Facebook Libra– The cryptocurrency which wants to re-invent money as we know
What is it?
It is Facebook’s attempt at a ‘regulated’ and decentralised cryptocurrency which uses blockchain technology just like Bitcoin. However, because cryptocurrencies like Bitcoin are permission less, whereas Libra isn’t permission-less, some people argue it isn’t a cryptocurrency at all. They call it a digital currency instead. I leave the terminology up to you.
According to Facebook, it will be of help to people who do not have access to a traditional bank or find using their financial services expensive. Their play is that unlike others, Libra will be backed by a reserve of other assets like bonds or other nations currencies for stability and governed by the ‘independent’ Libra Association. It has went as far as creating a subsidiary company– Calibra, just to look after crypto dealings and protecting user privacy. Your Facebook data will never mix with Calibra, so your Libra payments (in theory) will never be used for targeted advertisements.
Libra is built in an open source manner, so that anyone can use it on a global scale. Imagine online payments all over the globe with apps like WhatsApp, Facebook Messenger, or the Facebook app itself. Independent developers and organisations will be able to build on the infrastructure to cater to everybody’s needs. Facebook has developed a new programming language just for Libra– Move, which supposedly prioritises security and stability.
Many different companies have already invested in it to become a part of the association governing it. Some of them are: MasterCard, PayPal, Visa, eBay, Vodafone group, Spotify, Uber, Lyft.
Who is it for?
Everyone! That too on a global scale. You will only need the Calibra app to buy and use Libra and because your Facebook/WhatsApp accounts will not be mixed, you don’t need to be a member too. People with less money who pay more for financial services will find Libra to be of immense help.
When will it be available?
Libra is slated to launch near 2021 but if there’s one thing most people know, release dates are flexible.
What is there to be feared?
Time and time again, we have been showed that Facebook and privacy don’t necessarily go hand in hand. This is just pure speculation by me, but it is very much possible that a developer only, by exploiting the open source nature of Libra may be able to scam people in ways most of us can only imagine. Then again, humans have a tendency to fear what they don’t fully understand.
It also has been reported that the US house of representatives sent a letter to Mark Zuckerberg and his associates advising them to stop Libra’s development as they see it as competition to the US dollar, but that’s a whole different story.
Final Verdict.
I believe that the scale of adoption will be instrumental in the success of Libra. But, it is too early to make any judgements as no one even knows for sure whether or not it will even be even available to the general public.
