The Facebook cryptocurrency will be launched in the first half of 2020 with the mission of creating a global currency and a financial infrastructure that gives power to billions of people. Here’s all there is to know about Libra, the new digital currency launched by Mark Zuckerberg.
11 Things you Need to Know About Facebook Libra (LBR) Cryptocurrency
- Libra’s mission is to create a simple global currency and a financial infrastructure that empowers billions of people.
- Libra is a stablecoin that will be launched in the first half of 2020, entirely covered by a reserve of real assets (a basket of bank deposits and short-term government bonds). The balance of the basket can be changed if it serves to compensate for important price fluctuations.
- Facebook will not control Libra. He will have the right to one vote like the other founding members of the Libra Association, independent and based in Switzerland. This gives a decent level of decentralization, and the project is to have around 100 diversified and geographically distributed members at the time of launch. Other founders include MasterCard, Visa, PayPal, Uber as well as non-profit organizations such as Women’s World Banking and academic institutions. Everyone has invested 10 million dollars in the project.
- The project is built on the Libra blockchain, which is open source, and every developer can build smart contract using the Move language. Move was created to prevent asset cloning, to facilitate the exchange with current currency and to simplify the writing of blockchain codes that follow the intentions of the author without introducing bugs. The blockchain prototype (the testnet) was launched on June 18, and will be in beta mode until the official launch in 2020.
- The Libra blockchain is managed by nodes, which are servers that help make it work. Each of the founding members operates a different validator node. The blockchain follows a BTF (Byzantine Fault Tolerance) consensual approach, which means that only two thirds of the nodes must agree on the legitimacy of the transaction for it to be validated and written in the blockchain. Transactions incur small costs to pay for the “fuel” that covers the transfer of funds – similar to Ethereum.
- At the moment Libra is a blockchain permissioned, this means that only entities that meet certain requirements can participate in the group that governs the blockchain. The goal is to move everything on a system without authorization in 5 years based on a proof-of-stake consent protocol. This will protect against attacks by distributing control, facilitating competition and lowering entry barriers. The goal is for 20% of the votes in the Libra Association to come from node operators, based on how much Libra they hold rather than being a founding member.
- Facebook has launched a new subsidiary, Calibra. His first product will be a wallet that will allow Libra to be stored, exchanged and spent. The wallet will be available on Messenger, WhatsApp and as a standalone app. Expected for 2020.
- Facebook has stated that it will ensure that Calibra protects users’ privacy by never mixing Libra payment data with Facebook data, so it cannot be used for advertising purposes.
- The Libra Association will encourage the listing of Libra on multiple regulated exchanges around the world.
- The Libra Association aims to involve more and more companies that accept Libra as payment and will work on programs that encourage more developers and retailers to work with them. It also plans the use of incentives (probably Libra coin) to pay for node operators that will involve new companies. The companies that will earn these incentives can either keep them or pass them to users in the form of Libra coins or discounts.
- Libra will be held and expendable through its wallets (like Calibra) but others are also expected to build compatible wallets – including PayPal and Spotify. The goal is to make sending money and payment as easy as sending a message on Facebook.