There’s a peaceful tech revolution happening, with proxy battles on many fronts, and moving parts across the world, as a leap in finance itself stands to bring a new dawn.
Much of it moving somewhat slowly, in part because some battles were lost in regards to scaling, but in what may be quite a defining time for the crypto space, the giants of Silicon Valley have seen something.
What they have seen in many ways is quite simple. Cryptos are a bit raw right now. You have all these keys that you have to keep safe, all these random numbers and letters you have to copy paste, with it all sort of like having to put yourself a + and – cable together to get a bulb on instead of just flicking a switch.
Sergey Brin, Google’s co-founder, basically said last year they could just take all this and make it very easy to use. He was speaking a bit in code, but his point is clear:
“There were definitely web mail services at the time, but we kind of took it seriously [with Gmail] in the sense that no you can have an enterprise grade, top level, with gigabytes of storage which at the time sounded like a lot. You know, you can offer every person on earth, so that was kind of a leap.”
The crypto space has made a policy decision to not provide enterprise level capacity. Some like BCH try to, ethereum is sort of going in a roundabout way to do it, but the biggest crypto by far, bitcoin, is basically no different than when Nakamoto launched it in 2009.
There has been almost no improvement to it whatever from an end users’ perspective. It’s a raw skeleton of an idea.
Libra, The Crypto For the Masses?
Facebook’s idea, and if they go ahead with it then probably that of other tech giants, is to take this raw skeleton, furnish it up, hide away all the cables and so on, and turn it into something as easy to use as flicking a switch.
They have a blockchain called Libra which is pretty much a blockchain like bitcoin, but you need permission to have any say on the running of this blockchain.
This blockchain however is hidden away, down on Github for coders to do what they do. Everyone else gets Calibra, the front-facing interface.
To not labour the point too much, this page itself has HTML, CSS, etc., which makes it all possible, yet none of that is visible to the current reader unless they take some more steps to see the code.
That’s obviously because everyone has come here to read, not develop a website. So too, people don’t care about the blockchain code or the nodes or much else. They care about paying for things or about sending money to relatives.
This back-end and front-end exists on the blockchain space already because of a Simple Payment Verification (SPV) method implemented by Mike Hearn, one of the early bitcoin developers.
SPV or a wallet or Calibra or what really should just be called an app, is basically the blockchain, but without having a say on how it’s run, you just read it and get ownership data, you don’t write to it except for your own transaction.
The problem is although the user doesn’t care about how the blockchain works, coders do care because it’s what makes it all work, and such coders are open source volunteers so often do not care about users at all because there isn’t quite that profit motive.
Libra, Crypto’s Linux Moment?
There is almost no open source project directly appealing to end users. Plenty try, but it is always the case to the point it should perhaps be a law, that inevitably users are needlessly inconvenienced because to fix such inconveniences is inconvenient for the volunteer coders who might find the task boring and who mind think users should shut up and be grateful they getting anything at all for fully free.
Linux is a great example because as a free operating system you’d think it would be on all computers, but as everyone who has tried maybe many Linux Operating Systems knows, there’s always an annoying little problem here or there that shouldn’t be there at all.
There’s just not the competitive aspect, organizational and feedback aspect, or maybe there’s not even the drive to the same extent for open source coders to present a fully polished product that is at least as good or superior to leading products where the main end user tasks are concerned.
Ideology blinds them perhaps, or far more likely there’s just not the resources, certainly not to the same extent as say Microsoft.
So Microsoft won in the end because you could use it without annoyances or headaches, with some there of course but no where near the same extent.
Yet arguably Linux won too, but not quite. It is used on many Android phones, but it’s Linux sort of in name only as the OS, though Linux based, is fully controlled by Google. Hence why it’s all nice and shiny and doesn’t demand that users do anything, as it would have been the case had it been a directly fully open source product.
That’s basically Libra. It gets rid of pesky miners who refuse to increase capacity so that they can charge more and more in fees, it hides the blockchain at the back end, and presumably it will supply a very fine product for end users where usability etc. are concerned.
Joseph Lubin of Ethereum’s powerhouse ConsenSys, had a long statement on Libra, saying among many things:
“The Libra story is about dominant technology players trying to shoehorn themselves into what is going to be the future of the internet. Possibly they see the writing on the wall and want to make sure they have a seat at the table when new technologies like blockchain take hold.”
That’s like saying Blockbuster is trying to keep up with movie streaming. Why on earth would they not, except that they couldn’t because they were in the business of renting movies.
As such, that Facebook can potentially keep up suggests they’re not quite Blockbuster, that’s the banks who we’ll get back to shortly.
Facebook instead is more Google with Android. A sort of newish but established tech giant that sees an opportunity to be a dominant player in a new area. For Google that was phones. Facebook thinks for them it can be digital finance. Lubin says:
“The future I see will bring a waning dominance of the big, untrustworthy Web 2.0 companies of today. What we’re calling ‘Web3’ will be more user-centric than any previous Internet platform, putting the user, finally, at the center of the user experience.”
This is about opening up the data to give users or perhaps the public in general control over it rather than one company.
Opening up such data is quite a formidable task that isn’t quite anywhere near being achieved, nor arguably even envisioned with some clarity.
Yet this is in some ways missing the point because Facebook can not compete there, if it can be achieved at all. Facebook is trying to compete in the killer use-case of blockchains, the bitcoin like stuff.
Libra presumably does have smart contracts, but that’s kind of just bells and whistles to the crypto money itself, which is what has most of the implications.
Nor does Facebook really directly compete with something like bitcoin itself or ethereum if we take their main proposition to be that no one can control them.
Yet it does sort of compete in that it provides an alternative both as a platform and for value transfers for most cases where they’re not in grey areas.
That such competition would be coming has been known for long, hence why the blocksize debate was such a fierce battle which was lost.
Meaning the crypto space has failed to move as quickly as it could, both in bitcoin and ethereum where miners chocked their capacity for no reason.
It is a difficult argument to make that because of such failure so far, others should be stopped.
To argue that because the crypto space currently can’t compete in the race to mainstream usage, others too should be stopped from competing, is to ignore the potential this new competition can give the crypto space a very good reason to get moving or be left in the dust.
The Real Revolution?
That the days of banking as we know it are numbered, is obvious. Money will be freed and money will be just code, accessible to all, in one of the greatest advancement in finance.
Banks, due to their very nature, will find it very difficult to participate in this advancement because the blockchain, due to its very nature, gets rid of banks where payment and custody aspects are concerned.
That removes banks from their role of “gatekeeper to the financial system” as described by the chief executive of ING, Ralph Hamers.
That’s because with a blockchain you don’t need gatekeepers, only interfacing service providers, with some entrepreneur in his garage able to be such service provider.
In the case of Libra there are gatekeepers of sorts, the validators, but depending on their concrete design, everyone might be able to see what they’re doing.
They have control however over this platform, who can use it, what smart contract can run on it, if they decide to exercise such control which wouldn’t be too easy because all validators would have to agree to make changes which can be a pretty laborious process.
Yet where the vast majority of the public is concerned, it isn’t clear whether they would care much, with bitcoin, ethereum, or other cryptos, always an option.
Banks however would have many reasons to care because they would be losing control over money and over access to money.
There would be a new, very different bank. A hybrid of sorts between the old system and the new system. A bit like the 90’s AOL maybe. A gradual stepping stone to a mainstream open blockchain.
Banks have tried for years to delay such moment, but Facebook now has a pretty strong argument. Either they do it as an American company, or China, Russia, others, do it and so lead the future.
For many reasons we take issue with Libra, but we wouldn’t go so far as to support its prohibition because that would be a very big step to take during what may be a fairly defining moment for cryptocurrencies worldwide.
Change is coming. The great force of a powerful idea can not be stopped, much as anyone can stop connecting a + and – cable to create electricity.
All that can be done is slow it down, but that risks losing the race which is something that needs careful consideration.
So to answer the title question, we don’t think Facebook can coopt this space as much as Google can coopt Linux, but tech and banks might be going head to head once again this time at the big stage. Let’s see who wins the second round.
Editorial Copyrights Trustnodes.com