As expected and predicted Facebook has revealed the details of its cryptocurrency, Libra, which will let you buy things or send money to people with nearly zero fees.
June 18 2019 Facebook released its white paper explaining Libra and its testnet for working out the kinks of its blockchain system before a public launch in the first half of 2020.
The Libra mission.
A simple global currency and financial infrastructure that empowers billions of people.
Reinvent money. Transform the global economy. So people everywhere can live better
How it will work?
You’ll pseudonymously buy or cash out your Libra online or at local exchange points like grocery stores, and spend it using interoperable third-party wallet apps or Facebook’s own Calibra wallet that will be built into WhatsApp, Messenger and its own app.
“As we embark on this journey together, we think it is important to share our beliefs to align the community and ecosystem we intend to spark around this initiative:
We believe that many more people should have access to financial services and to cheap capital.
We believe that people have an inherent right to control the fruit of their legal labor.
We believe that global, open, instant, and low-cost movement of money will create immense economic opportunity and more commerce across the world.
We believe that people will increasingly trust decentralized forms of governance.
We believe that a global currency and financial infrastructure should be designed and governed as a public good.
We believe that we all have a responsibility to help advance financial inclusion, support ethical actors, and continuously uphold the integrity of the ecosystem.”
Read LIBRA introduction
Facebook is launching a subsidiary company also called Calibra that handles its crypto dealings and protects users’ privacy by never mingling your Libra payments with your Facebook data so it can’t be used for ad targeting. Your real identity won’t be tied to your publicly visible transactions. But Facebook/Calibra and other founding members of the Libra Association will earn interest on the money users cash in that is held in reserve to keep the value of Libra stable.
“Existing cryptocurrencies like Bitcoin and Ethereum weren’t properly engineered to scale to be a medium of exchange. Their unanchored price was susceptible to huge and unpredictable swings, making it tough for merchants to accept as payment. And cryptocurrencies miss out on much of their potential beyond speculation unless there are enough places that will take them instead of dollars, and the experience of buying and spending them is easy enough for a mainstream audience. But with Facebook’s relationship with 7 million advertisers and 90 million small businesses plus its user experience prowess, it was well-poised to tackle this juggernaut of a problem.”
Facebook wants to make Libra the evolution of PayPal. It’s hoping Libra will become simpler to set up, more ubiquitous as a payment method, more efficient with fewer fees, more accessible to the unbanked, more flexible thanks to developers and more long-lasting through decentralization.
The Libra Blockchain
The goal of the Libra Blockchain is to serve as a solid foundation for financial services, including a new global currency, which could meet the daily financial needs of billions of people. Through the process of evaluating existing options, we decided to build a new blockchain based on these three requirements:
Able to scale to billions of accounts, which requires high transaction throughput, low latency, and an efficient, high-capacity storage system.
Highly secure, to ensure safety of funds and financial data.
Flexible, so it can power the Libra ecosystem’s governance as well as future innovation in financial services.
The Libra Blockchain is designed from the ground up to holistically address these requirements and build on the learnings from existing projects and research — a combination of innovative approaches and well- understood techniques. This next section will highlight three decisions regarding the Libra Blockchain:
Designing and using the Move programming language.
Using a Byzantine Fault Tolerant (BFT) consensus approach.
Adopting and iterating on widely adopted blockchain data structures.
The Libra Blockchain is pseudonymous and allows users to hold one or more addresses that are not linked to their real-world identity. This approach is familiar to many users, developers, and regulators. The Libra Association will oversee the evolution of the Libra Blockchain protocol and network, and it will continue to evaluate new techniques that enhance privacy in the blockchain while considering concerns of practicality, scalability, and regulatory impact.
For more details, read the technical paper on the Libra Blockchain. Detailed information is also available on the Move programming language and the LibraBFT consensus protocol. We’ve open sourced an early preview of the Libra testnet, with accompanying documentation. The testnet is still under development, and APIs are subject to change.
What’s Next for Libra?
“We have presented a proposal for the Libra protocol, which allows a set of validators to provide a decentralized database for tracking programmable resources. We have discussed an open-source prototype — Libra Core — of the Libra protocol and shown how the introduction of the Move programming language for smart contracts allows the protocol to implement the unique design of the Libra ecosystem.”
Facebook hope to gather feedback from the newly formed Libra Association, as well as the broader community, to turn these ideas into an open financial infrastructure. In the early days of the system, using an externally recognized set of Founding Members reduces the demands on the consensus incentive system and allows for a faster pace of updates.
This is the goal for Libra: A stable currency built on a secure and stable open-source blockchain, backed by a reserve of real assets, and governed by an independent association.
“Our hope is to create more access to better, cheaper, and open financial services — no matter who you are, where you live, what you do, or how much you have. We recognize that the road to delivering this will be long, arduous, and won’t be achieved in isolation — it will take coming together and forming a real movement around this pursuit. We hope you’ll join us and help turn this dream into a reality for billions of people around the world”…
CNBC’s Jim Cramer said Tuesday that Facebook’s new Libra cryptocurrency is a “brilliant” endeavor that will boost the company’s status among consumers in highly volatile nations around the world.
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