Top Takes on Libra

It’s been a wild week in the stablecoin world! The reason is that cryptocurrencies now represent around $200 billion of value, and stable coins should reach $trillions far sooner. It ALL depends on regulators! Here are some top articles from the last week of buzz I think are worth reading:

How Will Facebook’s Libra “Blockchain” Really Work?, by Jameson Lopp (technical and good)

Whitepaper Deep Dive — Move: Facebook Libra Blockchain’s New Programming Language, by Lee Ting Ting

Facebook’s Libra Strategy — Deep-diving the Documents, by Matthew Hine (This is one of the best pieces so far. It’s good technically but misses the Association problem I outline)

The awesome Eric Voorhees Tweetstorm on Libra summarizes it succinctly. (He mentions that the Association will have the ability to stop some transactions, but I don’t really see that happening unless they are somehow forced to do it by some government. It’s a lovely read.)

My Four Big Questions the Libra Team Must Answer, highlighting some of the governance issues.

Barry James’s bid for a “People’s Node” in the Libra network. (Interesting and should exist, but they have to fix the association first.)

I would say the main misunderstandings of Libra are …

  1. Libra is not Facebook

  2. David Marcus is not Mark Zuckerberg

  3. Can we trust Libra? The correct answer is: we don’t know yet. The incorrect answer is: “No!”

  4. Libra isn’t really a currency, it’s a meta-currency

  5. Libra is a threat to central banks. Wrong. Libra will wake up smaller central banks first if their people prefer Libra to their own currency (Gresham’s Law applies). Libra has nothing to do with large currency central-bank policies until it hits at least $1 trillion in value.

  6. Libra’s Association is a Foundation. It isn’t. It’s an investment club. It’s a huge windfall of profit for the investors if regulators don’t kill the project.

  7. Libra is a trojan horse for Facebook to get your financial data.

  8. Libra is bad for cryptocurrencies. Wrong. If there are hundreds of millions of wallets, cryptocurrencies will scale up bigtime. I would say bitcoin is not overpriced at this point.

Preston Brewer, a legal analyst at Bloomberg, has an excellent piece on how Facebook will likely get the SEC to comply with its plan (because the Libra should not pass the Howey test) and outlines other legal challenges. Worth reading.

And, of course, government officials are absolutely clueless, posturing this way and that, hoping to get a bit of media attention to help their next bid for re-election.

I will have another live Libra call this Sunday, the 30th. At noon Eastern US Time I will go through the project and describe it. By around 12:30pm we will start the Q&A and discussion. I will record it and try to get it online that evening.