WTF is Libra? Facebook's Cryptocurrency

Nov 20
You might have been noticing that Zuckerberg has been in the news again. Don't worry; it's not another Facebook data breach. This time, Zuck was on Capitol Hill to talk about his new initiative in 2019, Libra.

What is Libra?

Libra is not a common currency: it is a cryptocurrency that will allow Facebook and Whatsapp users to purchase physical and digital goods in addition to sending funds "with nearly zero fees."

Recently companies like PayPal, Stripe, eBay, MasterCard, and Visa. have decided not to join the Libra Association, which Facebook has been organizing to run the proposed digital currency. Many people believe Facebook is biting more than it can chew, trying to satisfy the entire world unbanked individuals.

Libra 101

In this article I am going to cover the following?

  1. Where does the name Libra come from?

  2. What problem Libra is solving

  3. Who is behind Libra (besides Facebook)

  4. The difference between Libra & Bitcoin

  5. United States Government VS Libra/Facebook

 

Where does the name Libra come from?

The word Libra comes from the French word "libre" -- which means free. Libra is also an astrological sign which happens to represent justice and an ancient Roman unit of weight

So this must mean, Facebook wants to represent freedom, justice, and a unit of weight 🤷🏾♂️. However, in reality, the Facebook currency is none of those things. 

Libra is a digital currency, like Bitcoin. This means it does not and will not exist in physical form. 

Don't worry; you won't see Mark's face on LibraBucks or Libra-coins. However, it will function as a currency. 

What problem Libra is solving 🌎

Libra has a few things going for itself. Libra can be used for payments to friends and family overseas. You may think that’s a small market. But think again, it's a

💰💰💰💰💰💰💰💰💰TRILLION DOLLAR INDUSTRY 💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰

It's also an expensive industry. Since the Libra currency has many properties of a cryptocurrency, it might be borderless, lightning-fast and, most likely, nearly feeless. This would go a long way to helping underdeveloped nations finish developing, something I believe would benefit us all.

What about Venmo, Paypal, Google Pay?

Most of us use these services when trying to send money to friends and family. Services like Venmo are popular for a reason; they allow you to transfer money between your friends and family and business partners within your country in the blink of an eye. These businesses could be disrupted by Libra quite easily. 

As of March 31st, 2019 there are more than 2.7 billion active daily users of Facebook’s products. That is more than any nation on Earth, and almost as much as America, China and India combined. Imagine if all these people were given access to a global currency? They could use it to split a bill at a restaurant with their friends, pay their mechanic to fix the car, lend some money to a cousin. It’s incredible. Whatever concerns money Libra can be used for it. A little scary, isn’t it?

Libra for business is one size fit all solution.

Companies who signed up and invested in Facebook’s Libra include Uber, eBay, Lyft, Xapo, and Spotify. It makes sense. These businesses, which accept customers around the world, must accept payments in multiple currencies. The firms then need to convert these funds, paying fees and waiting 2-3 days for payments to clear. If these firms used a standard global currency, such as the Facebook crypto, they would save on fees and transfer times.

Who is behind Libra?

The Libra Association, you can read more about it here

Libra vs Bitcoin

Here is a helpful infographic since everyone loves pictures 😊 You'll notice Libra is similar to Bitcoin, but very different.

Facebook is only allowing a few trusted people/firms/companies to keep track of the Libra ledger. That means Libra is more like a digital currency (i.e. World of Warcraft gold, Second Life dollars, etc.) rather than an actual cryptocurrency.

United States Government vs Libra/Facebook

Facebook announced Libra and its Calibra digital wallet on June 18th, 2019 -- and regulators pounced on it straight away. 

U.S. Congress representatives and senate members were in a fury. 

The chair of the House Financial Services Committee, said: “Given the company’s troubled past, I am requesting that Facebook agrees to a moratorium on any movement forward on developing a cryptocurrency until Congress and regulators have the opportunity to examine these issues and take action.

Want to know more?

Even though Facebook’s Libra coin and Bitcoin are both viewed as cryptocurrencies they serve different purposes. 

If you want to hear more check out the latest episode of the People In Tech podcast.

Thanks for reading! 😄

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