Libra – Reinventing Money With Facebook

On June 18th, 2019, Facebook finally revealed some details about its upcoming cryptocurrency Libra, previously rumored to be called GlobalCoin. Even more, they published an extensive white paper outlining both its technical aspects and the project’s vision. Aimed at delivering financial services to everyone across the globe, Libra combines the cutting-edge technology of new platforms like EOS and Tron, all the while remaining a stablecoin pegged to a set basket of fiat currencies.

Opportunities For The Underbanked

Obviously, banking services are not available everywhere. As the world has been getting increasingly interconnected, there are still remote areas and war-torn regions which traditional banks simply have no reason to service. What’s more, in the last few years many countries have been hit by hyperinflation, economic recession, and other crises. People all across Africa and South America turned to digital gold as a practical medium of exchange and a safe investment. In fact, cryptocurrency can be a life-saver for those in failed states and lacking the infrastructure to simply exchange goods and services, not to mention cross-border payments. Due to the nature of blockchain technology, it is easy to operate and impossible to shut down, while low maintenance costs mean that fees can be kept extremely low. Libra aims to be a better alternative to existing solutions, a stablecoin people have trust in.

What It Takes To Reinvent Money

Facebook with its 2+ billion active users is uniquely positioned to target a large audience and become the new PayPal. Amidst rising concerns about data policy and user privacy, this is the right time for the company to change public opinion and turn itself around. Instead of creating a centralized in-app token, Facebook has instead decided to share control over Libra with 99 other founding organizations. The latter are carefully selected based on a number of criteria, and they include everything from tech giants to renowned research institutes. Among the companies that have joined in, each invested no less than 10 million USD. Planned to transition to a permissionless network in the future, the protocol will be run and governed by the Libra Association, and the founders will receive a share of the fees collected from transactions.

Pay With One Tap

As to the functionality and use cases of Libra, it will allow instant payments from within the Facebook Messenger, WhatsApp, the Calibra wallet app developed by Facebook itself, or any other wallet service. Currently, a programming language called Move is being developed with the possibility of providing smart contract functionality in the future. Libra will utilize a Byzantine Fault Tolerant (BFT) consensus mechanism based on the VMWare’s HotStuff framework, which will ensure the security of the network and a decent transaction speed of 1000 TPS.

A New Milestone for Crypto

Libra is expected to launch in 2020, and this will be an important development in the story of cryptocurrency. While some have already labeled Libra the “next Bitcoin killer”, the reality is quite the opposite. As a stablecoin, Libra will not be in direct competition with BTC. Besides, the crypto space is still at its infancy, and the hype, attention, and inflow of new users will inevitably drive Bitcoin’s price upward and will only reaffirm its value as an asset for investment.