Top 5 highlights on the Libra ecosystem

Facebook recently announced Libra: “allows a set of replicas — referred to as validators — from different authorities to jointly maintain a database of programmable resources”. I’ll start with being excited about having FAANG finally start contributing and embracing this new technology. These steps might be the first towards making cryptocurrency acceptable.

I highly recommend reading the 26 page technical document which will explain in detail the direction the design they have.

1. Libra currently is actually not a permissionless system. This means that the validators of the blockchain that form the core committee are actually chosen by a few people right now. The document highlights that it will become completely permissionless at some point and be based only on the holdings of the currency itself. They have some documents published on when and how that will happen. Also starting with the chain not being permissionless may skew it in the direction of the current committee even when it does try to become a permissionless system.
2. Transactions will for now be predefined and in the future versions“user-defined smart contracts in a new programming language called Move”. It’s interesting that they went for a custom smart contract language. What remains to be answered here is how robust the language is, how secure it is, what guidelines developers should be following to be careful etc. It does have some interesting features such as being able to define custom resource types which should be good for developers trying to build on the platform. Also the instruction set is more restricted than a higher level language. But a lot remains to be seen here.
3. The consensus protocol they use is the Byzantine Fault Tolerant Consensus or a variant of the HotStuff consensus protocol called LibraBFT. The interesting thing here is that since the consensus protocol outputs the entire history of transactions or a full state of the database, new validators should be able to quickly join the network.
4. Since an account is not linked to an actual user identity, users can create as many accounts as they want without any linkages between them. This resembles Bitcoin and Ethereum’s approach.
5. The last and most exciting bit about this all: the underlying data structure used for the actual “blockchain” is not a blockchain. It’s a single Merkel tree.

It will be interesting to see how the open questions pan out over time and when it actually becomes permissionless.