It’s called Libra, it will be managed independently and backed by real assets, and paying with it will be “as easy as sending text messages,” the social network said.
According to Facebook, which launched the project on Tuesday, starting next year users will be able to buy the currency through their platforms and store it in a digital wallet called Calibra, as well as make payments with Libra through their own app
A group of Facebook workers has spent the last year developing a cryptocurrency that could have far-reaching implications for the company’s business and for the wider digital environment of the payment industry if it succeeds. Now, the group is finally making public the details of their plans
Facebook released the plans early Tuesday when it published a technical academic report on the cryptocurrency called Libra, which aims to allow the public to start using next year. While some elements of the initiative have been previously leaked, Facebook executives in recent interviews have provided more details on how it will work, from the steps consumers will take to buy Libra, to the company’s long-term vision to expand who you can validate transactions on the network, beyond the large companies that initially will.
Currencies like Bitcoin and Ether do not have assets that support them. While this condition allows their owners to buy them with the possibility of selling them at a higher price in the future they can also run the risk of their value being lower due to price fluctuations.
The reserve that supports the cryptocurrency comes from two sources: private investment and the user. The first comes from the companies that are part of the Libra Association and contributed $ 10 million to the project.
The 4 points which must be know regarding bitcoin
- Facebook says it will not use Libra to boost its advertising business. To dissipate privacy issues, Facebook promises that it will not use the data collected through Libra transactions to direct the ads to consumers or couple that payment activity to the information it collects about them elsewhere. Facebook said the new Calibra subsidiary will work independently within Facebook, similar to how WhatsApp and Instagram worked when they were first acquired. Since the Facebook administration has exercised more control over those services recently, the agreement may not be reassuring for Libra users who care about their privacy.
- Facebook will finally offer other financial products, such as credit, to its users. One of the ways that Facebook sees itself making money with Libra is by creating financial products that users can buy through their applications. Those products could one day include loans that users would take in the form of Libra tokens or investment products that would allow them to make a profit from their savings. Facebook sees the greatest opportunity for such products in developing countries, where people have less access to traditional financial services. Libra Profit System – The Official Website 2019 is best option to get profit from Libra currency.
- The distribution of cryptocurrency through third parties raises questions about regulation . While users of the Facebook digital wallet that stores Libra tokens must send a government-issued ID to buy Libra tokens, people who don’t have an ID can buy Libra through external providers, said Kevin Weil, vice president Facebook product for Calibra, in an interview last week.
That approach could increase access to the card in the developing world. But it is still unclear what responsibility Facebook and other Libra partners will have to control illegal activity, such as money laundering and terrorist financing . Identity controls for the purchase of cryptocurrencies have become a standard in the United States and other countries to avoid such activities.
- Participation in the Libra Association is initially limited to 100 members who pay $ 10 million each, but the goal is to finally open the cryptocurrency government to others .
To be members of the Libra Association, PayPal, Uber and others committed $ 10 million to operate a network node: hardware and software that will help process transactions related to the Libra token. When Libra is launched, Facebook plans to have 100 companies in the external association, each with a government vote (including Facebook).