[vc_row][vc_column][vc_column_text]Facebook unveiled its cryptocurrency called Libra in June 2019. According to the currency’s whitepaper, Libra is a simple global currency that aims to empower billions of people through an accessible financial infrastructure. Here are ten takeaways about Libra that you probably didn’t know.
1. Libra users will interact with reserves through resellers
The underlying blockchain network and Libra cryptocurrency will be launched in 2020. Developers of the network will be able to read, build, and take part in a reward program for bugs. However, it is expected that the test nets will be released before the launch, and perhaps in the coming weeks. Users of the cryptocurrency will not directly interact with the Libra reserve but instead will be able to buy and sell Libra through resellers. Only a handful of resellers will be allowed to transact huge amounts of fiat and Libra currency. If you want to transfer between Libra and fiat, you will need to transact with the authorized entities. The resellers will be able to integrate with cryptocurrency exchanges and allow transactions for users who want to cash in or out.
2. You will earn interest on Libra stablecoin
“The cryptocurrency will be backed by several low-risk options like government securities, bank deposits, and other safe investments. Therefore, all money backing up Libra will earn interest. The interest earned will then be used first to pay for the maintenance of the ecosystem and the network. As such, there will be projected growth with a broader pool of funds for more development. The remaining amount will be paid out as dividends to the early investors in the network” Says Edie of learnbonds
3. Libra will be governed by the Libra Foundation
The cryptocurrency will be governed by the parent foundation, and not Facebook as many people assume. However, the wallet, CaLibra, is owned by the social media giant. CaLibra allows payments through Messenger, Whatsapp and other platforms owned by Facebook. The wallet is registered by FinCen (Financial Crimes Enforcement Network) which ensures the separation of social and financial data. It also ensures that financial services are based and built on the Libra network.
The area of regulation is always a thorny subject for most digital currencies. For Libra, the developers will be required by law to abide by the laws and regulations in the areas which they operate. However, the Libra blockchain will not be regulated
5. Libra will offer STO
“Security token offerings (STOs) are blockchain-based ways to raise funds for projects. Libra will offer a security token offering called Libra Investment. It will be a way to fund programs and cover operating costs for many startups. STOs will be made available to accredited investors and act as securities. They will also have the potential to earn interest and profit on the reserves.” Says Joe from insidebitcoins
6. The blockchain will be fully transparent
Just like bitcoin and other cryptocurrencies, all transactions on Libra will be fully transparent and visible to the public. This is despite Facebook’s history with data privacy scandals. It’s going to be a fascinating to watch for blockchain analysts and spectators, especially when it comes to privacy matters.
To use the Libra blockchain, users do not need their real-world identity. They can hold as many addresses without them being directly linked to their real identities. This is to enhance privacy. As Libra Association states, the pseudonymous nature of the network is to promote privacy while looking at ‘practicality, scalability, and regulatory impact.’ Also, crucial details such as timestamp, transaction amount, and blockchain addresses will only be visible to members available on the network. The association further stated that it would not store people’s data. External products like custodial wallets can make transactions off-the network’s blockchain. Customers will then be required to follow Know Your Customer conditions.
8. Plans include transitioning to a permissionless blockchain
Libra is currently starting off on a permission-based network which means access is given only to the founding members. This is unlike other cryptocurrencies such as bitcoin. However, there are plans to change that and include a permission-less network in the future. A permission-less network means that no single party has the power to change the existing rules of the network unilaterally. It is a prime goal for the Libra Association to make Libra a permissionless blockchain to operate as a true public service.
9. Uses BFT consensus protocol and is built on the HotStuff framework.
The Libra blockchain uses Byzantine Fault Tolerant (BFT) consensus protocol and is built on VMware’s HotStuff. It also has its programming language known as Move. BFT is arguably the most advanced algorithm that provides unrivaled performance benefits while also being very easy to implement. As a result, the Libra blockchain is fast and reliable and able to process thousands of transactions simultaneously. The high reliability and speed are vital to the scalability of the network without compromising on decentralization.
10. Libra is governed by a nonprofit organization
Libra Association, the governing body of the Libra cryptocurrency, is a not-for-profit entity based in Geneva, Switzerland. The association is made up of 27 founding members, including Visa, MasterCard, PayPal, Uber, among others. No founding member will own more than 1% of the blockchain network. The association is gearing towards a more geographically diverse outlook that will have members from 100 different locations.
In conclusion, Libra is set to launch as a low-volatility cryptocurrency that is secure, reliable, and scalable. The digital currency is powered by its native smart-contract blockchain popularly known as Libra Blockchain. Libra, aims to solve two main problems that are rife the world over, especially in the financial services sector; reducing cross-border money transfer fees and ensuring the unbanked population of the world is banked. With the involvement of Facebook in Libra development, there’s going to be mass adoption of cryptocurrencies as a whole.
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