Facebook introduces its cryptocurrency Libra on June 18th this year. It is said to be a virtual currency or simply a cryptocurrency. According to Facebook Libra is “A simple global currency and financial infrastructure that empowers millions of people”. As a result, People will buy stuff in exchange for Libra to each other through their mobile phones.
The CEO of Mark Zuckerberg is not alone in this. There are also some hot shots of Silicon Valley who are stick to his plans. Libra will be governed by the Libra Association. It is a Swiss Group having a total of 28 members including Facebook’s subsidiary company Calibra, Mastercard, Visa, eBay, and other famous names. The goal of Calibra is to provide financial services that will allow the people to use the Libra Network.
Calibra will introduce its first product which will be a digital wallet for Libra. According to the white paper of Libra, It is powered by blockchain technology. A technology on which all of the cryptocurrencies are based. Blockchain is a technology in which transactions are written in blocks. But each block is linked to each other in a chain forming a blockchain structure which is nearly impossible to hack or break. Furthermore, blockchain is a decentralized network which means that it is not regulated by any central authority.
The systems of participants in the network are called nodes. Every transaction which took place can be seen by every participant in the network which increases the authentication of the transaction by mutual consensus. But When it comes to Libra, it will not be fully decentralized as bitcoin is as it will be regulated by the Libra Association and its members which raises a lot of questions.
But according to Libra white paper, The Libra network over the next 5 years will shift from the permission blockchain model to the permissionless blockchain model. Regarding the transactions, the Libra network will be able to do 1000 transactions per second initially. But now the problem is that all of the cryptocurrency posses a fluctuational value which increases or decreases by time.
Value of Libra
the value of Bitcoin was increased from $900 in 2014 to $20,000 in 2018. This is not good for the global financial currency like Libra. Due to this reason, Libra will be a “Stable Coin” which means that its value will be tied to the value of real-world assets. Furthermore, Libra will have different values according to different traditional currencies. But Libra can be exchanged by any other traditional currencies through exchanges. The Only difference is that it will be a virtual or digital currency.
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