Libra is the digital currency owned by Facebook and they officially introduced Facebook Libra Coin to the world. Facebook offers this cryptocurrency on its messaging platform for the customers to send and receive this digital money all over the world through their smartphones.
As we all know the popularity of facebook all over the world and Zukerberg's company reached the pinnacle to attain its massive customer base. The cryptocurrency adoption by this company resulted in a long-awaited development of this digital currency. This is going to change the gateway of digital payment solutions.
Libra was introduced when the ban on cryptocurrency and blockchain advertisement was taken aback by the social media giant but it continued the ban on ICO (Initial Coin Offering).
Hope you all would have heard about the whitepaper. Yes! it is a document which describes completely about the cryptocurrency. Most of them will not have that interest to go through the whitepaper document So for them, this article will be really helpful.
Here in this article, you will be able to find the complete guide on Libra
What is Libra?
As we have already discussed, Libra is the global digital currency and financial infrastructure of Facebook. It is developed and backed by permission blockchain of Facebook and that is Libra blockchain, which is the same as the distributed ledger record used by all other blockchain companies.
What is the actual meaning of Libra?
Libra is a Latin word and in ancient roman, it is referred to the unit of weight. When you come across the unit of weight "lb" for pound, you will now be able to understand that it is derived from Libra and the British pound is represented by the symbol “£”.
Crypto interest with Facebook
Yes, the interest to build cryptocurrency was there with Facebook from a very long time. They hired David Marcus the PayPal president in 2014 to lead their Facebook Messenger. After delivering his idea to Zukerberg about launching a Facebook Cryptocurrency, he was moved from the Facebook Messenger team to company's blockchain development team. He also added to his team with economists and policymakers to work towards the goal of crypto development.
Whatsapp Stablecoin integration was introduced in India during 2018.
They started developing Libra to serve the entire world and it reflects the interest in crypto development.
“Also read the blog on Future of Blockchain Technology”
Why cryptocurrency is needed for Facebook?
Around 1.7 billion people are still not having access to basic financial system due to improper infrastructure, regulations of the financial system, geographical limitations.
In the white paper of Libra, it is stated that:
"The world truly needs a reliable digital currency and infrastructure that together can deliver on the promise of “the internet of money.”
Source: Libra white paper
As per World Bank data, it is found that around two-thirds of the people, those who are not having a bank account possess mobile phones and an account on Facebook. This condition seems to be suitable for them to develop Libra cryptocurrency and to use Facebook as its platform to make the unbanked to engage with this cryptocurrency.
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How the value of Libra is calculated?
To make Libra as a reliable currency, they made it as a stable coin and it is also referred to as Stablecoin.
Stablecoins are digital cryptocurrencies which are designed to improve the stability by pegging to other existing stable asset so that volatility is minimized. Facebook Libra Coin also works in a very similar way the only difference is that it is pegged to more than one asset.
The minimized volatility services like bank deposits and other government securities of any central bank will be backing Libra to minimize the volatility (Change in price in the trading system).
Facebook is not assuring about the change in the price of Libra, it means it may not be stable over time. It will not be able to take the value of a given local currency at all times. It may vary over time. To choose the assets that minimize the volatility of Libra lies in the hands of Libra association council.
Who controls Libra?
The responsibility to manage the impact of social media on Libra, to validate the Libra blockchain transactions lies in the hands of the multidisciplinary organization. These are an international group of organizations which are based in Switzerland and they form the Libra association.
The main responsibility of Libra association is to manage, reserve, expand, and promote the network and it facilitates the Libra blockchain operation and also coordinates with its stakeholders.
One more association named Libra Association Council is operated within the Libra association. This is not aiming for the profit of the organization. A founding member of the Libra Association is integrated into this Libra Association Council. The main responsibility of this Council is to support operational and policymaker's decisions.
Organizations need to comply with the policies of Libra to become the Libra blockchain validator node and also needs to invest a minimum of $10 million on Investment tokens of Libra.
How to buy a Facebook Libra Coin?
Facebook has not revealed how to buy a Libra as it is expected to be released by next year. It is stated that the popular financial organizations like MasterCard, Visa are joining with the association of Libra. To buy Libra, we can expect to use the same way we use MasterCard or Visa cards.
As per the website of Libra Association, we can use exchanges where Libra is listed or you can make use of the applications, that is built on the blockchain of Libra. It includes services like financial products, digital wallets.
Facebook uses the marketing technique named Airdrop. Here some free Libra coins are distributed to a group of people to promote the coins. These coins are distributed for performing any task by a group of people.
How to use Libra?
Facebook possess around over 2.7 billion users. The main theme behind this idea is to use this platform to run Libra and to reach globally via Whatsapp, Facebook Messenger, and Calibra.
Calibra is a wallet, which is developed by Facebook. It is used to manage and store the digital currency Libra.
Facebook is expecting from its customers to make use of Libra for purchasing online and also to do any transactions.
The impact of Libra on Crypto Market
The impact of Libra on the crypto market will enhance the adoption of digital currency worldwide. User can access this crypto and make digital transactions by making use of their smartphones. It is not mandatory for them to have a bank account to use this cryptocurrency.
The most popular Stablecoins may experience a decline in market share due to the stability of Libra coins.
Libra -Pros and Cons
Pros
Assures stability
Facebook Libra Coin is treated as a Stablecoin which assures stability with minimized volatility when compared to other cryptocurrencies in the market.
Massive customer base
Around 34 million active digital wallets in the whole world and 2.7 billion Facebook users will fulfill the space to enhance Libra.
Powerful Partnership
As we have already seen that MasterCard, Visa, and Paypal are their powerful partners and they are also the part of Libra Association.
Cons
Libra blockchain -Permissioned
To launch a validation node, the permission is required and the blockchain of Libra is permission blockchain. Only the authorized participants are allowed to access certain actions on blockchain. To be a partner of Libra Association you need to invest a certain amount.
Data Privacy
Calibra is the wallet developed by Facebook and it is stated that it will not share the data with its mother company Facebook. This ensures data security, privacy, and also avoids data mishandling.
Though the above mentioned is an advantage in case of any fraudulent activities are noticed in the wallet transaction, the chargeback policy is followed but how it works is not clarified.
Transaction per second
When compared to other cryptocurrency blockchains, Libra handles only 1000 transactions per second. If it is going to scale up globally, these numbers should rise quickly.
Conclusion
Finally, in this article, you will be able to find the complete guide on Facebook Libra Coin. It is going to be a revolutionary in the crypto world and for the entire payment solutions.
The massive user base of Facebook is the highlight of Libra and this number of users has never been reached by the most popular cryptocurrency Bitcoin.
Libra will elucidate the importance of cryptocurrency with its arrival to scale up globally.