June 22, 2019
Facebook’s Libra : A New Global Cryptocurrency
Facebook lastly announced its entry in Blockchain on 18 June 2019 after being in rumors for months. Libra, a new global currency is presently a joint project of 27 organizations including giants such as Facebook, MasterCard, PayPal, Vodafone and many more. Libra is Not-for-Profit membership Organization headquartered in Geneva, Switzerland. Facebook is presently leading the project, but after the project is launched it will retain an equal share.
What is Libra?
Libra is a new cryptocurrency that will be launched in the first half of 2020. It is created to provide an easy mode of payment among all the individuals and organizations in the world by eliminating the banks which charges 4-7 percent tax on global transfers. As per Libra’s White Paper :
“success will mean that a person working abroad has a fast and simple way to send money to family back home, and a college student can pay their rent as easily as they can buy a coffee”
How it is different from Bitcoin & Ethereum?
The primary issue with bitcoin, Ethereum and other cryptocurrencies is the rapid fluctuations in their fiat value. On the other hand, each Libra coin will be backed up by a real assets and these assets will be invested in different markets that don’t fluctuate much like Dollars, Pounds, Euros, Yan, etc. So if an individual buys Libra Coin today, tomorrow he'll get nearly the same quantity in exchange.
Libra's other benefit is its speed. It can make up to 1000 transactions per second while Bitcoin can do 7 transactions and up to 15 transactions can be done by Ethereum.
What is Libra Reserve?
Each Libra coin is backed up by real asset and all these assets are stored in Libra reserve. Initially Libra reserve will be created by the investments of its founding members and subsequently whenever Libra coin is minted (created), an equivalent asset will be transferred to reserve and asset will be returned whenever a coin is burned (destroyed).
The return gained from the asset's investment will be used for Libra Organization's expenditures and the remainder will be distributed among the founding members. Users are not going to get any portion of the exchange.
Libra Future Plans?
Facebook is planning to launch libra in market by first half of 2020 and also planning to increase the members to at least 100.Facebook also works on its own Calibra wallet which will be incorporated into Whatsapp, Messenger and its own application. The calibra will be a separate entity from Facebook, such that data collected using Calibra will not be used for showing advertisements on Facebook.
Libra is creating its own language to “MOVE” to create smart contracts and Libra BFT consensus algorithm to let developers code their own apps using Libra.
The Libra Blockchain?
For now Libra is going to use Permissioned blockchain, because of lack of nodes available but it will move to permission less blockchain in next 5 years. Permission less blockchain will help Libra to reach out to more people and will increase the speed. Also unlike the current blockchain that is assumed as collection of blocks, Libra Blockchain will be treated as a single data structure so that work applications can be simplified by just requesting data from a single source. The Libra Blockchain is pseudonymous which allows users to create one or more accounts that are not related to the identity of their real life.
Will Libra change the way we do transactions?
The Libra Association is planning to do the same thing, but implementing it is not simple. Blockchain's scalability is the first reason, and access to mobile phones and internet is another. Facebook and other founding members are planning to originally provide customers with free libra coins to generate a market and also permit resellers to reach out to every corner of the globe. A big client base that will be used to expand Libra is one of the requirements for becoming a member.
Libra White Paper : White Paper
Next Article : Libra for Developers.