Last updated 11:18 GMT 18 June 2019
Facebook has announced Libra, its cryptocurrency its says is “reinventing money”
Sending money will be a simple as sending a message or photo for users of its WhatsApp and Messenger products, Facebook claims.
The whitepaper for the Libra blockchain is available here.
The network is scheduled to go live in early 2020.
New Facebook app – Calibra
The currency’s tight integration with Facebook is underscored by the release of a new Facebook app called Calibra, essentially a wallet app for the Libra coin.
“Send money the way you send a message or a photo” Facebook announces on the website of its news app.
On the Calibra website the blurb reads: “Save, send and spend your money, all in the Calibra app. Top up your phone or pay bills. Your transactions will be private and secure.”
Commenting on the news, Yoni Assia Co-Founder and CEO of eToro, said: “Back in 2017 in his Harvard commencement speech Mark Zuckerberg talked about the need for people to have access to money in order to pursue their purpose. With 2 billion users, Facebook has the potential to create one of the largest financial platforms in the world.
“Crypto adoption is about more than money. It’s about global and local politics and the separation of state and money. It can be a powerful tool – hopefully for good. Facebook’s Libra could mean greater financial inclusion and greater access to the digital economy.”
Facebook privacy issues?
Facebook uses the word ‘private’ when talking about its new money, but that could be a barrier to adoption.
Account set up, as expected, is verified with a government-issued ID.
It’s not clear from first glance at the Calibra website the size of the fees on transactions, but they are described as “low”.
Calibra transaction fees
In the Calibra FAQ it says: “Transaction fees will be low-cost and transparent, especially if you’re sending money internationally. Calibra will cut fees to help people keep more of their money.”
Calibra is still under development but you can sign up for early access.
The app features are also being directly built into WhatsApp and Messenger.
Calibra aims to tbe global money and Facebook “is working to bring Calibra to as many countries as possible”.
Calibra is described as s subsidiary of Facebook but at the same time “operates independently from Facebook”.
Libra is backed by fiat and “other assets”.
The Libra blockchain whitepaper and the new Move language
Libra uses a byzantine fault tolerance tech, called the LibraBFT consensus protocol and a coding language it calls Move.
Described as “safe and flexible, you can find out more about More here.
A preview of the Testnet is available here.
Libra supply will be dynamic, changing with demand, according to the whitepaper.
The whitepaper likens Libra to the days when money was backed by gold as it explains how the collateral works:
Libra is designed to be a stable digital cryptocurrency that will be fully backed by a reserve of real assets — the Libra Reserve — and supported by a competitive network of exchanges buying and selling Libra. That means anyone with Libra has a high degree of assurance they can convert their digital currency into local fiat currency based on an exchange rate, just like exchanging one currency for another when traveling. This approach is similar to how other currencies were introduced in the past: to help instill trust in a new currency and gain widespread adoption during its infancy, it was guaranteed that a country’s notes could be traded in for real assets, such as gold. Instead of backing Libra with gold, though, it will be backed by a collection of low-volatility assets, such as bank deposits and short-term government securities in currencies from stable and reputable central banks.
Facebook stock rises
Facebook stock is 2% higher in overnight trade, with market participants likely to react warmly to Facebook’s ambitious plans to rival the US dollar.
Libra Classic 🙂
Not everyone is impressed though, as witnessed by a Github repo that has just been created for ‘Libra Classic’.
The planned fork (or spoof) git ReadMe states: “Libra Classic implements a decentralized, programmable database which provides a financial infrastructure that can empower billions of people without sacrificing privacy or profiting large American corporations.”