Joseph Lubin, the co-founder of Ethereum, is the latest critic of Facebook’s Libra describing it like "a centralized wolf in a decentralized sheep’s clothing". Given the social media giant’s massive security breach and data misuse, skeptics are critical about Facebook’s cryptocurrency venture.
Lubin wrote, according to Coin Telegraph, that sending money across the globe should be as simple and inexpensive as sending a message on the phone, and financial infrastructure should be globally inclusive and governed as a public good.
He pointed out the need for users to trust Libra’s fiat currency and government bond backing.
Block Crypto said Libra is backed by a "basket of currencies" and government bonds. Facebook hopes that Libra will be part of a broader ecosystem and evolve into a new financial infrastructure that will transform the lives of billions of people. David Marcus, the social media giant’s executive of cryptocurrency operation - Calibra, said their cryptocurrency holds the potential to provide people with access to a more inclusive and more open financial ecosystem.
However, Lubin pointed out ‘trust’ and the concept of ‘decentralization’.
“Perhaps most importantly, it requires our trust that Libra will eventually transition to a more permissionless, decentralized system whereby anyone can validate the network, rather than the restrictive evaluation criteria keeping control in the hands of the initial 28 firms," he said.
He also identified some positive factors such as the growth in user numbers and ease of use. “Talented UX designers could reduce the friction of using cryptocurrency. Managing private keys, understanding gas payments and installing crypto browser plugins could be as simple as pressing ‘send’ in WhatsApp .”
Bruce McClary, spokesman for the National Foundation for Credit Counseling, according to CNBC, said the usefulness of Libra depends on how widely accepted it becomes. “If you have acceptance from merchants and partnerships with payment transfer systems, I think it could have the potential to stand out,” McClary said Facebook’s cryptocurrency has the potential to go mainstream but it depends on time.
Sounding alarm on social media and crypto wallets in a blender, he said ‘there could be problems’. “First of all you want to make sure your financial transactions are secure and private," he added.
Experts have all pointed to ‘privacy’ being an issue with Facebook’s history of breaching the ‘privacy trust’ of more than a million users throughout the world.