This article is dedicated to a well-talked-about topic, Libra cryptocurrency. Libra coin is a project of Facebook. For the past month, it has been a hot topic among the community and crypto enthusiast. ChangeNOW’s analysts will conduct a close analysis of Libra Network algorithms, the companies that stand behind it and prospects of the first crypto Facebook has to offer.
What Is Libra Coin?
Facebook’s own cryptocurrency called Libra will be presented on June 18th. But Libra Network itself will be launched no earlier than 2020. It is planned that the currency will be decentralized and will not be able to be directly controlled either by Facebook or by investor companies. The initial course and methods of mining are also still unknown. Initially, the users from the US, UK and the European Union will have access to the crypto. In the future, it should spread to all countries where Facebook services are available.
Libra was developed in secrecy mode, so there is not much about it before the presentation of details, but something is known. First, the Libra price is promised to be bound to the basket of currencies of various countries, which means it will have a kind of protection against feverish price jumps. One one hand it will guarantee the stability, on the other, it will make it useless for investment purposes. Besides, Facebook plans using its own virtual currency to become more independent of the regulatory authorities.
Interestingly, among the project partners, there are established payment systems Visa, Mastercard, PayPal. They invested $10 million each in the project.
The stability of the new cryptocurrency should attract users from developing countries, where it has the potential to become a staple payment instrument. Provided that local governments will not resist this.
Facebook now has 2.4 billion active users per month. They will be the original base of the new cryptocurrency. In addition, Libra can also be used by Instagram users, WhatsApp messenger and Facebook Messenger owned by Facebook. Facebook is said to forge partnerships with major online trading platforms, where they can also use Libra cryptocurrency.
According to other sources, now Mark Zuckerberg’s company is developing physical terminals resembling conventional ATMs through which users can convert their money into Libra and vice versa.
Nevertheless, almost immediately, member of the US House of Representatives Maxine Waters called on the social network to stop working on the Libra project, calling the new initiative “another example of uncontrolled Facebook expansion.
The project aroused considerable interest both in the crypto community and beyond. So, according to news monitoring agencies, during the day after the publication of the documentation on the new cryptocurrency, Libra discussion intensity indicator on Twitter was almost equal to Bitcoin. That’s immense exposure.
Moreover, after the Libra announcement, the volume of search queries for the word ‘bitcoin’ has significantly increased, which indicates a revival of interest in cryptocurrency among the masses.
Thus, the confrontation in the market between various cryptocurrencies and digital assets is growing. To survive, developers will have to more actively develop and perfect their projects. Nevertheless, it is unlikely that many projects will survive in the conditions of fierce competition. Some will be replaced by more technologically advanced projects that solve the problems of millions of people better than others.
For example, some experts believe that the global means of payment from Facebook may pose a threat to less transparent stablecoins and digital assets like EOS and XRP, whose systems also depend on the decisions of a limited number of participants. Decentralized Bitcoin is likely to remain the dominant means of preserving value in the world of cryptocurrencies.
Given the current concerns of lawmakers, central banks, and governments of various countries, Facebook’s digital currency still has a thorny path. However, if the project proves successful, then, many experts believe, Libra will have a beneficial effect on the massive adoption of Bitcoin and other cryptocurrencies, and will also have an impact on the world of traditional finance in the long run.
Facebook representatives will take part in the meeting of the Senate Committee on Banking, during which they will answer questions from legislators concerned about the company’s plans to create its own digital currency. About this writes Reuters.
The hearing will be held on July 16 and will be devoted to the launch of the Libra project and the associated risks, including the security of users’ personal data, the committee said on Wednesday, June 19.
The names of the witnesses who can be called to the meeting are not disclosed at this stage, but a Reuters source familiar with the situation claims that David Markus, the head of the blockchain Facebook, will be among the invitees.
Will Libra Change The Crypto World?
Shortly after the announcement of Libra, Binance Research researchers released a fairly detailed review that allows you to understand a lot about the project without learning tons of information from various sources. Consider the main points of this material, focusing on the economic aspect.
So, the key theses, giving a general idea of the project and its possible impact on the crypto industry and the world of traditional finance in the medium and long term:
Libra is a cryptocurrency released on the Libra Network blockchain, developed by the Swiss Foundation and a consortium led by Facebook.
This cryptocurrency is provided with a basket of financial assets (the so-called Libra reserve) provided by node operators. At the initial launch stage scheduled for 2020, Libra will be supported by assets denominated in four fiat currencies: US dollar, euro, Japanese yen and British pound.
Working on the principle of Proof-of-Stake (PoS) and within a system based on two tokens, the new financial infrastructure will rely on the BFT consensus algorithm and support smart contracts after completing its transition from permissioned to an open blockchain.
Over the next 18 months, Libra will be built in via the Calibra wallet interface into the ecosystem of the largest social network organized around Messenger, WhatsApp and Facebook.com. This is likely to contribute to the rapid spread among 2.4 billion users and the massive adoption of crypto active assets at the global level.
In the medium and long term, the initiative is expected to have a significant impact on local and global markets, the landscape of the crypto industry, global finance and the economy.
In the medium term:
Facebook has a chance to firmly establish itself as a provider of open-source tools for digital applications, websites and e-commerce;
Libra supply volume may increase as the availability of this digital currency increases among institutional players and retail users.
In the long term:
Reforming the payments industry. In the digital world, a new category of intermediaries may emerge, able to press the positions of banks.
New offers in the field of financial services. New service providers may emerge, creating innovative decentralized Libra network applications available to users all over the world.
Greater financial freedom and a global decrease in capital controls. It may become more difficult for central banks to prevent capital outflows and implement restrictive monetary policies.
-Dollar-less world. If a global mass adoption of Libra occurs, a new accounting unit for trade may appear, which in turn will reduce the dependence on the single currency used in the quotes of global exchange goods and services.
In addition, Binance Research is confident that the Libra project has a chance to become “the daily implementation of ideology and theory” that underlies special drawing rights (SDRs) and other IMF / World Bank initiatives, becoming a currency actively used both by institutions and by private individuals.
Originally published at https://changenow.io on July 15, 2019.