What is Libra? Libra is a new digital currency proposed by Facebook, formally announced on June 18, 2019. As of today, the currency and network does not exist yet, and the launch is planned to be in 2020.
What’s to be expected from this new challenger to Bitcoin? Read on.
A cryptocurrency is a digital asset designed to work as a medium of exchange that uses cryptography to secure financial transactions and control the creation (mining) of additional units.
Cryptocurrencies can be divided into three main categories: Currencies, platforms and tokens.
Currencies are cryptos such as Bitcoin and Litecoin. Their purpose is to function as virtual money, and they offer an alternative to fiat currencies in the digital world. Fiat currency is money issued by government’s central banks.
The platform category can also be called an operating system for decentralized apps. The most known are EOS, Ethereum and Tron. They offer a framework for software developers to create dApps.
The most common type of token is a utility token, which means that the token has utility inside a certain application. Examples are Basic Attention Token and Pundi X. T. Tokens are usually built for a very specific purpose.
Facebook Libra belongs to the first category, and is designed to be used as a digital currency.
Libra can be placed into a subcategory referred to as Stablecoin. These are cryptocurrencies backed by fiat currencies, gold or other assets. The purpose is to replace fiat currencies in the digital world and provide a stable value. Therefore, Libra is not a direct competitor for Bitcoin.
Unlike Bitcoin, Libra is designed to be used inside Facebook and other apps the company owns. It is also expected to function in partner sites such as eBay, Uber and Coinbase. Libra is a medium-of-exchange where users can send money and house transactions.
Bitcoin has been regarded as more of an investment and store-of-value. The volatile nature of bitcoin speaks to risk takers to buy Bitcoin and trade it. Since Bitcoin is not owned or governed by any central party and lives on a decentralized network, it is vulnerable to bring price swings.
Facebook Libra was formally announced on June 18, 2019. As of today, the currency and network proposed by Facebook does not exist yet, and the launch is planned to be in 2020. Facebook also have plans for a digital wallet called Calibra, which will be available in Messenger and WhatsApp, as well as in a standalone app.
With more than 2.7 billion people using Facebook, WhatsApp, Instagram or Messenger every month, Libra is looking at a huge potential market.
Libra is also coming to the market with a lot of powerful players behind it, such as Mastercard, Uber and Visa. This could help Libra achieve mass adoption, which Bitcoin has strived to do for years.
“Libra is potentially one of the most positive external tailwinds in Bitcoin in its 10-year history,” said Spencer Bogart of Blockchain Capital, reports CNBC.
We are excited to learn more about Facebook Libra as the planned launch approaches…