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10 Functionalities That Facebook Libra Should Consider in the Near Future 10 functionalities that Facebook Libra should consider in the near future By Patrick Bucquet, Marie Lermite and Ally Jo More content on www.chappuishalder.com 10 functionalities Libra should consider – June 2019 We studied illustrations of digital coins already launched in social networks (Telegram, Kin and BitTorrent), marketplaces (Openbazaar and Particl) Introduction and Web Browsers (Brave and Steemit) to make a comparative analysis and determine 10 Facebook finally revealed plans for a functionalities that Facebook should cryptocurrency called Libra, a global, look at next. open access and secure digital currency. By creating its Coin, Facebook is entering a new digital era. Not only will it empower billions of 1. Decentralized ecosystem people, but it will also bring people together in a new shared economy by Facebook Coin must become a conveying a feeling of being decentralized, secure, and peer-to- connected to a community. There is peer stable coin on the block, with demand for an economy built around emphasis on creating an ecosystem chat, and Facebook’s team has a built around privacy and anonymity, proven track record in developing along with ease-of-use and scalability. products for the mass market. On the But while Libra plays at supply side, unique experiences will decentralization, it’s still basically a be created. On the demand side, users Facebook project run on a will increasingly consume these new permissioned blockchain, which products and services. In theory, means that only companies in the Facebooks Libra is a hugely ambitious Libra Association are allowed to project about a global, bigger and validate nodes. faster financial blockchain. Even if Libra doesn’t plan to stay However, we took a deeper look at it permissioned forever, no blockchain and noticed that Libra isn’t as has ever moved from permissioned decentralized as it pretends to be. to permissionless. There will be Additionally, while some people are political barrier to that, not to already rising hands and describing mention the companies in the Libra Libra as a “private global international association, which may want to hold monetary Fund run by techbros”, we onto their privileged position. This do believe that Libra is a potential represents a serious limitation in threat to the financial system and that terms of openness, unlike the Bitcoin more functionalities need to be blockchain, which is public and considered in the near future. allows anyone to participate. 10 functionalities Libra should consider – June 2019 Plus, Facebook employees designed 2. Frictionless on-boarding the blockchain and recruited the Process partners that will manage it. Libra wallets will be embedded in Facebook The primary feature required to enable apps like Messenger and WhatsApp, a digital community to use coins is a which means Facebook products will frictionless on-boarding process. In the be the primary way people experience case of Kin Wallet, Kik intended to it. integrate directly wallets for each Kik The Particl marketplace has a very user account. The Brave Browser has interesting feature to analyze in matter also automatically installed its wallet of decentralization. For instance, they into the system. This is what Facebook made sure that their transactions will have to do as well. happen between the seller and the buyer, with no middlemen involved, Since Libra’s mission is to enable a creating a completely decentralized simple global currency, the and trustless economy. onboarding process for users will not have to require prior expertise before Another example is BitTorrent. The interacting with Facebook Coin. Kik collaboration between BitTorrent and and Brave reduced onboarding TRON makes the TRON blockchain frictions to the maximum, such as protocol the world’s largest issues of transaction fees, private decentralized ecosystem and keys, alphanumeric, and including BitTorrent protocol the largest the common requirement to hold decentralized application in the world. coins in the first place. Openbazaar also offers a 3. User Privacy decentralized marketplace. Searching Openbazaar is fairly intuitive and Secure transfers of value within the operates very much like a social media Libra blockchain is of high importance application mixed with Ebay. Most of and Facebook must offer streamlined the features that have been added to experience for sending value to the platform have improved the contacts and paying for purchases. application greatly since Openbazaar When it comes to launch a global was first tested. Plus, users can also currency, one of the first things to look follow certain vendors and people can at is to build a payment platform and a follow other’s people store as well. payments channel network. This way, Openbazaar has also notifications of the platform can be used for instant new followers, but notifies users of value transfers between users, bots, orders status and details as well. and other services. 10 functionalities Libra should consider – June 2019 Facebook’s recent scandals over data Unlike conventional online privacy elevate the risk for potential marketplaces, user data are not being data mismanagement. Facebook stored on any server, nor shared with promised a full wallet refund in case of any third parties. The transactions take fraudulent transactions. However, place in a completely secure and there is no clarity on how the decentralized manner, with privacy chargeback mechanism will work and anonymity being the two most (transaction reversed, funds returned important features of these from the company’s reserves, etc.) transactions. Facebook Coin should also be used for storing data securely In the case of Particl, safeguards built in a decentralized way (Data Storage). into the system ensure that these transfers are secure. Particl uses an 5. Scalability innovative protocol called ring signatures or ring confidential Mass-market usage of existing transactions to secure the privacy of blockchains has been hindered by users on the blockchain. Plus, Particl their volatility and lack of scalability. also uses the new SegWit technology Facebook coin must leverage their 2,7 to improve the security and stability of billion active users to reward content its blockchain, while also greatly creation as Steemit does and the increasing network capacity and challenge for users is to emphasize efficiency. the creation of an ecosystem built with ease-of-use. One of Brave’s main goal is also to improve user privacy and as a result The on-chain transaction processing provide an enhanced browsing capacity of the Libra blockchain is experience. The Brave Ledger system expected to handle 1,000 uses the ANONIZE algorithm to transactions per second, a level quite protect user privacy. The Brave Ledger low compared to existing solutions has privacy and deterministic user such as Zilliqa (2,800+ TPS), Visa anonymity by design along with full (65,000+ TPS) or Steemit. In the case transparency while user privacy is of Steemit, the platform is known for maintained as well. having a very large user base and is able to process 10,000 transactions per second without any significant 4. Data Storage effort devoted to optimization. If Particl has a very interesting feature to Libra really intends to serve billions analyze in the matter. of people worldwide, those figures will have to go up quickly. 10 functionalities Libra should consider – June 2019 6. Accessibility and Ease-of-Use 8. Interoperability Facebook Coin must have high Facebook coin will be the unit of accessibility that promotes ease of use account for all economic and access on different platforms – transactions within the Facebook most importantly, the mobile platform. Ecosystem, and it will serve as the basis of interoperability with other Facebook will have to ensure that the digital services. Therefore, units of Libra architecture is built on the Facebook Coin will have to be Messenger App to allow Facebook fungible and transferable. users to store their funds securely in the Libra blockchain. This way, The social network Kik introduced an Facebook Coin will instantly become open source cryptographic token, the world’s most adopted wallet. named Kin, which is envisioned as a general-purpose cryptocurrency for Regarding access to different use in everyday digital services such platforms, BitTorrent is now working as chat, social media, and payments. with TRON on their Project Atlas to make their system accessible starting with desktop, mobile, then third party clients. 9. Economic incentives Facebook could participate in the incentives/rewards model and 7. Add-on Services perhaps periodically unlock and distribute a specific amount of In addition to payments for all digital Facebook Coin to be shared among and physical assets sold by individual digital service providers in its merchants within the Facebook ecosystem. ecosystem, Facebook Coin should The Kin Rewards Engine uses also be used as a payment for services economic incentives to bring other provided by apps built on the platform. digital services and applications into the decentralized Kin Ecosystem. This way, Facebook can establish new Inspired by previous systems like long-term models that will provide Bitcoin’s block rewards and developers and service providers the Steemit’s posting rewards, the Kin opportunity to innovate and create Rewards Engine creates natural lasting products and services for the incentives for digital service providers user base. to adopt Kin and become partners in the ecosystem. 10 functionalities Libra should consider – June 2019 This way, the network effect of the Kin Ecosystem grows, building the value of the currency, and in turn encouraging new partners to join this initiative. 10. Bots Combined with verified IDs, Facebook could use bots to make sure that Messenger users will be able to buy and exchange coins in a frictionless and legally compliant way. Also, it provides a unified entry point for users willing to connect with bots that offer exchange services, effectively creating a competitive market. In the case of Telegram, more than 800,000 bots are regularly used by 52 Contact us: million Telegram users.
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