libra facebook cryptocurrency

 

libra facebook cryptocurrency

Libra is the cryptocurrency designed and wanted by Facebook: it is a "stable coin" that is to facilitate the exchange of money through social networks or tools such as Messenger and WhatsApp. Thus, a parallel, blockchain-based currency is born for exchanging money between users or providing and paying for online services.

Libra, the new cryptocurrency wanted by Facebook to deliver financial services through its social network-a potential revolution with which the Libra Association hopes to be able to engage billions of users. The rationale is that much of the world is now outside of banking circuits, but through Libra, it could tap into resources and opportunities hitherto unavailable. The potential is immense and the caliber of partners already involved represents the best promise for a stable coin that is born to drive a revolution.

With Libra, one will be able to send a payment via Facebook, WhatsApp, or Messenger, and the user (or company) receiving the sum will be able to leverage a stable exchange rate with the dollar to convert their sum and use it at will. The cost of transactions will be minimal and the whole thing will start in 2020.

What it is.

Libra is the cryptocurrency wanted and designed by Facebook. For what purpose? To "reinvent currency," explains Mark Zuckerberg's team: "to transform the global economy. So people everywhere can live better lives." Because Facebook now consists of an immense (and growing) international community Libra was born as a potentially globally accepted currency, with a user base far greater than that of any other cryptocurrency in existence, with an established group behind it, and with an avalanche of opportunities in front of it.

libra facebook cryptocurrency

Stable coin

By definition, Libra is a blockchain-based "stable coin," i.e., a cryptocurrency whose value is statistically tied to the value of the dollar: this allows for easy exchange and takes the value of the currency out of the ups and downs with which the cryptocurrency market has long cradled the various Bitcoin, Ethereum, and others. Stability will be provided by a set of low-volatility assets, a kind of value standard that will allow the valuation to be kept stable over time just as happened with the "gold standard" for traditional currencies.

The fact that it can be easily used on Facebook, Messenger, and WhatsApp makes it a global currency that users will inevitably have to deal with: it will facilitate the exchange of money between people, regulate the exchange of value between users and businesses, and enable money exchanges across digital platforms.

Thanks to Libra, then, it will be possible at any time to send small amounts of money to any other user: once that money is received, it will be possible to manage its exchange, or it will be possible to reuse the credit acquired in other services or other purchases conveyed through the platform.

Permissioned

The blockchain underlying Libra is authorized, meaning that it can validate exchanges only upon approval by a set of central hubs. This makes Libra a very different cryptocurrency from Bitcoin, less free, and more controlled. The Libra Association explains that it aspires to a Permissionless system, devoid of centralized control and validation systems, but to date, there is not yet a sufficiently fast, secure, and scalable solution available to deliver such a solution into the hands of billions of users.

The technological heart of Libra could therefore evolve in the future, leading to a Distributed Ledger Technology that is as open as possible and as compliant as possible with that Facebook idea of giving birth to the world's most accessible currency.

libra facebook cryptocurrency

Libra Association

The presentation and management of Libra will be by the Libra Association, a "nonprofit" association based in Geneva. The association will be tasked with evolving the Libra Blockchain (the technological basis of cryptocurrency and a platform capable of certifying the exchange of value and individual digital wallets) and managing the reserves underlying the stable coin. The latter is a crucial aspect, the very essence of the project in that only by being able to manage specific reserves is it possible to envision a system that acts as a guarantor of value, transactions, and users' savings.

Facebook's partners in this venture include the likes of PayPal, Uber, Vista, and MasterCard, but also Spotify, eBay, Vodafone, Andreessen Horowitz, Coinbase, Iliad, Women World's Banking, Kiva, Booking Holdings, Farfetch, PayU, Mercado Pago, Creative Destruction Lab, BisonTrails, Xapo, Anchorage, Breakthrough Initiatives, Stripe, Lyft, Thrive Capital, Ribbit Capital, Union Square Ventures, and Mercy Corps.

Each of these brands not only brings collateral to the system but also offers new markets within which the currency will be able to circulate. This is an extremely valuable asset for a cryptocurrency that is proposed starting from a huge potential user base, from an immediately large pool of services, and therefore with all the prerogatives to bring about a real positive earthquake in the FinTech sphere.

The interest accrued from the money flowing into the association will first go to offset the costs of running the system, then accrue dividends accruing to the companies that have invested in the project. No coupons will be devolved to users since the purchase of Libre should not be considered as an investment but as a simple currency exchange.

What is it worth?

As a "stable coin," Libra has a predetermined value that ties it to the value of a currency such as a dollar. This makes the value of the cryptocurrency stable, forcing its exchange balances so that at any time the mechanisms and value of the amount sent or received can be clear.

The fact that the value of the exchange rate is practically fixed in relation to the Dollar implies that the exchange rate can be calculated at any time with respect to any other currency. It thus becomes possible to calculate the Euro/Libra exchange rate, for example, to figure out how much money an amount invested in the cryptocurrency is equivalent to. To pursue this assessment, we rely on an image that hints at what might be an initial exchange ratio against the U.S. dollar, the currency used as the main reference in bridging the traditional economy with Libra.

libra facebook cryptocurrency

Libra/Dollar Exchange Rate

As specified by the White Paper describing the cryptocurrency, the exchange rate is as follows:

1 LBR = 1.0493

Libra/Euro exchange rate

In light of the exchange rate with the U.S. dollar, it is possible to infer the value of Libra in Euros (€1 = $1.119):

1 LBR = €0.94

When does it arrive?

At the moment there is still no official date for the arrival of Libra and Calibra, but the debut will not take place before 2020. Evidently, the Menlo Park team intends to finalize everything necessary from a technical and legal point of view before fleshing out what is a major innovation, linked and taken care of moreover by a dedicated division called Calibra.

Calibra

libra facebook cryptocurrency

Calibra is the division of Facebook deputed to work on Libra. The first product to be handled by the Calibra division is the digital wallet designed for cryptocurrency, a wallet that the group will make available as much on Facebook, and messenger, as on WhatsApp, and as a standalone app.

Calibra's digital wallet will be used to receive, send and store its value expressed in Libra. As of today, the details are still unclear, but Facebook explains how the intention is to allow money to be sent instantly (as with sending a message or sharing a post) and at completely minimal cost ("low or zero"). The wallet will be accessible from virtually any smartphone, not least because Calibra's goals include the maximum democratization of access to credit, even outside the banking and credit systems, even and especially in emerging countries.

Above all, Calibra's primary goals include the creation of deep security measures that allow virtual money to be exchanged with peace of mind so that payment processes can be at least as secure as they are through the traditional systems that exist today. Fraud, spoofing, phishing, and other fraudulent systems will have to be outlawed from the outset, so that the Libra ecosystem can be truly secured and the wallet can be managed frictionlessly by any user, whatever computer culture he or she possesses and whatever caliber of exchanges he or she intends to convey.

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