Business Technology

Monday 16 September 2019

Trailblazer slams Facebook's crypto gatecrasher Libra

David Marcus, head of Facebook subsidiary Calibra, is to appear before US Congress. Photo: Bloomberg
David Marcus, head of Facebook subsidiary Calibra, is to appear before US Congress. Photo: Bloomberg

Matthew Leising

Facebook's foray into digital currencies risks reversing gains in privacy and user sovereignty won by computer-networking pioneers, according to one of the co-founders of Ethereum, the blockchain of choice for most business and finance projects.

Facebook has received flack from politicians including US President Donald Trump and regulators since announcing its plans to develop Libra, a digital asset backed by cash and short-term securities, that could be sent between the company's more than two billion customers with the help of blockchain.

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David Marcus, head of Facebook's Libra subsidiary Calibra, will appear this week before the US Congress. The company has already drawn politicians' ire for a series of stumbles including major data breaches and allowing Russians to hijack its platform during the 2016 election to push Trump's candidacy.

Now the criticism is coming from a leader in the computer science world that's fiercely protective of the structural independence created by Bitcoin in 2009 and Ethereum in 2015.

A key aspect of distributed computing systems that make up a blockchain is the inability of any one party to censor transactions or control who can and can't be a part of the network.

No person or corporation owns the underlying systems, similar to how the internet is free for anyone to use. Facebook threatens these blockchain tenets with Libra, said Mihai Alisie, a co-founder of Ethereum.

"This has implications on so many areas, from the economic to the political to the technological to surveillance and data privacy," he said. Facebook has prioritised growth over user privacy, he claimed.

Bloomberg

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