Introduction of Libra
Libra? No, we are not talking about your zodiac sign. If you have not heard about libra, then there’s quite a possibility that you might have not heard about Cryptocurrencies either. To know about libra, let us begin with a few important aspects we need you to get familiar with. Firstly:
What is CryptoCurrency?
Cryptocurrency is a digital currency/asset. It works as a medium of exchange, which uses strong cryptography to secure transactions. Cryptography also controls the addition of new units. It also verifies the transactions of the assets. The government doesn’t have any involvement in Cryptocurrency, so it is decentralized. Unlike banks which are centralized and the flow of money is controlled by the government. Cryptocurrency works with the help of distributed ledger balance technology, called a blockchain, which serves as a database for financial transactions. One of the first cryptocurrency to be developed was Bitcoin, which created a huge buzz back in 2017.
How BitCoin made Cryptocurrency popular?
Let’s start with what BitCoin is. So, it is an example of Cryptocurrency which is decentralized. For transactions involving BitCoin, there is no need for an intermediate. It was developed in Europe, back in 2008 by an unknown person using the name Satoshi Nakamoto. It was put into use in the year 2009. It was developed as a reward for mining. Later on, it became a source of investment. Initially, BitCoin didn’t attract much attention. People were scared to invest in it, because of security reasons, trust, etc. But as it gained popularity, the value of BitCoin gradually started to increase. More and more people invested in it, further adding to the growth. Bitcoin reached its peak value in November, which was valued at around US $8100. Seeing the popularity of BitCoin, other types of Cryptocurrencies started to show up in the Cryptocurrency world and now we have around 4000 different types of Cryptocurrencies. Thanks to BitCoin, Cryptocurrency gained a lot of popularity in a short period. Libra is a good example of an upcoming Cryptocurrency.
What is Libra?
Libra is a licensed blockchain currency and was proposed by the social media giant, Facebook. This project, currency, and all the transactions will be managed and entrusted by a group of companies, 27 companies to be precise. It will mainly be managed by a subsidiary company of Facebook, known as Calibra.
The development of Libra was started back in 2017, by an employee of Facebook, known by the name of Morgan Beller. Initially, Morgan Beller was the sole person working on this Facebook blockchain. Until February 2019, the team had become from a single member to a 50 members team. Facebook officially announced on June 18, 2019, that they were working on a blockchain. The currency will be released in phases, and the first phase is predicted to be released in 2020. Facebook also stated that it won’t release the currency unless and until all the regulators of the US approve of this currency.
How does Libra work?
Unlike BitCoin, Libra won’t act as a reward for mining. It will just be a normal asset like money. All the transactions will be managed by the Libra Association, with a full guarantee of security. Libra aims at seamless and effortless transactions through a network that doesn’t need permission from any official authorities. The libra coin will be backed by the same kinds of assets as reserves will be backed by.
Libra’s source code is published as an open-source under license. Facebook also plans to release an e-wallet called Calibra, which will be made available on Facebook Messenger, WhatsApp, and a dedicated app for Libra.
Impact of Libraz:
Now we all know that each country has its currency and banks. Some countries have more powerful economies, while some have less powerful economies. What Libra will do is it will maintain a single currency throughout the world for any transaction. It can easily take over the paper currencies because of its decentralized system. It will be a step towards one currency one world. There won’t be problems of powerful or less powerful economies. Everyone will have the same value for money. The less developed countries could benefit from it in many ways and can be equal in economies as compared to those countries which are highly developed. Libra may catapult crypto into the minds of everyone in the planet, fuel the next big crypto bubble, inspire more effective competitors, and it may even work. All the centralized banks would go down.