David Marcus is responsible for Calibra the new company created by Facebook to launch and manage their cryptocurrency named Libra. But what does this project consist of? What can Libra bring? Can this new cryptocurrency revolutionize the world of payment? I invite you to discover all you need to know about Libra.
Table Of Contents Summary
what is Libra?
Libra is offered as money to send money and perform transactions based on encryption, encoding understandable and decipherable only by those who know a certain code, such as Bitcoin. Although the blockchain of Libra is not accessible to all (goodbye RIG mining ). It can still be exploited by anyone who wants to offer its services or products with this digital currency at its base. This project will be operational in 2020 and could revolutionize the way millions of people exchange money and shop online. All we have to do is ask ourselves: Will Libra change the world economy?
How and why to use Libra
Libra wants to be a global currency usable for international payments and remittances. Also integrated into messaging systems such as WhatsApp and Messenger.
Libra should not only facilitate e-commerce (online purchases and sales) and money exchanges but also make credit more accessible. Especially for those who do not have a credit card or active bank account (1). 7 billion people in the world) or for companies that do not have access to credit (according to Facebook, 70% of those in emerging countries).
What does Facebook have to do with this?
Mark Zuckerberg had been working for a long time on the project of creating his own currency and in 2014 he called on his group to join former PayPal president David Marcus. Who now defines digital currency as “easy, fast, stable and secure”. In March, a first experiment started in India with WhatsApp, for the purchase of products by social chat.
Facebook now seems ready to manage the business directly without more mediations, simply by applying a percentage on the price of products sold on its social networks. As has already happened with some global brands such as Nike, Adidas, H & M, Zara, Prada, Burberry, and Dior.
Who takes part in the Libra project
Cryptocurrency will be managed by the Libra Association, an independent, non-profit organization based in Geneva, Switzerland. One hundred well-known partners should join the project of which 28 have already been announced:
- for payments: Mastercard, Paypal, PayU, Visa, etc;
- for purchases and bookings: Booking, eBay, Facebook, Spotify, Uber, etc .;
- telecommunications: Iliad, Vodafone
There are also fields of use which concern for example the more purely financial field (Coinbase, Andressen Horowitz, etc.).
What is the difference between Libra and Bitcoin?
Libra is a cryptocurrency such as Bitcoin. The most famous digital currency. Which had a boom in the fall of 2017 but then lost value in recent months. But there are some differences. Today, Libra would not be here if Bitcoin had not opened the road ten years ago. Unlike Bitcoin, which was born as a platform to facilitate financial trading but has become primarily an investment and a store of value (called “digital gold”). Libra is offered as a currency to send money and make transactions. It will also have a stable value linked to a basket of currencies such as the euro and the US dollar. Overcoming the volatility and fluctuations typical of other cryptocurrencies.
For this reason, it should be more suited to micropayments. Libra should also allow much lower costs (and more speed) for transactions. Users will also benefit from 24-hour live support in the event of theft or loss of passwords or smartphones.
Zuckerberg, through a special company (Calibra), intends to equip the new cryptocurrency with security systems to protect not only the money but also the user information. Which is a sore point in the management of Libra?
What are the advantages and disadvantages of Libra?
Among the most delicate aspects are the anti-money laundering controls (who will do them and how), the risk that they will be used to finance illegal activities or terrorism, like Bitcoin, because they are “independent” of a central banking institution. The issue of privacy on which Facebook has already had very bad episodes in the past is also worrying about the idea that tomorrow it will also know all our financial transactions.
On the positive side, on the contrary, there is the fact that “it could definitely lose mistrust of so-called cryptocurrencies and in general, digital and private forms of transfer of value, putting an end to the” Paleolithic ” slow financial transactions (even more than two days), costly, imposed on national borders or monetary defined.
To conclude on the cryptocurrency launched by Facebook: Libra
This gigantic project attracting large companies promises a real revolution in the world of monetary transactions. How will the States and the central bank organizations react to this cryptocurrency that promises to erase borders hard-pressed by our history?