Libra Cryptocurrency by Facebook: Facts, Myths, and Hopes
The launch of cryptocurrencies by the largest tech corporations, such as Telegram and Facebook, has been amongst the most anticipated events in the industry. While Telegram has already undergone the private sale of its tokens, Facebook was yet to follow suit. It was not until December 2018, when the company leaked the news about the launch of its own cryptocurrency, Libra, in WhatsApp. The initial report by Bloomberg claimed that Libra would be a stablecoin with the focus on the Indian market. The reality would be more exciting.
Facebook was developing Libra, which is a generic crypto asset protocol, in conjunction with its daughter company Calibra. The main features of the newly developed cryptocurrency included resilience to censorship, as well as decentralization and anonymity amongst the stockholders. The peg of Libra was a basket of currencies, ensuring its stability. The name of the wallet built into WhatsApp and Messenger was identical to the name of the developing company, Calibra.
Libra Association is a group of 28 companies ensuring governance of Libra, which also includes Facebook with a single vote. Libra protocol would not link Calibra accounts to the real-world identity without the consent of the customers while allowing the creation of several accounts. The safe storage and transfer of tokens are the two main functions of Libra. The cryptocurrency remains in development, as its registration will require government-issued ID to prevent fraud. Such a stipulation would advance the ability of Facebook to collect personal data.
The technology behind Libra includes protocol utilizing replicas or validators from various authorities for maintaining a database of programmable resources. Therefore, the cryptocurrency will use the top-down control with the broader utilization of the distributed ledger and smart contracts technology. The name of Libra’s programming language is Move, developed specifically for the coin. Practical Byzantine Fault Tolerance (PBFT) is the consensus model for Libra with the high speed (1000 t/s), private and permissioned blockchain, as well as the immediate finality with the 10-second intervals.
Libra blockchain uses account-based data for updating the ledger state. The coin relies on timestamps of the ledger in the form of a single versioned database. The whitepaper of Libra implies anonymity of transactions. However, further specifics are vital for confirming such an assertion. Libra may offer additional opportunities and features, while also exhibiting certain risks. Further reading on Libra’s future development and growth potential is available in our extended material here.
