How is Facebook’s Libra Blockchain Secured? Is it Open to a 34% Attack?
Information from Libra's whitepaper leads to questions about the blockchain's structure and whether it's as decentralized as other cryptocurrencies like Bitcoin.
Only minutes after Facebook released the whitepaper for its cryptocurrency, the internet exploded with speculation about its future and what unique features it brings which set it apart from other coins.
Although it looks like this coin holds great promise with its ability to satisfy scalability needs for the foreseeable future without sacrificing much in the way of security, there is one particular concern that Cryptovest picked up on after reading the cryptocurrency’s whitepaper and supplementary documentation in detail.
One of the key aspects that make Bitcoin such a popular and widespread coin—its decentralization—seems to be lacking in Libra, at least according to the following words within the whitepaper describing how it will work:
“It is governed by the independent Libra Association tasked with evolving the ecosystem.”
Of course, one could easily take these words without any context and interpret them in a myriad of ways, but this is already elaborated earlier in the paper:
“Blockchains are described as either permissioned or permissionless in relation to the ability to participate as a validator node. In a ‘permissioned blockchain,’ access is granted to run a validator node. In a ‘permissionless blockchain,’ anyone who meets the technical requirements can run a validator node. In that sense, Libra will start as a permissioned blockchain.”
The whitepaper also clarifies that Facebook will not be capable of dominating Libra, as all founding members of the Libra Association will have “the same commitments, privileges, and financial obligations.” It is therefore also inaccurate to call this a “Facebook cryptocurrency,” even if the company did come up with the concept that created Libra.
As far as decentralization is concerned, Libra is technically decentralized, with validation of transactions requiring multiple nodes run by different entities as opposed to a single source. But as the whitepaper itself mentions, the blockchain is still permissioned, restricting access to validation privileges only to members of the association.
What about vulnerabilities?
Robust as blockchains are, because of their trustless nature, they’re still bound to one particular weakness: Consensus can be “corrupted” if 51% or more of the chain’s “participants” validate a malicious transaction. This is known as a double-spend attack or, more commonly, a 51% attack.
The ability for a blockchain to function despite some malicious actors in it is known as the Byzantine Fault Tolerance (BFT). Libra operates under the same principle, perhaps intending to one day become a truly permissionless blockchain.
However, rather than having a BFT consensus model that favors the decision made by 51% of its validators, Libra’s whitepaper outlines a model in which this number drops to above 33%. Technical documentation clarifies this further:
“LibraBFT assumes that a set of 3f + 1 votes is distributed among a set of validators that may be honest, or Byzantine. LibraBFT remains safe, preventing attacks such as double spends and forks when at most f votes are controlled by Byzantine validators.”
Returning to the whitepaper, this is described in simpler terms:
“[LibraBFT] builds trust in the network because BFT consensus protocols are designed to function correctly even if some validator nodes—up to one-third of the network—are compromised or fail.”
From the understanding one could draw from both the whitepaper and more detailed technical documentation, Libra’s blockchain can technically suffer a “34% attack” where this proportion of nodes in the network is all that’s required to collude and corrupt the blockchain.
However, because this is a permissioned blockchain, the likelihood is very slim, as the parties that run Libra nodes all have a vested interest in making sure the network runs smoothly.
If the Libra blockchain ever becomes permissionless—a possibility the whitepaper implicitly suggests—then incentives begin to diverge. Facebook and the other members of the Libra Association will have to face the fact that 34% of nodes might not be enough to safeguard a blockchain.