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How will 'Libra' cryptocurrency of Facebook look and work?

How will 'Libra' cryptocurrency of Facebook look and work?

. 5 min read

Facebook has come up with a new company called Calibra to manage its new cryptocurrency.

Just like the leaked information for so long, Facebook is developing its own cryptocurrency.

The past days, Facebook announced Libra, the secret encrypted currency they have been developing for over one year. This currency will receive the supporting the massive investments from well-known payment companies; some name can mention to such as Mastercard, Visa, and PayPal, as well as some tech giants like Uber and Spotify.

Facebook sets high expectations for Libra; they emphasized that its virtual currency will provide cheap, easy-to-approach financial services. It aims to the market of 1.7 billion people who do not own bank accounts in the world nowadays.

To perform this goal, Facebook set up a subsidiary called Calibra; this company will develop an e-wallet to handle encrypted transactions of users together with an independent non-profit organization “Libra Association.” It has the participation of some founding companies – which up to now have invested about 10 million USD/company in Libra.

Here is everything we need to know about Libra’s operation, how it looks, and how it will work.

Libra can be used via Facebook Messenger, WhatsApp, and another standalone application

Libra cryptocurrency can use via Facebook Messenger, WhatsApp, and another standalone application
‘Libra’ cryptocurrency can use via Facebook Messenger, WhatsApp, and another standalone application.

Facebook says users will able to access to the Libra e-wallet – where users store encrypted money – by many apps such as Messengers, WhatsApp and an app called “Calibra,” which can be downloaded from Apple App Store and Google Play Store.

The image above is taken from Facebook’s news conference. It shows some ways to use ‘Libra,’ although this company acknowledges it will be long before it becomes a true consumer service with full functionality.

You will need an identification number (ID number), which is issued by the State to use Libra

When Libra launches in 2020, to create a Libra account, users will have to provide Facebook with the identification number, which provided by State for each person.

In addition, users have to provide some other accuracy information.

The problem is to reach 1.7 billion people who do not own bank accounts worldwide; the amount of information and required data has to be as small as possible.

When Libra launches in 2020, to create a Libra account, users will have to provide Facebook with the identification number, which provided by State for each person. In addition, they will also have to give out some other accuracy information.

The problem stays in the target of reach 1.7 billion people do not own bank accounts worldwide; this means the amount of information and requires data has to be as small as possible.

Currently, Calibra has opened to allow early access users.

How will users give money into Calibra wallet?

How will users give money into cryptocurrency wallet?
How will users give money into cryptocurrency wallet?

Users will be able to transfer cash into Libra, then store Libra number in Calibra wallet. They can do this without bringing money to any point of sale, just need a phone, via Calibra application or other third-party e-wallet apps.

Of course, if users want, they can still go to the point of sale (such as convenience stores, etc.) to convert cash into Libra and load Libra into Calibra wallet only same as topping up the phone by card.

By this conversion method, Facebook wants a Libra coin as near as a USD, Euro, or British Pounds, helping users to use more comfortable. It is just an example; at this time, the conversion value of Libra has still not yet decided.

What would you use Libra for?

What would you use Libra cryptocurrency for?
What would you use Libra cryptocurrency for?

Until now, Facebook has introduced the ability to transfer money to Libra. The example in the picture above is to transfer Libra via WhatsApp.

However, Libra will not only apply for individuals. Calibra website says the first version of this app will “support peer billing and some other payment methods such as QR codes, allowing small merchants to be able to use to accept payments by Libra.”

“Gradually, there will be many other methods, including in-store payments, integration into PoS systems, and other more.” PoS systems here are usually just neat as a cash drawer or a card reader.

The Vice President in blockchain products of Facebook, Kevin Weil, also said Libra development roadmap, it can integrate into Calibra-owned systems, like Uber.

There will be another association controlling Libra

Libra will not be completely controlled by Facebook
Libra cryptocurrency Association

Facebook has set up an independent organization “Libra Association” to manage this virtual currency. Facebook/Calibra is just one of 28 founding members, besides other “big guys” like MasterCard, Uber, and Andreessen Horowitz. These companies have spent a minimum of $ 10 million to join the organization.

Mark Zuckerberg said he hoped the “Libra Association” would have 100 members before officially debuting. They also inform to welcome rivals like Google and Twitter join in.

Becoming a member of the organization, you will have a voting ticket, using for selection of new founding members and managing directors.

Calibra will not share any information with Facebook – excepting you really want

Calibra will not share any information with Facebook - excepting you really want

Any information you share to Calibra will be kept separate from the information you share on Facebook.

said, Mark Zuckerberg.

By default, Libra will not share any information with Facebook. This company also affirms that they will not use financial data to navigate advertising to users. Calibra website also shows users will not need a Facebook or WhatsApp account to register for Calibra. However, Calibra may ask users if they want to import contacts or account information from Facebook.

In the end, what is Facebook get from this cryptocurrency?

Simply to say, Facebook will earn more revenue from advertising. They expect that companies are using their platform to do business will accept Libra and selling products to consumers to exchange for Libra. If this helps increase the sales index of companies, yes they will be willing to spend more money to place more ads on Facebook.

Developers will be able to create many things by using Libra’s blockchain technology

Facebook will open the new programming language source they use to develop Libra, called Move. That means developers can create new apps from Libra.

Based on Facebook’s announcement on the blog, Libra is an incomplete product, so everything can be changed before this virtual currency is realized in 2020.