This is the age of immense digitalization. From social circle to food ordering, from banking to shopping, everything is now digital. The amount of digital penetration has opened up newer payment processing platforms.
While the traditional yet widely used cards or other forms of electronic payments have been quite well accepted, today cryptocurrency is also gathering attention.
Cryptocurrencies are another form of digital currencies that are centralized or decentralized, allow person-to-person transactions using the amazing blockchain technology.
The methods employed to make use of this technology are safe, secure, reliable yet unrecognized by the governments of the countries. They enable digital transactions efficiently anywhere in the world without loading the wallet.
Not surprisingly at all, the social media giant Facebook has come up with its cryptocurrency – Libra. It has its special features which are being looked at by various cryptocurrency makers and users to be something novel. Let us explore the same.
If you are interested in trading Libra you can check the Libra Method Software which is reviewed by our team here.
A Brief Idea
Ever since cryptocurrencies have been widely acknowledged, there is an increasing number of firms working on bringing out the same. Each strives to offer something extra and edgy making use of the blockchain technology.
That’s mainly due to the fact that many people want to possess cryptocurrencies due to their lucrative, especially that of Bitcoin. This is evident from the intensity with which people trade the assets, on exchanges or systems such as Crypto Group.
Here is when the social media major Facebook thought of coming with its cryptocurrency and with a difference. The libra is a cryptocurrency owned by facebook under the Libra association. It is announced in the year 2019 yet is touted to be completely launched by 2020.
Owing to the issues raised by other cryptocurrency owners and users, and easing out the payment systems, this new cryptocurrency has something extra to offer. It does not require people to have a bank account or even a line of credit. This might sound illogical or unsafe but this is the reality and specialty of this novel digital currency-Libra. Let us delve deep into it.
Getting to Know Libra
Now that one is aware of what Libra is, in general, one needs to know in detail about its functioning, uses, potential applications, safety issues, privacy issues, and a whole lot of that.
Libra is a new type of digital currency developed by the Libra association that is owned by Facebook.
That connection has stirred the American government and lawmakers, given Facebook’s mishaps with personal information as of recently. How they’ll handle the project remains to be seen, because it is not yet ready.
It is not completely functional but is simply announced. It will be fully functional in the year 2020. The novel feature of this is that it does not require people to own a bank account or a line of credit. So one can easily understand the functionality and ease of its use.
Coming to its working, one can easily use its existing money to buy and sell Libra and vice-versa. The libra association is a group that is taking care of this currency. The partners of this group are global payment processing firms like Master card, Visa, and even PayPal.
Apart from the Libra association, there is also another group known by the name Libra reserve. There is a unique setup that allows Libra to be different from others.
The validator nodes are the nodes that allow easy buying or selling of Libra coins. It is something that is controlled or monitored by the Libra association. These nodes take charge and ensure that this particular cryptocurrency is centralized, unlike others.
Since this makes use of the centralized system, it’s mining or creation of extra Libra can be done via the Libra reserve. This ensures that the founding members pool into their money expecting a return or dividend. One can contribute to the same system as well.
The makers have tried to ensure an easy, stable, robust mechanism for the trading in Libra. They have eased out the process and are coming up with means to exchange the same with the fiat currency. It is based on the ‘move’ programming language.
As per the official announcement, all the peers are expected to own equal governance in the system as it is a centralized system.
There will also be a digital wallet for making use of Libra. It is by the name Calibra which will help you transact using the libra coins via other payment providers like master card, PayPal, etc. As per the technology geeks, the libra system won’t use the traditional blockchain consensus mechanisms. It is touted to make use of some sort of sequence that would be stored in Merkle trees.
Hence it is not surprising when people call this system as a programmable database instead of the block-based systems. Another thing to note is that Libra would work on the gas system that other cryptocurrencies like Ethereum use. This gas system works on the proof-of-stake or even the Casper protocol which speeds up the computational time required.
Delving deeper into the technology on which libra is expected to work, it shows that Libra would prove to be more stable coin as compared to others. It will use emerging techniques like a gas model to make simple and speedy transactions. This speeds up the transaction and also makes it extra secure.
Benefits And Disadvantages
The benefits of using this cryptocurrency are immense. They could be:
- It is a centralized system so its credibility levels could be higher.
- It is using a more speeding up kind of technology.
- It is a stable coin.
- It is backed up by the libra reserve containing the real or fiat currency.
However, with the recent issues at Facebook regarding the privacy of individuals, this system would also gather quite a few apprehensions. As per the company’s release, social media data is expected to remain separate from the financial history of any user.
Although only physical and practical transactions over time can prove this true. It is an open system, people would also doubt using it in the first place. With time and usage, it might look good.
The libra coin being a stable coin and something that has to do with a centralized system, it is expected that Facebook would use it for the transactions carried out on facebook as a marketplace or even via chats that would have any transactions.
Other than this, people or even businesses can use it to carry out normal online transactions via e-commerce websites.
People not having bank accounts could be the potential targets for using this technology. Also, it would be great for the students not having huge transactions. There are still countries where this could be a hit.
This is a new thing in the field of cryptocurrency, quite unconventional from the existing ones. While few are looking forward to this, the others are finding it less useful or something that might backfire. Few even do not find to be at par with the definition of digital currency as it defies certain definitions regarding a cryptocurrency.
There are few novel features that might surprise and increase the trust in the segment of cryptocurrencies and digital currencies. Libra being centralized and a stable coin can invite many people to invest, buy or sell through this coin.
Also going by the statistics, one can believe that this could be used extensively and can even be backed by the governments. Hoping for a bright future, let us see what lies ahead in this segment.
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