Facebook is frequently in the news. Mostly not for positive things. We have many blogs about the power of Facebook, however, this time we admire their new idea. Libra is Facebook’s plan to launch a crypto currency which will allow people to make instant and affordable international payments. It promises to help bring almost two billion unbanked people into financial services.
Libra has supposedly been built on a secure, scalable and reliable blockchain. It is also backed by a reserve of assets. The Libra Association has been set up to govern Libra and, according to Facebook, is an independent, not-for-profit organisation. The goal is to provide the internet to the large populations who still do not have access to the financial system.
Facebook intends the crypto currency to replace paper money or credit cards. They want to endorse a more efficient paying systems harnessed through an app. The idea is for it to act as a replacement for cash in underbanked areas.
The service has already attracted backing from numerous industries. Members of the Libra Association include PayPal, Visa, Mastercard, Vodafone, Women’s World Banking, Uber Technologies and Spotify. PayPal highlighted they believe in democratising the digital economy for people from all walks of life and businesses of all sizes with crypto currency.
What is the idea behind it?
There has been huge progress on internet access and mobile broadband which has empowered billions but the white paper stresses that large swaths of the world’s population are left behind. The paper highlights that 1.7 billion adults globally remain outside of the financial system. They have no access to a traditional bank despite the majority having a mobile phone and internet access.
“The world truly needs a reliable crypto currency and infrastructure that together can deliver on the promise of ‘the internet of money’.” said the white paper.
However, there are concerns about how Libra will operate and who will oversee its management. Yet, it is certainly a positive development. The programming language is called Move and is what will eventually be used for smart contracts. This is a more complex procedure to traditional blockchain and requires a ground up approach. This has meant that some experts, such as SilaMoney Chief Technology Officer Alexander Lipton, argue that Libra is not actually blockchain.
Libra’s idea is a glimpse the industry has had into the new crypto currency. However, as Facebook has had a history of centralised nature and the lack of transparency. This could have a negative impact on the success of the project.
I agree with the Coin Telegraph’s statement that:
“regardless, the creation of Facebook’s Libra remains a potentially momentous occasion for the crypto community. The new coin already has support from many corners in the sector and could be a major step in the right direction for an industry looking for mainstream legitimacy. While it is unlikely to fulfill the goal of a truly decentralised currency, Libra could be a milestone into crypto becoming a broadly accepted technology.”
What are your thoughts? I would love to hear them below.