Facebook, the world’s biggest social media platform, is rolling out its own cryptocurrency.
It has been reported that it won’t be called GlobalCoin as the BBC had asserted
but codenamed as Libra.
With further investigations, a new financial technology company called Libra Networks was set up in Geneva Switzerland which focused on blockchain and payment as well as data analytics and investing.
However, assumptions may say that they are targeting 2020 as a formal launch for their completely functional ecosystem.
Indeed, dozens of partners are funding and backing up the project such as Visa, MasterCard, Paypal and many others under the veil of the Libra Association.
Today, June 18th, Facebook released The Libra Blockchain white paper, which included upon lunch the possibility of running at 1,000 payment transactions per second with a 10-second finality time between a transaction being submitted and committed.
As it also explained the process in order to automate the validation of assets in the basket.
Additionally, trying out Libra’s blockchain is now possible through their testnet.
Libra is said to be a Stablecoin, pegged to a basket of currencies which will lead to a stable price preventing further complications due to price fluctuations during negotiations process.
In addition, Facebook held discussions with financial institutions in regards to funding in order to shape a $1 billion basket of various international fiat monetary currencies with safe protections that will fill in as collateral to balance out the cost of the coin.
They also unveiled their new digital wallet, Calibra. The first application based on the Libra Blockchain that will manage the interactions of billions of users allowing them to send/receive Libra.
What Facebook is trying to build already exists in the form of Tencent’s WeChat. The single largest social network in China that serves users various kinds of services, from mobile payments and gaming to direct lines of contact and businesses.
If successful, the token could have a significant impact in areas around the world that are currently impaired with the traditional financial system. With a massive user base, WhatsApp and their other Facebook’s family of apps can profit from consumer centric innovative ideas.
Therefore, making it easier for your payments, bills, transportation, travel-related goods, movie tickets, meals, shopping on the upcoming e-commerce services.
Avoiding credit card transaction expenses could likewise allow Facebook’s cryptocurrency to offer a cheaper way to pay merchants and encourage content creators. Thus, helping Facebook in their advertisement measurements and targeting to amplify its core business.
At the start, Facebook hopes to launch the network with 100 nodes in an effort to be decentralized, according to people familiar with the subject. Although that number is far lower than on other cryptocurrency networks, they surely won’t hold back on expanding it further.
This Venture didn’t go unnoticed, the U.S Senate Banking Committee sent an open letter to Facebook’s CEO Mark Zuckerberg, asking how the new cryptocurrency-based payment system would be legalized or regulated regarding privacy and consumer protection concerns, following a Wall Street Journal report.
After Zuckerberg laid out his ambitions at the company’s developer conference in April saying ”I believe it should be as easy to send money to someone as it is to send a photo”
Eventually, we can expect the leaders of the current online payment system being threatened by this upcoming change.