Facebook finally unveiled its long-awaited cryptocurrency plans on Tuesday, June 18, 2019. The upcoming new digital money designed by Facebook, “Project Libra” is meant for the billions of users using its apps and social networking platforms. With the success of this project, billions of users will have power to shop and send the digital currency “Libra” on Messenger and Instagram.
At the time, Facebook has not provided any specifics about how users will get the currency. However, executives proposed that the currency will first be distributed in mid-2020 on Messenger and WhatsApp.
Moreover, the company has also put forward the idea of a new digital wallet known as Calibra, which will provide users with a medium to store and spend Libra. This wallet will be operated by Facebook itself as a separate subsidiary. The wallet will show the value of users’ Libra in their specific local currency and will be designed parallely to a popular digital wallet Venmo. However, this wallet will not be available to the public for months.
David Marcus, the former PayPal executive and leader of Project Libra for Facebook pointed out that the main motive behind this is to reach 1.7 billion people around the world who lack a banking system. Marcus also said: “It’s an anomaly that the Internet has no protocol for money.”
The project has a huge organization behind it including dozens of non-profit organizations and other companies. The corporate members of this organization also known as Libra Foundation will be required to make a contribution of at least $10 million to help currency gain grip in the market. Some initial members of Libra foundation include Facebook itself with 27 other partners like Visa, MasterCard, PayPal, and Coinbase. Moreover, the foundation also includes venture capitals like Andreesen Horowitz and Union Square Ventures. Marcus looks forward to the partnership with around 100 partners by the time Libra debuts.
Libra Blockchain, similar to any blockchain will cater a tamper-proof record of transaction or ledger on the network. However, contrary to the blockchain of Bitcoin and other public blockchains, this blockchain will only be visible to authorized bodies. There authorized bodies here will be foundation members which will also be allowed to run the node.
Furthermore, these members will also keep a supply and demand check for LIbra. This means they must issue a new Libra when and where needed and also destroy the old one.
Libra’s blockchain will be built on a new language programmed by Facebook itself. This new language will be known as Move. This will give other third parties a chance to build and run smart contracts and other blockchain services on the language.
A number of questions were raised to know the motive behind Facebook’s decision to step into this market. To this Facebook, executives replied that the company sees an opportunity to step into the financial market and provide users a low-cost and at the same time an easy way to transfer money across borders.
Executives of global tech firms like Uber and Spotify also see a chance to reduce the payment processing cost. At the same time, they wish to touch a new customer market with people who lack credit cards.
However, at the end, it’s the consumer who will tell if Facebook’s step into the financial world will be a success or a failure. However, today Libra, the currency can be viewed as a revolution that would make transactions and payments easy for everyone.