Jun 22, 2019
Join Ben Jessel, Head of Growth for Kadena.io and me, Aviva Õunap, as we discuss the launch of Facebook’s new Cryptocurrency, Libra.
After making it very hard for other crypto and blockchain projects to advertise on Facebook, with outright bans on other cryptocurrencies advertising on their social media platform, Facebook has now entered the crypto space.
Facebook is launching a new digital currency called Libra that will roll out for use in 2020 and allow the platform’s billions of users across the globe to make financial transactions online. The new technology threatens to change the landscape of banking and is already the subject of scrutiny, as Facebook faces increasing calls for regulation and antitrust measures.
Facebook says Libra is a “global currency and financial infrastructure”. In other words, it is a digital asset built by Facebook and powered by a new Facebook-created version of the blockchain, the encrypted technology used by bitcoin and other cryptocurrencies.
Facebook is very likely to run into regulatory and antitrust concerns, but with the world of crypto left adrift with no specific legislation in place against their aims with Libra, will there be any in place ahead of the launch?
The currency will be serviced by a collective of companies, some of the world’s largest brands who have called themselves the “Libra Association”. Companies such as Uber, Lyft, Mastercard, Visa, and many others paid a $10 million USD fee to be listed as a ‘Founder’ of this association. The Libra Association is described by Facebook as an independent, not-for-profit organisation based in Switzerland serving two main functions: to validate transactions on the Libra blockchain and to manage the reserve Libra is tied to and allocate funds to social causes. No doubt, there will be benefits to the founders. We can only imagine what they may be.
Libra functions as what is known as a “stablecoin”, which we have already done a podcast on (Episode 50, What are Stablecoins?), pegged to existing assets like the dollar or euro, in the aim of making it less subject to the volatility that many cryptocurrencies experiences.
But is it safe? Really safe? It is Facebook, after all, and they have not exactly been the poster children for data protection. Facebook claims it will keep financial data from transactions on Libra separate from user ad profiles. The blockchain is “pseudonymous”, the company said and, like many crypto networks, will allow users to hold one or more addresses not linked to their real-life identities.
“Calibra customers’ account information and financial data will not be used to improve ad targeting on the Facebook, Inc family of products,” the company said.
It remains to be seen what the future will hold for Libra, and its users, but one thing is for sure. More people know about cryptocurrency than ever before, thanks to this endeavor.
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