Last week social media giant Facebook announced the details on its cryptocurrency, Libra, that will launch (along with 27 other partners, like Uber and Visa) in early 2020. Libra will be a new form of digital currency, with similarities to both PayPal and Bitcoin. It will work well for people without bank accounts and/or credit cards but could also prove very useful for others. With Facebook’s privacy standards in question lately, it might be hard to trust them with more, so here is everything you need to know:
When is it coming?
The plan is to launch in the first half of 2020. It will then be available on WhatsApp, Facebook Messenger, and through other Libra Partners.
How does Libra Work?
Libra is a form of digital currency that users will access through apps to pay for things or send money to friends and family, similar to what PayPal and Venmo do. But Libra is largely aimed at people without bank accounts, which are needed for both Venmo and PayPal.
Users will need to use a “wallet” to keep and exchange Libra.
Who created it?
The Libra Association is made up of 28 partners (companies and foundations). eBay, PayPal, Spotify are a few of its founding partners. Each of these partners has invested at least $10 million. This investment partially funds a reserve of fiat currency to exchange for Libra.
Fiat currency is “legal tender whose value is backed by the government that issued it.”
Facebook is one of these partners. However, Facebook created its own version of a “wallet” called Calibra where Libra can be kept and exchanged.
What is Calibra?
Like mentioned above, it’s Facebook’s version of a “wallet,” or an app that lets you exchange cryptocurrency. Calibra will be integrated into WhatsApp and other Facebook apps like Messenger. The process of sending money will be as simple as sending a text.
How much does it cost?
Libra will be far cheaper to utilize than any other money transfer service; most transactions will cost less than a cent.
Can you invest in Libra?
No, at least not in the same way that you can with Bitcoin. That’s because Libra isn’t designed to ‘gain’ or ‘lose’ value. Libra is designed to be a stable form of digital cryptocurrency that is said to be fully backed by a reserve of real assets that is supported by a network of exchanges.
What about my privacy?
Last week Mark Zuckerberg, Facebook’s CEO, explained that, “It’s decentralized — meaning it’s run by many different organizations instead of just one, making the system fairer overall. It’s available to anyone with an internet connection and has low fees and costs. And it’s secured by cryptography which helps keep your money safe. This is an important part of our vision for a privacy-focused social platform — where you can interact in all the ways you’d want privately, from messaging to secure payments.”
Do I need to have Facebook?
Nope! You don’t need a Facebook or WhatsApp account; you can create a Calibra account to use Libra.
According to Libra, “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.”
Facebook definitely has an interesting track record when it comes to data privacy, and that record will surely come into play as far as creating wariness from users. Nonetheless, it will be interesting to see how Libra and Calibra take off (or don’t).
Here at Extract, we value both privacy and security greatly in our software. We keep all of your information behind your firewall and redact private information automatically to ensure public records can remain accessible to the larger population. If you are interested in learning more or would like to see a personalized demo, reach out today.
Access the full Libra whitepaper here.
About the Author: Taylor Genter
Taylor is the Marketing Specialist at Extract with experience in data analytics, graphic design, and both digital and social media marketing. She earned her Bachelor of Business Administration degree in Marketing at the University of Wisconsin- Whitewater. Taylor enjoys analyzing people’s behaviors and attitudes to find out what motivates them, and then curating better ways to communicate with them.