Everything You Need to Know About Facebook’s New Cryptocurrency; Libra

Everything You Need to Know About Facebook’s New Cryptocurrency; Libra
Thimantha | Technology | 4th July 2019
Facebook is set to launch its new cryptocurrency called Libra early next year. Even though Libra will live on the blockchain, it will be more similar to PayPal than a true cryptocurrency like Bitcoin. Here’s how Libra cryptocurrency works. 

Image by TechCrunch

Libra is technically a stablecoin which uses the blockchain to record transactions. Which means that Libra will not be affected by the sudden price fluctuations faced by true-cryptocurrencies like
Bitcoin. To distant Libra from Facebook, they have set up an independent non-profit association currently comprising of 28 members including PayPal, eBay, Lyft, Visa and Mastercard. Each of these members in the council will maintain a node on the network. Facebook hopes that this association will grow up to over 100 members by the time Libra launches in 2020. This association will be responsible for verifying the transactions on the network. 

Image by TechCrunch
 

Like the Dollar is represented by $, Libra will be represented by the three wavy lines ≋. Libra’s value is tied to bank deposits and securities for a set of chosen, historically stable international currencies including the USD, Pound, Euro and Yen. The stable nature of the Libra coin gives merchants the confidence that the payment they’re accepting today will not dip in value the next day as traditional cryptocurrencies might do. Technically, Libra is a
stablecoin rather than a true cryptocurrency. 

Image by DigitalTrends
 
The Bitcoin blockchain is designed to handle 7 transactions per second. and Ethereum 15. By contrast, the Libra blockchain is designed to handle 1,000 transactions per second which will make it much faster than traditional cryptocurrencies. Libra Blockchain will be open source with an Apache 2.0 licence and it will be open for any developer to build apps for using their very own Move language

Image by Coindesk

Facebook has announced the very own
Calibra app that will act as a Libra wallet. More apps will be coming out once the coin is officially launched in 2020, potentially from partner companies of Libra like PayPal and MasterCard. These apps will make it much easier for people to transact money between each other and pay for services and products. It seems like Facebook is trying to make sending money as easy as sending a Facebook message. This will provide services like Spotify a huge advantage given that they themselves admit that one challenge they’re facing in converting more users to Spotify Premium is the lack of easily accessible payment systems in financially underserved markets. Libra will counter this accessibility issue and pave the way to enable payments in mass scale. 
 
It seems like Facebook is trying to reinvent money by spearheading a global coin which could be easily used by any person on the planet, has low transaction fees and is fast and secure. We can only wait and watch how the story unfolds; whether millions of people cash in money for Libra and the network booms as profits soar for the founding members and ease transactions for millions around the world, or it gets proven unreliable and cost a lot of people their money. Never forget Cambridge Analytica

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