Top 5 Things To Know About The New Facebook Cryptocurrency Libra

What are the top 5 things we should know about the new Facebook cryptocurrency Libra?

Facebook finally announces the details about the new cryptocurrency called Libra. Libra will be available starting next year to the billions of people who use Facebook services like Messenger, WhatsApp, and Instagram.
Top 5 Things To Know About The New Facebook Cryptocurrency Libra

The answers went in Phases:

Phase 1:
  1. It’s the 6th most centralized blockchain right now
  2. It will probably become the 13th most decentralized blockchain once it becomes permissionless
  3. It will possibly shoot Bitcoin to $20,000 or $50,000 through giving it so much mainstream coverage
  4. It will possibly replace Paypal and banks at the same time
  5. It will be governed by just 1 person, the Managing Director of the Libra foundation (bad).
Phase 2:
  1. Libra will be a Stablecoin pinned to a basket “of low-volatility assets".
  2. Libra will be a permissioned blockchain with transactions on its system maintained by servers run by members of the Libra Association, big tech and payments companies. Bitcoin or other cryptocurrencies are a permissionless blockchain; transactions on their system are maintained by anyone who wants to maintain them.
  3. Libra is just a sort of transitory interface for any currency based banking.
  4. Libra doesn't complete some of cryptocurrencies principles and backed by the real-world currency doesn’t offer the same level of investment opportunity. In effect, it’s only a new digital means for people to transfer money.
  5. In the next 5 years they will become fully decentralized governed by an autonomous council.
Libra is a permissioned blockchain digital currency proposed by the American social media company Facebook. The project, currency and transactions are to be managed and cryptographically entrusted to the Libra Association, a membership organization founded by Facebook's subsidiary Calibra and 27 others across payment, technology, telecommunication, online marketplace, venture capital and nonprofits.

As of July 2019, the currency and network do not yet exist, and only rudimentary experimental code has been released. The launch is planned to be in 2020.

The plan is for the Libra token to be backed by financial assets such as a basket of currencies, and US Treasury securities in an attempt to avoid volatility. Facebook has announced that each of the partners will inject an initial US$10 million, so Libra has full asset backing on the day it opens.

Libra service partners, within the Libra Association, will create new Libra currency units based on demand. Libra currency units will be retired as they are redeemed for conventional currency.

Initial reconciliation of transactions will be performed at each service partner, and the blockchain's distributed ledger will be used for reconciliation between service partners. The intent is to help prevent everyone but members of the Libra Association from trying to extract and analyse data from the distributed ledger.

In contrast to cryptocurrencies such as bitcoin which use permissionless blockchains, Libra is not decentralized, relying on trust in the Libra Association as "a de facto central bank".


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