{"id":565,"date":"2019-09-12T11:26:44","date_gmt":"2019-09-12T11:26:44","guid":{"rendered":"https:\/\/blog.pufsecurity.com\/?p=265"},"modified":"2022-04-06T05:39:58","modified_gmt":"2022-04-06T05:39:58","slug":"to-be-or-not-to-be-to-be-what-those-are-two-big-questions-for-libra","status":"publish","type":"dlp_document","link":"https:\/\/www.pufsecurity.com\/zh-hans\/document\/to-be-or-not-to-be-to-be-what-those-are-two-big-questions-for-libra\/","title":{"rendered":"\u201cTo be or not to be?\u201d & \u201cTo be what?\u201d those are two big questions for Libra!"},"content":{"rendered":"\n

Abstract:<\/strong><\/h2>\n\n\n\n

Facebook has revealed plans to launch its new cryptocurrency Libra in 2020. This breaking news has raised the attention of financial regulators all over the world. As the number of <\/a>cyberattack incidents targeting different cryptocurrencies surged over the years, Facebook is facing suspicions from specialists and companies and it is not yet clear if Libra can be successfully launched in 2020. Nonetheless, by diving deep into words of David Marcus, the head of Calibra and by studying the differences of Libra with WeChat Pay and other cryptocurrencies, we just might be able to tell. Although it is a little bit too early to conclude whether we should be negative or positive towards Libra, the one thing both the US Government and Facebook are sure is that cryptocurrency is the future.<\/p>\n\n\n\n

<\/p>\n\n\n\n

Introduction<\/strong><\/h2>\n\n\n\n

Since its debut on June 18, the\nfate of Facebook\u2019s Libra has been going up and down like riding a roller\ncoaster. The pro-Libra camp hailed that \u201cLibra will empower fans in underserved\nmarkets by enabling financial inclusion\u201d, and \u201cFrom in God we trust (US$) to in\nFB we trust (Libra)\u201d. While the con-Libra camp criticized and accused \u201cLibra in\nparticular and cryptocurrencies more broadly could offer the opportunity or\nhave been exploited to support billions of dollars of illicit activity\nlike cyber crime, tax evasion, extortion, ransomware, illicit drugs and human\ntrafficking.\u201d by U.S. Secretary of Finance Mnuchin, and \u201cFacebook Libra\u2019s\n\u2018virtual currency\u2019 will have little standing or dependability. If Facebook and\nother companies want to become a bank, they must seek a new banking charter and\nbecome subject to all banking regulations, just like other banks.\u201d by U.S.\nPresident Trump.<\/p>\n\n\n\n

As stated in the Libra White Paper, the goal for Libra is as follows: A stable currency built on a secure and stable open-source blockchain, backed by a reserve of real assets, and governed by an independent association<\/em>. Superficially speaking, the goal sounds very noble with very good intents, however, if we examine it more closely and thoroughly, we will find it very controversial and pretty difficult to achieve its goal, since it is not only at odds with the world\u2019s financial orders and monetary systems, but also invasive to the sovereignty of the hosting country\u2019s legal tender (or fiat money) system.       <\/p>\n\n\n\n

Although G7 finance ministers have warned that \u201ccrypto currencies such as Libra risk upsetting the world\u2019s financial system if they are not regulated tightly\u201d and Facebook\u2019s Marcus has also promised \u201cFacebook will not offer the Libra digital currency until we have fully addressed regulatory concerns and received appropriate approvals\u201d, there are still a lot of uncertainties surrounding Libra\u2019s future. The key questions focus on the security, privacy and trust related concerns of Libra as well as whether and how Libra could provide sufficient assurance that it fully meet all banking regulations such as required in FinCEN (Financial Crime Enforcement Network) and BSA (Bank Secret Act) including issues like KYC (Know Your Customer), AML (Anti Money Laundering), CFT (Combating the Financing of Terrorism), \u2026,etc. Therefore, it is worthwhile to discuss the following interesting topics regarding Libra including: <\/p>\n\n\n\n

  1. What is Libra & Calibra?<\/li>
  2. Is Libra a crypto currency?<\/li>
  3. If Libra could be launched, can Libra become a major crypto currency?<\/li>
  4. If Libra is approved as a payment instrument, could it become a primary one?<\/li>
  5. What are the major security, privacy and trust related obstacles need to be overcome before Libra can obtain appropriate approvals?<\/li>
  6. The future prospects of Libra in particular and crypto currency in general.    <\/li><\/ol>\n\n\n\n

    After the Introduction section, this articles will start with a review of security incidents and criminal activities happened in crypto-currency industries. Next, a synopsis of Libra & Calibra will be presented. Third, a comparison between Libra and other major crypto-currencies like Bitcoin, as well as between Libra and other key leading payment instruments like WeChat Payment and AliPay will be addressed. Fourth, the security, privacy and trust related issues of Libra and possible remedy solutions will be proposed. Finally, a conclusion will be drawn on the possibility of Libra to become either a major crypto-currency or a primary payment instrument as well as the prospects of crypto-currency.<\/p>\n\n\n\n

    <\/p>\n\n\n\n

    What went wrong in Cryptocurrency Industry?<\/strong><\/h2>\n\n\n\n

    There are numerous cyberattacks, data breaches, vulnerabilities, and cases of fraud to strike the cryptocurrency space over the previous years and the most high-profile ones happened in 2018 as reported in [1]. Also, the Crimes News in [2] reported that the most common cryptocurrency crimes until the end of 2017 have been as follows: <\/p>\n\n\n\n

    1. Initial Coin Offerings (ICO) related crimes, which were conducted by frauds and by stealing money from electronic wallets and storages through hacking or fraudulently-obtained information<\/li>
    2. A lot of users\u2019 money was stolen when using unverified exchanges and making transactions through suspicious services<\/li>
    3. People lost money by joining financial cryptocurrency pyramids. Per Kaspersky Lab estimate<\/a> in [3] the crypto-crime losses from 2018 totaling $1.7 billion, up 400% from 2017. <\/li><\/ol>\n\n\n\n

      That is why Kaspersky Lab and other well-known security firms advocated that \u201cWhy ICO security is a must\u201d and [3] also pointed out the four major areas of risk for crypto token sales are: smart-contract vulnerabilities<\/em>, staff wrongdoings<\/em>, phishing attacks on investors<\/em>, and operations security<\/em>.<\/p>\n\n\n\n

      To the cryptocurrency believers, it is a system for electronic transactions without relying on \u201ctrust\u201d but via code<\/em> backed by blockchain<\/em>. However, from both a software engineering and an information security perspective, this belief is not only a bit naive<\/em> but also a bit shaky<\/em> and risky<\/em> as well. <\/p>\n\n\n\n

      Blockchain systems including nodes and wallets comprising of the data structures and protocols are just software. In a nutshell, Blockchain technology provides a distributed ledger, which is made up of blocks of data that are chained together with cryptography that makes it almost impossible to make changes once something is recorded. The key concepts of a blockchain include: <\/p>\n\n\n\n

      1. No central authority as opposed to centrally managed databases<\/li>
      2. Distributed ledger which is a shared record of transactions recording what happened and in what order<\/li>
      3. The distributed consensus algorithm (i.e., mining), which is a way to ensure all the copies of the ledger are the same without trusting any particular node in the consensus network<\/li>
      4. The use of \u201ccurrency\u201d or \u201cdigital token\u201d that has value and is publicly traded and transactions involving these tokens are stored on the ledger<\/li>
      5. Cryptographically using \u201chashes\u201d to ensure secure, authenticated & verifiable transactions<\/li>
      6. Trust is provided through immutable, time-stamped records.<\/li><\/ol>\n\n\n\n

        As commented by Bruce Schneider in\n[4], \u201cWhat blockchain does is shifting some of the trust<\/a> in people and\ninstitutions to trust in technology\u201d and \u201cone needs to trust the cryptography,\nthe protocols, the software, the computers and the network that make up the\nblockchain system absolutely because they’re often single points of failure\u201d.\nSuperficially, blockchain based cryptocurrency can save the cost of certain\ntrusted intermediaries (e.g., bank processing fees). Actually, blockchain type\nof trust is even more costly despite of the fact that the cost is just hidden.\nTake Bitcoin as an example, the electricity and computing cost associated with the\nadditional bitcoin mined, the transaction fees, and the enormous environmental\nwaste is extremely expensive. Also, when trust turns out to be misplaced or\ntrust mechanisms are compromised, there is no recourse<\/em> in cryptocurrency systems. As discussed at the beginning\nof this section, there are many ways cryptocurrency crimes could occur\nincluding bitcoin exchange or bitcoin wallet gets hacked, the coin-owners\nforget their login credentials, bugs in smart contract code, etc. In all of\nthose cases, one may lose all of his\/her crypto money! <\/p>\n\n\n\n

        Per CoinDesk trade data, the current market price of Bitcoin is around US$9,000 which shrinks about 1\/3 of its peak value at US$13,000 this year, and the Bitcoin trade volumes dropped to only half of the previous averages are largely due to the recent negative publicity again Libra. There is a cryptocurrency paradox reported in [5] as follows: \u201cCrypto investors buy and hold crypto because they want their crypto to appreciate in value, but unless they use their crypto the value will not go up<\/em>\u201d & \u201cUnless the crypto is used, the value of the crypto will keep falling, and investors will start unloading their investment to avoid further losses<\/em>.\u201d Because of this paradox, [5] concluded \u201cno cryptocurrency is likely to be successful until investors can be persuaded to actively use their crypto, and not simply hold on to it and speculate that it goes up in value.<\/em>\u201d Two primary barriers to increasing cryptocurrency usage are:crypto’s high volatility<\/em>, and the possibility or likelihood of widespread price manipulation<\/em><\/a>. There is also a fundamental problem that \u201cthere is no means available (such as taxes) to incentivize investors to quit holding for speculation and actually use large amounts of crypto for mercantile activities.<\/em>\u201d as discussed in [5]. <\/p>\n\n\n\n

        Facebook\u2019s Libra is fully aware of\nthe barriers and problems of cryptocurrency and came up a clever design to\nsolve both “acceptance<\/em>”\n(how many merchants will take the crypto in exchange for goods or services) and\n“usage<\/em>” (how many owners\nare spending their crypto in exchange for goods or services) issues of\ncryptocurrency raised in [5].  <\/p>\n\n\n\n

        In summary, there is a general belief that investors bought into Bitcoin and other cryptocurrencies because they want to get rich and quick by speculating on their values rapidly appreciating. However, due to the cryptocurrency paradox and the  inevitable “death cycle” lead by it, many leading economists such as Nouriel Roubini and others have predicted that Bitcoin and other cryptocurrencies are failing badly and will sooner or later return to a value near zero<\/a> which will hurt the speculative investors very badly! Thus, it is logical to conclude that \u201ccryptocurrencies are useless<\/em>\u201d [4] as both an idea and an investment. However, in the dark world and speculative investment market, cryptocurrencies are still widely used by:<\/p>\n\n\n\n

        1. Speculators looking for quick riches<\/li>
        2. People who don’t like government-backed currencies<\/li>
        3. Criminals who want a black-market way to exchange money<\/li>
        4. Citizens mining various preexisting cryptocurrencies as part of an effort to mitigate the effects of a hyper-inflating national currency<\/li>
        5. Countries use cryptocurrencies as means to fight sanctions imposed on them, etc. [4,10].<\/li><\/ol>\n\n\n\n

          <\/p>\n\n\n\n

          A Synopsis of Libra & Calibra<\/strong><\/h2>\n\n\n\n

          Facebook unveiled an ambitious plan in June 18 to create a new global digital currency called \u201cLibra\u201d and a financial infrastructure to transform the way money moves around the world including buy things or send money to people with nearly zero fees, and it will work not just on its own apps. Per Libra white paper, \u201cLibra is a simple global currency and financial infrastructure that empowers billions of people.\u201d In summary, there are five essential components in Libra:<\/p>\n\n\n\n

          1. Built on a secure,\nscalable, and reliable blockchain.<\/li>
          2. It is a stablecoin\nwhich is backed by a reserve of assets.<\/li>
          3. It is governed by\nthe independent Libra Association.<\/li>
          4. Uses the Libra BFT\nconsensus mechanism.<\/li>
          5. Smart contract\ncoding is done through \u201cMove\u201d programming language.<\/li><\/ol>\n\n\n\n

            The basic of Libra including \u201ccash in a local currency, get Libra, spend them like dollars without big transaction fees or your real name attached, cash them out whenever you want\u201d is summarized in [6] and detailed in [7,8]. After its proposed public launch in the first half of 2020, one could pseudonymously buy or cash out one\u2019s Libra online or at local exchange points like grocery stores, and spend it using interoperable third-party wallet apps or Facebook\u2019s own Calibra wallet<\/a> that will be built into WhatsApp, Messenger and its own app.<\/p>\n\n\n\n

            A synopsis of Libra & Calibra is as follows [6,7,8,9]:<\/p>\n\n\n\n

            Initially,\nLibra will use a \u201cpermissioned\u201d blockchain where only entities that fulfill\ncertain requirements are admitted to a special inner group that defines\nconsensus and controls governance of the blockchain. Every Libra payment will\nbe permanently written into a public online ledger called Libra Blockchain\ndesigned to handle 1,000 transactions per second. The speed of this blockchain\nis much faster than Bitcoin\u2019s 7 transactions per second or Ethereum\u2019s 15 per\nsecond. Furthermore, the Libra blockchain is operated and constantly verified\nby a total of 100 targeted founding members of the Libra Association, which\neach invested $10 million or more for a seat in the cryptocurrency\u2019s governance\nand the ability to operate a validator node.       <\/p>\n\n\n\n

            When a\ntransaction is submitted, each of the validator nodes runs a calculation based\non the existing ledger of all transactions. Thanks to a Byzantine Fault\nTolerance system using a Practical Byzantine Fault Tolerance (PBFT) algorithm,\njust two-thirds of the nodes must come to consensus that the transaction is\nlegitimate for it to be executed and written to the blockchain. A structure of\nMerkle Trees in the code makes it simple to recognize changes made to the Libra\nBlockchain. With 5KB transactions, 1,000 verifications per second on commodity\nCPUs and up to 4 billion accounts, the Libra Blockchain should be able to operate\nat 1,000 transactions per second if nodes use at least 40Mbps connections and\n16TB SSD hard drives.<\/p>\n\n\n\n

            Facebook claimed that \u201cLibra has all the merits of Bitcoin but none of the shortcomings of Bitcoin\u201d. The arguments are based on the following facts: <\/p>\n\n\n\n

            1. Libra is a partially decentralized \u201cpermissioned\u201d blockchain compared to the fully decentralized public blockchain of Bitcoin<\/li>
            2. Libra has only 100 validator nodes, while Bitcoin has more than 10 thousand minor nodes worldwide<\/li>
            3. Libra employs a highly efficient PBFT algorithm to reach a consensus among 100 validator nodes on whether a transaction is legitimate and written to a 100 nodes Libra blockchain, while Bitcoin uses a very inefficient and costly mining algorithm to reach a consensus among 10K+ nodes to decide whether a transaction is legitimate to be executed and duplicated 10K+ copies in each of the 10K+ nodes if it is validated<\/li>
            4. The transaction processing speed is 1000 per section for Libra but 7 for Bitcoin. Thus, Libra is more likely to replace traditional \u201cfiat\u201d currency system and becomes a global digital currency than Bitcoin.    <\/li><\/ol>\n\n\n\n

              The details of Libra other important features including the underlying technology, the association that governs it, and the wallets one will use, the way payments work etc. could be found by referencing [6,7,8,9]. <\/p>\n\n\n\n

              <\/p>\n\n\n\n

              Comparisons between Libra and its major Competitors<\/strong><\/h2>\n\n\n\n

              The\ncomparison between Libra and its major competitors includes both \u201cA Comparison\nbetween Libra and Bitcoin\u201d and \u201cA Comparison between Libra and China\nmobile-based Digital Payments\u201d in section 4.1 and 4.2 respectively. <\/p>\n\n\n\n

              A Comparison between Libra and Bitcoin<\/strong><\/h3>\n\n\n\n

              Although both Bitcoin and Libra are crypto assets that can be transacted as digital currencies, they are different in many ways, from the goals, structure, technology behind them to the way they\u2019re used [11,12,13].<\/p>\n\n\n\n

              Many experts question whether Libra can even be called a \u201ccryptocurrency<\/em>\u201d because of its use of a permissioned ledger and its reliance on a trusted issuer to hold and manage a fund of assets that back the currency [12]. <\/p>\n\n\n\n

              The differences between Libra and Bitcoin are summarized in the following key areas:<\/p>\n\n\n\n

              1. Goals<\/strong>: Bitcoin is a virtual currency used\nas a peer-to-peer payment system, allowing people to exchange money without\ngoing through a bank while Libra is primarily to be used in cross-border\npayments and money transfers. The Libra is tied to a basket of\ngovernment-backed currencies and other assets, to avoid the volatile swings\noften seen in cryptocurrencies like Bitcoin and Ether<\/a>.<\/li>
              2. Structure<\/strong>:\nLibra is\ngoverned by the independent Libra Association a not-for-profit organization, which\noversees the development of the token, the reserve of real-world assets that\ngives it value and the governance rules of the blockchain. In contrast, Bitcoin\nis a totally decentralized architecture employing a distributed public\nledger in which transaction verifications are handled by 10K+\nminer nodes in using an decentralized architecture of verification.   <\/li>
              3. Technology<\/strong>: With\nBitcoin, transactions are recorded anonymously on a blockchain based\ndistributed public ledger. It\u2019s essentially a database maintained by a network\nof 10K+ node computers, on which transactions are secured in such a way that\nmakes it virtually impossible to tamper with. While Libra also uses a relatively\ncentralized blockchain governed by the Libra Association to keep transactions\nfast and scalable. But unlike Bitcoin, Libra\u2019s blockchain is permissioned which\nrequiring transactions can only be added to it by a group of 100 trusted\nparties. Furthermore, Libra employs a highly efficient PBFT algorithm as a\nconsensus scheme, while Bitcoin still uses the original Satoshi Nakamoto inefficient\nand costly mining algorithm to reach a consensus for deciding whether a\ntransaction is legitimate.<\/li>
              4. Use\nCases<\/strong>: Libra is a stablecoin backed by a reserve of assets\nwhich is primarily used in cross-border payments and money transfers. While\nBitcoin is permissionless, fully decentralized, deflationary and volatile\ncryptocurrency speculative investors to get rich quickly by speculating on\ntheir values rapidly appreciating. Libra is governed by \u201csupply and demand\u201d.\nThat means Libra Association can adjust the supply to match a quantity of other\nassets held in reserve, effectively maintaining a stable price even when demand\nchanges. However, Bitcoin has a fixed supply. It is well-known that the total\nnumber of Bitcoins that will ever be minted is \u201chard-capped\u201d at 21 million.\nThus, Bitcoin supply is fixed and cannot react to the market\u2019s demand, while Libras\nare created or burned when one of Libra\u2019s authorized resellers deposit or\nwithdraw money from its reserve. <\/li><\/ol>\n\n\n\n

                In conclusion, there is a general\nconsensus among the worldwide finance community that cryptocurrencies like\nBitcoin could not be viewed as securities<\/em>.\nCurrently cryptocurrencies including Bitcoin are primarily used as speculative\ninvestment assets rather than daily currency for payments. However, many\nexperts don\u2019t consider Libra as a cryptocurrency at all. Instead, Libra is viewed\nand treated more like a bank note or security since its value depends on what\nfiat currency it’s backed by and can only be used in peer-to-peer transactions\nif approved by the backers. Although as late as end of July 2019, it is not\noptimistic whether Facebook and its partners could manage to overcome the\nregulatory hurdles that have accompanied Libra. However, if they would, then\nLibra will undoubtedly have an enormous impact on the global economy. In a\nworst case scenario, if they wouldn\u2019t, but Libra is still allowed to launch in\na revised format in 2020, then Libra will still take a great step forward for\ndigital currency as long as Libra could start to convince people there are\n\u201cother ways\u201d of storing value than using fiat currencies like the U.S. dollar.<\/p>\n\n\n\n

                A Comparison between Libra and China Mobile-based Digital Payments<\/strong><\/h3>\n\n\n\n

                Initially, Facebook claimed Libra both as a cryptocurrency as well as a payment mechanism that mimics what WeChat does in China. However, Libra has been disputed that it is not a cryptocurrency at all, since it\u2019s a centralized system maintained by \u201cnodes\u201d that are administered by a centralized Libra Association, and one has to register using one\u2019s real name. Libra has not met the qualifications of a cryptocurrency! Thus, recently Facebook has emphasized that Libra will never compete with legal fiat currency and it is neither a security nor an ETF [14]. Libra appears more like a commodity and Facebook expects it to emerge as a cross border payment instrument.<\/p>\n\n\n\n

                From the experts who are familiar\nwith digital currency in China, they firmly believe even if Libra overcomes all\nthe hurdles and receives the approvals to be launched in\n2020<\/a>, it won\u2019t be able to compete with AliPay or WeChat Payment in Chinese\npayment domain in the near future due to the following observations:<\/p>\n\n\n\n

                1. China\nhas already led the rest of the world in mobile payment field. The top two\nChinese payment giants AliPay and WeChat Payment have won the recognition of\nmany world-wide merchants especially in EU countries like Germany.<\/li>
                2. Even\nin Asia, Japan and Korea have imported and accepted AliPay and WeChat Payment\nfor a long time. Libra will have a hard time to catch them up in short period\nof time.<\/li><\/ol>\n\n\n\n

                  In conclusion: Libra and Calibra are not WeChat, and they may never be! [15]<\/p>\n\n\n\n

                  <\/p>\n\n\n\n

                  Security and Privacy Issues of Libra and Possible Remedy Solutions<\/strong><\/h2>\n\n\n\n

                  The Trust, Security and Privacy concerns of Libra & Calibra can be summarized by the following seven specific questions asked by U.S. Senate Banking Committee and the answers given by the head of Calibra, David Marcus before the U.S. Senate on July 16, 2019 recaptured as follows [16,17]:<\/p>\n\n\n\n

                  First, the seven questions:<\/p>\n\n\n\n

                  1. How\nwould this new cryptocurrency-based payment system work, and what outreach has\nthere been to financial regulators to ensure it meets all legal and regulatory\nrequirements?<\/li>
                  2. What\nprivacy and consumer protections would users have under the new payment system?<\/li>
                  3. What consumer financial\ninformation does Facebook have that it has received from a financial company?<\/li>
                  4. To\nthe extent Facebook has received consumer financial information from a\nfinancial company, what does Facebook do with such information and how does\nFacebook safeguard the information?<\/li>
                  5. Does\nFacebook share or sell any consumer information with unaffiliated third parties?<\/li>
                  6. Does\nFacebook have any information bearing on\nan individual\u2019s (or group of individuals\u2019) credit worthiness, credit standing,\ncredit capacity, character, general reputation,    personal\ncharacteristics, or mode of living that is used (either by Facebook or an\nunaffiliated third party) to establish eligibility for,  or marketing of a product or\nservice related to 1) credit, 2) insurance, 3) employment, or 4) housing?<\/li>
                  7. How\ndoes Facebook ensure that information bearing on an individual\u2019s       (or\ngroup of individuals\u2019)     creditworthiness,\ncredit standing, credit       capacity,\ncharacter, general reputation, and\/or        personal\ncharacteristics is not used in violation of the\nFair Credit Reporting Act?<\/li><\/ol>\n\n\n\n

                    Next, the collective answers given\nby Marcus [17]:<\/p>\n\n\n\n

                    1. The U.S. should \u201cabsolutely\u201d lead the world in rulemaking for cryptocurrencies.<\/li>
                    2. The Libra Association chose to be headquartered in Switzerland \u201cnot to evade any responsibilities of oversight\u201d but since it\u2019s where international financial groups like the Bank for International Settlements, though Calibra will be regulated by the U.S. Department of the Treasury\u2019s Financial Crimes Enforcement Network.<\/li>
                    3. \u201cYes,\u201d Libra will comply with all U.S. regulations and not launch until the U.S. lawmakers\u2019 concerns have been answered.<\/li>
                    4. \u201cYou will not have to trust Facebook\u201d because it\u2019s only one of 28 current and potentially 100 or more Libra Association members and it won\u2019t have special privileges<\/li>
                    5. \u201cYes I would\u201d accept compensation from Facebook in the form of Libra as a show of trust in the currency.<\/li>
                    6. It is \u201cnot the intention at all\u201d for Calibra to sell or directly monetize user data directly, though if it offered additional financial services in partnership with other financial organizations it would ask consent to use their data specifically for those purposes.<\/li>
                    7. Facebook\u2019s core revenue model around Libra is that more online commerce will lead businesses to spend more on Facebook ads.<\/li>
                    8. When repeatedly asked why Facebook is pushing Libra to happen, Marcus noted that blockchain technology is inevitable and if the U.S. doesn\u2019t lead in building and regulating it, the tech will come from places \u201cout of reach of our national security apparatus,\u201d raising the spectre of China.<\/li><\/ol>\n\n\n\n

                      It\nappears Marcus didn\u2019t clearly answer some critical questions about Libra and\nCalibra at both the Senate Banking Committee and the next-day hearing at the\nHouse Financial Services Committee. A set of unanswered questions are described\nin [17] and the possible remedy solutions are suggested as follows as a minimum:<\/p>\n\n\n\n

                      Facebook should conduct a massive overhaul of its consumer privacy practices and re-establish its trust and reputation as a responsible and law-abiding social media giant where consumers could keep their personal information truly private.<\/p>\n\n\n\n

                      1. Facebook should provide sufficient assurance that data collected about transactions made with Calibra which are made on Facebook won\u2019t be \u201ccross-referenced\u201d or \u201ccorrelated\u201d with the data currently collected by Facebook if that transaction happens over their social networks.  <\/li>
                      2. The Libra Association should be able to guarantee that it would be able to freeze the digital assets if terrorist organizations or other cyber criminals were identified.<\/li>
                      3. The Libra Association should take a pro-active role in actively vetting its developers so that the risks of having crooked developers stealing users\u2019 money and\/or users\u2019 data could be prevented.<\/li>
                      4. The Libra Association should provide highly secure Libra wallets (e.g., American Calibra wallets) and education programs to protect users from scamming attacks and educate users on how to avoid scams. <\/li><\/ol>\n\n\n\n

                        Conclusion<\/strong><\/h2>\n\n\n\n

                        Libra\nhas been perceived as Facebook’s entrance into the largely unregulated\ncryptocurrency market. Per Facebook white paper, the idea behind Libra is as simple as to\nmake sending money to a friend or paying for something as easy as sending a Facebook\nMessage. However, in doing so Libra will have severe implications both for\nconsumers and global financial systems, since 1). Allowing a Big Tech company\nlike Facebook which doesn\u2019t have a good privacy protection record to take over\nthe payment system and\/or also trust Facebook to lead the way on a major new\nfintech regulation that could fundamentally change global financial systems would\nbe a huge mistake; 2). If Libra were to become such a widely used medium of\nexchange, then it could compromise both the Fed’s and International monetary\nauthorities\u2019 abilities to enact monetary policy.<\/p>\n\n\n\n

                        The\nfact that U.S. and\ninternational regulators and lawmakers\ndon\u2019t trust Facebook and the FTC\u2019s recent record-breaking $5 billion fine\nagainst Facebook for breaking their privacy promises makes whether Libra will be made available\nin a timely manner in 2020, or at all a very pessimistic prospect. However,\neven if Libra fails to launch at all does not mean the end of life for\ncryptocurrency because it seems there is only one thing the US Government and\nFacebook agree on: \u201ccryptocurrency is the future.\u201d Furthermore, there is also a\nstrong consensus that \u201cThe U.S. should \u201cabsolutely\u201d lead the world\nin rule-making for cryptocurrencies\u201d and \u201cThere are tremendous potential\nbenefits in blockchain technologies and cryptocurrencies\u201d among the U.S.\ndigital currency stake holders. Therefore, there are some hopes that U.S. will\nassume leadership on developing a framework for\nmanaging cryptocurrencies and future fintech innovations. Also, giving\nFacebook\u2019s firm belief in the digital currency’s potential benefits and\nFacebook’s willingness to work with regulators on its implementation, some\nexperts like Kris Marszalek, CEO at Crypto.com believes firmly that \u201cFacebook\nwill find a way to capture this tremendous opportunity in a compliant manner:\nif not via Libra, then via investments and M&A.\u201d Whether his prediction\nwill come true, only time can tell!<\/p>\n\n\n\n

                        Reference<\/strong><\/h2>\n\n\n\n
                        1. https:\/\/www.zdnet.com\/article\/2018s-most-high-profile-cryptocurrency-catastrophes-ico-failures-and-cyberattacks\/<\/a><\/li>
                        2. https:\/\/cointelegraph.com\/tags\/crimes<\/li>
                        3. https:\/\/www.kaspersky.com\/blog\/ico-security\/26811\/<\/a><\/li>
                        4. https:\/\/www.schneier.com\/blog\/archives\/2019\/02\/blockchain_and_.html<\/a><\/li>
                        5. https:\/\/fortune.com\/2019\/04\/24\/bitcoin-cryptocurrency-crime\/<\/a><\/li>
                        6. https:\/\/techcrunch.com\/2019\/06\/18\/facebook-libra\/?renderMode=ie11<\/a><\/li>
                        7. https:\/\/blockgeeks.com\/guides\/understanding-facebooks-cryptocurrency-libra\/<\/a><\/li>
                        8. https:\/\/blockgeeks.com\/guides\/what-is-facebook-libra-cryptocurrency-the-most-comprehensive-guide-part-2\/<\/a><\/li>
                        9. https:\/\/www.cnbc.com\/2019\/06\/17\/facebook-announces-libra-digital-currency-calibra-digital-wallet.html<\/a><\/li>
                        10. https:\/\/cointelegraph.com\/news\/us-sanctions-on-iran-crypto-mining-inevitable-or-impossible<\/a><\/li>
                        11. https:\/\/www.pcmag.com\/news\/369418\/crypto-comparison-why-bitcoin-and-libra-are-vastly-differen<\/a><\/li>
                        12. https:\/\/www.cnbc.com\/2019\/07\/19\/bitcoin-vs-libra-how-facebooks-cryptocurrency-is-different.html<\/a><\/li>
                        13. https:\/\/www.digitaltrends.com\/computing\/facebook-libra-vs-bitcoin\/<\/a><\/li>
                        14. https:\/\/seekingalpha.com\/article\/4271247-facebooks-libra-vs-bitcoin-5-key-differences?ifp=0<\/a><\/li>
                        15. https:\/\/www.pymnts.com\/cryptocurrency\/2019\/if-facebook-wants-to-be-wechat-why-did-it-launch-libra\/<\/a><\/li>
                        16. https:\/\/www.banking.senate.gov\/download\/facebook-letter-to-crapo-brown<\/a><\/li>
                        17. https:\/\/techcrunch.com\/2019\/07\/16\/libra-in-messenger-whatsapp\/?renderMode=ie11<\/a><\/li>
                        18. https:\/\/www.consumer.ftc.gov\/blog\/2019\/07\/what-ftc-facebook-settlement-means-consumers<\/a><\/li><\/ol>\n","protected":false},"excerpt":{"rendered":"

                          Abstract: Facebook has revealed plans to launch its new […]<\/p>\n","protected":false},"author":13,"featured_media":1853,"template":"","doc_tags":[210],"class_list":["post-565","dlp_document","type-dlp_document","status-publish","has-post-thumbnail","hentry","doc_categories-article","doc_tags-crypto-currency"],"acf":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.pufsecurity.com\/zh-hans\/wp-json\/wp\/v2\/dlp_document\/565"}],"collection":[{"href":"https:\/\/www.pufsecurity.com\/zh-hans\/wp-json\/wp\/v2\/dlp_document"}],"about":[{"href":"https:\/\/www.pufsecurity.com\/zh-hans\/wp-json\/wp\/v2\/types\/dlp_document"}],"author":[{"embeddable":true,"href":"https:\/\/www.pufsecurity.com\/zh-hans\/wp-json\/wp\/v2\/users\/13"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.pufsecurity.com\/zh-hans\/wp-json\/wp\/v2\/media\/1853"}],"wp:attachment":[{"href":"https:\/\/www.pufsecurity.com\/zh-hans\/wp-json\/wp\/v2\/media?parent=565"}],"wp:term":[{"taxonomy":"doc_tags","embeddable":true,"href":"https:\/\/www.pufsecurity.com\/zh-hans\/wp-json\/wp\/v2\/doc_tags?post=565"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}