Everyone knows Facebook has over billions users around the world. Now, the company wants to introduce its own cryptocurrency, which they have high aspirations of it competing with Visa and Mastercard for ease of payments for everyone.
While they have a massive user base, there is much more to release a new cryptocurrency than just having this many potential customers.
Once it became known of their cryptocurrency called Libra, there have been many mixed reactions from everyone from the media and the crypto world as well.
While there are doubts and opinions of Facebook’s Libra, there is a consensus that Facebook can make the adoption of the Blockchain more widespread.
To understand what Facebook’s Libra Coin is, and how the Libra Blockchain can change things as we know it, there is plenty more information to go over.
Let’s take a deeper dive into this virtual reality coin and see if it can become more than something outlined in a white paper.
What is Libra Coin?
This is not a Libra coin review by any means because as of yet it doesn’t exist. This is a look at what we know already about this coin called Libra.
First, the crypto community is split on whether or not Libra is actually a crypto currency. If you head to cryptocurrency Wiki, you see these coins are decentralized in their function. Yet, it appears that Libra will have an amount of centralized control.
This isn’t as much about controlling the financial side of the operation of the coin, yet this control allows Facebook or the companies under it who control their coin to collect details of user transactions.
Considering this, we will look at everything in the same way as any other digital currency.
Libra will allow users access and take part in using the blockchain technology, which Libra runs on. It will be a stable coin that is pegged to the US Dollar, EUR, SGD, and others.
Decentralized coins such as Bitcoin (BTC) and Ethereum are highly volatile in nature and in value.
Facebook’s cryptocurrency is aimed at creating stable financial services that can be used by the many individuals who don’t have any form of banking access, so they can partake in everyday consumer-style transactions.
At present, many of these payments need to be conducted through MasterCard, PayPal, and many others.
Overseas transactions are much different, and even sending money to families can become expensive and slow.
One thing Facebook is doing slight different is seeking partners, all these are part of the Libra Association and include the likes of PayPal, Uber, Mastercard, Visa, and others.
All these will work together to make sure payment processes are accurate, safer, and faster than any other payment offering which uses the Blockchain as their underlying financial technology.
Mass Adoption of Libra?
Individuals who don’t have a Facebook account, yet they are still exposed to the social media giant. Many families admit that Facebook is an essential part of their lives, and this is what Facebook is planning on with their Libra Coin crypto.
This scenario can make it much easier for the mass adoption of Facebook Libra. There are users there already rather than other crypto’s trying to gain new users.
Once the coin is released, it will only be available for use in WhatsApp and Facebook Messenger, to begin with.
With the hopes of reaching 100 or more partners in the Association, these companies will then be seeking their own ways of integrating into the Libra digital coin.
One thing Libra has in its favor is the number of ready users. Bitcoin is seen as being used by a small percentage of the world’s population.
Libra will have exposure to around 30% of the global population. This is a massive advantage for any digital asset.
How to Buy Libra?
Like many cryptocurrencies, there are many users who may want to use the cryptocurrency Libra, but they don’t have the access.
How to buy Libra coin for many users can be hard, so, to make this more accessible, there are reports Facebook will install ATM-style terminals. Therefore, users can have access while outside regular banking areas.
The reason here is the issues of converting Fiat currencies into crypto. With these terminals, and the retail outlets which begin accepting Libra.
It will become easier for some individuals to manage their personal finance without needing the use for a bank.
Pressures Facing Facebook and Libra
Even before the Libra coin has been released, it is facing a lot of pressure from Washington D.C and the U.S. House Financial Services Committee.
A short while ago, Mark Zuckerberg faced some stiff questioning regarding the Libra Coin whitepaper and what it was proposing to achieve.
These hearings came about as soon as the coin was announced. It was here that Facebook explained it would be handing control to a nonprofit association who will be controlling the currency.
Calibra will be the controlling banking committee of the coin and is tasked with protecting user’s privacy.
To do this, it was shown that the use of digital currencies would not blend with any Facebook data.
The money will be earned through the interest that comes from money users cash in, and held in reserve to help stabilize the Libra coin price.
This price analysis will keep it inline with the Dollar, yet it will not be seen as just another alt coin and is more of a payment system that uses crypto technology.
Although the plan is to create a global digital currency, which can help the unbanked population. The details show more decentralization and privacy than a lot of the Senate Banking Committee expected.
The goal is over the long-term where payment systems will be naturally attracted to coin. Yet, this
didn’t stop the Chief Executive of the Facebook blockchain.
He was called to explain the motive of the company before a committee in the San Francisco Mint building.
He explained that if there were to be a rise in commerce, then a small business could sell more on and off the platform. This, in turn, would see an increase in the percentage of advertising.
This is in itself one of the concerns of many around the world that this coin is being built as a means to generate more ad revenue.
Facebook has said they aim to abolish the transaction fee of using a credit card. However, this can be an influencing factor of what can be sold or bought, as it crosses the line of their ad business.
It leaves things open for the likes of Google or another internet search which exists or could be created to see what businesses spend on Facebook marketing.
At the other end of the spectrum, there are the millions that have no banking system. It is this kind of solution, which is viable for them to convert their local fiat currency so they can use it on a global scale.
Libra Blockchain Worries
The software used on the network is called Move. This is open source, and once ready, more developers can use it to create applications or smart contracts.
The risk is there for crooks to take advantage of this open-source language to develop suspect apps.
They can prey on the less fortunate who are not up to speed with things, yet they claim their app is safe to use because it uses Libra.
If there are frauds or significant issues, then everyone will look at Facebook. In lite of this, it has been said, there are no plans for Calibra to vet developers.
As much as Facebook does to distance itself from this, they will be the one who is ultimately responsible.
To use Libra, every person will need a “Wallet.” These can be built by anyone, yet Calibra will urge anyone to use their own.
This makes sending payments to friends or families as easy as sending a messenger message.
It can also open up a vast scope for money laundering as these funds can happen instantaneously to anywhere in the world.
While there is no way to purchase any Libra, you can still sign up ahead of its intended release date in 2020.
Facebook and the Association have big aspirations for Libra, yet it is not yet clear whether it can make the impact this group expects.
There is a lot of talk about the impacts, to the extent that it affected the BTC price as it was mentioned to the public.
There are others calling it a “Monopoly Scam” such as a professor from the New York, University Stern School of Business.
While there will be many talks from now until Libra’s release if it is allowed. There is one thing that will change.
The Federal Reserve will make some inroads into the supervision of all cryptocurrencies. This can be a good thing or a bad thing for the crypto faithful.
However, for the millions around the world who are eager to use such a means of handling their money, they will be hoping the Facebook coin’s release date comes sooner rather than later.