Architecturing The Global Brain with a New Digital Currency: Facebook Unveils Its Libra Cryptocoin
by Alex Vikoulov [Posted June 18, 2019 11.11 am PST]
The social media giant announces a new digital currency called Libra to be used as a peer-to-peer payment within messenger apps. Analysts agree that could legitimize the space, make it easier to buy other crypto assets.
On Tuesday, June 18, 2019, Facebook has officially announced details of its cryptocurrency, a digital coin called Libra which will let you buy things or send money to people with nearly zero fees around the globe. Transactions will be facilitated by a third-party wallet apps or Facebook’s own Calibra Wallet that will be built into WhatsApp, Messenger and its own app. The launch of this blockchain system is expected in the first half of 2020.
Facebook won’t be in full control of Libra, but will get only a single vote in its governance like other founding members of the Libra Association, such as Visa, Mastercard, Uber, PayPal, Spotify and Booking Holdings, which have invested at least $10 million each into the project. Facebook’s VP of blockchain, David Marcus, explained the company’s crypto move during a briefing at San Francisco’s historic Mint building. “If we were controlling it, very few people would want to jump on and make it theirs,” says Marcus. Facebook is launching a subsidiary company also called Calibra that handles its crypto dealings and protects users’ privacy.
Facebook wants to “enable a simple global currency and financial infrastructure that empowers billions of people,” according to its white paper. Some 1.7 billion people who lack a bank account might choose whoever offers them a financial services alternative as well as their online identity provider, too. “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,” Facebook writes in the white paper. That would be a huge improvement for people who use remittance services charging an average of 7% to send money abroad, taking $50 billion from users annually.
Unlike highly volatile and speculative Bitcoin, Facebook’s Libra will be endorsed by the relationship with 7 million advertisers and 90 million small businesses, but what’s even more important, Libra will be relatively stable as it will be pegged to the USD and other convertible currencies: euro, pound, Swiss franc and yen. A Libra is a unit of the Libra cryptocurrency that’s represented by a three wavy horizontal line unicode character ≋ like the dollar is represented by $. The Libra Association is based in Geneva, Switzerland and will meet biannually. The country was chosen for its neutral status and strong support for financial innovation including blockchain technology.
The Facebook project is expected to cost $1bn and has been in development for a year. It should enable Facebook’s 2.4 billion monthly users to change dollars and other international currencies into Libra coins. The digital currency can then be used to buy goods on the Internet – or wherever it’s accepted like in shops and other outlets – or to transfer money, without the need for a bank account. Transactions will be ultrafast but will not be completely free. There will be a tiny fraction of a cent fee to pay for “gas” that covers the cost of processing the transfer of funds similar to with Ethereum. This fee will be negligible to most consumers, but when they add up, the gas charges will deter bad actors from creating millions of transactions to power spam and denial-of-service attacks.
Even big investment banks are excited about the prospect of this international digital currency. Over the long run, Libra has much more potential to be adopted than Bitcoin. Also, Libra has a tremendous disruptive potential for national currencies, especially in developing countries. This may become a payment medium of choice for billions of customers in cross-border transactions. This initiative positions Facebook as one of the key actors at the center of the crypto asset development, and a main architect of this emerging and crucially important trend – building the Global Brain architecture.
READ MORE: Facebook announces Libra cryptocurrency: All you need to know [TechCrunch]
Keywords: Facebook, Libra, Calibra Wallet, blockchain, crypto, cryptocoin, cryptocurrency, bkockchain technology, digital currency, digital coin, crypto asset, Global Brain, peer-to-peer, Libra Association
Image Credit: Shutterstock
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