The much anticipated details surrounding Facebook’s blockchain project have finally been revealed.
The social media giant has announced its digital currency, Libra, will let you send money or buy things with almost no fees. It will be built on what they call a “secure, scalable, and reliable blockchain.”
Libra Blockchain: How You’ll Use It
After it launches next year, you’ll be able to buy or cash out your Libra online or at various exchange points (e.g. shopping centres), and spend it using third party wallet apps. Your other alternative will be Facebook’s Calibra Wallet (also coming next year) that’ll be built into WhatsApp, Messenger, and its own app.
The Libra Blockchain is pseudonymous and will allow you to hold one or more addresses that are not linked to your real-world identity.
Libra Blockchain: The First Truly Mainstream Cryptocurrency?
Libra is not trying to be the next bitcoin; it’s designed to not be a speculative asset, but rather a form of digital money backed by a reserve of assets. Facebook envisions Libra to be used primarily to transfer funds between people in developing countries who don’t have access to traditional banks; with the eventual goal to create the first truly global currency.
They also harbour ambitions for Libra to act as a decentralised worldwide method of payment as steady as the dollar; and envision it to assist you in the support of financial products from banking to loans to credit.
Libra Association: The Organisations Behind the Behemoth
Companies such as Mastercard, Visa, eBay, PayPal, Coinbase, and venture capital firms coupled with non-profit organisations will all oversee Libra and its development. They (and others) will all form part of Facebook’s newly formed non-profit Libra Association (see below).
This means that Facebook won’t have total control of Libra, which is much to the relief of many in the wake of their privacy scandals. Instead, Facebook will get a single vote in its governance just the same as the companies above, which have invested at least $10 million each into its operations.
Furthermore, The blockchain is operated and constantly verified by these founding members of the Association, which Facebook hopes will reach 100 before the official Libra launch.
The Association is based in Geneva, Switzerland and will meet biannually.
Will The Libra Fluctuate?
To make the Libra as attractive to the world as possible, the association has pulled out all the stops to ensure fluctuations are minimal.
The Libra’s value is linked to a group of bank deposits and short-term government securities for a slew of historically stable currencies; this includes the Swiss franc, yen, US dollar, pound and euro. To ensure the Libra maintains consistency, the Association can alter the balance in order to counteract large price fluctuations in any one currency.
We’re told the Libra’s start value will be close to that of a US dollar, euro or pound to make it easy to comprehend.
Libra: Move Programming Language
The Libra Association will promote the open-sourced Libra Blockchain and developer platform with its own Move programming language. The Libra Blockchain is open source with an Apache 2.0 license, so developers can build apps that work with it using the Move programming language.
Each Libra payment is permanently written into the Libra Blockchain, which is a cryptographically authenticated database that acts as a public online ledger; handling up to 1,000 transactions per second. This is much faster than Bitcoin’s 7 transactions per second or Ethereum’s 15 per second.
Libra for Business
Libra will sign up businesses to accept Libra for payment, along with giving customers discounts or rewards. Many businesses may see Libra as rather attractive given it’s basically a digital version of the U.S dollar.
It is also backed by trusted third parties, which gives it a large advantage over the likes of bitcoin.
Using Libra Blockchain
Given the official launch isn’t until next year, you’ll have to ensure you’re signed up to a Libra wallet like Facebook’s own Calibra, or others that will be built by Association members like PayPal or other third parties.
Once Libra has launched and you have a wallet, the steps will be as follows:
- Cash in a local currency;
- Obtain Libra, spend them like normal money but without large transaction fees or your real name attached; and,
- Cash them out whenever you please.