Facebook is entering the crypto game. The Libra is set to launch in 2020.
Backed by the Libra Association, this crypto is a bit different.
All cryptos use the blockchain concept. But the Libra plans to do things in non-traditional ways.
The Libra Association has 28 member companies. They hope to have 100 on board before launch.
What makes Libra different?
1. Libra isn’t fully decentralized. Libra nodes will only run from servers of the Association’s members. Critics question this move, but Facebook offered quick explanations. Fully decentralized, it couldn’t create a “global financial infrastructure.” The move is tied to handling capacity. They want to be able to handle 1,000 transactions/second. In contract to Bitcoin, which can only process 7 transactions/second. Visa can handle 24,000/second.
2. Libra will be launched as a “stable coin.” To minimize crypto volatility, Libra value is tied to assets of various currencies. In a recent letter, the breakdown looks like this: 50% US dollars, 18% Euro, 14% Japanese Yen, 11% British pound and 7% Singapore dollars. Missing from the mix? The Chinese yuan.
Despite the differences, criticism is strong.
Most fears hinge on the impact on financial stability.
Add in Facebook’s privacy and oversight issues.
According to one spokesperson, “We welcome the scrutiny…”
US Lawmakers are pressing for a halt until all issues get addressed.
Some original supporters are already backing out.
Read more here.