FACEBOOK’S CURRENCY - LIBRA

By Charlotte Fox

what is libra?

Following the recent launch of the Apple credit card, Facebook announced that it has plans to launch a crypto currency called ‘Libra’ in 2020, which is set to, “Transform the global economy.” It is being created to assist the 1.7 billion people across the globe who do not have access to a bank account. The currency is being developed by Facebook but will be shared with other companies, such as credit card companies and venture capital firms (which provide funding to start-up companies). As a whole, this is known as the Libra Association. However, Facebook’s reputation for neglecting privacy and worsening political and social issues over the world has led to the announcement of Libra receiving sudden backlash.

Facebook is also creating a sub-company called Calibra, which will develop products and services in order to make money off of Libra. This will start with the launch of a digital wallet.

how Does it work?

Libra is blockchain based, which means that digital information about transactions (e.g. date, time, and amount) is stored on a public database. It contains anti-money laundering and anti-fraud programmes and will not hold personal data in order to maintain a secure network.

It stands out from other cryptocurrencies such as Bitcoin because it is linked to real currencies i.e. pounds, dollars and euros which minimises its volatility (security risks).

You will be able to send Libra (money) on social media, including WhatsApp and Facebook messenger, which would be a lot easier than other forms of payment, such as PayPal. In the future, Facebook hopes that Libra will be accepted as a method of payment, and that other financial services will be based around it.

Facebook will make profit by creating Libra because there is a small charge for every transaction made, which will then be transferred to vendors. Facebook has 2.4 billion users each month, and WhatsApp (which is owned by Facebook) has 1.5 billion users each month, so by building relationships with advertisers and small companies, Libra will be able to gain lots of influence very quickly.

how can i access it?

When it is first available in 2020, Facebook is likely to execute an ‘air drop’, which means that they will give out small amounts of currency for free in order to provoke the ecosystem. This is very important if it is to accomplish its goal of reaching people without bank accounts. Only time can tell if Libra will be successful, and if it can be trusted…