Random Thoughts

Facebook’s Cryptocurrency: Libra

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In the midst of troubled and volatile political scandals, Facebook is now expanding its global domination by taking on one of the most unpredictable industries, cryptocurrency. Facebook’s Libra, is initially designed to provide banking solutions to those without, but at its heart, it is merely an attempt to repair the social media giant’s tarnished reputation and trust with its consumers. While Libra will be facing several roadblocks in its rise to power, the more I research and think about its potential for greatness, the more excited I become.

Cryptocurrency has been a hot topic for some time, offering a secure and private method of transferring currency without the involvement of the government or banking industry. Due to cryptocurrency’s robust guarantees against tampering by utilizing a decentralized ledger system, Libra can be the final cog in the wheel to get Facebook user’s faith back to what it was, long ago.

So, what makes Libra different than cryptocurrencies like Bitcoin? Only approved partners will be able to access Libra’s ‘permissioned’ network, and none of them have the power to either edit a ledger or stop a transaction. Even more impressive is Facebook’s stance on its influence over Libra. Libra will be governed by a consortium of investors, nonprofits, and financial service providers; Facebook will only have a single vote. While Facebook’s promises of ‘not abusing its power’ often fall on deaf ears, we actually don’t have to trust their word, since this is the beauty of the blockchain system. As an open-source software controlled by an expanding collection of partners, Libra’s influence and potential change to the world of economics could be massive; however, using Libra to any one party’s advantage or in the reduction of user’s faith will be unlikely.

Libra will take the form of a stablecoin, defined as a digital currency which is asset-backed (like the U.S. dollar). With Libra, your token will be less volatile as other cryptocurrencies you hear horror stories about by being backed by short-term government securities and bank deposits. Facebook is also releasing a subsidiary company, Calibra, which will handle services and products such as Libra’s digital wallet.

With Facebook’s 2.6 billion active users, can you imagine what a decentralized, frictionless payment system will do to the banking industry and companies like PayPal? I, for one, can’t wait to see the results of Facebook’s disruption of the industry.

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