Facebook has finally unveiled its blockchain plans following numerous rumors about its “GlobalCoins” project. Last week, the company announced that the global cryptocurrency will actually be called “Libra.” 👀
Here’s what we know:
- Libra will launch in 2020 along with a blockchain-based network
- Facebook is also launching a digital wallet called Calibra, which will have its own app and be built into WhatsApp and Messenger
- Calibra promises to keep your crypto dealings and your Facebook data private
- Founding members of the Libra Association, a not-for-profit which oversees the token’s development, includes Visa, Uber, Lyft, Spotify, PayPal, Mastercard, Stripe and Andreessen Horowitz, to name a few
- Facebook, Calibra and these other founding members will earn interest on the money users cash in (it will be held in reserve to keep Libra’s value stable)
Some initial reactions:
“If Facebook can make this right then we potentially have one global currency” - Edul
“I'm very very curious how this matures. Facebook is one of the few companies that can accelerate cryptocurrency adoption to the mainstream (whether the crypto communities like it or not).” - Ryan
“Now Google and Apple will compete and it will really boost the industry.” - Seth
In the white paper Facebook published last week, the company states its mission is to “enable a simple global currency and financial infrastructure that empowers billions of people.”
Between the lines, Facebook may be poised to scale a global cryptocurrency (more so than Bitcoin or Ethereum). In Facebook’s words:
“Mass-market usage of existing blockchains and cryptocurrencies has been hindered by their volatility and lack of scalability, which have, so far, made them poor stores of value and mediums of exchange.”
On the selling side, Facebook has relationships with 7 million advertisers and 90 million small businesses. On the consumer side, it’s estimated that 2.1 billion people use Facebook (which includes WhatsApp, Instagram or Messenger) each day.
If successful, Libra could become something akin to the next PayPal — an easy to set up payment method that’s universal and decentralized. Ironically, David Marcus, co-creator of Libra and long-time Facebook exec, is the former President of PayPal. It could also become a competitive banking system by offering access to folks in developing countries, reducing money transfer fees through Calibra and offering loans and credit to users.
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