Facebook Libra - The Silicon Valley's Cryptocurrency
Libra - The silicon valley Cryptocurrency
Facebook Inc is all set to enter into the Cryptocurrency market after it has made its mark in the social media. The company has announced its plans to create a Cryptocurrency called Libra. What is this all stuff about? Let's find out!
Cryptocurrencies
First of all, what is a Cryptocurrency? Basically, it's a virtual currency which is protected by cryptography and runs on Blockchain technology. Since the infamous rise in wealth of Bitcoin, the world's most popular Cryptocurrency, there are innumerable cryptocurrencies in the market. Libra is just one of them. But what makes it special is that for the first time, it is coming from a reputed and known company, none other than Facebook.
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The cryptocurrency market has earned itself a bad name due to the heavy losses faced by investors due to hackers and it's used in terror funding, money laundering and illegal drug sales. With Libra's entry, Facebook is trying to create trust in Cryptocurrency again.
Facebook Libra
Facebook has created a Geneva-based entity called the Libra association and has partnered up with 28 companies to create this digital currency. The big names in the partners' list include MasterCard, Visa, PayPal, Uber, Vodafone, Spotify and eBay. The cryptocurrency is set to launch in the first half of 2020. Facebook plans to sign 100 partners by the first half of 2020. Each partner must invest at least $10 Million to join and will get 1 vote irrespective of their investment.
Calibra
Now here comes the part as to how to operate this digital currency. Facebook has also created a subsidiary company named Calibra, which will offer digital wallets to use Libra. Calibra will be connected to Facebook's Messenger, WhatsApp and will also have its own separate app. Facebook is at an advantage here, as it's user database consists of more than 2 billion users, which is exactly what you need to start a new venture.
Facebook Libra: The Reason
More than half of the people of the world don't have a bank account. But most of the population owns a smartphone. Facebook says it's their efforts towards creating an economy where people can transact much more easily. It hopes it will power transactions between consumers and businesses around the globe and offer consumers without banking services access to financial services for the first time.
Downsides of Facebook Libra
Facebook is at a disadvantage in this new venture due to last year's Cambridge Analytica scandal. Many people may find it hard to trust a company which does not respect it's privacy and data security. Plus, many governments have kept Facebook at its toes due to the fake news matter. So, It may affect the new venture. But, Facebook has a solution to this. Due to the partnership, Facebook will be less likely to have a major say in important decisions. Which means even though the digital currency is founded by Facebook, it'll have only a fraction of controlling rights by the first half of 2020.
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Future of Libra
This digital currency opens up a huge system of e-commerce and the online economy. It is yet to be seen how exactly is the company planning to run this thing. But it's basically aimed at easing the lives of people.
So, what do you think about this? Let us know in the comments.