Facebook Libra Coin has been a hot topic in recent days. Moreover, there is a lot of news and questions out there on this matter. So guys, here I am going to give you my reviews as per Facebook Libra coins. I also answer about how it works. However, the name comes along as the Libra was a unit of weight in ancient Rome.
Facebook declared on the previous day that Facebook is going to start blockchain technology.
Approximately 1.7 billion adult people remain outside of this system service. So Facebook takes a while for the financial system to give access to these 1.7 billion people. Facebook Libra coin attempting to construct the idea that they want to remove the extra fees. Moreover, they want to remove barriers for people who want to transfer money such as wiring money or overdraft an ATM charge. Facebook Libra Coin
Table of Contents
What Is Libra?
Libra Coin is just like other Cryptocurrencies. A digital currency that will be decentralized and a peer-to-peer transaction system. Facebook is the mother and partner of this coin, and next year in 2020 they are going to launch this Facebook Libra Coin. It acts to protect information and verify transactions securely over the internet.
They will be accessing those who are using Facebook Messenger, and WhatsApp who are downloading a stand-alone app. This person is allowed to access through a digital wallet. However, you can imagine digital money and alternative Bitcoin. The whole system is based on blockchain technology. Facebook Libra Coin
It’s allowing people to send money over the Internet namely zero fees. Moreover, people can buy things and you can cash out using Facebook’s own Calibra wallet. So in a word, the Libra coin is a digital currency. Recently they released their Testnet before the launch of their blockchain in 20120. Also, they explain all about the project on their whitepaper.
Libra Key Points
- Libra Association is headquartered in Geneva, Switzerland.
What’s Calibra?
Calibra is a Cryptocurrency wallet associated with Libra coin. Calibra digital wallet manages Libra coin and can be integrated with third-party wallets. Libra and Calibra are to make basic financial services.
Moreover, Calibra will be functionally able and attach to Messenger and WhatsApp. So in this way, Facebook users can enjoy sending, receiving, and saving Facebook Libra coins just like they are sending messages.
Through Calibra, people can send coins to another user with a smartphone. However, it will be very low cost as well as fast. Also, people can buy different things like coffee, etc.
Background On Facebook’s Role In Cryptocurrency
Understanding Facebook’s motivation behind creating Libra (later rebranded to Diem) gives readers valuable context about the project’s significance.
- Facebook’s Vision for Financial Inclusion: Facebook launched Libra with the ambitious goal of creating a global financial system that would empower people, particularly those without access to traditional banking. The idea was to make money transfers as easy as sending a message, accessible to billions worldwide.
- Initial Partnerships and the Libra Association: Originally, Facebook collaborated with major players such as Visa, Mastercard, PayPal, and Uber, forming the Libra Association. This consortium was designed to manage the Libra project, ensuring it wasn’t solely controlled by Facebook but rather a collaborative effort with diverse industry expertise. Facebook Libra Coin
- Regulatory Backlash: Shortly after its announcement, Libra faced intense scrutiny from governments and regulatory bodies. Lawmakers expressed concerns about potential threats to national currencies and the risk of money laundering. This backlash led to several high-profile partners, including Visa and Mastercard, withdrawing from the association and forcing Facebook to alter Libra’s structure.
This section provides readers with an overview of why Libra was controversial from the start and sets the stage for understanding the challenges it faced.
How Does Libra Work?
Libra acts just like a digital currency alternative to Bitcoin. Users are able to cash in their local currency and spend just like other dollars. The transaction fees are very low and it may attach your name. We will know more details day by day. Already Facebook published more than 100 pages of documentation as per this project.
So, you can find different messages and some of the key points in their white paper about Facebook Libra coin and Calibra. Social giant network Facebook invited the funding members to collaborate on financial contributions to the project. They intend to develop the tokens, not for profits. They say.. “If we were controlling it, very few people would want to jump on and make it theirs,” says Marcus.
They also believe that it has to be for a global open instant and low-cost money transfer system. Also, it has to be a decentralized form of governance, which means that it’s not one central entity controlling everything.
Moreover, their target is to become a global currency and design a better financial infrastructure for the public good. Basically, they are going to be built on a reliable, scalable, and stable currency.
It’s also going to be governed by an independent association. That’s gonna assist people to evolve the financial ecosystem. So I think Facebook Libra is going to be really decentralized in many different ways. For example, governance, system, and also in this protocol, as well as now the Association is a not-for-profit.
Libra Works like PayPal And Venmo
You can imagine with Facebook Libra Coin with PayPal and Venmo. Because people use an app to access their wallets buy things and send and receive value. But the ambition and usability are more than PayPal and Venmo.
So to use Libra you need to have a “wallet”. Hopefully, current PayPal, Apple Pay, and other Libra association apps can be integrated into the wallet called Calibra. Though they allow different developer wallets.
Unlike Bitcoin, it is backed by a government currency system. As per their description, this coin is a similar type of Euro, USD. So you do not need to buy this coin to get 100x profit in the future.
Is It the Name Facebook Libra Coin Or Libra Coin?
In a word, it is a Libra coin but Facebook has a vital role. As a result, many people know it is a Facebook Libra Coin. Actually, Facebook has more than 2 billion users. Also, 7 million advertisers this them. So they were forced to expand the Facebook Libra Coin.
Libra Governance Body And Voting Power
To be included in the Libra association there are some requirements. So as the requirement, they need a half rack of server space with more than 100mbps dedicated internet server connection. Also, relabel site connectivity and reputable security. Facebook Libra Coin
The managing director will be selected through every organization member’s vote. Who will appoint an executive team and elect a board of five to 19 top representatives?
It is mentioned that Facebook and Calibra have only one voting power. In addition, Facebook permanently accesses to vote 1% of the total vote. Basically, it helps to decentralize Facebook.
Moreover, the requirement is the company has a 1 billion USD market capital as well as approximately $500 million in members’ funds. In addition, reaches 20 million people a year.
One thing Facebook allows research organizations to develop and increase use case more flax-ability among the users. They allow universities and nonprofit organizations to work with them. And they must have at least five years of experience as well as $50 million in budget.
Libra Association Recruiting Founding Members
To run blockchain transactions and validation on the blockchain Libra Association is eligible to recruit new funding members. There has also been an early contribution reward system to encourage fundraising.
MasterCard onboard PayPal pays your stripe and Visa which is the largest you-know payment processing processing company.
You can use the coin to purchase, bookings on eBay, or Facebook. Leadership roles Facebook is going to open up its entire membership towards Facebook Libra Coin.
They’re gonna allow them to transact in the actual token itself and what’s interesting about the blockchain tech is that they’re gonna be able to scale that using high transaction and high capacity systems. Facebook Libra Coin
Comparison with Other Stablecoins
This section will help readers understand how Libra compares to other popular stablecoins and where it fits in the broader ecosystem.
| Aspect | Libra (Diem) | Tether (USDT) | USD Coin (USDC) |
|---|---|---|---|
| Backing Assets | Backed by multiple fiat currencies and government securities | Backed by USD reserves | Fully backed by USD in U.S. banks |
| Governance | Managed by the Diem Association | Operated by Tether Ltd. | Operated by Circle and Coinbase |
| Blockchain | Permissioned blockchain initially, plans for semi-permissioned in the future | Operates on multiple blockchains | Built on Ethereum and other blockchains |
| Use Cases | Everyday transactions, financial inclusion, cross-border payments | Primarily used in crypto trading | Payment settlement, peer-to-peer transactions |
| Stability | Stable value due to diversified reserves | Stable, but questions about reserve transparency | High transparency and audibility |
- Backing Assets and Stability: While most stablecoins, like Tether, are pegged to a single currency, Libra’s diversified reserve model provides more stability, potentially making it more suitable for international transactions and everyday use.
- Governance: Unlike decentralized stablecoins, Libra’s governance is more centralized, which may appeal to regulators but could deter crypto purists who prefer decentralized systems.
By comparing these elements, readers can see how Libra is positioned as a stablecoin with unique characteristics and can better assess its potential role in the market.
Privacy And Security Concerns
This section will address the privacy and security aspects of using Libra, which is essential given Facebook’s data handling history.
- Data Privacy Concerns: Due to Facebook’s previous data privacy scandals, many users have reservations about using a financial service associated with the company. Although the Diem Association is technically independent, the association’s connection to Facebook may impact user trust.
- Security Features: The Diem Association has emphasized that strong security measures, such as end-to-end encryption and blockchain-based security, will protect user funds and data. Highlighting these security protocols can reassure users concerned about potential risks.
- Public Perception and Adoption: Privacy-conscious users may still hesitate to adopt Diem, particularly in regions where data privacy laws are strict. The Diem Association has a significant task ahead in demonstrating transparency and building public trust.
This section will help readers understand the security measures and challenges Diem faces in gaining user trust.
FAQs On (Facebook Libra Coin)
Q1: What is Facebook’s Diem, and how is it different from Libra?
A: Diem is the rebranded name of Facebook’s cryptocurrency project, initially launched as Libra. The rebranding reflects efforts to address regulatory concerns and distance the project from Facebook’s data-related controversies. Diem aims to offer a stable digital currency for global transactions.
Q2: How does Diem maintain its value compared to other cryptocurrencies?
A: Diem is designed as a stablecoin, backed by a reserve of fiat currencies and government securities. This backing helps maintain a stable value, making it less volatile than cryptocurrencies like Bitcoin, which are not asset-backed.
Q3: Can I buy and use Diem right now?
A: Currently, Diem has not yet been launched for public use. The Diem Association is working closely with regulators, and once regulatory approvals are obtained, Diem will be available for purchase through approved platforms.
Q4: How does Diem compare to other stablecoins like Tether (USDT) and USD Coin (USDC)?
A: Diem differs from other stablecoins in its asset-backed reserve, which includes multiple fiat currencies and securities, enhancing stability. Additionally, Diem has a more centralized governance model, overseen by the Diem Association, which distinguishes it from decentralized stablecoins.
Q5: Is Diem safe to use, and how does it address privacy concerns?
A: The Diem Association has implemented strong security measures, such as encryption and blockchain technology, to protect user funds and transactions. However, due to Facebook’s involvement, some users may have concerns about data privacy. The association has taken steps to reassure users that Diem will prioritize security and regulatory compliance.
Q6: Why did Facebook decide to launch Diem?
A: Facebook developed Diem to create a global financial system that would make low-cost digital payments accessible worldwide, especially for people without access to traditional banking. Diem’s goal is to provide financial inclusion and lower transaction fees on a global scale.
Q7: What are some potential use cases for Diem?
A: Diem could be used for international remittances, allowing people to send money across borders affordably. It could also support financial services for the unbanked population and facilitate seamless online payments, making it valuable for eCommerce and microtransactions.
Conclusion
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