LIBRA: Rising tides of change lift all the boats

2019-10-23 09:05:00 · 1453 views · 5 min read

Venice tides


For the past few days, my social media feed has been overwhelmed with comments, opinions, and notes about the announcement of Libra, Facebook’s new global blockchain protocol and cryptocurrency.


A few reached out to me both in private and on social media and in public to ask for my take. I have been, as several indicated, “noticeably and oddly silent.”


I can now reveal that this is because of my involvement with the Creative Destruction Lab. CDL is a global science and technology seed-stage program founded in Toronto and distributed across Seven cities in three countries and was announced today as one of the Libra Association’s founding partners.


Professor Ajay Agrawal


The Creative Destruction Lab is a not-for-profit seed-stage program for massively scalable, science-based companies. Its nine-month program pairs founders with experienced entrepreneurs and investors to set focused, measurable objectives with the goal of maximizing equity-value creation. Founded in 2012 by Professor Ajay Agrawal at the Rotman School of Management at the University of Toronto, the program has now expanded with locations in Vancouver, Calgary, Montreal, Halifax, and Oxford. Since its inception in 2012, companies that have participated in the CDL program have created over $4.2 billion in equity value. CDL Alumni include North (Waterloo), Atomwise (San Francisco), Deep Genomics (Toronto), Automat (Montreal), Kyndi (Palo Alto), and Heuritech (Paris). I have been a mentor, associate, and active participant in CDL for around three years since first invited by Barney Pell and welcomed by Professor Agrawal. It’s one of the most rewarding things I do in my free time.


So, what is Libra? “Libra’s mission is to enable a simple global currency and financial infrastructure that empowers billions of people.” The new digital currency will be built on the Libra Blockchain and fully backed by the Libra reserve, a basket of fiat currencies and ‘other assets’. The project is in principle; decentralized and governed by the Libra Association, of which Creative Destruction Lab is a Founding Partner — what it will become in practice — only the future knows — but there’ve been quite a few statements by Libra, Facebook and other partners that the final end state is distribution and control by token and stakeholders — in a manner similar to EOS, ETH, and BTC.)


Today I think of it as a blend of E-cash (let’s see how many of you know what that is), a mileage points program (more on that later I suspect), Venmo, and a multinational, stable coin (by the way, check out the list of economists involved, it’s pretty nerdy and impressive!) In short, Libra is designed to be a high throughput, global blockchain, one that’s built with programmable money in mind but limits how much users can do as it evolves from prototype to a robust ecosystem.


If that’s all it is, then it will be a remarkable vehicle for an acceleration of global markets, payments ecosystems and a potential threat to the US banking hegemony — which in my mind isn’t a bad thing. More importantly, this announcement reinforces the trend over the past 18 months of enterprise adoption of the blockchain, the recovery of the price of BTC and other cryptocurrencies and rapid adoption of protocols in a diverse array of businesses from logistics to fashion, the securities industry, energy and of course banking. I’ve seen the future, and the blockchain is one of its key platforms.


Over the past few weeks, as whispers about Libra Association and Facebook have swirled, I’ve seen a lot of criticism about it’s plans and protocols. Some are valid, but most are primal fear mongering. David Canelis says that “Facebook’s Libra ‘cryptocurrency’ is missing one thing: monetary policy” due to supply/printing issues due to supply, printing issues. Early on some criticized the $10m node staking requirements, though many cryptocurrencies like EOS have used similar mechanisms to fund their foundations, operations and the development and governance of their protocols. Many shared well-founded fears around privacy and others voiced what I think are reasonable concerns around governance and implementation. Some voiced what I feel are unfounded fears that Libra will eclipse BTC as a store of value and a global instrument of financial transfer (BTC’s role in the latter to my mind is still unsettled matter).


In my humble opinion, a really interesting question is what stake and role FB, the Libra Association (and of course Libra users) will have in its implementation and success. The fact that FB will allow employees to take their pay in LIBRA is quite indicative of their view of its future stable or ascendant value. Caitlin Long wrote a particularly solid and mostly positive piece in Forbes, and Jameson Lopp has written a particular good, while skeptical, interrogation of the whitepaper — TL:DR He doesn’t think its a blockchain. Like with all new technologies, caveat emptor: read, learn, and form your own opinion, not the Twitter rantings of the uninformed. I welcome reasoned, thoughtful discussion and debate but no trolls, unless you are really good at it.




In many respects, the discussion and debate remind me of my early days at the BBC. The press, blogosphere, and particularly Reddit decided that my boss, Erik Huggers, a former Microsoft executive, represented the sale of the BBC’s technology future to his former employer Microsoft. There were even protestors outside the BBC on my first day at work! Nothing could have been further from the truth as the next three years together represented a period of openness and progress. We launched iPlayerthe mobile service, and a new homepage. We embraced the open-source movement and open standards web actively, while simultaneously re-launching iPlayer on Adobe’s flash — at that time the only truly open standard multi-platform video player framework vs the closed Microsoft Silverlight system. I believe that organizations, like people, are multifaceted and can evolve and change. We showed this at the BBC, and I believe there is a lot to be hopeful for with Libra.


BBC protesters


What is far more interesting, however, is that NO ONE, with any strong factual or logical argument, has made the case that Libra Association’s step of creating a digital currency (and protocol) is irrelevant. The strength of the initial 30 partners gives me comfort that there will be voices around the table helping steer this protocol and, I hope — transparency of decision-making governance as we build and develop Libra. They also mean that the Founding Members and Partners are playing to win. Facebook won’t fully control Libra, but instead get just a single vote in its governance like other founding members of the Libra Association including Visa, Uber, Visa, Coinbase and Farfetch as well as the one I’m closest to — the Creative Destruction Lab (the only academic & entrepreneurship program, for now!)


Even more critically, and this is why I’m personally excited about Libra, is that it creates a framework to build successful consumer-centric blockchain applications.


I’ll leave the negatives to others in the blogosphere. In my mind, these are the biggest positives of #Libra visible from today’s announcement:

  1. Integration with an existing ecosystem of users and global distribution from day one. The importance of this cannot be understated.
  2. Onramps and offramps in hundreds of countries, particularly in emerging markets. PayU, stripe, Coinbase, Kiva, PayPal make this a global platform from launch.
  3. Treasury management. The economists involved in this project are world class, and yes, this is really hard. Reducing volatility is a critical requirement of cryptocurrency if we really want broad adoption. Do not underestimate the firepower and global nature of this piece.
  4. Simple blockchain codebase. Libra Association owns the open-sourced the related programming language called Move: The Libra code is on GitHub: Facebook has a pretty solid history of developing and collaborating with open source and open standards (React Native, GO, FBML)
  5. PARTNERSHIPS: I’ll just put this here:

There are 30+ partners announced now with up to 100 contemplated under the white paper.


6. Regulatory integration and independence. One of the major draws of cryptocurrencies and blockchain is the idea that no centralized entity (such as a bank or government) controls them. While obviously, governance is necessary, Libra, like EOS and a few other protocols, uses a delegator governance system with staked nodes. While Libra has engaged lobbying firms in a number of jurisdictions, there is no sense that this is a US-dominated or even domiciled effort. It’s truly universal, global, programmable money.


7. Financial Inclusion. Since almost two billion adults globally remain outside of the financial system, Libra will help connect the world in a unified financial ecosystem. I really believe and support the message of financial inclusion in both the whitepaper and with those I’ve interacted with so far.

8. KYC — ok I know it’s a pain and we’d all like to get rid of it, but we also really want to stop terrorism and bad state actors — and it turns out KYC & The Magninsky act are quite good both of those things. Without saying anything I’m not supposed to — I remember being pitched by a startup a few years ago in Brazil proposing that an Orkut ID + Gmail account with +5 years of use was a pretty good sign of creditworthiness. I’ll just leave that there. FB has some interesting perspective on trust, based on the social graph.


Lastly — before my feed fills up with accusations of being a FB pawn, or worse a decentralized refusenik. I should state, openly and clearly: I am blockchain non-monogamous. I think it is WAY too early in this revolution to start selecting the winners and losers other than in the broadest of terms. I’m a holder of BTC, ETH, EOS, Cosmos, Cardano, Gochain, LTC, Monero, RIPPLE, and even HVN and ITM. (look them up). I am an active blockchain investor and a fervent believer in the power and opportunities of decentralization and web 3.0. I am also, however, not a decentralization fundamentalist. I think there are roles and places for a number of approaches to the creation of an open, pseudonymous, distributed ledger that can record transactions between parties efficiently and in a verifiable and permanent way, governed by consensus. Moreover, a blockchain can move from permissioned to permissionless over time — governed initially by a foundation with an expectation that this will transmute to the holders of the tokens over time. The brilliant Professor Joshua Gans, who leads CDL’s Blockchain stream blog talks about this a lot and quite intelligently.


For clarity, I’m crypto non-monogamous — I embrace any firm, organization or protocol that facilitates our evolution away from centralized sovereign systems. We are in the first stages of a long journey where our thoughts and attitudes towards money, globalization, and trust will evolve far past our current, provincial thinking. I asked a friend of mine the other day, why it was that we should pay for the goods on our bodies, our table and in our bags that were made in factories and by artisans around the world with tokenized instruments controlled by the sovereign nation where we, by pure accident of birth or parental domestication happen to bank? At exchange rates manipulable and controlled by the whims of organizations whose very incentives run cross purposes to ours. Is Libra perfect? I doubt it, and much about it is unclear today. However, I think this is one of the most important changes in our global entrepreneurial marketplace, and I’m honored to be a participant and collaborator in both CDL and by Proxy Libra.


Applications for the Creative Destruction Lab’s blockchain stream, which will include course materials, Libra technical resources, and other access as part of the curriculum, is still open. If you are working on a new business, on Libra or any blockchain, or want to embrace AI, Quantum or Libra in your existing blockchain business, I encourage you to apply for its CDL Blockchain Stream.

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