- Facebook unveils low-volatility cryptocurrency Libra, governed by the non-profit Libra Association based in Geneva
After launching Facebook in 2004, Mark Zuckerburg is now entering the cryptocurrency space in order to salvage its reputation which took a hit after the reports of the social media giant selling its users data to companies were released.
Earlier in March, Zuckerburg who runs Facebook, Instagram, WhatsApp, and Messenger, said he would focus on private and encrypted communications.
“I believe a privacy-focused communications platform will become even more important than today’s open platforms,”
To realize this vision, Facebook embarked on the journey to cryptocurrency by announcing its project Libra. After much speculation and information being unearthed here and there, Facebook has released the website and its white paper.
A Simple Global Currency And Financial Infrastructure That Empowers Billions Of People
Today, Facebook officially launched its website and whitepaper of Libra. Per this, Libra is built on the “Libra Blockchain” with “Libra” being the unit of currency. This blockchain is developed by a Swiss foundation and a consortium led by Facebook.
This will be running on a Proof-of-Stake blockchain that relies on the BFT-consensus algorithm and will support smart contracts once it completes its transition from a permissioned to a permissionless environment.
Its list of founding members include:
The Libra Association will also be issuing its own security tokens (STOs) called Libra Investment Token, a way to fund incentive programs and cover operating costs.
The permissioned blockchain has 100 validator nodes operated by public entities who have to make an initial minimum investment of $10 million worth of Libra Investment tokens.
I think it's safe to say Facebook's Libra is massive tech companies giving the finger to government authority and power, claiming it for themselves and themselves only.
— Peter Todd (@peterktodd) June 18, 2019
Unlike Cryptos, Libra Backed By Low Volatility Assets
The whitepaper further reveals this so-called stablecoin is backed by a basket of financial assets, “unlike the majority of cryptocurrencies.” These reserves include a collection of low-volatility assets such as bank deposits and short term government securities in currencies from
“stable and reputable central banks.”
In its initial release is scheduled for 2020, Libra will be denominated in four four fiat currencies viz. USD, EUR, JPY, and GBP.
“Unlike the majority of cryptocurrencies, Libra is fully backed by a reserve of real assets. A basket of bank deposits and short-term government securities will be held in the Libra Reserve for every Libra that is created, building trust in its intrinsic value. The Libra Reserve will be administered with the objective of preserving the value of Libra over time.”
Moving forward, Libra will incorporate into the Facebook ecosystem that involves Messenger, WhatsApp, and Facebook.com that will be using the Calibra wallet interface.
Imagine a world where Facebook’s digital wallet, Calibra, didn’t just custody financial assets, but also allowed you to store and permission your data.
One wallet. Every asset you own.
Low probability of happening, but high potential impact.
Wilder things have happened.
— Pomp 🌪 (@APompliano) June 18, 2019
“Our money is increasingly in the hands of a small number of banks and payment companies, and we should avoid ceding further control to unaccountable corporate interests. Facebook’s plans pose alarming implications for privacy and power in the economy,” attacked David Clarke, the head of policy at the consumer campaign group, Positive Money.