What Is Facebook Libra, How Will It Work: In a white paper release, Facebook has launched a new cryptocurrency called Libra. There were sources which claimed that Facebook has been working on new technology to enter the financial markets for 1 year. Now we know that what were they working upon. Libra is a new cryptocurrency coin is going to change the way we use the digital payment world. They in to reach out to 1.7 billion people in the world to use this service. But what exactly is Libra and what is the mechanism behind its working? We have come of with detailed information about the new cryptocurrency.
What is Facebook Libra?
Facebook Libra is a new digital currency or a cryptocurrency which has been developed by Facebook. The company wants to make the digital payment world simpler. There are billions of teachers who do not have facilities in order to make digital payments. However, Libra will allow these people to join the mainstream without opening a bank account. Just like there are wallets for Bitcoins, there is calibra for Libra. It is a lot different compared to other cryptocurrencies like Bitcoins. This is going to be one of the few regulated cryptocurrencies out in the market. The white paper reveals that the coin will be launched in 2020.
How does it Work?
Most people are thinking that how will this currency work. Well, the major role behind the working of this currency will be handled by the libra association and the Libra reserve. At the time of launch, there will be a few hundred companies which will be a part of the association. These companies will act like the nodes which are required to validate a particular transaction. The number of nodes will increase as and when scaling is required.
The nodes are the only legal entities which can infuse or diffuse a Libra in the system. This is where you can differentiate Libra from Bitcoins. Bitcoins are not regulated by any particular node and it can be created using the mining process by anyone. Moreover, the transactions are also validated by independent nodes. There is no need to have a bank account for a credit card in order to use Libra. It can be simply used by anyone to convert the currency from one form to another.
One more thing that must be noted by the users is that Libra will be backed by government Fiat currencies. This means that you can be converted from one form to another using the Fiat currencies like dollars and euros. This also indicates that Libra will be much more stable compared to Bitcoins. The founding members of the association will create the pool of money and they will get a return as evidence or low yield bonuses. They will also get the benefits when an individual converts it from a fiat currency.
How is it connected to Facebook?
Facebook had its mastermind behind this is regulated cryptocurrency. The company aims to be an independent member of the association without getting any privileged benefits’. It is still not clear about how the voting part will be divided between the companies. However, it is quite clear that Facebook will have some major nodes because it has a huge network of computers compared to any other association member.
The exact financial model of Libra is not still clear. But it can be expected that Facebook will integrate the system in messenger for peer to peer transfer. Besides, it can also be used to make payments are the Facebook marketplace. Some also believe that it will be integrated with WhatsApp and will also have a standalone application for making the payments.