Don't fear Libra. Fear Facebook
Too Long; Didn't Read
What I want you to take away: Libra is boring. It's a simple cryptocurrency composed of well-known, battle-tested components.
I also want to convince you that if users transact through Facebook products like Whatsapp or Messenger they are doomed to leak a lot of valuable data to Facebook. No matter what (crypto)currency Facebook adopts.
Libra is a permissioned proof-of-stake blockchain. "Permissioned" because only Libra Association members can run validator nodes (long-term Libra might shift towards a permission-less system, but that's not the case right now).
"Validators" are nodes which produce new blocks. A block is an aggregation of user transactions. User accounts are backed by public/private key pairs, and transactions are based on smart contracts. Smart contracts use a new Language called "Move".
Libra Blockchain vs Protocol vs Core
In the paper we see a distinction drawn between "Libra Blockchain", "Libra Protocol" and "Libra Core". Until proven otherwise Libra Core will probably be the only implementation of the Libra Protocol. And the Libra Protocol will probably be the only protocol for the Libra Blockchain. Enough already.
Once a public/private key pair is generated, Libra has a
operation (similar to Stellar!).
Libra also supports changing an account's underlying Ed25519 key pair without changing its Libra public key (similar to Stellar!!...spotting a theme yet?)
In Libra transaction execution and smart contract calls are one and the same. Smart contracts closely follow what Ethereum does (concept of code to execute, gas price, gas cost).
Each transaction has a sender address/pubkey, a program, a gas price, a max gas amount and a sequence number. It's basically exactly the same than Ethereum except that all transactions are smart contract calls (including raw send/receive operations)
The Libra paper states a difference between gas in Libra vs Ethereum: "The system is designed to have low fees during normal operations, when sufficient capacity is available. This approach differs from some existing blockchains, which target validators with lower capacity and thus at times have more demand to process transactions than throughput. In these systems, fees spike during periods of high demand -- representing a revenue source for the validators but a cost for the users"...this makes no sense to me. How are validators not benefitting from high gas price?
Libra transactions have side effects. This is the concept of "events" (Stellar has the exact same thing, called "effects"). Transactions cannot read events. In other words, transactions cannot take as input side effects of previous transactions. The only supported mutation is explicit state mutation.
In terms of protocol, applying a transaction is defined as:
Transactions are only a function of the current state. Because transactions are deterministic, transactions/blocks can be replayed and auditing can be performed.
A neat idea in this paper: to configure the genesis block and forks, special transactions are added to the consensus protocol through configuration. They're not part of the ledger history. Essentially, configuration-as-vote.
I've said above that transactions are implemented as smart contract calls. And contracts are based on Move, a new programming language designed specifically for Libra.
Move source code compiles to Move IR (Intermediate Representation), which compiles eventually to Move Bytecode. This is like Ethereum's Solidity which eventually gets compiled down to EVM (Ethereum Virtual Machine) instructions.
Move "resources" are values (strings, integers, etc). Move modules are code to
interact with resources. Resources are hierarchical, stored under
Modules are code units published on Libra (equivalent to an Ethereum constract). They declare structs and procedures. Structs contain data and/or other structs. Procedures are functions. "At a high level, the module/struct/procedure relationship is similar to the class/object/method relationship in object-oriented programming".
If you think this looks general-purpose you'd be right. But: "while move is used to defined core system concepts, such as the Libra currency, users are unable to publish custom modules that declare their own resource types". In other words: there is no custom smart contract support!
"The key feature of Move is the ability to define custom resource types, which have semantics inspired by linear logic". What's "linear logic"? You tell me, here is the paper.
"The Move type system provides special safety guarantees for resources. A resource can never be copied, only moved". Hence the name. Aha! More on the design of move is available here.
For storage Libra uses Merkle trees. Nothing new here. History can be pruned by validators. And validators "are free to discard historical data not needed to process new transactions". In practice this could be a huge headache. Yes data can be authenticated because it's all part of an authenticated merkle tree. But someone has to keep the whole history somewhere.
The paper states: "Clients can optionally create a replica of the entire database by synchronizing the transaction history from the validators. While creating a replica, a client can verify that validators executed transactions correctly, which increases accountability and transparency in the system". This is true provided that validators keep track of the entire history and open up their APIs. Given that Libra is a permissioned blockchain I doubt anonymous internet users would be able to mirror the entire blochchain freely unless they've been following the network since genesis. Validator nodes are likely to prune history after some time. When this happens Libra's full history might be in the hands of a happy few (Facebook will certainly keep a copy if I had to guess!).
Consensus in Libra is driven by "LibraBFT", based on HotStuff. It has the property to require 2 or more confirmations, and work with the concept of blocks and "QC"s (Quorum Certificates). Nothing new under the sun.
Networking is done with libp2p. Discovery/bootstrapping seems unsolved: "We currently assume clients have an out-of-band mechanism to find the addresses of validators to submit transactions to -- the final version of this mechanism is yet to be designed"
If Libra is boring, why fear Facebook?
It should be pretty clear from the previous section that Libra brings absolutely nothing new to the world of cryptocurrency. In some ways this is good. It'll probably be robust and safe to use because most of its components have been battle-tested by others.
Libra is "pseudonymous". Accounts aren't linked to anything by default. They're a formatted hash of a completely random public/private key pair. However, as soon as Libra accounts are linked to real names and personal data, Libra stops being anonymous and starts being worrisome.
The same is true of Bitcoin or Ethereum today! If Facebook were to adopt them as cryptocurrency, and users started paying each other through a wallet that Facebook controls (existing Facebook apps, or the new Calibra wallet app), they'll inevitably tie financial information to the existing mountain of data Facebook already has about them.
In short: don't fear Libra. Fear Facebook.