Tuesday, July 7, 2020
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Facebook enters the Cryptocurrency dance

Facebook is stepping into the world of virtual currency.

With a project to launch Cryptocurrency planned for 2020, the final parameters of this new UFO are set and revealed in order to attract investors. Let’s decipher “Libra”, which heralds a revolution in the world of Fintech. What are the parameters of this new virtual currency? Can we compare it with Bitcoin?

The contours of this new virtual currency

Messenger, WhatsApp and Instagram are all part of the Facebook application universe.

Libra can therefore be used by the 2.1 billion users in this environment, exchanging virtual currency or buying partner products. Because it is in fact with 27 partners that Facebook created this new benchmark in the world of cryptocurrencies. By accepting Libra, partners like Ebay, Uber and Spotify will therefore be able to reach all of the users of these networks.

Regarding the purchase of Libra, it can be done via Coinbase, the second largest Bitcoin exchange in the world (and incidentally one of the partners of the famous social network for its creation). It could also be that players like Paypal and Mastercard join the project to offer them for sale.

The question then arises: how much will Libra be worth?

At the moment, there is no answer.

Only, we know that the price of the currency will be managed according to the principle of “1 for 1”, which implies that it is indexed on a basket of currencies defined to avoid displaying a volatility equal to other virtual currencies.

In this sense, the basket of currencies will be composed of the currencies deemed solid by the project leaders: the dollar, the euro, the pound sterling and the yen. The value of Libra will be calculated by the Swiss Libra foundation, based in Geneva.

In reality, everything opposes
Bitcoin and Libra.

The only common denominator for these assets is their virtual currency nature. While Bitcoin is a public blockchain (open and decentralized), the Libra blockchain is private. This means that only the 28 creative partners can connect to it.

Another difference: the transaction time.

While Bitcoin takes approximately 10 minutes to execute a transaction, the exchange of Libra will be almost instantaneous. This is not by chance: since the Blockchain is public, the infrastructure to ensure its operation is much more substantial and requires cumbersome procedures.

Finally, we anticipate a much larger market on the Libra side. Bitcoin is currently owned by around 30 million people worldwide, for a total value of around $175 billion. While Libra has more than 2 billion potential users, the market will be much wider because it is more open to everyone, even the younger generations.

Despite this announced revolutionary project, one point may raise questions: the question of personal data.

After the explosion of the Cambridge Analytica affair, Facebook is shaken by repeated scandals. Why do partners’ managers take such a risk? Because it is the Swiss Libra foundation that will hold the personal data of users, not Facebook.

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