What’s a Cryptocurrency?
It’s a form of digital cash that uses encryption technology to make it secure. Cryptocurrencies exist not as physical bills or coins but rather as lines of digitally signed computer code. Records are typically kept on ledgers known as blockchain.
And what is Libra?
Libra is a Facebook-led cryptocurrency. As with other cryptocurrencies, people will be able to buy and sell libras on exchanges for traditional currencies.
How do you spend Libra?/ What is Calibra?
To be able to send and receive Libra, Facebook will create for you a wallet called Calibra. Calibra wallet is the equivalent of our local EcoCash which you use to receive your RTGS$ money. You will put Libra (cryptocurrency) in your Calibra (wallet) by purchasing it using your your usual money like RTGS$ or US dollars.
Calibra wallet will have its own standalone apps on top of being integrated on apps like WhatsApp and Instagram.
Why would you want to use Libra instead of the money that we are used to?
The initial goal of Libra Association is to solve the international remittance problem in the world. Remittances are notoriously expensive. But Libra will provide users with a very cheap way to do remittances that’s why people will probably use it.
Why not use other cryptocurencies?/ Why Libra will probably be preferable?
Although Bitcoin and other cryptocurencies (altcoins) have gained a lot of attention, they aren’t widely used foror one thing: their value fluctuates wildly, meaning that $100 in bitcoins today might be worth $300 a month from now or even $2.50. So only a handful of people and merchants accept bitcoins as payments.
Facebook is hoping to keep the libra’s value stable by tying it closely to established currencies. Unlike most other cryptocurrencies, the Libra will be backed by real-world bank deposits and government securities in a number of leading currencies. These are all low-volatility assets.
What will power Libra cryptocurrency?
Then there’s Libra ‘The blockchain’. Libra ‘The cryptocurrency’ will be working on Libra ‘The smart contract blockchain’ which Facebook says is designed to be “secure, scalable ans reliable”. The Libra blockchain, like other blockchains, will provide a tamper-proof record of transactions on the network. But, unlike Bitcoin and other public blockchains, only authorized bodies (in this case, foundation members) will be allowed to run a node.
Governance of Libra cryptocurrency and blockchain?
Libra will be governed by Libra Association, a non-profit based in Geneva, Switzerland, which will eventually have 100 geographically diverse founding members.
No member will control more than 1% of the blockchain network so that no one will abuse the network. As per the report, each member will invest $10 million and will become the member of Libra Association. The association will work as an autonomous association that will oversee the coin sovereign of Facebook.
Members of the Libra Association will be the validator nodes that operate the Libra Blockchain and form the Libra Association Council that will direct the Association. The validators are what secure the network and confirm transactions. At first, only founding members will be able to operate validator nodes, but eventually membership in the Association, and the ability to operate nodes, will be open to any holder of the Libra currency
So, will Facebook control Libra?
No. As you can see from the explanation above, Facebook is a co-founder just like everbody and its voting power is just 1%.
What’s in it for the members?
For the $10 million that members will pay, they will receive what’s called a Libra Investment Token which will earn them interest. This interest will accumulate from the reserves of the low-volatility assets. They will also cash in on the very low transaction fees they charge.
Libra cryptocurrency and the underlying blockchain network are set to launch next year.
The post Answers To The Important Questions About Facebook’s Cryptocurrency, Libra appeared first on Techzim.
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