Let us first start with the scientific terms so that you can easily understand the other things in the blog!
What is Crypto Currency?
A digital currency that uses cryptography to verify and secure financial transactions.
What is Digital Currency?
A type of currency designed to be used in the digital form.
What is Cryptography?
A tool for protecting the integrity of information that is a key component of blockchain technology.
What is BlockChain Technology?
Blockchain Technology is technology that can safely store transaction records on a peer-to-peer network instead of storing them in a single location. Independent servers around the world, called nodes, make up the network that operates the blockchain.
I hope you are clear with the scientific terms! Let us move with the topic ahead!
What is Libra?
According to the white paper published by Facebook on Libra ‘s Website, “Libra is a simple global currency and financial infrastructure that empowers billions of people”.
Libra will permit its billions of users to make financial transactions across the globe, in simple terms, Libra will let you purchase things or send money to people with nearly zero fees.
You will anonymously purchase or cash out your Libra online or at local exchange points like grocery stores, and pay it out using interoperable third-party wallet apps or Facebook’s own wallet that will be built into WhatsApp, Messenger and its own app!
Libra has Five important features: –
- Built on a secure, scalable, and reliable blockchain.
- It is a stable coin which is supported by a reserve of assets at backend.
- It is governed by the independent Libra Association.
- Uses the Libra BFT consensus mechanism.
- Smart contract coding is done through “Move” programming language.
Regardless of so many high-profile defections from project and severe reproval from US regulators and politicians, Facebook officially moves ahead on 14th October with the plan of developing new digital currency called “Libra” after their launch in June.
The non-profit libra association, who would be governing the currency, officially signed on 21 charter members on 14th October at the organization’s inaugural meeting in Geneva.
What is the Idea behind the rise of Libra?
As per the Business Insider Report of August 2017, 2 billion people around the globe don’t possess a bank account !
We are living in the digital age! Libra white paper states that “The arrival of the internet and mobile broadband has authorized billions of people globally to have access to the world’s knowledge and information in less time. These services are now accessible using a smartphone from almost anywhere in the world.”
Here, Facebook is planning to make its noteworthy impact with Libra. Unlike other crypto projects, Facebook already has a huge number of users and doesn’t need to start from the base. They can hold their 2.38 billion users to get known to Libra and push them to adapt to it.
Analysts all over the world are talking a lot about Libra, they say Libra could be a welcome lift to Facebook’s profits could be a huge money maker for Facebook, arriving as its growth slows.
How will Libra connect with people?
Facebook has developed a subsidiary company cum digital wallet called “Calibra” which will be used to interact with Libra. Users will be able to send Libra via their smartphones by using Calibra. To send funds to your Calibra wallet, Facebook will allow you to select from a list of partner payment providers, such as MasterCard, Visa, PayPal, and Stripe. People will also be able to turn US dollars into Libra for their Calibra digital wallet, by going to local or online currency exchanges. In short Calibra will handles its crypto dealings and protects users ‘ privacy by never blending your Libra payments with your Facebook data thus it won’t be getting used for ad targeting.
Facebook wishes that the 1.7 billion people who do not possess bank account might choose whoever offers them a financial service (like Libra) as an option to provide them online identity.
But eventually Facebook/Calibra and other founding members of the Libra Association will earn interest on the money, through user ‘s cash in that reserved to keep the value of Libra stable.