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On the second day of the congressional hearings, New York representative Alexandria Ocasio-Cortez (AOC) questioned Facebook's David Marcus about the centralization of Libra.
The 29-year-old congresswoman went directly to Facebook for calling Balance a decentralized project. She asked Marcus about the process by which they selected 27 founding members of the Libra Association, a so-called non-profit organization supporting Facebook's cryptocurrency.
Realizing that Facebook had installed the main founders using a $ 10 million investment among the criteria, AOC said the crypto supported by the social media giant would become "a currency controlled by a non-democratic coalition of large corporations". Facebook's digital badet does not want to replace sovereign currencies and its broader goal is to work with regulators and address all their concerns in a timely manner.
"Who chose the founding members?" @AOC Facebook's David Marcus asks of the Libra badociation.
"We are discussing a currency controlled by a coalition of mbadively mbadive companies and not democratically chosen." https://t.co/D5DNvyW7IF pic.twitter.com/cFrfIJce54
– Bloomberg Crypto (@crypto) July 17, 2019
Rep Adams: Can consumers become nodes on a Balance Blockchain?
North Carolina Representative Alma Adams was another member of Congress who seemed not to be impressed. The veteran politician asked Marcus if he would allow everyday consumers to manage a node on the Libra blockchain, a common practice in decentralized blockchains, where individuals could set up their own mining platforms to manage the network.
"No, Congressman, they can not," replied Marcus, explaining that their criteria only allowed large companies and companies with at least technology / blockchain or finance experience to become member of the Libra badociation.
When asked why big companies would invest $ 10 million in Libra, Marcus said their current partners agreed that the status quo for finance was not working for too many people. They deserve reduced costs and easy entry into the digital currency infrastructure.
"That's why they joined Libra," added Marcus.
A difficult transition
The AOC issues followed Libra's claim to switch to a network without permission. In retrospect, Libra is a payment network based on a chain of blocks based not on one, but on a set of nodes to confirm and store transactions on a public ledger. In the technical paper released last month, the Libra Association said its blockchain would initially be centralized and that founding members, which include names such as Uber, PayPal and Visa, would act as nodes.
The badociation promised that it would decentralize the chain of Libra chains over time to spread control among more partners. Nevertheless, how would these new members become members of the Libra Club? A question that remains unanswered. Questions also arise about the incentives that investors would need to increase membership – and eventually give up the float.
Jerry Brito, Executive Director of Coin Center, m said The dream of Libra to become a big book without permission poses technical, legal and governance problems.
On the legal side, even baduming that Libra resolves the chain governance of the composition of the reserve (a big technical challenge), the reserve will still need somebody's name on the bank accounts. (We do not have any central bank coins yet.) That's probably the Association. pic.twitter.com/MLBea3jtHm
– Jerry Brito (@jerrybrito) June 18, 2019
"I do not know how Libra manages to do without permission, at least as I understand this term. I sincerely hope that they will be able to, and I am delighted to see them try, "Brito tweeted.
Do you think Facebook's "cryptocurrency" will weaken under regulatory pressure? Share your opinion in the comments below!
Images via Bloomberg TicToc "Video on AOC currencies on Facebook", YouTube video, Twitter: @crypto, @jerrybrito
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