Amid controversies surrounding Facebook’s Libra, its fork called Open Libra is introduced.
Facebook is facing many roadblocks to get Libra started. The project has been at the centre of multiple controversies at legal, technological and geo political level. This has resulted in concerns by its promoters and Paypal has already left the association.
Libra may be the most talked-about crypto across the global but it is also facing criticism. Amid all this negativity, a fork may have the possibility of launching if it disassociates itself from Facebook. This is where ‘Open Libra’ comes to the scene.
With years of waiting for Facebook’s Libra, it may be difficult to imagine Libra without Facebook. However, this may the central appeal of this project. In fact, if Facebook is not behind the project, regulators may feel more comfortable with it.
Ben Mezrich on CNBC’s Squawk Box debates that, “This is all about trust. You can’t have a bank, you can’t be a new currency without people trusting it if you’re going to sit in the middle of it, and people don’t trust Facebook … I think that Amazon could pull this off because, for whatever reason, we all trust Amazon… We put our credit cards in there every day”.
His words make sense as people are more aware of it too. After PayPal, there are numerous reports that some other members of Libra’s association may also leave. If hell breaks loose, it is estimated that only 15 companies will be left in the association that have direct links to Facebook.
During the recent Ethereum Devcon, Lucas Geiger, Co-founder of Wireline took the stage to discuss about ‘Open Libra’. The project is created to : lock the door open” for the crypto. And the key to this is simply get Facebook out of the equation and fully open-source the technology.
There is no whitepaper for Open Libra and there is no clarity how it will achieve some of the crucial goals of Libra. However, for the review of the users, a codebase is created by the developers.
Open Libra, also a Stablecoin?
Libra was introduced as a stablecoin that will be backed by an array of fiat currencies. But which currency will back Open Libra is yet unknown. And there is no surety that the regulators will be comfortable with this approach.
The project indirectly takes a dig at the biased vision of a group of corporations that are controlling the financial movements. It aims to substitute these groups for a set of “best-in-class companies and non-profit foundations working in applied cryptography and blockchains.”. At first impression, the idea looks the same but there is a need to study the project more carefully.
All these speculation has led to many commenting that a Facebook coin without Facebook makes no sense.
There is a long road ahead before any of these projects are launched. We are hopeful that they do launch. There are also speculations that Libra may not actually launch. Libra needs to have regulators trust and Open Libra needs to earn trust of virtually everyone.
Libra’s Open Source will also need to comply with the same regulation as the original Libra. And until there is more information or a whitepaper, the project will lack credibility. It could meet the same fate as a Ripple less XRP that was recently proposed on social media.
What are your thoughts on Facebook’s Libra and Open Libra? Share in the comments below.