After months of rumors and anticipation, Facebook has officially announced the cryptocurrency they have been working on. The name of the cryptocurrency is Libra. It is a stablecoin cryptocurrency means its value won’t fluctuate much like other cryptocurrencies and you can not mine it. Facebook creates a subsidiary to manage the transactions of Libra called Calibra. It is also a wallet for Libra.
Libra is governed by an independent Libra Association that has over 20 members including payment merchandise Visa and MasterCard. Facebook is targeting to get over 100 partners for Calibra before the launch of Libra which is due somewhere is 2020. All the members of Libra Association get equal votes to avoid the vandalism of the customer data and privacy. Facebook itself has 1 vote or 1% of the total, whichever is highest.
Facebook’s goal with Libra is to create a global payment system. It is similar to PayPal but backed by many reputed companies with a vision to be the global digital currency of the world. The thing that differentiates Libra from other cryptocurrencies and payment systems is that its value is stable. This makes it easy for anyone to trade in Libra without worrying about the conversion rate. Also, it’ll have a low-cost and transparent conversion fee which would be great for international payments.
FAQ About Libra: Everything You need to know
- What is a cryptocurrency?
- What is Libra?
- How it’s different from other cryptocurrencies?
- What is Calibra?
- When will Calibra be available?
- What do I need to get started?
- How can I use Libra?
- Where will I be able to use Calibra?
- Will Calibra charge fees?
- What countries is Calibra available in?
- Can I use my local currency in Calibra?
- How will you prevent fraud?
- How will you keep my information safe?
- What’s the relationship between Calibra and Facebook?
- Can I still use Calibra if I don’t have a Facebook, WhatsApp, or Messenger account?
What is a cryptocurrency?
Cryptocurrency is a type of digital currency which you can trade for good and services just like a regular currency. Being a digital currency, it uses secure cryptography to verify the transaction and avoid frauds. Generally, cryptocurrencies use blockchain based decentralized network to provide maximum security and privacy. Due to the decentralized network for transaction verification, cryptocurrencies are limit to ~10 transaction per second. And the value of the cryptocurrency depends on the type of blockchain it is built on, which may cause absurd fluctuations in the value of the cryptocurrency.
What is Libra?
Libra is designed to be a simple global digital currency. It is built on a secure and reliable Libra blockchain which is designed in-house by Facebook. Libra is backed by reserve assets which are designed to give it intrinsic value. Unlike other cryptocurrencies, it is governed by Libra Association which is an independent association where every member has 1 vote or 1% of the total vote including Facebook/Calibra itself.
How Libra is different from other cryptocurrencies?
Unlike other cryptocurrencies, Libra won’t use a fully decentralized network, not initially at least. It will an approval system to add nodes to its network. It has a set of requirements; any reliable service/business/person that satisfies the requirements can be a member and will be added a node to the Libra network. Having a small and reliable network allows having around 1000 transaction per seconds which is a huge compared to~10 transaction on other decentralized cryptocurrencies. Facebook is planning to make the Libra network fully decentralized to scale it globally.
What is Calibra?
Calibra is a subsidiary of Facebook which is a digital wallet for Libra. It is made for Libra from where you can manage Libra transactions and send and receive money.
When will Calibra be available?
Calibra is being built currently and will be available as an app when Libra is launched in 2020. It will also be integrated into Facebook Messenger and WhatsApp. You can sign up for early access here.
What do I need to get started?
When available, you would need a government-issued identification to create an account. This is required to comply with laws and prevent frauds.
How can I use Libra?
You can use Libra with the Calibra app. You can get Libra in-exchange for your local currency using the Calibra app and use its payments and money transfer.
Where will I be able to use Calibra?
Libra is a digital currency, you can use it to pay for good and services on the supported merchandises and outlets. You can also use it to send and receive money through Calibra app, Facebook Messenger, and WhatsApp.
Will Calibra charge fees?
One of the goals of Calibra is to minimize the transaction fee. It will have a low-cost and transparent transaction feel especially for international money transfer.
What countries is Calibra available in?
Calibra is looking forward to having a global launch. It would be available to everyone anywhere as soon as possible.
Can I use my local currency in Calibra?
Yes, you can exchange your local currency to equivalent Libra value using the Calibra wallet app. All the transaction on Calibra will happen in Libra and you will be able to convert it back to your local currency.
How will you prevent fraud?
Calibra will require a government-given ID to signup and verify accounts. It will also use Facebook and WhatsApp account information for user verification and fraud prevention (if you use those apps for Libra payments). On top of that, the Calibra app will have in-app reporting and customer service. In case of any unauthorized fraud, the victim user will get a full refund.
How will you keep my information safe?
As per the documentation, all the transaction activities are said to be private and won’t be posted publicly. Facebook assures that it won’t use Calibra user data for ad-targeting. To can read more about Calibra data privacy here.
What’s the relationship between Calibra and Facebook?
Calibra is a subsidiary of Facebook which will operate independently. It will be governed by the Libra Association which is planning to have over 100 members with an equal vote.
Can I still use Calibra if I don’t have a Facebook, WhatsApp, or Messenger account?
Calibra will be integrated Facebook Messenger and WhatsApp. If you don’t use Facebook and/or WhatsApp, you can still use Calibra through the Calibra mobile app.
For more information, you can read the Libra White Paper here.
This is all the necessary information you need to know about Libra. It is a new cryptocurrency with a goal to be the global digital currency with minimum and transparent transaction fee. Now the question is, will people trust a payment system by Facebook? Will Facebook will able to get other reputed tech giants on Libra Association?