Christian Catalini, co-creator of Meta’s now-defunct Libra project, took to X to explain how Stripe’s Tempo blockchain fails one of the basic tenets of the crypto movement: decentralization.
In fact, Catalini believes that if Stripe’s Tempo succeeds commercially, it would mean that early crypto idealists will have to embrace a future where the original ethos of decentralization is lost. Catalini used the example of Libra’s failure to demonstrate his point.
The failure of Libra—what really killed it
Catalini noted that in the tech and finance industry, being too early to the market is almost the same as being wrong. In his post, Catalini wrote:
Besides the unfortunate timing, several other factors contributed to Libra’s ultimate failure. This included the “Silicon Valley hubris—the belief that elegant code can simply wish away centuries of financial regulation,” Catalini wrote.
Additionally, Facebook’s aggressive marketing of Libra not only drew more attention, but also provided ammunition to its opponents.
According to Catalini, there is a prevalent misconception that Libra failed because it could not meet regulatory guidelines. However, the opposite is true, Catalini wrote, adding:
Problems with corporate blockchains like Tempo
Catalini wrote:
This is how corporate blockchains usually work: a tech firm creates a blockchain and promises fairness. But after capturing a substantial chunk of the market, the temptation to tilt the playing field in their favor becomes nearly irresistible.
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And “crypto’s purpose is to break this cycle of broken promises,” Catalini wrote, adding:
Libra engineers decided to sacrifice the permissionless aspect of the network. Similarly, the network had to also scrap its plan of non-custodial wallets because regulators would not approve of it. Regulators needed to know who to call or fine when things go wrong, he explained.
How the success of Tempo is linked to the future of crypto
According to Catalini, if corporate blockchains like Tempo and Circle’s Arc succeed, it would indicate that “the crypto experiment was not a revolution, but a failed coup.” This is because while the backend technology will be different, the market structure will remain “eerily familiar,” he wrote.
In fact, Catalini described it as a change of kings while the throne remains the same—fintech giants will replace existing card networks and financial institutions. He further surmised that it is likely the markets in the West and the East will be controlled by at least two competing empires.
Catalini believes that if Libra’s demise could be wholly chalked up to bad timing, then Tempo’s success is nearly inevitable, given the change in regulatory stance. And in such a case, “the crypto world’s original dreamers may finally have to accept a more pragmatic, centralized reality.”
However, he warned:
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Source: https://cryptoslate.com/critics-argue-stripes-blockchain-ambitions-clashes-with-crypto-decentralization/
