It looks like economics professor and cryptocurrency skeptic Dr. Nouriel Roubini and Bitcoin advocate Andreas M. Antonopoulos finally agree on something—that Facebook’s upcoming stablecoin (which is part of project Libra) is not really a cryptocurrency.
Facebook’s Project Libra
We have had reports over the past 10 days or so from Techcrunch, The Wall Street Journal, and The Block, which say that according to their sources Facebook is planning to release details of its stablecoin project (Libra) on June 18 and that this project has the backing of such big names as Andressen Horowitz, Union Square Ventures, Coinbase, Vodafone, eBay, Uber, Spotify, Mastercard, Visa, and PayPal, each of whom will reportedly pay around $10 million each to be part of the project’s governing consortium (the Libra Association).
The new stablecoin, which is expected to launch no earlier than 2020, is rumored to be called either GlobalCoin or Libra (depending on whom you ask). Everyone is expecting Facebook to make an announcement on Tuesday (June 18) and possibly release a whitepaper about its upcoming “cryptocurrency”. But is it a true cryptocurrency according to the “traditional” definition of the word, i.e. in the same way that Bitcoin is a cryptocurrency?
One of the many interesting things about Facebook’s new stablecoin is that it has managed to get two people with generally diametrically opposed views on cryptocurrency to agree, possibly for the very first time, on something crypto-related: that Facebook’s new coin is not a real cryptocurrency.
What Antonopoulos Says About It
In a video (titled “Bitcoin Q&A: Facebook’s GlobalCoin”) he published on his YouTube channel on June 11, Antonopoulos explained that what Facebook is proposing is not a cryptocurrency because “it doesn’t have any the fundamental characteristics of cryptocurrency, i.e. “it doesn’t stand on the five pillars of an open blockchain.” The five pillars are: it’s open; it’s public; it’s neutral; it’s borderless; and it’s censorship-resistant.”
Antonopoulos says that all of these five characteristics “stem from decentralization of control”, and that “anything that’s created by a centralized organization… cannot achieve any of these five pillars,” and the reason for that is that “the law prevents them from doing so.”
What Roubini Says About It
As for Roubini, in a recent interview with Coindesk, he said this about Facebook’s stablecoin:
“It has nothing to do with blockchain. Fully private, controlled, centralized, verified and authorized by a small number of permissioned nodes. So what is crypto or blockchain about it? None.”
Although many members of the crypto community have expressed similar concerns, Roubini denies that he shares similar views as the “crypto faithful” since he doesn’t even believe that it is possible to have a “public decentralized trustless blockchain”:
“But in my opinion, public decentralized trustless blockchain is a pipe dream … so we disagree on 99% of [the] substance.”
In fact, as recently as May 8, according to CNBC, he called crypto “the mother and father of all bubbles” and went on to say:
“The term 'cryptocurrency' is totally a misnomer… To be a currency, you have to be a unit of account, valuable and a scalable means of payment.”
And he thinks even Bitcoin does not deserve to be called a cryptocurrency since it “can’t be scaled efficiently” (due to a throughput of only seven transactions per second), too volatile, and too “susceptible to fraud.”
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