Facebook: ABC of the Libra cryptocurrency
Libra developers believe the world needs a world currency, digitally native, that puts together the properties of the world's best currencies: confidence, low inflation, broad global recognition, and fungibility. The Libra currency is designed to help with these global needs, with the goal of expanding the way money works for further people around the world.
Libra is designed to be a stable digital cryptocurrency that will be fully backed by a pool of real assets, the Libra Reserve, and backed by a competitive network of exchanges that buy and sell Libra. That means that anyone with Libra has a high degree of security that they can convert their digital currency into local trust currency based on the exchange rate, just like exchanging one currency for another when traveling.
So they believe that collaborating and innovating with the financial sector, including regulators and experts in a diversity of businesses, is the only way to guarantee that a sustainable, secure and reliable framework underpins this new system. And this approach can take a big step toward a lower-cost, more accessible, and more connected global financial system.
The mission for Libra is a simple global currency and financial infrastructure that empowers billions of people. Libra is made up of three parts that will work together to create a more inclusive financial system:
It is built on a secure, scalable, and reliable chain of blocks.
It is backed by an asset pool designed to give it intrinsic value.
It is governed by the independent Libra Association, charged with evolving the ecosystem.
The monetary unit is called "Libra" and will have to be accepted in many places and easy to access for those who want to use it. In other words, people must have confidence that they can use Libra and that its value will remain relatively stable over time.
Unlike most cryptocurrencies, Libra is fully backed by a reserve of real assets. A basket of bank deposits and short-term government securities will be kept in the Libra Reserve for every Libra created, generating confidence in its intrinsic value. In this regard, the Libra Reserve will be managed with the aim of preserving the value of Libra over time.
What is the project about?
Libra behaves more like one of the so-called "stablecoin", cryptocurrencies that are linked to traditional fiat currencies such as the dollar or the euro. Here, the objective is to minimize their volatility so that their value cannot suffer those incredible ups and downs that we have seen with Bitcoin, Ethereum, Ripple, and others.
Libra will be accessible to anyone with an entry-level smartphone and data connectivity, backed by a reserve made to maintain its stable value.
Plus, Libra transactions are fast and easy, no matter where you're sending or spending your money. It is a global cryptocurrency that will be available worldwide as it fosters an ecosystem of products and services created to help people use Libra in their daily lives.
What's Facebook's bet on this cryptocurrency?
Facebook wants to enter fully into the financial sphere and will do so with its own cryptocurrency called Libra (which is mentioned). This cryptocurrency is, to a certain extent, an attempt to domesticate Bitcoin and control the phenomenon from large mega-corporations such as Visa and Facebook.
The social network emphasizes that the goal is to provide a financial system where people can easily access it, in addition to facilitating global money transfers in a simple way and with low commissions.
The liberation of Libra represents Facebook's boldest incursion into financial services, and the social media giant hopes it will give a chance to the "1.7 billion adults worldwide" who are "outside the financial system and do not have access to a traditional bank".
Proposal and possible uses in the future
Their developers have plans for a new decentralized blockchain, a low-volatility crypto currency, and an intelligent contract platform where together they can create a new opportunity for responsible financial services innovation.
Reinventing money, transforming the global economy are key features of their proposal. So, all these people in different parts of the world can live better with a simple global currency and a financial infrastructure that empowers billions of people.
Today his team was publishing Libra's white paper, which describes their goals for this cryptocurrency and also launched libra.org as a home for the association and everything related to Libra.
So, they will continue to be updated in the coming months. On the other hand, they are also opening the code for the Libra blockchain and releasing the initial Libra testnet for developers to experiment with and develop.
The Libra blockchain
Over the next few months, the association will work with the community to gather feedback on the Libra Blockchain prototype and bring it into a production-ready state. In particular, this work will focus on ensuring the security, performance, and scalability of the protocol and implementation.
Over the next few months, the association will work with the community to gather feedback on the Libra Blockchain prototype and bring it into a production-ready state. In particular, this work will focus on ensuring the security, performance, and scalability of the protocol and implementation.
As mentioned above, Libra is especially targeted at the 1.7 billion people who do not have a bank account and how costly it is for them to transfer money to their families. It is undoubtedly a promising initiative, as it has as allies big players such as Facebook, PayPal and Visa, other Silicon Valley companies such as Uber and Lyft, and big venture capital firms.
They still have a lot to do, and we need to know before the launch of the target in the first half of 2020.
