What do you know about Libra? Facebook’s Cryptocurrency
Many you may have heard about Libra recently – if you’re in Australia, I’m not referring to the Australian company that produces Pads, Tampons & Liners Designed By Women, For Women. I’m actually referring to the Libra, the new Cryptocurrency that was pushed and announced by Facebook.
Now, when many of you heard of CryptoCurrency, you might think of Bitcoin and Ethereum as the two main things due to the huge interest in it in late 2017 to early 2018, then have heard nothing since, unless you’re interested in keeping up it.
Libra is different from other blockchain and cryptocurrencies, as it is not a completely decentralized ledger with an open network that anyone can participate in. Bitcoin and Ethereum are completely open and allow anyone to run a “node” which validates the transactions on the network, keep it running and keep it true. Libra will have a node network of 100, and these nodes will be run by the Libra Foundations’ 100 members. The ledger that is curated by the nodes will be public but only the 100 member nodes will be able to mine and validate it.
This foundation is currently made up of Mastercard, Visa, Uber, PayPal, Stripe, Spotify, eBay, Lyft, Vodafone and many more. There is huge support from these large brands and each had to contribute 10 million dollars and meet certain criteria to join the foundation and be responsible for the network and currency.
The Libra foundation will also operate the Libra Reserve which is a collection of low volatility assets including bank deposits and government securities in multiple currencies. This means that it will sort of operate as a “Stable Coin” which means it will not be as volatile, as it will be backed by real currency or assets rather than what people think it should be worth. The reserve uses the money exchanged for Libra’s to fund its investments and manage the eco-system.
What use is Libra if there are no people or platforms using it? To support its growth and adoption the Libra Foundation has created an open-source developer platform. This will allow developers to be able to accept Libra within their apps and services, helping spread adoption. With over 1.3 billion people on Facebook, why not add Libra support to your product or service reducing the barrier of transactions for your users.
Facebook hopes to use Calibra, its Libra wallet, to become the new PayPal effectively. What this means, is that Facebook wants it to be the way people spend money and will allow transfers all around the world with fewer fees than traditional methods. The Calibra wallet will be integrated into Facebook, Instagram, Messenger and WhatsApp to allow frictionless transfers for its users.
I believe that Libra would allow Facebook to now accept payments and operate more like a marketplace than a catalog to customers. At the moment the platform supports advertising of products and services to users who then click away from Facebook to purchase or use said products and services. The Calibra wallet that they’re creating will allow it to be the portal and cash register for these products and services which allows them to take a margin from every sale as they are handling the transactions. They will increase revenue tremendously as they are covering the start and end of the customer journey and I’m sure it won’t be long before they handle the store-front aspect and charge for that also.