Facebook is the world's largest social network with approx. 2.4 billion users. The company is going to introduce their own cryptocurrency called Libra, in 2020. The cryptocurrency and blockchain system is backed by major companies, and it is supposed to change the global financial market in numerous ways. The main goal of the cryptocurrency is to help 1.7 billion people get access to financial systems. This huge amount consists of adults who do not have their own bank accounts, across the globe. Facebook co-founder Chris Hughes called the prospect of Libra’s success, as very scary. On the other hand, Wall Street is liking this endeavor because it adds a potentially big source of revenue. Facebook makes a majority of their profits through advertising, and cryptocurrency could be another moneymaker. Facebook can profit big time from consumers using Libra, even if the transaction fees are low. Libra could help Facebook get into finance, and become a huge financial player. Libra has the power to be a new decentralized global payments platform. Libra is a cryptocurrency like bitcoin, but there are major differences. Libra's value will be pegged to a basket of modern paper currencies and backed by reserves consisting of bank deposits; government securities; and other low volatility assets. First, Libra will be on a blockchain that allows only known nodes to participate in the network. Also, this blockchain is called permissioned because access is granted to validators — entities that endorse transactions. Eventually, Libra plans to have no permissions as long as technical requirements are met. Libra will be governed by a nonprofit group based in Switzerland consisting of 28 founding members. The Libra blockchain will be open to anyone who wants to build applications on it. Each founding member can control a validator node, by investing at least $10 million through the buying of Libra Investment Tokens. The tokens grant rights to a share of future interest earned by the reserves. Next, Facebook seeks to diffuse the concerns of regulators; competitors; and consumers by controlling Libra. This process will be done with the setup of a nonprofit group, Libra Association. The Libra Association is a system that is purely controlled by Facebook, as the firm is becoming a subject of massive skepticism and concern due to its practices. Libra is not a blockchain in the pure sense, because transactions are not totaled into blocks. A huge concern of Libra is the cryptocurrency could leak a lot of information about users transactions. Another concern is usability, as private keys are evaporating - lost by users or stolen. In this penultimate paragraph, cryptocurrency problems will be further discussed. One problem is they lack price stability. The second problem is they are prone to be used for illegal activities. The final problem is they seek to circumvent central authorities, among other obstacles that impede mass adoption. Libra is created to avoid many of these challenges. The blockchain system could become a framework to support many platforms. In closing, Libra will not be supplanting financial institutions or central banks. The world's major banks will be involved, if Libra is launched successfully in 2020. Facebook’s entry into cryptocurrencies would hasten the regulation of bitcoin, ripple, etc. Enjoy the picture of Libra cryptocurrency. Let's see if the cryptocurrency can help Facebook make more $$$, in twelve months.
