The rumors are now officially confirmed: Facebook launched its own digital money, and it has made ambitious promises. The confirmation came after Facebook made online a website the o official introduce Libra to the public. In the White Paper for Libra published on the website, www.libra.org, the company said that “Libra is a simple global currency and financial infrastructure that empowers billions of people.”
According to the white paper, there are three things that make Libra different from other cryptocurrencies that are already existing including bitcoin: It is built on a secure, scalable, and reliable blockchain; it is backed by a reserve of assets designed to give it intrinsic value; the independent Libra Association governs it tasked with evolving the ecosystem.
“The Libra currency is built on the “Libra Blockchain.” Because it is intended to address a global audience, the software that implements the Libra Blockchain is open source — designed so that anyone can build on it, and billions of people can depend on it for their financial needs. With the proliferation of smartphones and wireless data, increasingly more people will be online and able to access Libra through these new services. To enable the Libra ecosystem to achieve this vision over time, the blockchain has been built from the ground up to prioritize scalability, security, efficiency in storage and throughput, and future adaptability,” reads the white paper.
Furthermore, the white paper confirms that the currency will be officially called “Libra,” consistent with the earlier rumors of its existence. Libra promises that the currency will be accessible to everyone who wants to use and with relative ease. Also, digital money says that users can be confident that they can use Libra and that its value will remain relatively stable over time.
The currency, unlike other crypto money, is said to be backed by “a reserve of real assets” and a “basket of bank deposits and short-term government securities will be held in the Libra Reserve for every Libra that is created, building trust in its intrinsic value.”
The Libra Association
The paper also noted that the currency would be managed and governed by the Libra Association, again a consistent detail from previous rumors. The Libra Association is an independent, not-for-profit membership organization headquartered in Geneva, Switzerland.
“The association’s purpose is to coordinate and provide a framework for governance for the network and reserve and lead social impact grant-making in support of financial inclusion,” they said.
The members of the Libra Association is comprised of “geographically distributed and diverse businesses, nonprofit and multilateral organizations, and academic institutions” which include the “Founding Members” of the organization such as:
- Payments: Mastercard, PayPal, PayU (Naspers’ fintech arm), Stripe, Visa
- Technology and marketplaces: Booking Holdings, eBay, Facebook/Calibra, Farfetch, Lyft, MercadoPago, 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
- Nonprofit and multilateral organizations, and academic institutions: Creative Destruction Lab, Kiva, Mercy Corps, Women’s World Banking
Facebook hopes that the Libra Association can reach around 100 members by 2020, the targe date for Libra to start rolling off to users.
The Libra Blockchain
The currency, Libra, will also operate through its own blockchain technology, the Libra Blockchain. The goal of the Libra Blockchain is to serve as a solid foundation for financial services, including a new global currency, which could meet the daily financial needs of billions of people.
“The Libra Blockchain is designed from the ground up to holistically address these requirements and build on the learnings from existing projects and research — a combination of innovative approaches and well- understood techniques,” the white paper reads.
The new blockchain technology for Libra is said to be powered through a newly designed programming language called “Move.” With this, Facebook promises that the language was intended to prioritize security and safety as a transaction happen on the blockchain technology.
“Move takes insights from security incidents that have happened with smart contracts to date and creates a language that makes it inherently easier to write code that fulfills the author’s intent, thereby lessening the risk of unintended bugs or security incidents.”
Moreover, to securely store transactions, data on the Libra Blockchain is protected by Merkle trees, a data structure used by other blockchains that enable the detection of any changes to existing data. Unlike previous blockchains, which “view the blockchain as a collection of blocks of transactions, the Libra Blockchain is a single data structure that records the history of transactions and states over time.”
In the end, Facebook encourages everyone to get involved in this new venture by giving them feedback regarding their new product.
“Our hope is to create more access to better, cheaper, and open financial services — no matter who you are, where you live, what you do, or how much you have. We recognize that the road to delivering this will be long, arduous, and won’t be achieved in isolation — it will take coming together and forming a real movement around this pursuit. We hope you’ll join us and help turn this dream into a reality for billions of people around the world,” the paper concludes.