Technology-Watch - the Zuckbuck or Libra Cryptocurrency
by: Simon Hughes
date: Wednesday, Jun 19, 2019
category: technology-watch libra blockchain
There have been rumours all over the internet about Facebook working on the launch of its own Cryptocurrency and yesterday all was finally revealed. I read through the whitepaper so you don't need to, here is everything you do need to know.
The project has been running inside Facebook for over a year and it's clear that Facebook have learnt from all the other cryptocurrencies available. It has an ambitious goal:
The Libra Blockchain is a decentralized, programmable database designed to support a low-volatility cryptocurrency that will have the ability to serve as an efficient medium of exchange for billions of people around the world.
They have clearly chosen some of the best features of existing blockchain technologies while putting their own spin on things. LIke bitcoin there is no real concept of identity, only public/private key-pairs that allow you to interact with your wallet. A user can have multiple accounts by creating many key-pairs. Also like bitcoin they have embraced the open source with the core code available on github, this is a big departure for Facebook!
Like Ethereum it is a programmable currency, and comes with its own smart contract programming language Move.At the moment its unclear just how feature rich this language will be, but it will allow users to interact with the core software and data structures on the blockchain.
At the beginning Libra will be a permissioned blockchain which means only the founding members of the Libra Association will be able to run full nodes. The founding members are established organisations so less likely to act badly, more on the fouding partners below. The whitepaper however does suggest the aim is to become a permissionless blockchain, at which point anyone will be able to run a full node, although work is not expected for at least 5 years.
Up to this point you might be thinking, “So what, its just another cryptocurrency with no use?"……
Now for the game changer!
The Libra currency is unlike anything before. We have speculative coins that are designed to be appreciating assets like bitcoin, and we have stable coins which are tied to the value of a single currency, typically the US Dollar. But the Libra coin is designed to be used for spending across the globe. Libra is tied to a collection of global currencies, and is actually backed up by cash and other assets stored in the bank to give consumers the perceived value of a real currency. A user can now go and buy $500 worth of Libra and send it to a friend across the globe in seconds. The recipient will then be able to spend that LIbra coin anywhere in the world as if it was their local currency, in most cases without having to actually convert back to a local currency due to all the payment providers signing up.
It's not difficult to imagine some companies paying their executive payroll in Libra, leaving those execs free to spend anywhere in the globe with small transaction fees, and no need to ever exchange currencies when they travel. There are so many genuine use-cases for this. Every fintech company in the world will be thinking about this, and how it impacts their business model.
So who is involved in the Libra Association then?
The image above shows the large number of organisations involved in the Libra coin, this really is so much more than just Facebook. We have VISA and Mastercard as two of the biggest card providers in the globe, alongside this we have lots of payment providers including paypal, stripe, etc to allow you to spend your Libra currency. The whole currency is funded by some of the biggest names in Venture Capital in Silicon Valley including Andressen Horowitz. And to cap it all off we also have some of the biggest corporations who want you to spend your Libra coin directly with them including ebay, spotify, uber, vodafone, and of course Coinbase to allow you to convert your Libra into and out of other cryptocurrencies. This covers the whole ecosystem of where we use cash today.
This genuinely feels like a global currency and could have a massive impact of the way traditional FIAT currencies are perceived. The US Government are so worried about it they have already asked Facebook to stop any further work on this until they have had time to perform a full enquiry. Given the project is registered outside of the USA I am not sure how much attention will be paid to this, and with the massive amount of global corporations included this is way more than a Facebook coin, and I don't see this stopping for anyone.
For more information on Libra check out the links below:
If you have a project that you think could benefit from the Libra coin and need any more information feel free to contact me, pick up the phone or drop me an email.
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