Libra: An Explanation of Facebook’s New Cryptocurrency

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What is Libra?

According to the whitepaper, Libra aims to provide a global currency and financial infrastructure to empower billions of people. The idea is that individuals all over the world will be able to send each other money and access basic financial instruments through the power of the internet.

The internet of money is finally here… if the Libra whitepaper is to be believed. Those of us who have spent time in the blockchain space might wonder if a better solution might not already be at hand?

Cryptocurrencies like MakerDAO, for example, already provide an international stable coin with a viable governance system. Facebook is either ignorant of this fact or hopes that its gigantic user base is.

When it launches, the Libra ecosystem will consist of three key components:

  1. The Libra blockchain
  2. A reserve of assets designed to give intrinsic value to the coin
  3. The Libra Association which will be in charge of governance

For you and me, this means that the Facebook team is building a new blockchain to support its stable coin called Libra. The Libra Association will be in charge of governing the token, while the reserve will ensure that the token price remains relatively stable.

The native wallet, Calibra, will make funds accessible through WhatsAPP, Facebook Messenger and a separate mobile APP. Although Libra has all the hallmarks of a cryptocurrency – including a whitepaper, wallet, blockchain and buzz-words – it’s closest relative is really WeChat’s payments feature.

WeChat is China’s most popular chat and payments APP, logging over 1 billion active users per month. Interestingly, the Chinese platform launched its wildly popular payment service way back in 2013, meaning Facebook is lagging far behind.

Libra’s whitepaper and testnet were released on June 18th 2019, and the public launch is scheduled at the beginning of 2020.

Libra: An Explanation of Facebook’s New Cryptocurrency
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