Recently, Facebook made headlines when they announced their plans for Calibra (a new Facebook’s subsidiary that focuses on financial services). Their goal shall revolve around the utilization of a new digital currency, provided by Blockchain, called Libra.
First step, Calibra will introduce a digital wallet and is expected to launch in 2020. This announcement from Facebook has received different reactions from both the crypto media and mainstream media.
What is Libra?
Libra is a cryptocurrency created to allow people to access and participate in the Libra Network. Users shall be able to exchange fiat currency into these digital currencies and use them in online transactions.
The digital coin is essentially a stable coin as it is pegged to government-issued currencies such as USD, EUR, SGD, etc. However, many decentralized cryptocurrencies like Bitcoin or Ethereum, are volatile in its valuation. Facebook create a more stable cryptocurrency for ordinary online consumer transactions.
Traditionally, to make financial transactions, one needs help from banks or what is available today as online money transfers such as PayPal, Transferwise,….However, it is important to remember that existing financial systems today are of their own technology. What makes Libra special as compared to other financial systems, is that it is powered by the blockchain.
The Libra Association is made up of reputable partner companies such as Mastercard, Visa, PayPal, Uber, and many others. These companies shall work together to ensure payment processes are faster, more accurate, and safer than existing financial technology by using Blockchain Technology.
What is next for Libra?
If the question is about global “Blockchain” adoption, then, Facebook is a brand that is widely known in the world. The success of Libra can become the main driver of blockchain technology adoption in the general population.
In addition, their partners will be invaluable in legitimizing blockchain technology as an innovation to be adopted by most, if not all, businesses dealing with intermediaries.
That is blockchain technology, but what about Bitcoin adoption? Interestingly, the price of Bitcoin has soared from $9,000 to $12,000 since Libra’s unveiling. The philosophy behind Bitcoin is, in my opinion, unbreakable. Bitcoin is not backed by cash and government bonds like Libra. What gives Bitcoin value is the trust in its system.
Libra does not represent the true nature of decentralization — the ideology that makes Bitcoin desirable. Could Libra also drag Bitcoin into mass adoption? Let’s wait!
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