Facebook Inc., said it would launch a blockchain-based digital currency (cryptocurrency) called Libra in 2020. Check CMC with Url: coinmarketcap.com/currencies/facebook-libra, Libra is listed, but there is no transaction activity data.
This currency will be controlled by Facebook and several other large companies incorporated in the Libra Association. Following is an explanation of Libra Facebook Crypto:
1. Libra coins are reserved with real assets
Libra will become a digital currency supported by real asset reserves, including bank deposits and short-term government securities, and is held by a network of custodians.
This structure is to attract people’s trust and stabilize its value. Libra holders can also convert coins into traditional currencies based on the prevailing exchange rates.
2. Blockchain-based technology
Libra transactions will be empowered and recorded by blockchain, the ledgers of transactions managed by computer networks.
Libra’s blockchain technology will require permission, meaning that only the authorized entity, the Libra Association, will be allowed to run data on the computer, in contrast to bitcoin, which has no transparent regulator.
The software will become an “open source,” which means companies outside the association can build applications on it.
The association plans to give birth to a blockchain without permission within five years of launching Libra.
3. Libra Association
The Libra Association is an independent, non-profit, 28-member company. The association is based in Geneva, Switzerland, and will oversee the big decisions regarding Libra digital coins.
Members of this association include Mastercard Inc., Visa Inc., Spotify Technology SA, PayPal Holdings Inc., eBay Inc., Uber Technologies Inc., and Vodafone Group Plc, and venture capital companies Andreessen Horowitz and Thrive Capital.
A minimum investment of US $ 10 million to join this association, except for non-profit members such as the Kiva financial inclusion group. This association targets to have 100 members at the time the Libra coin is released.
All members have the right to vote in one crucial decision regarding Libra. Facebook will become a member of this association through the formation of Calibra, a digital wallet for Libra.
4. Digital Wallet
Individuals and traders will be able to use Calibra to save, send, and receive Libra.
This digital wallet will be available as a standalone application on smartphones and connected to Facebook, Messenger, and WhatsApp applications.
Facebook also wants to make Calibra available as a transaction tool throughout its suite of applications, such as to make digital payments from online shopping on Instagram.
To buy Libra, people can transfer using their bank account or do so by exchanging cash at certain outlets or banks.
The Libra currency and the Calibra digital wallet are two separate entities, although Calibra engineers are involved in developing the blockchain in the Libra currency.
Calibra has around 100 employees, mostly based at Facebook headquarters in Menlo Park, California, as well as in Tel Aviv. Calibra’s executive, Kevin Weil, told Reuters that the company had not planned to significantly increase the number of employees.
5. Privacy and Security
Everyone who uses Calibra must go through the “know your customer” process. This process is verifying the user’s identity to prevent crime in the financial sector.
That means whoever registers must share their ID cards and other personal information.
Calibra will provide assistance to customers who lost their cellphones or passwords, and return customers’ Libra money that was stolen by fraudsters, Facebook said.
Calibra will only share user data with Facebook’s parent company and third parties when there is agreement from the customer, or in other “specific cases,” such as when law enforcement requests information, according to a statement.
Facebook promises not to use Calibra data to improve ad targeting.
Information about Libra customers will be available transparently, such as when paying with a credit card, Weil told Reuters.