Libra, the Facebook cryptocurrency

Libra is the cryptocurrency designed and wanted by Facebook: it is a “stablecoin” that will facilitate the exchange of money through the social network or tools such as Messenger and WhatsApp. Thus a parallel currency is born, based on blockchain, for the exchange of money between users or for the provision and payment of online services.

Libra Network Partners

Libra , the new cryptocurrency wanted by Facebook to provide financial services through its social network: a potential revolution with which the Libra Association hopes to be able to involve billions of users. The logic is that for which a large part of the world is today outside of the banking circuits, but through Libra it could draw on resources and opportunities that were not available until now. The potential is clearly immense and the caliber of the partners already involved represents the best promise for a stablecoin that is born to drive a revolution.

With Libra you can send a payment via Facebook, WhatsApp or Messenger and the user (or company) who receives the sum will be able to leverage on a stable exchange rate with the dollar to convert their sum and use it at will. The cost of transactions will be minimal and everything will start from 2020.

What’s this?

Libra is the cryptocurrency wanted and designed by Facebook . For what reason? To ” reinvent the currency “, explains the team of Mark Zuckerberg: ” transforming the global economy. So people, everywhere, will be able to live better lives “. In light of the fact that Facebook is now made up of an immense (and growing) international community, in fact Libra was born as a currency potentially accepted all over the world, with a far greater user base than that of any other existing cryptocurrency, with a consolidated group behind it and facing an avalanche of opportunities.

Stablecoin

By definition Libra is a “stablecoin”  based on blockchain, that is a cryptocurrency whose value is statistically linked to the value of the dollar: this allows an easy change and removes the value of the currency from the ups and downs with which the cryptomoney market has cradled for some time the various Bitcoins, Ethereum and others. Stability will be guaranteed by a series of low-volatility assets , a sort of standard value that will make it possible to keep the valuation stable over time as has happened with the “gold standard” for traditional currencies.

The fact that it can be easily used on Facebook, Messenger and WhatsApp makes it a global currency with which users will have to deal with: it will facilitate the exchange of money between people, regulate the exchange of value between users and commercial activities and allow exchanges of money through digital platforms.

Thanks to Libra, therefore, it will be possible at any time to send small amounts of money to any other user: once this money is received it will be possible to manage the change, or you can reuse the credit acquired in other services or other purchases conveyed through the platform.

permissioned

The blockchain at the base of Libra is of the ” permissioned ” type , that is able to validate the exchanges only after the approval of a series of central joints. This makes Libra a cryptocurrency that is very different from Bitcoin(permissionless), less free and more controlled. In reality, the Libra Association explains that it aspires to a Permissionless type system, without centralized control and validation systems, but to date a sufficiently fast, secure and scalable solution is not yet available to offer such a solution in the hands of billions of users.

The technological heart of Libra could therefore evolve in the future, to achieve a Distributed Ledger Technology that is as open as possible and more compliant with the idea of ​​Facebook to create the most accessible currency in the world.

Libra Association

The presentation and management of Libra will be organized by the Libra Association, a non-profit association based in Geneva. The association will have the task of evolving the Libra Blockchain (technological base of the cryptocurrency and platform able to certify the exchange of value and the individual digital portfolios) and to manage the reserves that underlie the stablecoin. The latter is a crucial aspect, the very essence of the project in that only by being able to manage specific reserves it is possible to imagine a system that guarantees the value, transactions and savings of users.

We have joined Libra in the hope of offering the value of blockchain to billions of people around the world

Katie Haun, General Partner, Andreessen Horowitz

Facebook’s partners in this adventure include names such as PayPal, Uber, Vista and MasterCard , but also Spotify, eBay, Vodafone, Andreessen Horowitz, Coinbase, Iliad , Women’s World Banking, Kiva, Booking Holdings,, Farfetch, PayU, Mecado Pago, Creative Destruction Lab, Bison Trails, Xapo, Anchorage, Breakthrough Initiatives, Stripe, Lyft, Thrive Capital, Ribbit Capital, Union Square Ventures and Mercy Corps.

Each of these brands not only provides guarantees to the system, but also offers new markets within which the currency can circulate: this is an extremely valuable asset for a cryptocurrency that is proposed starting from a huge potential user base, from a pool of services immediately wide and therefore with all the prerogatives to determine a real positive earthquake in the field of FinTech.

The interest accrued from the money transferred to the association will first of all compensate for the costs of managing the system, therefore dividends will accrue to the companies that have invested in the project. Users will not be given any coupon because the purchase of Libre should not be considered as an investment, but as a simple currency exchange.

How much is it worth?

As a “stablecoin”, Libra has a predetermined value that links it to the value of a currency such as the Dollar . This makes the value of the cryptocurrency stable, forcing the exchange balances so that the mechanisms and the value of the sum sent or received can be clear at any time.

The fact that the value of the exchange is practically fixed in relation to the Dollar implies that the exchange rate can be calculated at any time with respect to any other currency. It thus becomes possible to calculate the Euro / Libra exchange rate , for example, to understand how much money equals a sum invested in cryptocurrency. To carry out this evaluation we base ourselves on an image that reveals what could be a first exchange ratio with respect to the Dollar, a currency used as the main reference in the bridge between the traditional economy and Libra.

Exchange Libra / Dollar

As specified by the White Paper describing the cryptocurrency, the change is as follows:

1 LBR = 1.0493

Exchange Libra / Euro

In light of the exchange rate with the Dollar, it is possible to deduce the value of the Libra in Euro (€ 1 = $ 1,119):

1 LBR = € 0.94

When it arrives?

At the moment there is no official date for the arrival of Libra and Calibra, but the debut will not take place before 2020. Evidently the Menlo Park team intends to develop everything necessary from a technical and legal point of view before embodying what is a major innovation, linked and managed by a dedicated division called Calibra.

Calibra

Calibra is the Facebook division appointed to work on Libra. The first product that the Calibra division will have to manage is the digital wallet designed for cryptocurrency, a portfolio that the group will make available both on Facebook, on Messenger, and on WhatsApp, as well as a standalone app .

The digital wallet of Calibra will be used to receive, send and keep its value expressed in Libra. To date, the details are not yet clear, but Facebook explains how the intention is to allow money to be sent in instant times (such as sending a message or sharing a post) and at minimum costs (“Low or null”). The portfolio will be accessible from almost any smartphone, also because among the objectives set by Calibra there is the maximum democratization of access to credit, even outside banking and credit systems, also and especially in emerging countries.

Among the primary objectives of Calibra there is above all the creation of deep security measures that allow the exchange of virtual money in peace, so that the payment processes can be as secure as they are through the traditional systems that exist today. Scams, spoofing, phishing and other fraudulent systems will have to be put offside right away, so that the Libra ecosystem can be truly guaranteed and the wallet can be managed without any friction by any user, any computer culture possesses and whatever the size of the exchanges which intends to convey.

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