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What are the top 5 things we should know about the new Facebook cryptocurrency Libra?

What are the top 5 things we should know about the new Facebook cryptocurrency Libra?

Libra is a cryptocurrency, that is to say, “a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units and verify the transfer of assets”.

Libra is first and foremost, a cryptocurrency created to let people access and participate in the Libra Network. Users shall be able to exchange fiat currency into these digital currencies and use them in online transactions

The key takeaways after going through Libra’s white paper are;

1. Governed by a non-profit

  • Libra’s governing body, the Libra Association, is a non-profit based in Geneva, Switzerland, which will eventually have 100 geographically diverse founding members.
  • No member will control more than 1% of the blockchain network, the Association said.
  • Libra is starting on a permissioned blockchain, meaning (unlike Bitcoin) only founding members will have access to the network. But there are plans for Libra to transition into a permissionless network over time, meaning “no single party will be able to unilaterally change the rules of the network.” The Association says that for the Libra Blockchain to operate as a “true public service,” the network eventually has to be permissionless.

Note: Libra Blockchain currently uses Byzantine Fault Tolerant (BFT) consensus protocol and is based on VMware’s HotStuff framework.

2. Pseudo-anonymous transactions

Much like public cryptocurrencies, Libra’s all non-custodial transactions will be pseudo-anonymous. It means that the cryptocurrency’s transaction amount, timestamp, and public blockchain addresses will only be visible to members on the network.

3. 7 major companies have chosen to drop out of the consortium

  • Mastercard
  • Visa
  • PayPal
  • eBay
  • Stripe
  • Mercado Pago
  • Booking Holdings

MEANWHILE, IBM HAS EXPRESSED INTEREST IN WORKING WITH LIBRA ON ITS DIGITAL CURRENCY EFFORTS.

4. The digital coin is essentially a stable coin as it is pegged to government-issued currencies such as USD, EUR, YEN, POUND, and SGD

Facebook cryptocurrency Libra

5. The project has drawn attention from:

Countries:

  • Switzerland
  • Japan
  • American Regulators
  • UK
  • France
  • China
  • India
  • Thailand
  • Japan
  • South Korea
  • Russia

Intergovernmental Organizations

  • ECB
  • BIS
  • G7

For a graphical representation of the above, check out this infographic