June 24, 2019
Technical side of Libra
Some things about this crypto:
- It is pseudo-anonymous (there is no identity on the blockchain)
- It’s permissioned (like hyper ledger)
Organisations will run nodes.
These nodes validate transactions.
Each time a consensus is voted on, a new leader will be designated at random to count up the votes.
“Founding Members are organizations with established reputations, making it unlikely that they would act maliciously,”
- On-chain governance
The Founding Members hold Libra Investment Tokens.
These give them voting rights.
They make decisions about the design of the crypto, managing the reserve and letting new validators join the network.
Bitcoin does not use this system. They require 51% of the network to vote on decisions.
- Smart Contracts
In Etherum, these are contracts that cannot be broken. Basically, it’s a way to program something directly into the blockchain.
Libra will allow you to code things directly into the blockchain.
Every time you run Libra code, you have to pay for it (no free beer here).
- Libra limits how much its users can do on the protocol at first
- It breaks data out from the software, so one smart contract can be directed at any pool of assets. One set of code can be used on any number of wallets or collection of assets.
What’s super interesting about this, is that Libra sounds to be Turing complete.
This means you can build Facebook on web 3.0, a decentralised Facebook.
“Facebook - the worlds first social network where you control your data, and we can’t control it at all” has a nice ring to it.
If Facebook builds itself onto this blockchain, imagine everyone else that follows. Eventually, we’ll be on a completely decentralised web, and Facebook will own it. And their founders will be the only ones who have voting rights to change things.
A subset of people get to decide on the majority of the population, sounds familiar, huh?
- Proof of stake is the future (but it’s not ready yet)
“Over time, membership eligibility will shift to become completely open and based only on the member’s holdings of Libra,”
By not using proof of work (Bitcoin) and proof of stake (Etherum) they are reducing high energy costs and increasing performance. From the paper:
“We did not consider proof-of-work based protocols due to their poor performance and high energy (and environmental) costs.”
- Libra is burning
Burning is where you permanently remove coins from circulation, reducing the total supply.
We burn coins because:
- Proof of burn. It’s a way of achieving consensus in a network
- Increase the value of coins (supply/demand curve)
- Protection against spam. In Bitcoin, the miner gets paid the fee. In Ripple, the fee is burnt so everyone gets treated equally.
However, Libra won’t use burning to increase the value of its coin. Tokens will be issued and burned constantly, as the Libra association responds to demand shifts for its reserve.
What’s interesting is that there isn’t a hard number of minimum or maximum supply stated. This will be up to the Founding Members to decide.
- Users don’t need to hold onto the whole transaction history
With Bitcoin, to really use it, you need to download the entire 37gb transaction history.
Libra makes it ledger disposable. Users only need to hold proof of the last block, which they can easily do on a smartphone.
“historical data may grow beyond the amount that can be handled by an individual server. Validators are free to discard historical data not needed to process new transactions.”
Written by Brandon Skerritt who loves writing and dogs 🐶 You should follow me on Twitter
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