Facebook Announces Its Cryptocurrency “Libra”

Facebook, officially unveiled its much-anticipated cryptocurrency today with the launch of its official website and whitepaper.The cryptocurrency will be called Libra and will be powered by a smart contract blockchain platform called Libra Blockchain that’s designed to be “secure, scalable, and reliable.”

Libra cryptocurrency and the underlying blockchain network are set to launch next year. The testnet will be released in the coming weeks so that the developers will be able to read, build, provide feedback, and take part in a bug bounty program.

What Libra is all about?

While Facebook’s Libra coin will offer multiple options on what to do with it, their initial goal is to solve the international remittance problem in the world. Mark Zuckerberg’s latest blog post reads:

Libra’s mission is to create a simple global financial infrastructure that empowers billions of people around the world.

Unlike other cryptocurrencies, Facebook emphasized, Libra is backed by “a reserve of real assets,” with an equivalent amount of real currencies and assets held in reserve for every Libra that is created. Bitcoin and others have not gained widespread acceptance because of their fluctuations in value. Facebook hopes that by pegging Libra to the dollar the euro, the yen and other real currencies it will offer a more stable alternative with mainstream appeal.

Governance of Libra

The main organization that will be working towards the growth and development of the cryptocurrency is the Libra Association, an independent non-profit organization headquartered in Geneva, Switzerland. The association consists of well-known venture capital firms, non-profit organizations, technology service providers, and financial firms. This includes Coinbase, PayPal, VISA, Stripe, eBay, Spotify, Xapo, Facebook’s Calibra, Vodafone, Union Square Ventures and Mastercard.

Basically, they have brought all the best companies in every industry and put them together to work on this project. Now they have only 28 worldwide companies, but they plan to gather around 100 by the beginning of 2020 when they will launch the blockchain. These members would be operating and maintaining the network’s node, and manage the cryptocurrency’s reserve, Libra Reserve.

Further, the association will be making decisions pertaining to the cryptocurrency and its ecosystem via a voting mechanism. Every member of the association has the right to cast a vote on decisions on Libra, where each of the 100 members would be able to cast only one vote.

Privacy concerns

The social media giant also addressed concerns surrounding the privacy of Libra. It stated:

The Libra Association recognizes the importance of privacy on the public blockchain – but also recognizes the risks of misuse. The association itself is not involved in processing transactions and does not store any personal data of Libra users.