Facebook is Launching Libra, Its Very Own Cryptocurrency
Facebook turned heads last month when it announced they would be launching its very own cryptocurrency. The digital currency, Libra, will be powered by blockchain and is expected to launch sometime in 2020.
Libra will function as most cryptocurrencies do, allowing users to access and participate in a network where you can exchange fiat currency, like the dollar into this digital currency, and use them for online transactions. While many cryptocurrencies suffer from volatility, Facebook is looking to create a more stable tender that will be pegged to government-issued currencies. This is a key characteristic that Facebook hopes will spread the adoption of Libra among its several billion users.
At first, Libra will only be available through the Facebook messenger app and WhatsApp. Eventually, Facebook plans to install ATM-like terminals that will allow people to quickly and easily manage their Libra coins. The social media giant hopes that Libra will partner with shopping outlets so people may use their coins to purchase goods and services.
Libra will attempt to undermine the current leader in cryptocurrency, bitcoin, by offerings key perks that bitcoin doesn’t have. This includes near-instantaneous transaction times, negligible fees, and less volatility. It will also require around the same amount of computing energy as that of a credit card, while Bitcoin requires massive amounts of energy.
With Facebook’s recent history of completing bungling fool all things privacy and user-data related, the thought of the company operating a digital currency has caused some well-deserved concern over users overall security. While Facebook ensures that Libra will remain decentralized as a separate entity from the social media company itself, it is hard to remain truthful of a company that has repeatedly betrayed the trust of its users.
The working prototype of Libra has yet to be sufficiently tested in real-world applications, and it will face steep competition from the many of cryptocurrencies out there that are much more established and adopted. However, if Libra is adopted by all of Facebook’s users to shop and transfer money, it would quickly become one of the biggest financial entities in the entire world. This has caused governments to be wary of Libra, as it is not clear how it would be properly taxed and regulated.
Cryptocurrency is still very much in its infancy as a technology, and we have yet to see one become widely adopted and used. With a company as big as Facebook entering the crypto market, we could potentially see crypto become much more widely used by people for their day-to-day transactions.