Libra, the cryptocurrency of Facebook, could change global trade and finance, a new way for people to send money and make their payments.
Facebook announced the creation of Libra in June and expects to launch it early next year.
Libra is a cryptocurrency developed by Facebook. The company says it will make it easier to send money online, which is cheaper and faster. It will also improve access to financial services, especially for people without bank accounts or with little access to banking.
How will Libra work?
Libra and the technologies to use it will be built on a blockchain platform called Libra Network.
A blockchain is formed by a series of servers that register and validate each transaction made in the network. Unlike many other cryptocurrency networks that allow any server to join the chain, Libra Network is an “authorized” blockchain, which means that only certain servers can connect.
Facebook says it will allow the network to run faster than other cryptocurrencies, making Libra practical for everyday uses, such as buying something online.
The network is built with open source code. This means that any developer can create a digital wallet or other tool to use Libra on the web. Facebook has said it will eventually make the Libra Network transition to a public blockchain, although it has not provided details about that process.
Who will supervise Libra?
Although Facebook imagined and developed the infrastructure for Libra, it will not manage the digital currency. Instead, an independent nonprofit organization called Libra Association will oversee the launch of Libra and will govern the currency.
The Libra Association is a consortium of companies and non-profit organizations around the world based in Geneva, Switzerland. It has 28 founding members, including payment, technology, telecommunications, venture capital and blockchain companies, as well as non-profit organizations.
Members include Paypal, Lyft, Coinbase and Mercy Corps, among others. The association expects to have 100 members for the launch of Libra.
The association will have two main functions: the member organizations will operate the servers to run the Libra Network. The Libra Association will administer the reserve that will support Libra to guarantee its stability.