What is Facebook Libra Coin?

News Lekhak March 02, 2023 0

Facebook Libra (now called Diem) was a proposed global cryptocurrency and payment system announced by Facebook in June 2019. The currency was designed to be a stablecoin, pegged to a basket of fiat currencies and other assets, with the goal of making financial services more accessible to people around the world. The project was intended to be governed by the Libra Association (now called the Diem Association), a consortium of companies and organizations from various industries, with Facebook serving as one of the founding members. However, the project faced significant regulatory scrutiny and pushback from governments and financial regulators, and it has since undergone significant changes, including the abandonment of plans to create a global stablecoin.

Despite the challenges faced by the project, the idea of a global cryptocurrency and payment system remains an attractive one, with the potential to revolutionize the way people send and receive money around the world. While the fate of Facebook Libra remains uncertain, the project has already spurred interest and investment in the wider cryptocurrency and blockchain space, and it has raised important questions about the role of governments and regulators in shaping the future of digital currencies and financial services.

 

What is Facebook Libra Coin?

Facebook Libra Coin (now called Diem) was a proposed cryptocurrency launched by Facebook in 2019. It was designed to be a stablecoin, meaning its value would be pegged to a basket of currencies and other assets to avoid the volatility that has been associated with other cryptocurrencies like Bitcoin. The goal of Libra was to create a decentralized, global digital currency that would be accessible to anyone with a smartphone.

However, the proposal was met with skepticism and scrutiny from regulators and policymakers around the world, who raised concerns about the potential risks to financial stability, privacy, and security. In response, Facebook made several changes to the project, including changing the name to Diem and reconfiguring the currency to be a single stablecoin backed by the US dollar.

As of early 2023, the launch of Diem is still pending regulatory approval, and it remains to be seen whether the project will come to fruition in its current form.

What is Cryptocurrency?

Cryptocurrency is a digital or virtual currency that uses cryptography for security and operates independently of a central bank. Cryptocurrencies use decentralized technology known as blockchain, which is a distributed ledger that records all transactions made with the currency. Unlike traditional fiat currencies, cryptocurrencies are not issued or regulated by a central authority, such as a government or financial institution.

The most well-known cryptocurrency is Bitcoin, which was created in 2009. Since then, thousands of other cryptocurrencies have been developed, each with its own unique features and purposes. Some popular cryptocurrencies include Ethereum, Ripple, Litecoin, and Tether.

Cryptocurrencies are typically bought and sold on online exchanges, where they can be traded for fiat currencies or other cryptocurrencies. The value of a cryptocurrency is determined by supply and demand, and can be highly volatile due to the absence of regulatory oversight and the speculative nature of the market.

While some proponents see cryptocurrencies as a revolutionary development that can offer greater financial freedom and autonomy, others argue that they pose significant risks, including potential for fraud, money laundering, and market manipulation.

What is Facebook Libra cryptocurrency?

Facebook Libra cryptocurrency (now called Diem) is a proposed digital currency developed by Facebook, designed to be a global payment system that is accessible to anyone with an internet connection. The currency is intended to be a stablecoin, meaning its value would be pegged to a basket of currencies and other assets to avoid the volatility associated with other cryptocurrencies like Bitcoin.

The Libra project was announced by Facebook in 2019, but it was met with significant regulatory scrutiny and concerns about its potential impact on financial stability, security, and privacy. As a result, Facebook made several changes to the project, including rebranding it as Diem and reconfiguring the currency to be a single stablecoin backed by the US dollar.

The goal of Diem is to create a fast, low-cost, and secure payment system that can be used by people around the world. The currency would be managed by a consortium of companies, known as the Diem Association, with Facebook playing a leading role. However, as of early 2023, the launch of Diem is still pending regulatory approval, and it remains to be seen whether the project will come to fruition in its current form.

What is Libra Blockchain?

Libra Blockchain is a blockchain-based platform developed by Facebook for its proposed cryptocurrency, Libra (now called Diem). It is designed to be a scalable, secure, and decentralized infrastructure that can support the transaction volume and speed required for a global payment system.

The Libra Blockchain uses a modified version of the Byzantine Fault Tolerance (BFT) consensus protocol, which is intended to enable fast transaction processing while maintaining a high level of security and resistance to attacks. The BFT protocol requires a supermajority of validator nodes to reach agreement on the state of the blockchain, making it more resilient to malicious actors and network failures.

The Libra Blockchain is also designed to be flexible and interoperable with other blockchains, allowing for the integration of new features and the exchange of assets across different networks. Developers can use the Move programming language to create smart contracts and custom applications on the platform.

However, since the initial announcement of the Libra project in 2019, there have been significant changes to the project, including the rebranding of the currency to Diem and the adoption of a new architecture that is more focused on compliance with regulatory requirements. As of early 2023, the launch of Diem is still pending regulatory approval, and it remains to be seen how much of the original Libra Blockchain design will be implemented in the final product.

Who are the members and partners of Facebook Libra Coin?

When the Libra project was first announced by Facebook in 2019, it had a group of founding members that included a mix of technology companies, financial institutions, and non-profit organizations. However, as the project faced regulatory scrutiny and challenges, several members withdrew from the project, including PayPal, Visa, Mastercard, and eBay.

As of early 2023, the project has been rebranded as Diem, and the consortium of companies that manages the currency is now known as the Diem Association. The current members of the Diem Association include:

• Facebook 
• Shopify 
• Coinbase 
• Bison Trails 
• Slow Ventures 
• Ribbit Capital 
• Thrive Capital 
• Andreessen Horowitz

In addition to these members, the Diem Association has partnered with several other organizations and service providers to support the development and adoption of the currency, including Anchorage, Fireblocks, and Silvergate Bank.

It's worth noting that the membership and partnerships of the Diem Association may change over time as the project evolves and regulatory requirements are clarified.

Features of Libra Crypto Coin?

The Libra cryptocurrency project (now called Diem) was designed to have several features that set it apart from other cryptocurrencies:

• Stablecoin: Libra was intended to be a stablecoin, meaning its value would be pegged to a basket of currencies and other assets to avoid the volatility associated with other cryptocurrencies like Bitcoin. 
• Global payment system: Libra was designed to be a fast, low-cost, and secure payment system that could be used by anyone with an internet connection around the world. 
• Decentralized: Like other cryptocurrencies, Libra was intended to be decentralized, meaning it would not be controlled by a central authority like a government or financial institution. 
• Scalable: The Libra Blockchain was designed to be a scalable infrastructure that could support the transaction volume and speed required for a global payment system. 
• Interoperable: The Libra Blockchain was designed to be interoperable with other blockchains, allowing for the exchange of assets across different networks. 
• Accessibility: Libra was designed to be accessible to people who do not have access to traditional financial services, including those in developing countries or without a bank account.

However, since the announcement of the Libra project, there have been significant changes to the currency's design and features, including the rebranding of the currency to Diem and the adoption of a more conservative approach focused on regulatory compliance. As of early 2023, it remains to be seen how many of the original features of Libra will be implemented in the final product.

Move: What is the programming language of Libra?

Move is a programming language developed by Facebook specifically for the Libra Blockchain. It is designed to be a safe and flexible language that can be used to create smart contracts and custom transactions on the blockchain.

The Move language is based on Rust and is designed to minimize the risk of errors and vulnerabilities in the smart contract code. It includes features like resource types, which ensure that resources like assets or data are always used correctly, and a linear type system that prevents resources from being copied or lost.

One of the key benefits of the Move language is that it enables developers to write and test smart contracts in a sandboxed environment before deploying them on the blockchain. This helps to minimize the risk of bugs and vulnerabilities in the code that could compromise the security of the blockchain.

The Move language is still relatively new and is currently only used in the context of the Libra Blockchain. However, Facebook has indicated that it may eventually release the language as an open-source project, allowing other developers to use it for their own blockchain projects.

Who is the owner of Libra?

The Libra cryptocurrency project (now called Diem) was initially developed and announced by Facebook in 2019, but it was always intended to be managed by a consortium of companies and organizations known as the Libra Association (now called the Diem Association). Facebook's role in the project has always been that of a founding member and technology provider, rather than an owner or controller of the currency.

However, since the initial announcement of the project, there have been significant changes to the project's structure and governance, including the withdrawal of several key founding members and the rebranding of the currency to Diem. As of early 2023, the Diem Association is still in the process of seeking regulatory approval for the launch of the currency, and it remains to be seen how the ownership and governance of the project will evolve over time.

Benefits of Libra Coin?

The Libra cryptocurrency project (now called Diem) was designed to offer several potential benefits, including:

• Low-cost and fast transactions: Libra was designed to facilitate low-cost and fast transactions, making it an attractive option for users who want to send money or make purchases without incurring high fees or waiting for extended periods for transactions to be processed. 
• Global accessibility: As a digital currency that can be used by anyone with an internet connection, Libra was intended to make financial services more accessible to people around the world, particularly those who do not have access to traditional banking services. 
• Stability: Unlike many other cryptocurrencies, Libra was designed to be a stablecoin, meaning its value would be pegged to a basket of currencies and other assets, reducing the volatility that can make other cryptocurrencies difficult to use as a medium of exchange or store of value. 
• Security: The Libra Blockchain was designed to provide a secure and tamper-proof platform for transactions, using advanced cryptography and other security measures to protect user data and funds. 
• Interoperability: The Libra Blockchain was intended to be interoperable with other blockchains, allowing for the exchange of assets and data across different networks. 
• Innovation: The Libra project has already spurred significant innovation in the field of cryptocurrency and blockchain, with many other companies and organizations exploring new ways to leverage the technology for financial services and other applications.

However, it's worth noting that many of these potential benefits have yet to be fully realized, and the Libra project has faced significant challenges and regulatory scrutiny since its initial announcement. As of early 2023, it remains to be seen how many of these benefits will be delivered in the final product.

History of Libra Coin?

The Libra cryptocurrency project (now called Diem) was first announced by Facebook in June 2019, with the aim of creating a new global payment system that would be accessible to anyone with an internet connection. The project was initially met with significant interest and excitement, with many observers hailing it as a potential game-changer for the world of cryptocurrency and financial services.

However, almost immediately after the announcement, the Libra project faced a backlash from regulators and lawmakers around the world, who expressed concerns about the potential risks to consumer protection, financial stability, and privacy posed by the currency. Several key partners, including PayPal, Mastercard, and Visa, withdrew from the project in the face of this regulatory pressure.

In response to these concerns, the Libra Association (now called the Diem Association) made significant changes to the project's design and governance structure over the following months, including abandoning plans to create a global stablecoin and instead focusing on developing a range of stablecoins pegged to individual currencies. The currency was also rebranded as Diem in late 2020.

As of early 2023, the Diem Association is still seeking regulatory approval for the launch of the currency, with the aim of making it available for use in certain jurisdictions in the coming years. However, the project has faced ongoing challenges and skepticism from regulators and the broader cryptocurrency community, and it remains to be seen how successful it will ultimately be.

Facebook Libra Cryptocurrency vs Bitcoin?

Facebook's Libra (now called Diem) cryptocurrency and Bitcoin are two different cryptocurrencies with different designs, goals, and target audiences.

Here are some key differences between the two:

• Governance and control: Bitcoin is a decentralized cryptocurrency that operates on a distributed public ledger called the blockchain, with no central authority or controlling entity. In contrast, Libra was initially designed as a permissioned blockchain, with control and governance of the currency held by the Libra Association (now called the Diem Association), a consortium of companies and organizations. 
• Stability: Bitcoin's value is highly volatile, with its price subject to significant fluctuations based on market demand and other factors. Libra, on the other hand, was designed to be a stablecoin, with its value pegged to a basket of currencies and other assets, reducing volatility and making it more suitable as a medium of exchange or store of value. 
• Purpose: Bitcoin was designed as a peer-to-peer electronic cash system, with the goal of creating a decentralized, trustless, and censorship-resistant currency that could operate outside of the traditional financial system. Libra, on the other hand, was intended to facilitate low-cost, fast, and global payments, making financial services more accessible to people around the world. 
• Security: While both Bitcoin and Libra were designed with security in mind, they use different cryptographic protocols and security measures to protect user data and funds. Libra's permissioned blockchain is designed to be more secure than Bitcoin's public blockchain, but it also gives more control to the currency's governing authority. 
• Adoption: Bitcoin has been around since 2009 and has a large and dedicated community of users and developers. Libra, on the other hand, has faced significant regulatory scrutiny and skepticism since its announcement, and it remains to be seen how widely it will be adopted.

In summary, while both Bitcoin and Libra are cryptocurrencies, they have different goals, designs, and target audiences. Bitcoin is a decentralized, trust less, and censorship-resistant currency, while Libra is a permissioned, stablecoin designed to facilitate low-cost and global payments.

How will Facebook make money from Libra?

Facebook's business model for making money from Libra is not yet fully clear, as the project has undergone significant changes and delays since it was first announced in 2019. However, there are a few potential ways that Facebook and its partners could generate revenue from the currency:

• Transaction fees: One of the most obvious ways that Facebook could generate revenue from Libra is by charging transaction fees for using the currency. This would be similar to how payment processors like PayPal and Square make money from facilitating transactions. 
• Interest on reserves: Another potential source of revenue for the Libra Association (now called the Diem Association) could be interest earned on the reserves that back the currency. Since Libra is designed to be a stable coin, its value is pegged to a basket of currencies and other assets held in reserve. The interest earned on these reserves could potentially be used to fund the operations of the association or distributed to its members. 
• Financial services: Facebook has also explored the possibility of using Libra as a way to offer financial services to its users, such as loans, savings accounts, and insurance. If successful, these services could generate revenue for Facebook through interest payments, fees, or other charges.

It is important to note that the Libra project has faced significant regulatory hurdles and skepticism since it was first announced, and it remains to be seen how successful it will be in achieving its goals. The project has undergone significant changes in response to regulatory pressure, including the abandonment of plans to create a global stablecoin, and it is unclear how these changes will affect Facebook's revenue potential from the currency.