Finally, the details of Facebook’s cryptocurrency are here. Facebook’s Libra would let you buy things or send people money with almost a non-existent fee. You could cash out or purchase your Libra online or even at some local exchange point which could be a store. You can spend it with the help pf interoperable third-party wallet app or the tech giant’s very own Calibra wallet.
As Facebook is steps into the cryptocurrency game, here is what we know about Libra:
Facebook enters the crypto market with Libra
The social media giant has released its white paper which aptly explains Libra along with its test net, and other details of its blockchain system before it is publically launched in the first half of 2020. Along with Libra, Facebook is launching a subsidiary company called Calibra which shall handle all of the crypto dealings and protect user privacy. Also, no one can know about your real identity via your publically visible transactions.
Also, Facebook is adamant that Calibra won’t be sharing any financial data or account information to third parties. But, the wallet shall use the Facebook data for compliance with the law, the security of customers’ accounts, prevent unethical/criminal activity, and alleviation of risks. An independent foundation, the Libra Association shall regulate the coin. It consists of Facebook representatives, merchants, non-profits, venture capitalists, financial institutions as well as the companies which run the nodes.
Libra – How will it work?
A Swiss-based nonprofit shall manage Libra which is not only backed by Facebook, but more than two dozen founding member companies. These companies include big names such as eBay, Visa, Mastercard, PayPal, Uber, Lyfy, Spotify, Coinbase, and a venture capital firm Andreessen Horowitz. Real government-backed assets from central banks shall provide stability to Libra which is a first for cryptocurrencies.
Messenger and WhatsApp users could use Libra and cash their local currency to purchase it. A digital wallet, Calibra shall hold this currency which you could, later on, spend on product and services like any other currency. Users could convert their digital currency into legal tender according to the exchange rate.
Setting up the digital wallet – Calibra
It won’t be until the first half of 2020 that you could buy Libra. Once it is launched, consumers shall find numerous ways to purchase it and not necessarily via Facebook. The transactions fees is expected to be lower than the one which traditional finance companies are charging at the moment. As a result, not only merchants, but regular people can benefit from it too who send money to family members abroad and have to rely on the costly means of wire transfer services.
The main aim of Libra is to help people who do not have access to financial tools and traditional banking. Cryptocurrencies could be used as a credit card at the moment for online shopping, but Libra expects to go further than that. The currency shall allow consumers to purchase the currency and then utilize it at participating merchants.