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Libra is the upcoming cryptocurrency by Facebook which Facebook claims is supported by variety of tech companies including but not limited to Mastercard, Paypal and Visa. Facebook also enforces a real name policy, and at this stage we all know that Facebook tracks you down and steals data. Considering the fact that Mastercard and Visa have access to SWIFT which means they could literally track every single transaction of yours and dox you, How truly secure is Libra? Two first amendments of cryptocurrency were decentralization, anonymity and security, so far based on hypothesis Libra seems to offer none.

reed
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Thesnake123
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2 Answers2

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At the moment it is impossible to know how secure it is, because it basically doesn't exist yet. It will be launched in 2020. Also, everything that revolves around blockchains tends to be controversial, because the at the moment the "blockchain" is still a solution in search of a problem. So I guess most answers will be based on speculation, and this question might even be closed because it's too "opinion-based". Nevertheless, I'm going to tell you a few things to consider.

  • Libra is backed by a reserve of assets designed to give it intrinsic value. This is supposed to make its value stable, unlike BitCoins for example. This sounds like a good thing that is absolutely needed (who would want to use a coin that might lose half of its value overnight?). However, at the moment we can't know how well this will work.
  • Libra will start as a permissioned blockchain. This means that not everybody will be allowed to run a validator node. Citing the whitepaper: "To ensure that Libra is truly open and always operates in the best interest of its users, our ambition is for the Libra network to become permissionless. The challenge is that as of today we do not believe that there is a proven solution that can deliver the scale, stability, and security needed to support billions of people and transactions across the globe through a permissionless network."
  • The consensus protocol will not work correctly if more than one-third of the nodes get compromised.
  • The Libra Blockchain is pseudonymous and allows users to hold one or more addresses that are not linked to their real-world identity. But will this be legal? How about money-laundering laws? And taxes? Governments must be able to control the transactions, somehow. Pseudonymous doesn't mean anonymous. But if the blockchain is immutable, if the pseudonymous identifier is leaked, will an "attacker" be able to see how John Doe has ever spent his money? We will see.
  • Libra is still in prototype stage. Libra is powered by open-source software, and the technology behind the Libra Blockchain will be free for all to inspect, use, modify, and distribute. However, it must not be very mature yet, because, citing the technical paper: "As Libra Core is currently in the prototype stage and does not power a blockchain with a currency that has real-world value, our security procedures are not fully in place."

Sources:

https://libra.org/en-US/white-paper/
https://developers.libra.org/docs/policies/security

reed
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  • woa thanks for detailed answer – Thesnake123 Jun 20 '19 at 18:38
  • "This sounds like a good thing" it may do initially, but when you think it through it means that whoever controls that reserve of assets effectively controls the currency. The whole thing reeks of an attempt by the banking/finance cartel to jump on the blockchain buzzword without actually offering the advantages of a proper neutral cryptocurrency. – Peter Green Jun 20 '19 at 19:12
  • @PeterGreen those 'advantages' are only advantages depending on your goal. Blockchain/cryptocurrency is just a technology, and has no inherent bias towards or against privacy/decentralization/security/etc. Most people haven't adopted cryptocurrencies because they don't care about those 'advantages' versus stability and having government-backed and protected money. This has the opportunity to be a digital currency that sees real adoption, precisely because it finds a middle-ground. – Angelo Schilling Jun 20 '19 at 22:35
  • Out of interest @AngeloSchilling, do you work for FB? –  Jun 21 '19 at 07:29
  • @Ian haha, nope. I don't even have a FB account. – Angelo Schilling Jun 21 '19 at 18:34
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Privacy International has quite a good introduction to Libra, taking particular notice of the concept of control attacks. (BTC requires 51% of the control. Libra potentially as low as 34%).

The article should address your questions in some detail and give you ideas on where to look for more info.