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The long-anticipated Facebook cryptocurrency Libra white paper has been released finally. Now, join us to have a look at what cryptocurrencies Libra has “referred to”.
Brief History of Libra Currency
The Libra Blockchain is a decentralized, programmable database designed to support a low-volatility cryptocurrency that will have the ability to serve as an efficient medium of exchange for billions of people around the world.
As a first step toward the goal of decentralization, the Libra blockchain protocol will be handed over to a new organization: the Libra Association, whose members will hold tokens separately and can vote on the blockchain to make decisions related to the governance of the Libra blockchain.
Ben Maurer, head of Facebook blockchain technology, said that as time went by, the goal of the Libra Association was to change the node membership from the establishment of founding members (who own interests during the ecosystem creation) to those who have concerned interests and hold Libra tokens.
Libra aims to act as a high-throughput global blockchain. However, unlike other blockchains, Libra seems to be more concerned with consumer payments and other financial applications.
Moreover, Facebook has also created a new programming language, Move, which allows developers to write commands on the blockchain and share them with the public. To validate the design of the Libra protocol, Facebook has built an open-source prototype to implement Libra Core and hoped to push the ecosystem development through global collaboration.
In fact, many sources who have visited Facebook said that in the past few months, Facebook had made “great efforts”. They referred to the existing cryptocurrency projects in the market and added their own updating and improvements. Like Bitcoin, no real identity on the Libra blockchain
The Libra Blockchain is pseudonymous and allows users to hold one or more addresses that are not linked to their real-world identity.
The White Paper states
Initially, the consensus structure for Libra will be dozens of organizations that will run nodes on the network, validating transactions. Each time consensus is voted on for a new set of transactions, a leader will be designated at random to count up the votes.
Libra opts to rely on familiarity rather than democracy to choose the right entities to establish consensus in the early days. Founding Members are organizations with established reputations, making it unlikely that they would act maliciously.
These entities range from traditional payment networks (Mastercard, Visa) to internet and gig-economy giants (eBay, Lyft) to blockchain natives (Xapo) to VCs (Andreessen Horowitz, Thrive Capital).
Like Tezos, it comes with an on-chain governance
The only entities that can vote at the outset are Founding Members. These members hold Libra Investment Tokens that give them voting rights on the network, where they can make decisions about managing the reserve and letting new validators join the network.
The governance structure is built into the Move software from the start, and like Tezos it is subject to revision over time. Updates will be essential as it adds members and evolves from what’s more like a delegated proof-of-stake (DPoS) system (such as EOS or steem) to a fully decentralized proof-of-stake ecosystem.
Like Ethereum, it makes currency programmable
The white paper defines interesting ways in which its users can interact with the core software and data structure. But there are a lot of interesting issues. For example, anyone can make a non-voting replica of the blockchain or run various read commands associated with objects (such as smart contracts or a set of wallets) defined on Libra. Crucially, Libra’s designers seem to agree with Ethereum that running code should have a cost, so all operations require payment of Libra as gas in Ethereum in order to run.
Libra has important changes in its smart contracts.
- First, it limits how much users can do on the protocol at first (the function of Move has not been yet opened).
- Second, it breaks data out from the software, so one smart contract (what Move refers to as a “module”) can be directed at any pool of assets, which Move calls “resources.” So, one set of codes can be used on any number of wallets or collections of assets.
Like Ethereum, it thinks POS is the future
Like Ethereum, it thinks proof-of-stake is the future, but it is also not ready yet. Meanwhile, the paper dismisses the approach of the blockchains with the longest track record (namely bitcoin, etc.)
Essential Libra, in both its permissioned and permissionless state, the Libra Blockchain will be open to everyone, any consumer, developer, and business can use the Libra network, build products on top of it, and add value through their services.
The Libra Blockchain adopted the BFT approach by using the Libra BFT consensus protocol. …… This class of consensus protocols also enables high transaction throughput, low latency, and a more energy-efficient approach to consensus than “proof of work” used in some other blockchains.
The Binance which purposefully burnt tokens became very influential last year. Binance, the world’s leading exchange, created the BNB token, with which users could pay trading fees at a discount. Binance led the way to token bonfires, regularly burning a significant portion of its profits paid in BNB.
Of course, Libra does not increase its value by burning tokens. Unlike the collateralized stablecoins such as Tether, which are constantly being issued and burnt, the Libra Association responds to changes in demand for its reserves, so they do not give a specific maximum or minimum supply of tokens.
Like coda, users don’t need to hold onto the whole transaction history
As an encryption protocol not understood by most people, Coda is one of the first to make its ledger disposable. Users only need to hold proof of the last block, which they can easily check on a smartphone to be sure they are interacting with a valid ledger.
Similarly, on Libra, historical data may grow beyond the amount that can be handled by an individual server. Validators are free to discard historical data not needed to process new transactions.
Like EOS, Libra hasn’t worked everything out yet
EOS was launched without its approach to governance being well-defined, which yielded complications in future development. Similarly, Libra promises to decentralize, but there are no specific measures to effectively force its members to do so.