Facebook’s Libra CryptoCurrency Is Finally Out: Most Important Key Details You Need To Know
On Tuesday, Facebook announced its Libra cryptocurrency will be rolled out for use in 2020 and will enable its users around the world to make financial transactions online. Facebook released Libra White Paper with lots of information explaining various important aspects about the new cryptocurrency. However, here are some of the most important aspects to note about the Block.
Functions Like A Stablecoin/ Has Low Volatility Crypto
Facebook will not be in full control of the new crypto. The currency will be serviced by a collective of companies called the “Libra Association”. It functions as what is known as a “stablecoin”, pegged to existing assets like the dollar or euro, in the aim of making it less subject to the volatility that many cryptocurrencies experience. The Libra Blockchain is designed to be “secure, scalable, and reliable.” according to the association, the new cryptocurrency has two main aims; facilitate low-fee fund transfers across the world and to reach the 1.7 billion people around the world who do not have access to a bank account.
It Will Be Controlled By Non-Profit
The governing body behind Libra, the Libra Association, is a not-for-profit registered in Geneva, Switzerland. The association plans to have about 100 geographically different founding members. The founding members that contributed a minimum of $10m(£8m) to be listed as founding members of the Libra Association include tech companies such as PayPal, Ebay, Spotify, Uber and Lyft, as well as financial and venture capital firms such as Andreessen Horowitz, Thrive Capital, Visa and Mastercard.
To Transact Permissionless
Libra will start on a permissioned blockchain which means that unlike other blockchain networks like Bitcoin, currently, only the founding firms will be allowed to access the network. However, plans are underway to transition to a network that does not need permission to access. This means that, in future no unilateral user will have the power to change the terms and conditions of the network. According to the association, Libra Blockchain will eventually be permissionless for it to operate as a true public service.
Just like other public cryptocurrencies, users will pseudonymously buy or cash out your Libra online or at local exchange points like grocery stores, and spend it using interoperable third-party wallet apps or Facebook’s own Calibra wallet that will be built into WhatsApp, Messenger and its own app. This means that the transaction details can only be viewed by the network members. The association says that no personal data will be held on the blockchain. To open a custodial wallet, a user will be required to adhere to KYC regulations.
Reserves Backing Reserves
Libra will be backed by various low-volatility assets including bank deposits as well as government securities in fiat money from stable central banks such as USD, GBP, EUR, and JPY. in addition Libra will not be pegged on a solitary currency and will not have a fixed value in any real global currency.
Security Token Offering (STO) To Be Offered Soon
In order to fund various incentive programs as well as cover the operating costs, Libra plans to offer a security token that will be referred to as Investment Token. Only accredited investors will be allowed to buy the securities. The investors will be able to earn profits based on the interests realized on reserves.
$10 million Costs To Run A Node
Entities who aspires to be validator nodes will have to make an investment minimum of $10 million worth of Libra that will be issued by the association. The association estimates that running the validator nodes will cost about $280, 000 per year. However, universities, NGOs, social impact partners (SIPs), as well as Multilateral Organizations are not required to make any investment to join the association but will be required to support the running of their own nodes.
FinCEN Registered Firm
Facebook has launched a subsidiary company called Calibra that handles its crypto dealings and protects users’ privacy by never mingling your Libra payments with your Facebook data so it can’t be used for ad targeting. Calibra is a Financial Crimes Enforcement Network (FinCEN)-registered subsidiary. Calibra is in operation in all the US states and 9 commonwealths and territories.
Complying With Regulations
Developers that are interested in building their dApps on the Libra Blockchain will be required to adhere to the laws and regulations of the jurisdictions they are based in. however, the Libra network will not be regulated.
To Be Launched In 2020
Libra cryptocurrency as well as the core blockchain network will be rolled out for public use in 2020. The testnet is set to be released in a few weeks time. The developers will have a chance to read, build and offer feedback as well be involved in a bug bounty program.
What do you think of the Libra cryptocurrency? Will the new technology disrupt the crypto space? Share your views with us in the comments section.