Three things we don’t know about Facebook’s digital currency

The launch of Facebook’s new coin is certainly a big event, but so much about it remains unsettled, writes Mike Orcutt.

Hype and controversy: It’s been the most hyped cryptocurrency-related event ever, but crypto enthusiasts are split over whether it’s good for the industry or not. Three questions are worth asking.

Is Libra really a cryptocurrency? It will run on a blockchain, but it’s a far cry from Bitcoin. It has a centralized structure, with a small number of stakeholders who can validate transactions.  Facebook claims it wants Libra to become “permissionless” like Bitcoin eventually.

Can it take blockchains mainstream? Today’s public blockchains use too much energy and process transactions too slowly to meet mainstream demand. This is probably the biggest obstacle to the adoption of cryptocurrencies. Ethereum is working on a replacement approach to fix this called “proof-of-stake” but will Facebook get there first?

The biggest question of all: What’s in it for Facebook? We don’t know how it will make money, and how it will handle people’s financial data. Read the full story here.