Facebook Libra Interview: “My Biggest Worry Is that It Doesn’t Get a Fair Chance”By LongHash
We asked Christina Smedley from Facebook's blockchain division to address the controversies surrounding Libra’s launch. Smedley handles branding for Calibra, the Facebook subsidiary that will introduce a digital wallet for Libra. The interview has been slightly condensed for clarity.
LongHash: One of the big criticisms of Libra is that it will not be decentralized, and that this will just give Facebook even more power.
Facebook: Facebook is going to be one of 28 organizations that are part of the Libra association. The Libra Association has been set up to put together a blockchain and to govern that blockchain.
Now, to your question about decentralization. If you want to build a global currency, which doesn’t exist in the world right now, that is backed by a reserve, that is linked to a basket of currencies, to make sure that it’s stable and to make sure that it doesn’t fluctuate, which is what we’ve seen with a lot of other cryptocurrencies, we need to make sure that this runs effectively before making it permissionless.
The association is going to be responsible for taking the Libra network to a permissionless state, and that would begin within 5 years. Facebook will just be one organization in the association. We will have no different kind of responsibility or power or decision-making ability than any of the other 28 [organizations] that joined.
LongHash: I’m just going to run through all the different controversies. The second one is that Libra isn’t a real blockchain.
Facebook: I don’t think we’d agree with that. It may not be a permissionless blockchain right now, but it will be. We created a programming language called Move, we built it using HotStuff. We took a look at other blockchains that existed, and one of the things that we’re solving for is that for this to be global and for this to help the world in the way that we think needs to happen for financial inclusion, it needed to be able to run really quickly, and so we took a long look at different blockchains.
We looked at Bitcoin, we looked at Ethereum and we decided that the best thing to do is was to create our blockchain. And I think our engineers would ague that it is a blockchain.
One of the things that people get confused about is the fact that this is open-sourced, and the fact that you will be able to see transactions on the public chain is something that people shouldn’t lose sight of. You do not have to use the Facebook wallet that we’re building which will be private and will be very good for people like me, who can’t remember their passwords. You can build anything on the open source blockchain.
LongHash: What about privacy? There’s confusion about how much information Calibra will have about users, and what this means for people who are worried about revealing their identities.
Facebook: Calibra is going to be a private network, a wallet that runs on that network. Your data on network, we’re doing what we can to make sure that your social data is kept separate from your financial data. And we’ve also published guidelines which are available on our Web site…and they actually outline what our privacy principles are and our guide rails. We haven’t finalized everything yet because we haven’t built the product. So it would be wrong of us to make complete commitments. But they’re pretty clear about what we want to do.
As in any blockchain, your transactions are public. But there will be people that will build things on the blockchain that will enable people to decide to shield their identity. We fundamentally expect that to happen.
LongHash: Can you purchase Libra without any know your customer/anti-money laundering (KYC/AML) procedures?
Facebook: Using the Calibra wallet, which is the only thing I can talk about, we will be fully regulated and compliant in the countries that we operate in. So where crypto isn’t allowed, or Facebook doesn’t operate, we will not be in those countries as Calibra. And users will have to go through KYC, according to the guidelines of their country, wherever they are.
LongHash: So Calibra for now will not be in China, because Facebook is not in China?
Facebook: The blockchain can be. Libra can be, the network.
LongHash: If a government came to Calibra and asked for information about a user, do you have processes in place for that?
Facebook: It will be like any kind of financial services organization that is regulated, that follows regulations where for money laundering, or criminal intent, there are various different pieces that you are set up, that you follow. We would be no different than those, because we are financial services.
LongHash: A big part of Libra’s mission is giving more power to the unbanked. But is there some tension there, because you still have to go through a KYC/AML process?
Facebook: We’ve talked about this a lot internally. We aren’t going to be able to initially help the most unbanked, the poorest of the poor. Because you will have to follow your local country guidelines. And because we are who we are, we will do those properly. I can imagine that people on the open source network may find ways in which people can start to think about identity differently.
You know, it’s really interesting, because even in WhatsApp as an example…there are [organizations] who have WhatsApp who do do not have bank accounts. We will be able to help them. And we will think about ways in which we can do KYC that enables people to quickly access this financial network.
LongHash: In the United States at least, there’s a trust issue with Facebook. Facebook has had a lot of scandals. And people associate Libra with Facebook.
Facebook: We’ve been very honest and open about the fact that we’ve played a significant role in building the technology but all of that is being open sourced and handed over to the association. I think as more companies become more visible with what they’re doing, what their plans are for the network, people will see it as being something that it isn’t just linked to us.
I also think on the other hand, it’s important to remember that Facebook in many countries around the world is highly trusted. If you go to places like the Philipines, we are very much valued. And so we believe that people will respond to this well, the Calibra wallet, because it’s going to be a solution for them that they never had.
I think the company is taking everything really seriously. We’re doing everything we can to demonstrate that we respect and value the trust that people that people put in us to use our services.
LongHash: Are there specific lessons from the past that you are applying to Calibra?
Facebook: I wouldn’t necessarily say there are lessons learned for us, because we are a new team. But things that we’ve done, we’ve done differently. So for instance, we would not normally share a product that we are planning to launch so early. But we did that, because we knew that people would have the question: What is in this for Facebook?
So we are clearly saying, we plan to build a wallet, and this is what it’s going to look like, we even told people what it’s going to look like, which is really unusual for us.
It’s a journey. I’m really proud to work for Facebook. There are so many people trying so hard to do the right things for people who use us.
LongHash: Do you think you will shake up central banks?
Facebook: t’s such a long journey ahead of us. I don’t think anyone is expecting global currencies to change tomorrow, or overnight. We want to talk to people, we want to learn, we are coming into this with open hearts. One of the reasons why we launched the testnet so early, the Libra network, was so that developers, communities, can build on it, can test it, and see what it’s like. And that’s just part of the journey that we’re on.
LongHash: So what are you worried about?
Facebook: I joined this team because I believe in the mission. I joined the Libra team at Facebook to help build this, right from day one, because I truly believe that it’s time. The fact that you can send a picture in 10 seconds and it doesn’t cost you anything, money should be the same as that. It’s the one thing that hasn’t really evolved.
So my biggest worry is that it doesn’t get a fair chance, and that people dismiss it without actually letting it get to the people that we really want to serve. That’s what keeps me up at night.
LongHash: But as you said, that doesn’t seem to be the case outside of the United States.
Facebook: Yeah I know, but we need people who send remittances, and a lot of those are based in places like the U.S., they send money home, they spend a fortune sending money home. This is a solution for them. But they have to want to do it as well.
LongHash: I think the problems will be unforeseen.
Facebook: Yeah, but what also will be unforeseen is the greatness of what will be built. I don’t think we know what will happen on the open source network for good.
LongHash: That brings up another criticism. Some people think that Facebook and its CEO Mark Zuckerberg are arrogant for trying to do this huge thing.
Facebook: Well first of all, he isn’t. Secondly, I hope we are demonstrating that we’re not…The fact that we have included the community in it. We’re listening. We’re listening really intently on things like Reddit and listening to what the community thinks about this. And it’s rewarding! People are building on it already. That’s super exciting.
LongHash: So [before announcing the launch], why did you have to be so quiet about this?
Facebook: It’s actually really because we knew that it would be misconstrued, we know that people wouldn’t understand. And you did see in the run-up to our announcement that people got it wrong…we wanted to be ready before we actually started to explain it.
LongHash: What was the main thing that people got wrong?
Facebook: I think they thought it was going be a centralized Facebook coin, and it’s not.