Facebook recently announced that it will be launching a cryptocurrency named Libra in 2020. Now there is a lot of hype about it in the crypto market, everyone wants to know more about Libra and people look keen on investing in this new cryptocurrency, So we have come up with this article to let you understand all about Libra in an easy way-
What is Libra?
Libra is a new cryptocurrency which will be launched and governed by Libra Association with Facebook as the Initiator. Libra is based on Blockchain Technology and is Supposed to be stable and less-volatile in nature. It is a new decentralized blockchain, a low-volatility cryptocurrency, and a smart contract platform that together aim to create a new opportunity for responsible financial services innovation.
Libra cryptocurrency is represented by three wavy horizontal lines Unicode character ≋. Facebook has also created a subsidiary company “Calibra” which will be providing financial services enabling people to use Libra. Libra association includes big name like Mastercard, Visa, Uber, eBay, Spotify, PayPal, PayU, Stripe, Vodafone Group and others.
“Libra’s mission is to enable a simple global currency and financial infrastructure that empowers billions of people”
- How will you be able to use it?
Facebook has created a Calibra Wallet, which you will be able to download once it has been launched. This will enable users to send Libra to almost anyone who is on a smartphone. Maybe later it can be integrated into Facebook, Messenger and Whatsapp. Besides others can also create libra wallets which will improve the ecosystem.
- What will you be able to buy with it?
You will be able to make online transactions/sending money in the app. But since many Big named companies are part of Libra Association, it is expected that they will also accept Libra increasing payment venues for Libra Users. More companies are expected to become members of Association in future, expanding the use of Libra as a payment system. It is expected to be a payment ecosystem for everyone.
- What is Libra Association?
Libra Association is a group of financial, commerce and other firms who will be founding members of Libra. Libra Association HQ is situated in Geneva, Switzerland. Libra Association is expected to govern and guide its development in a manner. Libra Association is expected to boost credibility and reliability to new cryptocurrency. These founding members are expected to bring the trust of people in Libra.
- What do members of Libra Association do? Why have they joined the association?
They oversee the process of its development, its reserves and its ecosystem. Each founding member has to pay $10 Million in order to become a member of the association beside other requirements. Later, they will be paid dividend from interest earned on Libra reserves. 28 members are already on the team. Libra association targets to have 100 founding members of Libra before its launch day.
- Your personal data will not be given to ad companies(Claimed).
It is not a secret that your personal data is shared with many ad companies by related entities for revenue and content optimization. However, Facebook has claimed that it has created a subsidiary company called Calibra, which will be supervising and developing products around Libra. So your personal data related to Calibra Wallet is to be secure(Claimed).
- Cryptocurrency Libra will be StableCoin Alike: No Investment prospect hence.
Libra will be in the types of Stablecoins such as USDTether, TrueUSD etc. Price of Libra is to be low volatile and mostly stable to a basket of Fiat currencies. Since its Price is to be kept Stable there will be no investment value in it. Hence dont just rush to buy it as it will be around with same value afterwards. Libra will be backed by bank securities and assets.
Comparison With Bitcoin-
Bitcoin is far different than Libra, While both are Blockchain based and payment systems, they are totally different, here are some points to understand this-
- Bitcoin is in limited supply while Libra has no such limit.
- Bitcoin’s price depends on demand and supply while Libra will have stable price, meaning while Bitcoin has investment incentive Libra Don’t.
- Bitcoin is developed by the community while Libra’s development will be in hands of big Companies.
- Bitcoin is highly anonymous while Libra is not.
- Bitcoin wallets except for some providers don’t need KYC while Libra wallet will.
- Bitcoin transactions are slow while Libra’s transaction speed will be considerably high.
Comparison With Paypal-
With investment incentive out of the game, crypto investors don’t have much use for Libra, beside Libra is designed to be a stable payment medium which put it in range of payment processing companies, a sector dominated by Paypal, let’s see how both are-
- Paypal is regulatory compliant and present in most countries while Libra is yet to come.
- There is no issue of price and volatility in PayPal while Libra will have the issue as the currencies it will be based upon face volatility with respect of others.
- Paypal provides protection to buyers and that program is highly trusted since buying from unknown stores always carry a scamming risk, which won’t be provided by Libra.
- Paypal transactions are instant while Libra transaction at large volume will face slow speed with the capability of the network
- Paypal Fees are high while Libra fees will be much Low.
Libra is an effort by Facebook to provide financial services to Unbanked, Many regulators have already raised their voices against Libra because of Facebook’s disregard of privacy concerns and also their recent troubled past. There are a lot of hurdles Libra is going to face, but we expect whatever will happen to libra its impact is going to be good for Crypto world.