What You Need to Know about Facebook Libra
Imagine sending money anywhere in the world as easily as you’d share a photo. That’s the sales pitch behind Facebook’s first venture into the crypto market via the new cryptocurrency Libra. Called by some the evolution of PayPal, Libra is not without gargantuan, Facebook-tier goals: to become a simple, reliable world currency.
Traditional Blockchain Blocked its Own Potential
A scaling problem faced by traditional cryptocurrencies like Bitcoin and Ethereum is their unstable market value. The engineering feat that is blockchain technology has value, and the exchanges for Bitcoins and Ether show profitability, but neither currency is ideal in exchange for traditional goods and services. Why would you accept payment for a gallon of milk in Bitcoin if the value of that Bitcoin could fluctuate wildly by the next day? Libra, by direct comparison, is to be fiat-backed; a stablecoin.
The Libra Association
The non-profit running the show is the Libra Association, whose investment partners (apart from Facebook) include PayPal, Visa, and Uber, among others. The Libra Association will have a variety of world currencies acting as Libra’s stabilizing financial basket. Anywhere in the world, Libra exchanges are backed by old fashioned cash.
This is not the first time a major corporation has entered the stablecoin marketplace.
But it’s unprecedented given Facebook’s reach, including IM services Messenger and WhatsApp, as well as photo sharing behemoth Instagram, all of which are likely to have Libra integration features. Imagine having an integrated market plugin on a social media influencer’s page that could sell promoted items directly to any follower in any country around the globe.
The New Digital Wallet
Calibra is however a Facebook subsidiary, and features a new digital wallet. This will be the main exchange platform for switching cold hard cash into Libra digital money. It will reportedly be available as part of Facebook Messenger, as well as Whatsapp and a standalone app.
Launching early 2020, per a statement by the company, Calibra will be as secure and reliable as a credit card, if the backing documentation is to be believed. In the event of a hack or another form of theft, lost Libra coin will be returned to the wronged party at no fee.
It’s Meant For Everyone, Everywhere
The ideal for this whole system is to have a currency that ignores international borders. Venmo, as an example, is a go-to domestic system for US citizens to settle accounts without the need for cash or IOUs.
Libra hopes to provide this same level of speed, security, and stability to a global community, regardless of exchanges and with a minimal execution of end-user fees.
But Can Facebook Be Trusted?
This announcement comes shortly after years’ worth of discouraging headlines for the social media giant. Security concerns, privacy concerns, Facebook’s seeming unwillingness to take a harder stance against certain instances of false information and modern day extremist rhetoric, all play into a narrative that most people simply won’t trust Facebook with their money.
On the other hand, this service is not eyeing first world markets as the primary focus for its services. In many ways, the third world, and various pockets of disenfranchised individuals, might turn to a low- or no-fee service like the one Libra is currently being pitched as. Only time will tell if Facebook’s approval rating affects its ability to run Calibra while also having a Libra Association board vote.
Alternative Revenue Streams
All that being said, traditional cryptocurrency markets aren’t going anywhere. It’s an exciting time to get involved, and the best application of your time, effort, and finances might be through a to-scale mining operation. Colocation services, offered by Compute North, are a cost effective way to set up, power, and execute a to-scale mining operation. Contact us today to learn more about how quickly and efficiently the expert installers and technicians at Compute North can get your rig mining up and running.