Facebook’s own cryptocurrency has been a hot talk since 2017. Overwhelmed with a plethora of rumors, more and more people are hooking onto this idea, and finally, Facebook revealed its Libra project on 18th June. With all the hype and hope from Facebook, everyone seems excited about the Libra and its future.
What is the Libra project?
For those who are unaware of Facebook’s latest ventures in the cryptocurrency arena, project Libra is a codename for Facebook’s experiments with blockchain. Reportedly, the project is alleged to be a new cryptocurrency that would be used globally.
Since we are talking about Facebook, needless to say, this will be integrated with its other services i.e. WhatsApp, Instagram, and Messenger.
From all the reports available online, we can infer that it will possess the following features:
- No need for bank accounts: Any Facebook user can easily trade the new cryptocurrency and there are no fees for any transaction.
- Borderless: That’s exactly how it gets its name, GlobalCoin. However, it will not be named GlobalCoin in actual because there is already another cryptocurrency that is registered with this name, the more likely name is Libra. This currency will be acceptable worldwide.
- Stablecoin: In order for its operation, it has to be devoid of fluctuations, and that’s why the big F thinks the coin should be stablecoin. To ensure minimum fluctuations, Libra will be pegged with multiple currencies worldwide.
- Real-world ATMs: Facebook will install ATMs from where people would be able to buy its tokens in exchange for any fiat currency.
- Regulation: Facebook has been in talks with CBTC about its stablecoin. So, we can expect that Libra will operate with regulations if it eventually gets approved.
The aim is to create a global currency that will also bridge the gap between cryptocurrencies and fiat currencies.
Centralized Crypto in the Game
Hardcore cryptocurrency enthusiasts are backlashing the idea of a centralized coin. The Satoshi ideology followers consider Bitcoin superior to Libra. The prime idea behind the first cryptocurrency, Bitcoin, was to take away the centralization so that the economy is unaffected by financial crises.
According to users on forums like bitcointalk.org, trust in a central organization is the key to its successful operation. But, in today’s world, nobody can be trusted and that’s why a decentralized public network like Bitcoin is the answer.
We have not forgotten about the Cambridge Analytica data breach. Facebook allegedly leaked the personal data of millions of its users. Ever since this incident, the Zuckerberg company has lost its reputation. The right question to ask here is, “How can we trust a company with our money when we cannot trust it with our data?”
The comments on a recent Gizmodo post tells us about what general people think of Facebook starting a cryptocurrency coin.
Amongst all this backlash, rumors are that the company will create a separate decentralized entity. But there is no clear way to determine whether it is just a way to sidestep the regulations or a true step towards fairness. We can never be sure.
Reports also say that Facebook will charge an annual fee of $10 million from companies to operate as their nodes. With over 100 companies/nodes, Facebook will have $1 billion as the security to its cryptocurrency. The question here is that $10 million will make it a barrier for common people, how will it be the “currency of people?”
Cannot deny the adoption
Everyone is hoping that the launch of Facebook’s cryptocurrency will trigger explosive growth in the number of cryptocurrency users. With a user base as big as 2.7 billion, there is nothing wrong in expecting such aggressive growth.
The major outcome of this would be increased awareness of digital currencies. This is not going to be only beneficial to Facebook, but other cryptocurrencies like Bitcoin and Altcoins will also gain traction. Since Libra will not be used for investment purposes, other coins may benefit from this.
If everything goes as rumors have it, then Facebook’s cryptocurrency may revolutionize our concept of money. The most adopted global currency will certainly have a huge impact on our lives. People will shift to it because of its ease of usage and zero transaction fees. Let’s see how everything unfolds ahead.