In the past few years, the internet has seen many faces of cryptocurrency. The most notable being Bitcoin. It worked by having computers around the world keep tabs on each other as they solved cryptographic puzzles. Bitcoin continues to be popular among the crowd despite its volatility in value. Facebook’s Libra is a cryptocurrency that’s similar in ways to Bitcoin, but with several key differences.
Bitcoin is known for having wildly fluctuating values. On the other hand, Libra’s value is much more tied with government-issued currency. It’s like exchanging a dollar for a euro. It fends off many people’s fear of losing the value of their cryptocurrency overnight. Another advantage of using libra as a peer-to-peer payment system is the small transaction fees compared to credit cards. The payment would be as easy as sending a message or a text as Facebook plans to release it initially with Facebook Messenger and Whatsapp.
The focus of Libra is not to replace Bitcoin but to dive into populations with no bank accounts. Popular peer-to-peer payment methods like Venmo and PayPal require a bank account to send and receive money. On the other hand, Libra is capable to receive without the need of a bank account. It’s helpful in lesser developed parts of the world wherein people abroad can turn their fiat money into Libra for people to receive. It’s possible to send Libra to those without bank accounts and use the cryptocurrency to avail goods and services.
Libra will be stored in digital wallets that can be developed by third-parties. Facebook is working on Calibra, its own digital wallet to store the currency. It stores your Libra and exchanges it online or participating merchants in real-time. While it does look to be convenient and holds many advantages, are there any risks associated with it? Calibra, the digital wallet, will not be connected to your Facebook account, therefore they won’t be able to advertise base on your purchases. But a government-issued I.D may be required. Although Calibra may be able to advertise other Calibra products to you when it asks for your permission.
Facebook isn’t widely trusted and loss value because of the Cambridge Analytica Incident, but this new project may bring back lost credibility and bring back the value of their shares. Libra is still a new cryptocurrency that has not even entered the market. However, people are already seeing good ways to use it and ways the consumer can be taken advantaged of. It’s planned release is in the first half of 2020. Many more updates and changes may come later.