What is Libra? Summarize everything you need to know about Facebook’s electronic currency

Facebook finally revealed its whitepaper Libra details, which will allow you to buy or send money to people for almost zero fees. You can buy or pay for Libra online or at local exchange points like grocery stores and use third-party wallet apps or Facebook Calibra wallets, integrated into WhatsApp, Messenger and apps. their own. On June 18, Facebook released the whitepaper explaining Libra and testnet on how to handle the bottlenecks of the blockchain system before being publicly released in the first half of 2020.

Facebook gained complete control of Libra, but instead received only one vote in the board as other founding members of the Libra Association ( Libra Association ) including Visa, Uber, Andreessen. Horowitz … those who invested at least 10 million dollars in each node of the project. The association will promote the blockchain platform and developer Libra with open source with Move programming language ( similar to Ethereum’s solidity language ) plus registered businesses accept Libra for payment and even discount for customers or create rewards.

Comparing Ethereum’s Solidity language and Facebook’s Move, fair to say, the Move has learned a lot from Solidity.

Facebook launches a subsidiary called Calibra that handles electronic money transactions and protects users’ privacy by never mixing Libra payments with your Facebook data for use on items. advertising target. Your true identity is not tied to your publicly displayed transactions. But Facebook / Calibra and other founders of the Libra Association will earn interest from locked-up cash in stockpiles to keep Libra’s value stable.

Facebook has created a global digital currency to promote financial activity for actually having more privacy and decentralization.

Vice President in charge of Facebook blockchain David Marcus explains the company’s motives and links to its core revenue source, he said if more commercial transactions take place, businesses will sell more goods. more on the platform and they will want to buy more ads, so it will be good for Facebook’s advertising business.

What is Libra?

Facebook describes Libra as a “global financial and monetary infrastructure”. In other words, Libra is a digital asset built by Facebook, based on a blockchain version – Bitcoin encryption technology and many other electronic currencies used – created by the company itself.

Libra has the symbol ≋.

Origin of the name Libra?

The name Libra is inspired by the Roman unit of weight (1 Libra = 0.329 kg), the zodiac of Libra symbolizes justice and the meaning of “freedom” in French, according to David Marcus, former PayPal executive, head of Facebook’s virtual money project.

According to Guardian, pound pounds (1 pound = 0.4536 kg) is also derived from Libra and the pound’s pound symbol is stylized L in Libra.

Risks and opportunities when building a new PayPal

In electronic money, Facebook sees both threats and opportunities. They keep their promise to break the way of buying and selling by eliminating existing transaction fees on credit cards. It is very dangerous for businesses to advertise on Facebook for it to affect their buying and selling activities. If a competitor like Google or an emerging person has built a popular currency and can monitor transactions, they will know what everyone buys and can focus on the cost of marketing. Facebook.

Meanwhile, 1.7 billion people without bank accounts can choose anyone who provides them with alternative financial services, which is another thing Facebook wants.

However, existing cryptocurrency types such as Bitcoin and Ethereum are not properly designed to scale up into a means of exchange. Their unpaid prices are prone to large fluctuations and unpredictable, making it difficult for traders to accept payments. And electronic money misses most of their potential beyond speculation unless there are enough places to take them instead of dollars. But with a relationship on Facebook with 7 million advertisers and 90 million small businesses plus user experience, it’s ready to solve this problem.

Now Facebook wants to turn Libra into PayPal’s development. It hopes Libra will become simpler to set up, more popular as a payment method, more efficient with less overhead, more accessible to developers, more flexible thanks to the developers. develop and last longer through decentralization.

Success means that a person working abroad has a quick and simple way to send money home and a college student can pay their tuition as easily as buying a cup of coffee. get high. That will be a big improvement today, when you get stuck in unsafe check payments, while money transfer services charge an average of 7% to send money abroad, they take about 50 billion dollars from users every year. Libra can also offer small micro transactions that are only worth a few cents, which is not feasible for credit cards when fees are always attached.

Can not be ignored globally by consumers who consider it too much trouble because too few benefits, or too strange and limited to use to pull them into the modern financial context.

How does Libra work?

You now know the basics of Libra. A local fiat currency can be exchanged for Libra, spending them as dollars without transaction fees. Facebook has released over 100 pages of documents about Libra and Calibra and we have come up with the most important things:

Libra Association – New Central Bank

Facebook knows people will trust the full control of the electronic money they use and they also want to help to promote adoption. Thus, Facebook recruited founding members of the Libra Association, which oversees the development of tokens, real-world asset reserves, bringing about the value and governance rules of the blockchain. Each founding member paid a minimum of $ 10 million to join and become a valid node operator (more later), winning a vote in the Libra Association’s board and enjoying a share (corresponding to their investment) dividends earned from users of Libra.

The 28 members that are about to be established by the association include:

Payment: Mastercard, PayPal, PayU, Stripe, Visa

Technology and e-commerce: Booking Holdings, eBay, Facebook / Calibra, Farfetch, Lyft, Mercado Pago, Spotify AB, Uber Technologies, Inc.

Telecommunications: Iliad, Vodafone Group

Blockchain: Anchorage, Bison Trails, Coinbase, Inc., Xapo Holdings Limited.

Venture Capital: Andreessen Horowitz, Breakthrough Initiatives, Ribbit Capital, Thrive Capital, Union Square Ventures.

Non-profit and multilateral organizations, and academic organizations: Creative Destruction Lab, Kiva, Mercy Corps, Women’s World Banking.

Facebook said it hopes to achieve 100 founding members before Libra officially launches and it is open to anyone who meets the requirements including direct competitors like Google or Twitter.

To participate, members must have half of server space, dedicated internet connection 100mbps or more, full-time engineers and enterprise-level security. Businesses must reach two of the three thresholds of market value of $ 1 billion or $ 500 million in account balances, reaching 20 million users a year and / or being recognized as a leading industry leader by Interbrand Global or S & P.

Investors focusing on electronic money must have more than $ 1 billion in managed assets, while Blockchain businesses must be in operation for a year, with enterprise-level privacy and storage or security pile more than $ 100 million in assets. And only one-third of the founding members may be by businesses related to electronic money or the exception of unintentional invitations. Facebook also accepts research institutions such as universities and non-profit organizations that meet three of the four criteria including financial activity for more than five years, multinational or something similar, and / or $ 50 million in budget.

The Libra Association will be responsible for selecting more founding members to act as authentication nodes for the blockchain, raising funds to launch the ecosystem, designing incentive programs to reward those who accept early and reduce subsidies. A committee with a representative from each member will elect the executive director of the Association, who will appoint an executive team, electing a committee of 5 to 19 top representatives.

Each member including Facebook / Calibra will only receive a maximum of one vote or 1% of the total votes (depending on a larger number) in the Libra Association council. This provides a degree of protection decentralization against Facebook or anyone else who takes control of Libra for its own sake.

Libra currency – A stable currency

The Libra logo is a symbol of three wavy horizontal lines ≋ (like the dollar denoted by $). The value of a Libra means being largely stable so it is a good means of exchange because traders can believe that they have earned a Libra today and that value has not been changed.

The value of Libra, which is tied to a basket of bank and government bonds for a series of historically stable international currencies, including USD, British pound, Euro, Swiss Franc and Japanese Yen. The Libra Association maintains this asset basket and can change the balance of the component if necessary to compensate for large price movements in any currency so that the value of a Libra is stable.

The Libra Association is still giving the correct value to Libra, but it means that it is somewhere close to the value of the dollar, euro or pound. For example, a cup of iced coffee in Saigon may cost from 1 to 2 Libra, similar but not quite the same as the dollar ( Note, this means it evaluates itself, not on USD As USDT, USDC or TUSD we are still trading, the Libra Association will be a Central Bank equivalent to the Central Bank of England, which is run privately ).

The idea is that you will earn some money and keep the Libra balance that you can spend when traders accept and use for online services. You will be able to trade with your local currency (such as VND) to Libra and vice versa through a number of applications such as Facebook’s Calibra, third-party wallet apps and local agents like convenience stores. Benefit or anywhere to accept Libra.

Libra- One Exchange One Store

Every time someone wants to buy a Libra, the money will be transferred to Libra Reserve and a similar Libra value will be cast and transferred to that person. If someone withdraws money from the Libra Association, Libra they return will be destroyed / burned and they receive the same value in their local currency. That means there is always 100% value of Libra in circulation mortgaged by real world assets in Libra Archive. It never runs segments. And stable currencies are not tied and are not tied to a currency like USD, Libra maintains its own value – although that will draw the same amount of money as a certain currency by time. time.

When Libra Association members join and pay a minimum of $ 10 million, they will receive Libra investment token. Their share of the total number of tokens translates into the dividend rate they earn on assets in the stockpile. Such dividends are only paid after the Libra Association uses profits to pay for operating costs, ecosystem investments, technical research and funding for non-profit organizations and other organizations. . This interest is part of what attracts the Libra Association members. If Libra becomes popular and many users are a currency, then the stockpile will grow tremendously and earn significant profits.

Blockchain Libra – Built for speed goals

All Libra payments are permanently credited to the Libra blockchain – a password-validated database, which acts as a public online ledger designed to handle 1000 transactions per second. Blockchain is operated and continuously verified by the founding members of the Libra Association, each has invested 10 million dollars or more to talk about cryptrocurrency management and authentic node operation capability.

When a transaction is submitted, each node will run a calculation based on the existing ledger of all transactions. By the Byzantine Fault Tolerance ( Byzantine Fault Tolerance ) system, only two-thirds of the nodes must agree that the transaction is legal so that it can be executed and written to the blockchain. A structure of the Merkle Tree in code makes it easy to identify changes made to the Libra blockchain.

Trading on Libra cannot be reversed. If an attack compromises more than one-third of authentic nodes causing a hard fork in the blockchain, the Libra Association will temporarily stop transactions, find out the extent of the destructive power and recommend updating the software to solve hard fork.

The transaction is not completely free. You have to pay a very small part of a fee to pay for Gas fees, similar to Ethereum. This fee will be negligible for most consumers, but when they add the Gas fee will prevent bad actors from creating millions of transactions to attack spam and denial of service attacks.

Move the coding language – To move Libra

Blockchain Libra is open source with the Apache 2.0 license and any developer can build applications that work with it in the Move coding language. The prototype of blockchain launched testnet today, so it works effectively in developer beta mode until it officially launches in the first half of 2020.

The Libra Association is partnering with HackerOne to launch a bug bounty system later this year, which will pay security researchers to identify safety errors and malfunctions. Libra Core Libra Core, meanwhile, uses the Rust programming language because it is designed to prevent Move and security languages ​​that are not available.

Move is created to make it easier to write blockchain code according to the author’s intent without giving an error. It is called Move because its main function is to move Libra money from one account to another and never let those assets accidentally be duplicated. The core transaction code looks like the procedure LibraAccount.pay_from_sender (receive_address, amount).

Finally, Move will be able to create smart contracts for programmatic interactions with the Libra blockchain. Until Move is ready, developers can create Libra modules and trading scripts with Move IR, which are high enough to be readable but at a low level enough to be converted into code. Actual moves that are written into the blockchain.

The Libra ecosystem and the Move language will be completely open for use and construction, which brings quite a risk. Developers can be bait for new electronic users, claiming their application works like legitimate people and it can be safe because it uses Libra. But if consumers are ripped off by these scammers, anger will surely emerge on Facebook. Although it has tried to make a full distance through its subsidiary Libra and the Association, many people will probably always think of Libra as Facebook’s electronic money and blame their woes.

Use Libra – Calibra

So how do you really own and spend Libra? Through Libra wallets like Calibra by Facebook or third parties, it is possible to include Libra Association members like PayPal. The idea is to send money to friends or pay anything as easily as you are sending a message on Facebook.

No member of the Libra Association agrees to provide details about what they will build on the blockchain, but we can take Facebook’s Calibra wallet as an example of a basic experience. Calibra will launch with Libra coins on iOS and Android in Facebook Messenger, WhatsApp and a standalone application. When users first register, they will be done through KYC process (Know Your Customer), where they will have to provide ID or Passport and other verification information. They need to conduct customer appraisal and report suspicious activity to the government.

From there, you will be able to transfer money to Libra, choose a friend or someone, put some money to send them, add a description and send them Libra. You can also ask Libra. There is also the possibility that Calibra will provide a quick way to pay for traders like scanning QR codes.

Privacy – At least from Facebook

Facebook CEO Mark Zuckerberg explained some of the philosophy behind Libra and Calibra in a post today. Software is decentralized – meaning it is run by many different organizations instead of just one organization, making the system more fair. It is available for anyone with an internet connection and has a low cost and cost. And it is password-protected to keep your money safe. This is an important part of Facebook’s vision for a privacy-focused social platform – where you can interact with all the ways you want to be private, from texting to the bar. safe math.

By default, Facebook does not enter your contacts or any of your profile information but may ask if you want to do so. It has also won share with any of your transaction data back to Facebook, so it has been used to target you by ads, your News Feed ratings or make money online. continue on Facebook. Data will only be shared in specific cases in an aggregate, anonymous or by law enforcement agency.

Mark Zuckerberg’s Facebook screenshot.

In case you are hacked, cheated or lose access to your account, Calibra will refund you the lost amount when possible through 24/7 chat support. Calibra may become the default wallet for many Libra users, this extra protection is necessary.

But Kevin Weil, head of product for Facebook blockchain group, said that if scale is achieved, Facebook could launch other financial services through Calibra to make money.

Global Coin

Global Coin is referring to a global coin, not the Globalcoin name as we have been mistaken for a long time.

If Facebook succeeds with Libra, the other founders of the Libra Association can earn big dividends from interest. And if buying goods via Facebook with Libra becomes super fast, businesses will increase their advertising spending there. But if Libra is attacked or proven unreliable, it could make many people around the world pay the price while making them disappointed in electronic money. And by providing an open Libra platform, shady developers can build applications that not only collect users’ personal information like Cambridge Analytica, but also their digital currency.

Facebook just tries to reinvent the money. Next year, we will see the performance of the “Libra Association”, the association of the richest tycoons in the world.

summary

Libra Coin will be a stable currency, locked into a basket of different global currencies.
Libra launch date: Quarter 1, 2020
Will Libra compete with the BTC?
Is not? Libra will not compete with BTC or electronic money.
Libra will compete with Banks, Credit Cards, Visa, Mastercard, etc.
The reason Libra will not compete with BTC is because Libra is indistinguishable from the traditional fiat money that banks are currently offering.
The reason Libra will not compete with electronic money is because of the difference of electronic money and it represents FREEDOM, open money, decentralization, borderlessness, uncensored.
Libra will not have any of these features or benefits.
Libra is of little benefit to Westerners but will benefit those who suffer from monetary control, less democracy, corruption, high inflation, which account for 90% of the population on the planet. fine.
Libra will only be a form of centralized currency that is broken (not completely focused or completely decentralized).
Facebook can cancel platform users, censor their users and transactions, they will track and record your payments to whom and why, and if they don’t like your activity, they have Can freeze your account and your money, like PayPal today.
Your spending will be monitored continuously and your activity will be sold or given to third parties or intelligence agencies.
Libra will be very large simply because of the number, almost 2.4 billion active users and WhatsApp has 1.5 billion daily users.
They will keep track of your whole life.
In the end, as Changpeng Zhao said, they know you better than you.

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Source : Tạp Chí Bitcoin