s Libra Cryptocurrency

‘A Very Expensive Failure’: Blockchain Experts Slam Facebook’s Libra Cryptocurrency

Last Updated March 4, 2021 2:36 PM
Ben Brown
Last Updated March 4, 2021 2:36 PM

By CCN.com: A lot has already been said about Facebook’s Libra cryptocurrency and its ambition to disrupt the finance world. But what about the blockchain technology that powers it? 

Blockchain experts have poured over the technical documents  and played with the Libra protocol testnet . Suffice to say, they’re not convinced about Libra’s claims.

Facebook Libra blockchain testnet
Facebook launched the Libra protocol blockchain testnet on Tuesday, but experts aren’t convinced. Source: Libra

“A disaster in slow motion”

Bitcoin developer Tamas Blummer offered the most damning assessment of the Libra protocol . He said Facebook is abusing its position to muscle into the blockchain world.

“Trying to buy leadership in a cutting edge technology is very expensive and likely futile. I am pretty certain that this will be a very expensive failure, but a great door opener for Bitcoin.”

Getting deeper into the blockchain itself, Blummer said the blockchain has more in common with Ethereum more than Bitcoin. It shares many of the same features as Ethereum such as sharding and a form of Practical Byzantine Fault Tolerance (PBFT). Indeed, it may even kill Ethereum and Ripple, Blummer claimed.

“Libra resembles Ethereum more than Bitcoin. It contains all the features that make Ethereum garbage. account model, generic language, gas, on-chain scaling with sharding, some BFT consensus. In addition it has to implement all KCY and AML. A sure disaster in slow motion.”

“Libra is more like Ethereum or Ripple than Bitcoin”

A deeper and less biased analysis of the Libra protocol came from Jameson Lopp, a bitcoin engineer and educator. In a lengthy and incisive Medium post , he agreed the protocol shares more with Ethereum than Bitcoin. 

“From a data structure perspective, Libra is more like Ethereum or Ripple than Bitcoin.”

In addition to sharding and PBFT features, Lopp thinks the Libra protocol is aiming for a Proof of Stake model, similar to Ethereum’s plan. But he’s skeptical about the project’s ability to solve the problems that have plagued the Ethereum team.

“Sounds like Facebook has not solved any of the massive problems that Ethereum has been working on for years.”

Facebook’s Libra is not a blockchain

No matter your opinion on the cryptocurrency itself, all experts seem to be aligned on one issue: Libra is not a real blockchain. Lopp admits that the protocol is proficient and impressive, but not a blockchain:

“This protocol seems to be very well designed… [but] “The Libra Blockchain” is not actually a blockchain… There is no actual blockchain data structure in the Libra protocol.”

It echos the assessment of bitcoin guru Andreas Antonopoulos who said the project doesn’t qualify as a real cryptocurrency:

“What Facebook, or any company like Facebook, is proposing is not a cryptocurrency. It doesn’t have any of the fundamental characteristics of cryptocurrency. It doesn’t stand on the five pillars of an open blockchain. In fact, it has none of those.”

While Libra may not be a blockchain by technical standards, there’s no denying the positive impact of Facebook referring to it as such. By embracing the words “cryptocurrency” and “blockchain,” Facebook has brought legitimacy to the industry. Even if the technology isn’t there yet, this alone is a big step forward.