Libra Coin is A Basket of Confusion
Many are confused as to whether Facebook’s new coin is a cryptocurrency, if it is built on a blockchain, and if it really is a step forward. People want to know if they can trust Facebook and if this is anything like bitcoin. Let us investigate.
But first, let’s hear it from Facebook “Libra is a global, digitally native, reserve-backed cryptocurrency built on the foundation of blockchain technology. People will be able to send, receive, spend, and secure their money, enabling a more inclusive global financial system”.
Is Libra a Cryptocurrency?
Not necessarily. Libra is definitely one step forward than fintech companies such as Venmo but it isn’t truly similar to cryptocurrencies such as DAI, Monero or bitcoin. These cryptocurrencies are run on blockchains, have different governance mechanisms and are likely to stay more decentralized than corporate run digital payments network.
While Facebook is said to be built on a blockchain, it is permissioned, for the most part.
Furthermore, the project expects to become more open and decentralized over time. That last part, might not take place, its Facebook after all.
Basket of Currencies
Libra will be backed a variety of currencies and government debt assets, including the euro, and others for stability. You don’t want Libra for appreciation in assets, you want to hold it to exchange value on a regular basis.
If users want to minimize their exposure to national currency instability, they would simply convert to Libra and hold it.
KYC and AML Inherent
Sending Libra via Facebook means that KYC and AML procedures are already taken care of.
Facebook has your identification, it knows who you are, it knows your friends, family, where you live and where you go to work.
The social media giant knows your past relationships, and where you might have gone for lunch the other day.
The project is supposed to be in conjunction with Facebook but it is the main backer. Users should tread accordingly.
Don’t expect it to be censorship resistant.
Libra is an exciting project because it brings more exposure to the cryptocurrency industry. If the Libra Project takes off, it can certainly serve as a large on-ramp to digital assets, one would use Libra to exchange to BTC or Ether.
Facebook already has a global list of more than 2 billion active users who bring their own social graph into the equation.
If given the right approvals, the company is expected to integrate crypto into Whatsapp, Instagram, and its Facebook app.
Launching in 2020
Libra and Calibra is expected to launch in 2020, that’s just a short while away, this gives it enough time and more to meet with regulators, address concerns, build out tech and provide updates.
A Libra STO will also be coming soon to fund operations.
It will be interesting to see how fintech companies and developers build on top of Project Libra to open up more value.
The company has a host of key partners ranging from Paypal, Coinbase, Square, Vodafone, A16Z, and countless others who will help it become more popular in everyday transactions.
Partners also include Uber, Lyft, non profit organizations, and even music companies.
The One Basket Currency to Rule Them All?
The coin does signal that the cryptocurrency industry is not one that is a joke, it is one that is here to stay. Most may have laughed and discounted the cryptocurrency industry in the past as a passing fad. With large corporations such as Facebook, globally known, and varied in tech operations, taking steps toward a wide currency release, the cryptocurrency industry is becoming more relevant and is one industry that cannot be ignored.
The blockchain and cryptocurrency industry went from becoming an obscure sector to becoming mainstream. Companies such as IBM, Paypal, Moneygram, Jingdong, and other entities are stepping into the sector and making certain that they don’t miss the crypto boat.
People like the Winklevoss twins expect that more companies will launch their own cryptocurrencies over the next decade.
It looks the cryptocurrency sector is still in the very early stages and there is much room to grow.
What You Must Know about Libra
Libra Coin is A Basket of Confusion