Facebook’s Libra is a ‘Permissioned blockchain digital currency’. A higher degree of security is built into this peer to peer network so new computers being added into the network have to be pre-authorsied to join. The present Blockchain of Bitcoin, uses a permisionless Blockchain which some argue is still as secure as pre-authorisation that Libra intends to transact using. Libra is trying to be seen as more security conscious. Libra also hides transactions, or obsfucates these similar to Cryptocurrency ‘Monero‘. The idea being that only members of the Libra network can analyse, and extract info from the distributed ledger so the network is closed and transactions unlike Bitcoin cannot be viewed. Libra however is not ‘decentralised’ and is ‘permission based’, and offers the ability to generate ‘Smart Contracts’.
Libra unlike Bitcoin does not rely on mining to generate coins. Libra has a permissioned proof of stake system which allows a network to receive distributed consensus on a transaction, via random selection on the stake, which could be wealth, or age, as opposed to ‘Mining’. So the more ‘Coins’ you own, the more power you have with the proof of stake system. Even as a Bitcoin miner you need to stake at least an amount to mine a block.
Libra has an impressive list of name companies, and backers on board known as the Libra Association. Visa, Uber, Paypal, and Andressen Horowitz are all involved in developing this new payment technology.
It is expected that libra will be policed by facebook to remove fake libra related sites. Regulatory issues, have placed Libra under the spotlight as cryptocurrency, and digital currencies generally seen as a ‘huge risk’ to financial stability. All agree these type of developments are ‘inevitable’, particularly the US. Facebook has at present over 1 billion users on its platform. Stats for end of 2018, fourth quarter, showed facebook, without its cryptocurrency in use had 2.32 billion monthly active users worldwide. One admittance about the technology is it cannot right now deliver necessary scalability to support billions of people using a Cryptocurrency.
Libra is expected to be incorporated into Facebook within the next 18 months causing concern with legislators. Reportedly an ‘anti-trust’ probe is now being launched by EU regulators, concerned that libra shuts out competitors. Facebook Libra’s, main rivalry is Binance ‘Venus’.
Despite these teething problem the launch date for Facebook’s libra is set for 2020.
What will be able to buy with facebook libra?
- Pay for goods and services on facebook
- Use payments for car rides with Uber
- Pay for Spotify online subscriptions
- Proposals for more diverse financial based products are also in the pipeline for development
Here at ixdlab_ we can help you to understand and formulate opinions on using electronic cashless payment technologies such as Bitcoin, Ripple, XRM in your business. Look out for more on #Cryptocurrencies later on.
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