The worst kept secret in crypto is finally out in the open. The white paper for Facebook’s new cryptocurrency, Libra was unveiled on June 18. Let’s take a look at what is the Libra coin, and what details we know about it so far.
What is Libra?
Libra is the newly announced cryptocurrency from Facebook. Rumors have been building in the last couple of months about the project. It will be built on its own blockchain technology, and will be released sometime in 2020. Its mission, according to the white paper, is to “become a simple global currency and financial infrastructure that empowers billions of people.”
How will you be able to use Libra?
It was revealed in the white paper that Facebook will create Calibra, a subsidiary that will be in charge of creating the digital wallet for Libra. It will be available on Messenger, Whatsapp and as an app itself.
Who will operate Libra?
Its day-to-day operations and its launch will be governed by the Libra Association, a not-for-profit organization that will be based in Geneva, Switzerland. Members will “consist of geographically distributed and diverse businesses, nonprofit and multilateral organizations, and academic institutions.” Quite possibly to deflect accusations of its centralization, members of the association will also run nodes and verify transactions on the blockchain.
What will I be able to buy?
As well as being able to send money between each other through Calibra, you will be pay for items online using the currency. It is not clear what items or where yet, but with founding members of the Libra Association including eBay, Spotify and Uber, it seems that several major online merchants may be among the places you will be able to spend it.
How will I be able to buy Libra?
This is also not clear at this moment, but with members of the Libra Association including Mastercard, Visa and Paypal, many are speculating that customers of these payment systems at least will be able to buy Libra.
Will it be safe?
Within just a day of its announcement, many in the world of tech are already debating its safety. This is not surprising in the wake of the multiple security breaches, such as the Cambridge Analytica scandal, that the social media giant has suffered in the last few years. The creation of Calibra to oversee the digital wallet of the currency, and also to ensure the separation of data from transactions and platform usage, is to counteract these fears. Also, as referred to above, members of the Libra Association will verify blockchain transactions, and each member will only have one ‘vote’, so Facebook couldn’t take control of it even if they wanted to. But still, questions remain. Tech Crunch speculates that a ‘dodgy developer’ could use the newly developed coding language, with the ostensible purpose of making Libra apps, to steal Libra currency.
Will it rival and even kill Bitcoin?
While it already has probably become the most famous cryptocurrency in the world alongside Bitcoin, the truth is they are very different animals. Despite any endeavors to claim otherwise, its governing body is made up of many multinationals, which alludes to a centralized nature. This will NOT go down well with many in the world of crypto. Quite possibly the most central tenet if Bitcoin and the like is decentralization, and even though no-one will have control of the Libra Association, it’s fair to say that many in the world of crypto will never be won over because of suspicions over its membership.
Will you be able to exchange Libra?
To put it simply, yes! Facebook state in the white paper that it has been ”backed by a reserve of real assets — the Libra Reserve — and supported by a competitive network of exchanges buying and selling Libra.”However, it has been designed as a stablecoin. This means that its value will be tied to the value of fiat currency, to give confidence in its long-term stable value. This will suit some, obviously, but speculating investors, who are drawn to the exchange of Bitcoin and other cryptocurrencies because of their volatility, will be most likely put off by this.
Written by Rick O'Neill