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Facebook announces its cryptocurrency Libra

18 Jun 2019 TECH

By Motlagae Konyana

Facebook’s plans to launch its own cryptocurrency could change the game for Bitcoin, ETH, XRP, Litecoin, and others, in a positive and a negative way. With a white paper detailing plans for Facebook Libra,  it is a simple global currency and financial infrastructure that empowers billions of people – solution.  Facebook’s own Calibra wallet  will be built into WhatsApp, Messenger, and its own app.

Bitcoin and other major digital currencies are “people’s currencies.” They have the potential to become new decentralized currencies, free of the control of big governments.  Even though Libra belongs to Facebook, Facebook won’t fully control Libra, but instead get just a single vote in its governance.  

Libra is for everyone and in its white paper it hopes to serve as a solid foundation for financial services, including a new global currency, which could meet the daily financial needs of billions of people. With Facebook already having over 2.38 billion monthly active users, Libra has the potential to disrupt others who have been in the lead for a couple of years now.  

Libra is designed to be a stable digital cryptocurrency that will be fully backed by a reserve of real assets — the Libra Reserve — and supported by a competitive network of exchanges buying and selling Libra. The hope is to create more access to better, cheaper, and more open financial services — no matter who you are, where you live, what you do, or how much you have.

So how will Libra work?

The idea is that you’ll cash in some money and keep a balance of Libra that you can spend at accepting merchants and online services,  you will be able to trade in your local currency.   For example when you cash in a Rands or a respective local currency, the money goes into the Libra Reserve and an equivalent value of Libra is minted and given out to you.  Soon you should be able to buy from Facebook using Libra.  Transactions on Libra are not reversible and are not entirely free. Users could incur a tiny cost that covers the cost of processing the transfer of funds similar to Ethereum. 

Calibra – which is a subsidiary of Facebook will launch alongside the Libra currency on iOS and Android within Facebook Messenger, WhatsApp, and a standalone app.

Libra is still in its prototype stages – its white paper has just been released and its blockchain system will available in the first half of 2020.

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