On the second day of congressional hearings, New York's MEP Alexandria Ocasio-Cortez (AOC) worried Facebook manager David Marcus about centralizing Libra. She questioned Marcus about the process by which she had selected 27 founding members for the Libra Association, a so-called nonprofit cryptocurrency for Facebook.
When she discovered that Facebook had invested $ 10 million as one of the main founders' criteria, AOC said Marcus responded that the social media giants-supported crypto would become "a currency that would be one of the most popular." undemocratically selected coalition is largely controlled by massive corporations ". Facebook's digital asset does not seek to replace state currency, and its general purpose is to work with regulators and address all their concerns in a timely manner.
"Who selected the founding members?" @AOC asks David Marcus of Facebook from the Libra Association.
"We are discussing a currency controlled by an undemocratically selected coalition of mostly massive corporations." https://t.co/D5DNvyW7IF pic.twitter.com/cFrfIJce54
̵1; Bloomberg Crypto (@crypto) July 17, 2019
Rep. Adams: Can Consumers Become Nodes in the Libra Blockchain?
Another congressman who appeared unimpressed was North Carolina's representative, Alma Adams. The veteran politician asked Marcus if he would allow everyday consumers to node in the Libra blockchain, a practice that is common in decentralized blockchains where individuals could build their own mining facilities to run the network.
"No, Congressman. You can not, "Marcus replied, explaining that their criteria only made it possible for large companies and companies with at least technical background / blockchain or financial knowledge to join the Libra Association.
Asked why large companies would invest $ 10 million In terms of scale, Marcus said the existing partners agreed that the financial status quo does not work for too many people. They earn lower costs and easy access to the digital money infrastructure.
"That's why they came to Libra," added Marcus.
A Difficult Transition
AOC's questions followed Libra's claim to transition to an illegitimate network. In retrospect, Libra is a blockchain-based payment network that is based not just on one node but on multiple nodes to validate and store transactions in a public ledger. In last month's published article, the Libra Association stated that its blockchain would initially be centralized and its founding members, which include names such as Uber, PayPal, and Visa, would act as a knot over time.
The Association promised this over time, they would decentralize the Libra blockchain to distribute their control over more partners. However, the question remains open as to how these new members should be included in the Libra Club. There are also questions about the incentives that investors would have to increase the number of members – and finally give up the float.
Jerry Brito, Managing Director of the Coin Center, said Libra's dream of becoming an unauthorized ledger has technical, legal and governance challenges.
On the legal side, even if the balance solves chain control of the reserve composition (a major technical challenge), the reserve will still need a name on the bank accounts. (We do not have any central bank coins yet.) Presumably that's the federation. pic.twitter.com/MLBea3jtHm
– Jerry Brito (@jerrybrito) June 18, 2019
"I'm not sure how the scale becomes too permissive – at least like that I understand this term. I sincerely hope they can and I'm happy if they try, "tweeted Brito.
Do you think Facebook's "cryptocurrency" will falter under regulatory pressure? Share your thoughts in the comments below!
Pictures on Bloomberg TicToc "AOC grills Facebook Exec on Libra digital currency" YouTube video, Twitter: @crypto, @jerrybrito