According to the media The Verge, one of the challenges facing cryptocurrencies is the issue of trust. “The fundamental problem of traditional money comes from what it needs to keep it running – trust,” Nakamoto wrote in his first public statement on the Bitcoin system: “People must believe that the central bank does not intentionally degrade the currency,” But the history of fiat money is full of betrayal of this trust. “People linked cryptocurrencies to related intensive technologies, mining gold rushes, and alarming price volatility – are the direct result of a total refusal to trust central financial institutions.
Now, this power is in the hands of Facebook. On Tuesday morning local time, Facebook announced an ambitious new cryptocurrency project called Libra, managed by a consortium of technology and financial companies including Facebook and traditional banking companies such as Visa and Mastercard. This project is basically Facebook’s view of the global financial blockchain. On a technical level, Libra is similar to Bitcoin and Ethereum: it has the same anonymous attributes and the same support for smart contracts and standalone applications. In theory, everything in cryptocurrency is good.
However, Libra is still basically a Facebook project. Facebook employees designed the blockchain and recruited partners to manage the blockchain. Libra wallets will be embedded in Facebook apps like Messenger and WhatsApp, which means that Facebook products will be the primary way people experience it. Using Libra means trusting Facebook, but the company is facing the biggest crisis of trust since its inception this year. While cryptocurrencies initially meant decentralization, Libra meant further consolidation of one of the world’s most powerful companies. At its most basic level, using Libra means trusting Facebook. If the project is successful, it could mean the end of the era of cryptocurrency decentralization.
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