Facebook Coin: Libra Already Making Waves
Facebook Coin is already in the minds of a lot of the general public. During June 2019, Facebook announces that they are developing and will release their own cryptocurrency. They call it Libra. Facebook’s Libra announcement is already making waves and could be the reason behind the large rally of Bitcoin during July.
However, Libra may face problems down the road already because of their association for Facebook itself. There is more than just the issue of cryptocurrencies involved.
What is Libra, the Facebook Coin?
Facebook’s vision of Libra is that it will be a simple global currency with a financial infrastructure that can empower billions of people. They plan to build it on a scalable and reliable blockchain which will be secure.
Libra is a stablecoin. We have an article on stablecoins here. In short, a stablecoin ties its worth to another asset, so that its value is more stable and not as volatile as a traditional cryptocurrency like Bitcoin. Libra will have the backing of many different assets though, not just a singular currency like many other stablecoins.
There will be an independent group, the Libra Association, which will govern the specifications of Libra and the direction of the coin. Facebook plans to have 100 members in this Libra Association before its launch in 2021.
Libra will use a consensus mechanism with the name, LibraBFT and will have smart contracts which will be written in the “Move” programming language. Facebook will provide a digital wallet, Calibra, which will allow users to send Libra via their smartphones. This similar use case to services like PayPal and NFC payments will go a long way to making crypto a more acceptable product to the general public.
How will Libra be adopted?
Facebook will allow you to deposit to Calibra from major services like PayPal, MasterCard, Visa and Stripe. This will further reduce the friction for users to start using this new Facebook coin and many experts think this will be a positive step forward to have cryptocurrencies be more palpable to the mass population.
With over 2 billion monthly active users on Facebook as of the writing of this article, Facebook has a huge pool of potential users who can easily start using Libra straight away. If and when Facebook releases Libra, there is a very high chance that this cryptocurrency will really take off.
Did the Announcement of Facebook’s Libra Cause the Recent Bitcoin Spike?
Since the announcement from Facebook for Libra, there has been a lot of speculation and excitement over the news. Since then, Bitcoin has also enjoyed its largest increase for the last year.
In general, there are many factors that could affect the price, which has been trending towards growth already. The announcement probably was of help to the growth but not the only factor influencing it. Correlation is not causation but it could be part of a larger picture.
You should keep abreast of news like this. Any positive news in the cryptocurrency space can influence the price of the major coins like Bitcoin. This is the data that can help you if you regularly trade. Find out what Trading Style you have.
Trust is an Issue
Although there is a lot of hope for Facebook’s cryptocurrency coin, there are some reservations as well. Facebook suffers from a major trust issue and Libra may suffer the same just from the association.
Facebook implicitly have the trust of the billions of users on their platform but this incident has shown that they may not be able to keep that trust. The data they did have for each user was shocking as well, showing that Facebook knows more than we think they know about us.
What Future Does Facebook’s Libra Face?
In the US, there is already members of Congress who are wary of Facebook having control of what looks to become a major playing in cryptocurrency payments considering this track record from before. There are hearings already scheduled by the US Congress. These would have Facebook testifying in defence of Libra in front of a financial services panel.
It is important to understand how large social platforms make data available that can be used in ways that have big implications for consumers’ financial lives, — US Congress
They could have the power to make Facebook stop work on Libra and to make sure it never sees the light of day. Facebook has its work cut out for them. They will have to convince these politicians that they know what they are doing. This is in stark contrast to their current image where they are not trusted.
Facebook needs to clean up its image. If Libra is to become a success, it needs to be trusted before it becomes adopted. With their large user base, however, even if a small percentage blindly trusts their services, this could still look to become one of the fastest and most widely adopted cryptocurrency. This issue could not matter and it is just inevitable, without interference from a Government like the US.
Facebook’s Coin, Libra, is set to release in 2021. This is on the proviso they sort their tiff with the US Congress and fix up their stained image. If they do release it, Libra could become one of the most widely adopted cryptocurrency yet.
When Facebook does release Libra, will you use it? Do you trust Facebook at all after their recent scandals? Do you think this will be a net positive or net negative to cryptocurrencies? Let us know what you think in the comments down below.
Will iCE3X add Libra coin in the cryptocurrency exchange? It’s too early to say, let’s see how Facebook will do first and if there is a huge user demand and the coin is well enough secure we may consider in adding it.