There have been several announcements in the news about a blockchain protocol known as LBRY. But what do these announcements mean for the platform? Is it really on its way out?
Read on to learn more about the LBRY network and what it means for the future of this unique protocol.
What is LBRY?
LBRY is an open-source network based on blockchain technology that can be used to share media such as videos and pictures. Developers can build apps on the protocol similar to the way you are able to build apps on Ethereum.
Creators can choose to share their media using the LBRY protocol in numerous ways. You can share videos using a price per stream where users pay to download something (think what iTunes used to be) or you can post videos that users can watch for free (think YouTube).
As it was, LBRY was considered a better alternative to sites like Spotify, Instagram, and YouTube because there was no advertising, and no bias over which content was shown to users. It also was decentralized, meaning the protocol wouldn’t ban users whose content they may not have agreed with. The major app developed on the LBRY protocol was Odysee, which basically was a decentralized version of YouTube.
At its genesis, there were many followers behind LBRY and community that kept the platform going. That all started to change in November 2022.
SEC Destroys LBRY
In the fall of 2022, the SEC began battling with the creators of the LBRY protocol. The way LBRY works is that users must purchase LBRY tokens in order to pay for things on the platform. The creators have also sold LBRY in order to raise funding to keep the platform alive. According to the SEC, the sale of these tokens was considered the sale of an unlicensed security, which is illegal in the United States.
The creators of the LBRY protocol entered into this battle with the SEC sometime during the fall, and it wasn’t until November that the rulings began to be finalized. The final ruling from a judge came on November 7th, 2022, and it was a dark day for LBRY because the judge sided with the SEC, ruling LBRY an unlicensed security.
What Happened to LBRY?
The individuals behind the LBRY protocol are smart, and they saw the demise coming. On November 29th, 2022, after the ruling was handed down, they took to Twitter to inform users what had happened.
In the tweet, the founders expressed that this ruling would likely be the end of the platform, especially because the SEC plans to fine them over $20 million, which is much more than the reported $12.2 million that the platform made through the sale of LBRY tokens.
Additionally in the tweet, the founders recognized the leaks from within the government (especially the SEC) and stated that they wanted the members to hear it from them and not from the news at a later date.
While this is sad for the creators of this platform, it is also sad for the cryptocurrency industry as a whole, because this particular ruling could make the sale of almost any token illegal. Thoughts of that aside, the creators of the LBRY protocol state that LBRY will still be around, but it will likely die out soon, as the company will no longer be able to fundraise to keep it alive and there is less incentive for users to develop the platform. They cannot put any more money into the development.
Sadly, LBRY, as the community know it, is done.
What LBRY’s Downfall Means for Crypto
Overall, 2022 was a dark year for cryptocurrency. While the year started out with some all-time highs, it ended at some all-time lows. There was the unfortunate finding of FTX insolvency which eventually led to the arrest of Sam-Bankman Fried. As a result, numerous investors found themselves out everything.
All that aside, regulatory bodies have begun to crack down on cryptocurrency as a whole. From Ripple’s SEC case, to the pending SEC case against FTX, it is becoming harder and harder to get into the space without facing scrutiny. Suddenly, Satoshi Nakamoto’s disappearance after creating Bitcoin is starting to make a little sense.
Although all these court cases might start to scare people away from blockchain technology, the truth is, this is the future of the world. Even if LBRY goes by the wayside, companies all over the world are starting to use blockchain technology to accomplish things. From using it to better supply chains, or to build a virtual world (Metaverse anyone?) blockchain technology is coming, and it’s time that people learn to accept it.
What society needs to do now is decide what they want from blockchain technology. If they want everything to carry on the same as it has always been, then standing behind the SEC rulings make sense. The SEC will continue to quash any decentralized protocol that pops up and citizens will forfeit more and more of their privacy. The government will control cryptocurrency and it won’t mean freedom for anyone.
But, if you want something different, say a world where private data returns to being private and people have control over the blockchain (as opposed to the government) the time to fight back is now.
Unfortunately, this is easier said than done since you can’t exactly march into the SEC headquarters and demand they leave LBRY alone. But what you can do, is continuing to support decentralized protocols.
This is a bit of a double-edged sword, however, because there are many decentralized protocols out there that are scams. So, the best thing you can do in the now is to research products before you buy in and ensure you are supporting the good ones. LBRY was a great platform with a mission we are sad to see go. And we know it won’t be the last platform we say goodbye to either.