Facebook will soon announce specific plans for its cryptocurrency, i.e., Libra crypto. What exactly does this mean for the crypto world?
Facebook does not want to stay behind.
Facebook has been a trendsetter. More than two billion social network users are clear proof of this.
You can also see it on Instagram, which also belongs to the group of Facebook-owned websites.
Now Facebook has decided to enter the crypto field. It is potentially an extremely “bomb” novelty.
Because Zuckerberg’s firm estimates social trends, it can remain competitive and at the very top of Internet companies.
Entering the cryptocurrencies at least signals confidence that the cryptocurrencies have a future, which is good news for the industry.
Although the release of new crypto has not yet been officially announced, there is a lot of information about the new Libra cryptocurrency.
First of all, it is essential to say that this is the so-called stable coin.
Where to buy Libra crypto coin?
Facebook makes a libra coin for a simple reason. Its main goal is usefulness.
Although it is fantastic for investors to earn enormous profits, huge volatility is not suitable for practical use.
Especially merchants cannot afford to accept a currency that can lose up to 90% of its value. That’s why Facebook chooses a stable coin.
The libra crypto will be built on different currencies and will have its own specific and stable value.
Thanks to the combination of different national currencies, the stability of the coin will be further enhanced.
If the dollar were to fall but the euro would only grow, the pound would better maintain its stability.
The Libra should be covered with the libra reserve. This will be a fund where money will be deposited to cover the value of the Libra. This results in low volatility and allegedly low inflation.
Blockchain Libras will appear to be open-source, which is extremely important because Facebook clarifies that it is willing to adhere to industry-wide standards.
Fb libra Crypto is based on two social pillars: open-source technology and the decentralized nature of cryptos.
However, it is not yet clear how decentralization will be. A whitepaper is not announced previously, and then we will be wiser. Meanwhile, it seems likely that many large corporations will represent the currency.
Visa, Mastercard, Spotify, Uber, or eBay
The interest in the corporate sphere is genuinely enormous. So many companies will work with Facebook.
- There will be payment networks such as Visa and Mastercard.
- Spotify represents the entertainment platform.
- eBay or Farfetch will represent digital trading systems.
- This includes Coinbase for the crypto industry or Vodafone in telecommunications.
The development and operation of Libra will be supervised by the companies mentioned above.
These will form the control body of the entire Blockchain.
This should bring confidence in the whole system because although Facebook is popular, it does not enjoy much trust in society after many scandals.
It indicates that the pound will not be so decentralized. This system will not be able to resemble open blockchains like BTC, ETH, or LTC.
Instead, it will be a very similar system on which currencies like EOS or NEO operates. NEO will be the nearest.
Corporate companies mostly respect transaction and block verifiers.
What can the Libra mean for cryptocurrencies?
First of all, it can be said that Libra will bring colossal interest. 2 billion people will suddenly be exposed (daily) to crypto universes.
And this is a crucial step. While global adoption is still the music of the future, the advent of a “global currency” can open the door for millions of new investors.
For people, crypto will become a regular part of their lives.
Imagine that you need to send money to your daughter for college. You don’t have to deal with bank transfers.
Open Messenger and send it for £ 300. The ease of use will be crucial.
Thus, Facebook could show the future path that others will follow, as it will be pleasant to the mainstream.
Price of Libra cryptocurrency?
It is easy to expect that Libra will appear on cryptocurrency exchanges.
This will bring new money to the industry and will subsequently benefit crypto-currency holders.
The Libra will be a springboard for the future.
In the end, genuinely decentralized and independent currencies will prevail.
However, they will be paved with libra coins, which allow easy adoption of the crypto among the general population.
According to sources familiar with the situation, the test net will be launched very soon, in the coming weeks.
Why Facebook’s cryptocurrency will quickly change the world?
Bitcoin appeared on the scene in 2009 and became more popular in 2010. For example, if you wanted to know more about this cryptocurrency in 2013, 75% of the information available was technological (bitcoin is certain electronics of the future), 20% politically (for the radical overthrow of central banks), and only 5% economically (why Bitcoin never drops to zero).
Since then, we have seen substantial price fluctuations in this digital currency and the SEC’s rejection of Bitcoin ETFs. Currently, 60% (mainly cryptic ‘hedge funds’ in the Cayman Islands) are available, 25% (still primarily) at the political level in the liberal critics of the Fed) and 15% in the technological form (from minerals in Xinjiang and Central Asia).
In short, we have seen a shift in the idea that Bitcoin is not just a transactional technology but an irreplaceable way to store value. However, it is surprising that this idea has not entirely disappeared because of the Bitcoin ETF principle’s failure.
Here In this article, we wish to reiterate why we believe that Bitcoin is still not an appropriate store of value and why we hope that the SEC will continue to reject the Bitcoin ETF deployment proposals.
Instead, we will point to some services that are based on modern names and have real value and utility. We will also explain how these technologies can become the basis of a more powerful distributed system called blank blockchain islands. Finally, let’s take a closer look at Facebook’s new crypto coin.
Why Bitcoin ETFs are always and still a bad idea
Last year, the US Securities and Exchange Commission rejected for the second time the attempts of brothers Cameron and Tyler Winklevoss to launch the first ETF fund associated with crypto on a regulated stock exchange.
We can compare this idea with “Ferrari Horse Drawn” because it is a twenty-first-century transactional technology combined with a twentieth-century fund and stock infrastructure.
Here are some reasons why the SEC should reject any new proposal to create Bitcoin ETFs:
- It’s a perverse combination of technologies. It’s like using Outlook, but then you print your emails (in our case, Bitcoins) and paste them into a paper envelope (the equivalent of the ETF in this metaphor) and send them instead (via a traditional stock market). Send this “email” directly from one e-wallet to another to send.
- Bitcoin ETFs would focus on the price fluctuations of this cryptocurrency rather than on their technological applications.
- An increase in Bitcoin trade would lead to greater volatility, which would discourage mainstream users from using this technology.
- In the virtual currency, the money market has not changed to generate interest on new bitcoins held by ETFs – the principle on which all other traditional currency ETFs are based.
- We have not yet reached a satisfactory conclusion on the prerequisite factors for achieving viable crypto. For this reason, it would not be appropriate for a leading regulator, such as SEC, to favor one crypto over another.
Although gold has a much longer history, it still represents a non-productive good (it generates no interest, no dividends, no returns for minors, etc.).
It can not be denied that this precious metal has not performed well over the past 40 years, and it is very likely that this trend will continue over the next 40 years.
The Bitcoin economy will look better than gold – but it’s much easier to replace cryptos as part of the chemical picture.
It is now necessary to think about the number of automated services (smart contracts) that a decentralized blockchain application needs to compete effectively and significantly with traditional currencies. We call this hypothetical economy the “Virgin Islands of Blockchain.”
How would Facebook Blockchain be better than Bitcoin?
It is no secret that so-called “offshore financial centers” such as Hong Kong, Singapore, Ireland, Luxembourg, the Cayman Islands, and the British Virgin Islands offer a range of sought after financial services.
The reason is that even if these sites do not have enough natural resources, they have many qualified legal and financial professionals capable of providing first-class services.
This platform would be as useful to international trade as the British Virgin Islands if these financial and legal services could be integrated into a secure digital platform or a distributed application, even without a specific geographical location.
It is precisely from this hypothesis that the name “Virgin Islands of Blockchain” derives.
Such an ideal digital platform raises the question of what currency would Blockchain use in the Virgin Islands.
So far, we have no information on a reputable offshore financial center that accepts any of the existing cryptocurrencies as official currency – although it should be noted that most of them have not yet reached the level of the current digital identity system in Estonia.
The British Virgin Islands and the Cayman Islands use the US dollar, while Ireland and Luxembourg use the euro.
At the same time, Hong Kong and Singapore use the “Currency Board,” an exchange rate system in which the local currency is tied to a robust foreign currency and exchanged for a reserve currency.
While the Hong Kong dollar is linked to the US dollar, the Singapore dollar is connected to a set of unpublished currencies, including the US dollar, the euro, the yen, etc.
The currency board system used in Singapore seems to be a kind of “steady cash” model on which Facebook’s cryptocurrency rests. Such a model could also be applied as part of the proposed Virgin Islands Smart Contract System.
Facebook introduced Libra crypto.
Facebook has finally unveiled its crypto this week and has already received support from leading companies such as Uber, PayPal, Visa, and Mastercard.
The new cryptocurrency will probably be linked to several reliable status names and, according to published data, to the name “sharp.”
It has even been speculated whether interest should be paid, whether money laundering supervision should be automated, or whether people who do not have a traditional bank account should be helped effectively.
Facebook has, therefore, introduced plans to launch libra crypto by 2020. It is based on the principles of a closed blockchain. Strong partners (including PayPal, Visa, and Mastercard) provide stability.
Of course, the main benefit would be a considerable user base because Facebook products, including Instagram and WhatsApp, are used by billions of people worldwide. Including those who do not have a credit card or bank account.
From the beginning, he points out that this is not their job, but a joint venture of various companies. By the first half of 2020, when the Libra reaches the end-users, the association that manages this currency should get 100 companies.
Facebook director David Marcus, responsible for the project, hopes the club will have more than 100 members when the new cryptocurrency is introduced. In the meantime, 28 have been mentioned. In particular, some companies’ presence suggests that Facebook had the idea of changing financial habits on a global scale.
Libra in Financial World
First, there are three major players in the financial world: Visa, MasterCard, and PayPal. Their presence does not guarantee success, but it shows that the technical solution and its potential impact are attractive for these companies.
Also, there is Coinbase, which hopes in turn that the new Libra cryptocurrency will be exchanged on this exchange and others. Vodafone also represents telecommunications companies.
And there are also large Uber, Lift, or Spotify companies that have the great advantage of spending real money from users around the world by simply clicking on a mobile screen.
Since Facebook has a lot of information about its users, it is straightforward for the company to lay the foundation for a thriving digital economy by providing integrated business services and services related to digital identity or digital signatures and certificates.
In 2015, it was assumed that Facebook could become a dominant force in the banking sector, which is relatively surprising if the company took so long to reach the current stage.
FB’s Libra will Overshadow Bitcoin.
Even the bitcoin itself will likely be entirely overshadowed by a Facebook crypto coin shortly.
There are several reasons – Facebook already has more than 2 billion users. The new digital currency user interface is likely to be much more acceptable to most users than Bitcoin. This cryptocurrency’s stable price will lead to its actual use, not just speculation associated with price fluctuations.
Mark Zuckerberg himself said, “Sending money over the Internet should be as easy as sharing photos.”
Sending Money via Wechat Pay
Tencent Holdings Limited provides its users with a straightforward way to send money via WeChat for some time. However, there are still barriers to using this payment service inside and outside of mainland China.
However, suppose the cryptocurrency Facebook is as easy to use like Facebook Messenger, and the transaction fees are reduced to less than 0.1%. In that case, we wish to emphasize that it will be the leading international payment tool outside China.
In the end, however, it remains true that Facebook and Tencent have much better prospects than Bitcoin.
Remember that it is much easier to replace Bitcoin with something better than to find a better alternative to the two giants of the Internet.
Bitcoin vs. Libra crypto, How Libra differs from Bitcoin?
Facebook has drawn the attention of news from around the world with its project to create a cryptocurrency.
A social media company was forced to defend the Capitol Hill project because it feared for privacy and its possible illegal use.
This is an experiment of monetary systems in the digital age and is inevitably compared to popular cryptos such as Bitcoin. However, many experts ask if the Libra can even be called a cryptocurrency.
Also, both virtual currencies come with the so-called. The white paper (on which the crypto-currencies are based), entitled crypto-currencies, Libra, and Bitcoin is indeed very different.
Main differences: Libra and Bitcoin
One of the most significant differences lies in the underlying technology behind both names.
Bitcoins record transactions anonymously in a public book called Blockchain. It is essentially a database managed by a computer network where transactions are secure to make the manipulation practically impossible.
Libra also uses a form of Blockchain or distributed network. Unlike Bitcoin, the Libra blockchain works at least for the moment – “with permission.” This means that transactions can only be made between groups of trusted parties.
Here is the Libra association – a consortium of companies based in Switzerland, including Visa and Uber. Each non-profit organization has invested at least $ 10 million in the project.
Ido Sadeh Man, founder, and chairman of the Saga Foundation, a cryptographic company advised by JP Morgan, President Jacob Frenkel, said: “The Libra will create a centralized, pool-based structure that will be composed only of significant institutions—having purchased their voting rights.
This differs from Bitcoin, which anyone with enough hardware and Internet access can access and expect.
The Bitcoin white paper describes the virtual currency as a peer-to-peer payment system that allows people to exchange money without going through the bank.
It is now commonly used as a form of investment. The term “WATER” is widely used in the industry that describes the long-term purchase and ownership of a particular cryptocurrency—often called “digital gold.”
Libra’s primary purpose is to use it for cross-border payments and remittances. The currency is tied to a basket of government currencies and other assets to avoid the volatility that often occurs in crypto-currencies such as bitcoin and ether.
Many in this area refer to the so-called. ‘Stablecoin’ whose goal is to maintain a stable value. Facebook CEO David Marcus, who heads the Blockchain initiative, previously said it would be “more of a traditional currency” than a cryptocurrency.
According to Hayter,” co-founder and CEO of the CryptoCompare digital name comparison platform, “Facebook and its partner companies can tailor their supply and demand to the size of other assets held in reserve while maintaining a stable price, even as demand grows.
Bitcoin, on the other hand, has a fixed volume. The total number of bitcoins to be released equates to a “strict limit” of 21 million.
Sadeh Man, a member of the Saga Foundation, said: “The Bitcoin offer is firm and can not meet market demand.”… “The currency of the facebook is created or restricted when one of the authorized book sellers pays or withdraws money from his reserve.”
Various Regulatory issues
The motto of Facebook is often taken into account in the debate on the regulation of cryptos. Some concerns that the company’s blockchain project could have affected regulatory authorities could be associated with other digital assets.
This would be problematic given the difference between Libra and digital currency such as Bitcoin. Van Valkenburgh said that although Bitcoin eliminates the need for financial intermediaries, the book model depends on Libra Association units.
He further noted: “A system without intermediaries is a system that eliminates the risks of an intermediary and, therefore, no regulation is necessary to protect against the risks presented by intermediaries.”
According to the White Paper on Libra, the Libra Association currently has 28 founding members and hopes to reach 100 members by introducing the currency. The token must be submitted in the first half of 2020.
Although the Bitcoin cryptocurrency network includes so-called ‘miners’ who record transactions, Van Valkenburgh also noted that it would not make sense to regulate them because they are not trusted to manage funds for users. At the same time, he added that crypto exchanges, on the other hand, require regulatory oversight.
Questions about how Libra crypto coin could fit in the existing financial regulations were raised during a recent hearing. Facebook Marcus faced unpleasant questions about whether the Libra could be considered a marketable financial asset, which he said could not. But Marcus said it could be viewed as a commodity.
Jay Clayton, president of the Securities and Exchange Commission, told CNBC last year that cryptocurrencies such as Bitcoin can not be considered securities. Crypto-currencies are “offsets for government currencies” like the dollar and the euro.
According to CryptoCompare Hayter, this currency “will undoubtedly have a considerable impact on the world economy and could even overshadow the currency with Bitcoin,” which Facebook and its partners can overcome the regulatory obstacles associated with Libra.
Hayter, this currency “will undoubtedly have a considerable impact on the world economy and could even overshadow the currency with Bitcoin,” which Facebook and its partners can overcome the regulatory obstacles associated with Libra crypto.
According to Andy Bryant, the chief operating officer for European trading – bitFlyer, Libra could convince people that there are “other ways” of storing value than other Fiat currencies than the US dollar or the euro use.
Finally, he said: “If Libra crypto succeeds, I think it will be a big step forward for the entire cryptocurrency industry.”
Why does Libra lose partners?
The next Facebook crypto coin has lost another significant partner. This time, Vodafone’s mobile operator leaves the scale. While private cryptocurrencies face problems due to government interference, central banks gather to explore the possibilities cryptocurrencies offered to the state.
Since its launch, the Libra project has faced significant pressure from regulators. This, of course, does not like the idea of a global currency in the hands of a private company. In the fall of 2019, they even escaped from government messages to the Libra Association members to drop the project.
In 2019, VISA and MasterCard, the two strategic partners, broke away from the great Libra players. Vodafone is the latest in a series of global companies leaving Facebook. Speaking to Vodafone revealed the following:
“From the outset, we argued that Vodafone’s goal is to really help people who can’t hold bank accounts and people who don’t want to use banks. We remain fully focused on achieving our goal, and we believe that we will succeed if we move our focus to the (mobile financial platform) M-Pesa.”
M-Pesa is a relatively successful startup, which is especially popular in Eastern and Southern Africa.
Central banks merge
As governments take increased action against projects similar to the Libra project, central banks in Canada, the United Kingdom, Switzerland, and the European Central Bank have established the CBDC Research Center. It is a platform for exchanging ideas. They are exploring the possibility of creating country cryptocurrencies.
Europe is also thinking about its country. He also wants a new European Central Bank president, who has already taken the first steps to create the euro. We must soon find out their specifications. It could be launched in a few years.
China is also working hard on its currency. It will be interesting to know whether the crypto has succeeded or will end up in historical ruins. However, the only real estate crypto is still Petro, Venezuelan oil crypto.
Fb’s cryptocurrency Libra can threaten the world economy.
Crypto like Libra can threaten the global economy if they are not tightly regulated, warns the G7.
Libya could endanger the global economy if it is not tightly regulated, warn the G7 finance ministers. Balance crypto can potentially be a tool for money laundering, terrorist financing, and drug sales. That’s what the G7 leaders say.