Editor's note: This article is transferred fromRancaijing (WeChat ID: rancaijing), Author: Momo Belling, Editor: Allen, reprinted with authorization from Odaily.
Libra is like a landmine, waking up the blockchain world that has been dull for nearly a year.
Libra is a cryptocurrency project led by Facebook and jointly launched by 28 global industry giants. The white paper was released on June 18, Beijing time. The 12-page white paper mainly tells what Libra is, the background of its launch, and its purpose.
According to the white paper, the goal of the Libra blockchain is to become a solid foundation for financial services, create a new global currency, and meet the daily financial needs of billions of people. Its founding members include payment institutions such as Mastercard, PayPal, and Visa, trading platforms such as Facebook, eBay, and Uber, telecom companies such as Iliad, and Vodafone Group, as well as some investment institutions and non-profit organizations.
After reading the white paper, a digital currency researcher was surprised to say, "Libra's breakthrough significance is beyond doubt." In his opinion, this breakthrough combines the real financial system with the blockchain digital currency. .
If it can land, Facebook will cut into the payment field through digital currency, and once it succeeds, it seems to cut off the business similar to the electronic payment of domestic Internet giants Ali and Tencent. Ali and Tencent will face a choice in the future. Should they issue digital currency through the blockchain, and at the same time of strategic defense, enter the global payment field?
However, some people believe that under the current regulatory structure, the biggest problem facing the launch of a globally accepted digital currency is how to break through the supervision of various countries. In addition, the degree of technical implementation and security are also like mountains in front of you.
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Facebook wants to engage in "borderless currency"
In the white paper, Libra was given a mission: to build a simple, borderless currency and financial infrastructure for billions of people.
The background of this mission is that with the popularization of the Internet and mobile broadband, billions of people around the world have access to knowledge and information around the world, enjoy high-fidelity communication, and a variety of lower-cost and more convenient services. But in the financial sector, access to financial services by those who desperately need them is often underserved or limited due to the impact of cost, reliability, and the smoothness of remittances; moreover, the poor pay more for financial services.
The distributed management characteristics of blockchain and cryptocurrency have the potential to solve the problems of availability and reputation of financial services. The purpose of Libra is to allow everyone to transfer money around the world as easily and securely as sending a text message or sharing a photo.
In fact, another reason for Facebook to issue coins is likely to be related to its current situation. In 2018, Facebook, which has 2.7 billion global users, encountered the largest crisis of trust in history—the leak of 50 million user information was used to influence the results of the US election. Affected by this, Facebook's market value once evaporated by 59 billion US dollars, and Zuckerberg's net worth also shrank by 16 billion US dollars. In addition, in contrast, Facebook’s revenue structure has always been relatively single-in Q4 of 2018, Facebook’s mobile advertising revenue accounted for about 93%, reaching 16.64 billion US dollars; in Q1 of 2019, Facebook’s advertising revenue was 14.91 billion US dollars, accounting for total revenue than 98.9%. The single income structure makes the risk of this global social giant more concentrated.
Issuing coins is more like seeking a way out for Facebook. "Facebook should have seen a major opportunity. The benefits of making currency are much greater than advertising. This is to grab the big cake from the government and banks." Liu Changyong, director of the Blockchain Economic Research Center of Chongqing Technology and Business University, told Ran Caijing.
Libra consists of three parts: built on the blockchain; backed by a reserve of assets that give it intrinsic value; and governed by the independent Libra Association.
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Member of the Libra Association
A digital currency researcher told Ran Caijing that although there were many digital currency issuance models before, they were basically not considered or could not be connected with the existing financial system. Even though the Hyperledger, a blockchain project that appeared before, has accommodated some financial institutions, it has not been involved in the issuance of digital currency. "Libra is a digital currency derived from the blockchain and connected to the real financial system. There is no doubt about its breakthrough significance."
Xiao Lei, the chief analyst of BiStrategy, pointed out that if Facebook’s currency issuance plan is successfully realized, one-third of the world’s population will receive a new global transaction currency system in the future.
Wang Lijie, founding partner of PreAngel, also wrote that the more technology companies of Facebook's size come, the more new users they bring in, the more confident the market will be, and the market will grow more and more. more prosperous. In his view, "the denationalization of currency, the rooting and germination of this ideal, is already an irresistible trend."
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Tencent Ali's attitude
In the white paper, Facebook wants to build a financial infrastructure for billions of people.
As soon as the bold words came out, bigwigs from all walks of life gathered to watch. Wang Xiaochuan directly stated on Weibo: Internet 3.0 is coming, if you can’t save yourself, you will be revolutionized by others; Xiao Lei said: Libra white paper seems to have seen the expanded version of the 2008 Bitcoin white paper; Lang Xianping, who would reject 100 bitcoins for nothing, also said on Weibo, “Facebook’s issuance of digital stable currency is worthy of attention, and financial technology will also trigger a new wave of enthusiasm.”
Why does Facebook get so much attention?
Most importantly, Facebook has 2.7 billion users, and the data dimensions of these 2.7 billion users are extremely rich.
"Facebook's Libra currency does not require KYC, they have huge data of 2 billion people. Not only including names, IDs, addresses, phone numbers. They also know your family, friends, real-time/historical location, etc. They know more than you Know yourself. Now they control your wallet again, which is the best KYC.” said Changpeng Zhao, founder of cryptocurrency exchange Binance.
KYC (Know Your customer) is the user's information, which is the first line of defense of traditional financial institutions. Therefore, regulatory agencies, financial institutions, end customers, and other financial industry participants are all seeking technological advancement, hoping to use high-tech means to track and collect information, so as to better meet KYC requirements. Once this goal is achieved, all parties involved will benefit, and obviously Facebook can save this step.
In addition, the Facebook team has assembled many high-level teammates. For example, top players in the payment field represented by PayPal and VISA, as well as Silicon Valley companies such as Uber and Lyft, declared in the white paper that when the currency is issued in the first half of 2020, the number of founders of the Libra Association can reach 100.
At the same time, there are many big guys who understand blockchain technology in the team. In May 2018, Facebook established a separate blockchain department after its reorganization. This group was led by David Marcus, an executive of Facebook's independent instant messaging application Messenger.
Marcus joined Facebook in 2014. Before becoming the head of Facebook's blockchain department, Marcus has been paying attention to the blockchain world and has also joined the board of directors of the Bitcoin trading platform Coinbase.
Sogou CEO Wang Xiaochuan said on Weibo: Facebook has huge advantages in leading this matter, such as global vision, extensive alliances, and the credit endorsement of its 2.7 billion people. As a result, the world has changed and it is a new challenge for China.
Changpeng Zhao also came to express his opinion, "Countries should encourage their technology giants to issue their own cryptocurrencies (hopefully on Binance Chain). Libra will increase the influence of the United States in many parts of the world. Imagine if Tencent/WeChat was before Facebook Just issued such a (cryptocurrency), where would that influence exist?"
Xiao Lei told reporters, "Alibaba and Tencent need to act as soon as possible, but they also need to reach cooperation with various domestic institutions. Now it is not a question of whether they should, but a question of how to compete."
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Ma Huateng commented in the circle of friends
But neither Tencent nor Alibaba seems to be interested in issuing such a global digital currency. Ant Financial CEO Jing Xiandong said last year that they would stay away from digital currencies but focus on the underlying blockchain technology.
On June 18, Ant Financial reiterated this position. Therefore, we see that although Alipay is actively expanding overseas markets, it has not issued cryptocurrencies. Instead, it has adopted a more traditional strategy, such as cooperating with local payment service providers one by one to provide payment services for local users.
The attitudes of Tencent and Alibaba are highly consistent. During the two sessions last year, Ma Huateng publicly stated in an interview that Tencent did not consider issuing digital currency, even though Tencent had previously registered trademarks such as Wavecoin and infcoin. Today, Tencent is only focusing on the underlying technology, such as using blockchain technology to issue an invoice.
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Three big mountains placed on the road of issuing coins
Facebook's coin issuance news is more like a ceremony.
After the sense of ritual, there are thorny practical issues. The first thing to bear is the tolerance of the regulatory authorities.
As we all know, the U.S. government does not reject the issuance of certificates, but the supervision of companies issuing certificates is quite strict. Although the white paper stated that Libra was registered in Switzerland, which is friendly to digital currencies, after the news of Facebook’s currency issuance, on Wednesday local time, the Banking Committee of the U.S. Senate announced that it will announce Facebook on July 16. Libra, the global digital currency initiative created, held a hearing. The banking committee said the hearing would explore the project, called Libra, and any data privacy concerns it might raise.
U.S. Democratic Congressman Maxine Waters called on Facebook to suspend the development of the Libra project, and asked Facebook's top executives to accept questions from the U.S. Congress, and explain what impact Libra will have on the privacy and security of global Facebook user data, and wait for Congress to hold a hearing. further decision. Democratic Senator Sherrod Brown accused in Twitter, "Facebook uses this power to use users' data instead of protecting their privacy. We must not allow Facebook to transfer high-risk funds through Swiss bank accounts without supervision. encrypted assets.”
Markus Ferber, a senior member of the European Parliament, issued a statement saying that the currency issued by Facebook should make "regulators highly vigilant" and called on the European Commission to develop a virtual currency regulatory framework.
In addition, the head of the Bank of England and the French Minister of Finance have all expressed their attitude to review and supervise Libra. All kinds of government-level statements mean that it is difficult for Facebook to bypass the supervision of this mountain.
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Figure / Visual China
Second, the bottleneck of blockchain technology. The blockchain has a law called "impossible triangle", that is, decentralization, efficiency and security cannot be satisfied simultaneously on a blockchain. Judging from the data disclosed in the white paper, the efficiency of the Libra blockchain is not high. The content of the technical white paper shows that the Libra protocol initially supports 1000TPS with a block interval of 10 seconds. This is far lower than the peak value of 3996 TPS of EOS, and there is not much advantage compared with Tron's peak value of nearly 1,000 TPS.
From a practical point of view, 1000TPS means that 1000 transactions can be processed in one second. This figure is very low. Compared with actual applications, during the Double Eleven period in 2018, Tmall Mall created a peak of 491,000 orders per second, and 823 million people sent and received red envelopes on WeChat during the Spring Festival in 2019. Even if each person only Sending and receiving once is also 1.6 billion transactions. None of the currently known blockchain networks can achieve such efficiency.
Even the blockchain researched by Tencent and Ali has certain limitations. Judging from their external news, both Tencent and Ali are focusing on the alliance chain, which means that their blockchain technology is not a decentralized technology in the true sense, and naturally cannot be compared with the decentralized blockchain technology.
In addition, an issue that cannot be ignored is security. A "Blockchain Security Report 2018" released by Block Rhythm shows that there were 138 security incidents in the blockchain industry in 2018, a sharp increase of 820% over the previous year; the resulting economic losses were as high as 2.238 billion US dollars, A sharp increase of 253% compared with 2017. Among these security incidents, Ethereum had 54 security incidents throughout the year, and EOS.IO had 49 security incidents throughout the year. Ethereum and EOS are already technologically advanced blockchain projects.
According to Sui Gang, deputy director of Chuangyu 404 Lab, as a world-renowned Internet technology company, Facebook’s technology and security are unquestionable. “It must not be compared with previous blockchain projects.” But in From another perspective, Libra claims to be an anonymous system. Sui Gang believes that this is impossible. Expensive. And there is no privacy for the individual."
Sui Gang believes that, like any other currency or financial infrastructure, dangerous cybercriminals will also try to extract improper benefits from the Libra network, increasing the risk of its system being attacked. In addition, transactions that occur on the Libra blockchain are pseudonymous, which also creates the possibility of fraudulent and illegal activities by third parties. The form of the "licensed chain" is a semi-centralized alliance chain, which increases the risk of Libra being attacked.
This risk may also be placed in front of Alibaba and Tencent in the future.
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A blockchain experiment
Looking back on the 10 years of the blockchain, it is a decade in which it has gradually been recognized by the mainstream world from a niche.
On October 31, 2008, Satoshi Nakamoto published an article entitled "Bitcoin: A Peer-to-Peer Electronic Cash System" on the mailing list of the "cypherpunk" website. In the place of the great god, Satoshi Nakamoto's idea has not been recognized by many people.
For a long time, the blockchain and Bitcoin have been more like toys for technical geeks. Whether it is Dan Larimer, the founder of EOS, or Vitalik Buterin, the founder of Ethereum, they are like an incomprehensible minority.
Not only that, too many myths of getting rich and speculative stories have been born in the digital currency world, and because of the attraction of these stories, the entire industry is mixed, such as a project manager who is more business-oriented, has no investment case, and his qualifications are still young. He wants to switch to VC . In the original Internet industry, it may be difficult to complete such a "transformation". But in the currency circle, the project manager successfully counterattacked and became a partner of XX Capital.
In 2018, the blockchain industry came to a big baptism. Beginning in the second half of 2018, Bitcoin fell from its peak to $3,200, and its market value dropped by 81%. At the same time, some speculators who wanted to make quick money chose to leave the market.
A good trend is that blockchain technology has been recognized by more and more mainstream worlds. Domestic Internet companies such as Baidu, Ali, Tencent, Huawei, and JD.com are all deploying blockchains; while foreign JPMorgan Chase, Twitter, and Wal-Mart are also trying.
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image/pexels
Gu Yanxi, founder of the distributed asset clearing system DAEX (Digital Assets Exchange Group), believes that this is a milestone in the development of digital currency.
Wang Feng, former CEO of Linekong Interactive and founder of Mars Finance, believes that the birth of Libra will lead to the emergence of more transaction scenarios. Although it will have a great impact on the market position of existing stablecoins including USDT and even Ethereum, it will It is likely to lead more than two billion people in the world to the door to invest in Bitcoin. An open financial revolution will emerge, Satoshi Nakamoto and Bitcoin will be even greater.
At the same time, he said that it is the advocates of the coinless blockchain that should go home and review behind closed doors. Looking at the world again, encrypted digital assets will definitely have a broader market base in the foreseeable future.
Chen Weixing, chairman of Fancheng Capital and founder of Kuaidi Dache, said that Libra will allow more technology giants and technology investors to start re-examining the blockchain field and give more opportunities to reliable entrepreneurs. It also made some outstanding entrepreneurs start to consider blockchain entrepreneurship again. "Zuckerberg's determination is equivalent to setting an example for the technology giants."
There is no doubt that Zuckerberg and his Facebook have made a very important attempt, daring to challenge privacy protection, the financial system, and a series of innovative things such as digital assets and digital currency.
As a result, Facebook once again received unprecedented attention. According to incomplete statistics, there are more than 70 opinion leaders and industry insiders commenting on the incident.
But it cannot be defined as a "milestone" just because of the high degree of attention. Kong Huawei, director of the Shanghai Branch of the Institute of Computing Technology, Chinese Academy of Sciences, believes that from a technical point of view, Libra is not very innovative, but is "worse" than Bitcoin. "It is actually a consortium chain with 71 nodes, which is even weaker than EOS, which is at least a public chain."
In fact, the form of Facebook's currency issuance is greater than its meaning. At present, its TPS is only 1000, which obviously cannot support large-scale transactions. In contrast, Alipay’s payment peak reached 120,000 transactions per second in 2016, while Tencent’s peak value reached 158,000 transactions per second.
Cai Yige, general manager of Tencent Blockchain, said in March this year that from the perspective of Garther2018 technology curve, the blockchain is currently in the process of de-bubbling. The development of the industry actually requires the emergence of more valuable and influential products. Products and technologies are spiraling up to promote the prosperity of the industry. Therefore, the blockchain industry still has a long way to go. As for the future development of the industry, I think it will be forging ahead, and the power of change lies in the calmness. It is very appropriate to describe it as "on protracted war".
In this way, Facebook's currency issuance is more like a blockchain experiment, and there is still a long way to go from the real blockchain era.
