Facebook accused of knocking off Libra cryptocurrency's concept from an MIT report
Mon, 29 Jul 2019, 04:06 am UTC
In the latest stream in attacks, the whitepaper of Facebook’s cryptocurrency Libra was reportedly a knock off of another digital asset.
According to CoinDesk, Alexander Lipton, a Connection Science Fellow at the Massachusetts Institute of Technology and adjunct professor at New York University, claimed that Libra copied the concepts of a coin he proposed in his academic work.
“Without being obnoxious, I can tell you that the actual structure of Libra is pretty much lifted verbatim from the paper which Sandy Pentland and Thomas Hardjono and I published last year,” Lipton, referring to the paper entitled “Digital Trade Coin: Towards a More Stable Digital Currency,” told the news outlet.
The whitepaper for Tardecoin was released in 2018 as a part of the Open Science publication from the Royal Society, authored by all three fellows of MIT. It reportedly tackled a transmission coin, which like Libra, is backed by a basket of tangible assets. The only difference between the two is that Tradecoin will theoretically be supported by oil, gold, base metals, and agricultural commodities, while Libra with government-issued bonds and securities.
Tradecoin was also poised to be managed by a consortium of companies, which is similar to the Libra Association that consists of big names including Mastercard, Paypal, Visa, and Uber. However, Lipton said that Facebook’s selection of partners was different from what the authors had in mind, noting that their targets were more of “raw material producers, supra-natural organizations, and, possibly, a couple of large-scale payment providers, but certainly not the likes of Uber.”
But ultimately, both coins aim to help with conducting payments, catering to the unbanked population, and bringing them into the financial system.
Meanwhile, Lipton claimed that they or their paper was never acknowledged in Libra’s white paper at all. He offered his criticism against Facebook’s upcoming digital asset, saying Libra can be issued in a non-immunized fashion against the financial paper. He went to add that since purchasing Libra will need to buy government securities and other high-grade paper for additional backing for the coin, since it is difficult to earn interest on cash.
He further cautioned that it can cause massive inflation in developing countries since it functions as money.
“It will cause enormous inflation because the amount of money will be kind of doubled, roughly speaking, in fact much more than doubled … I am not a big fan of quantity theory of money, but I am absolutely certain that as the amount of money explodes, prices will go up.”
The news follows after Facebook CEO Mark Zuckerberg reaffirmed his commitment to the social media’s cryptocurrency project, saying they will spend “however long it takes” to address the concerns of all regulators and experts.
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