A Brief Introduction to Libra
Explaining what Facebook’s Libra is, and how it could change the world.
Word of the Libra currency, built on the Libra blockchain has taken the world by storm. As a brainchild of Facebook, Libra seeks to elevate the common man to attain financial freedom. This will come about by establishing a decentralized monetary system with access to financial services and cheap capital, low-cost transfer and distribution of money, all the while collaborating with the financial sector to make this new system sustainable and secure.
Libra also assures us of a strong asset-backing to ensure its intrinsic value, it is built on a secure, reliable and scalable blockchain and is governed by an independent, not-for-profit membership organization — the Libra association. It is hoped that 100 organizations will have joined the Libra association by its target launch.
Since Libra does not believe that a proven solution exists that can satisfactorily support billions of people and transactions across the world through a permissionless network (anyone who qualifies can run a validator node), Libra will begin as a permissioned blockchain (access is granted to run a validator node), then work towards becoming permissionless. However, in both its permissioned and permissionless states, the Libra blockchain will be inclusive of everyone to encourage ease of entry, innovation and healthy competition that ensures quality products are delivered to consumers.
At the core of the Libra blockchain is the Move programming language, whose priority is to ensure its security. Moreover, the Libra Blockchain adopted the BFT approach by using the LibraBFT consensus protocol whose functionality bypasses failure of up to one-third of the network of the validator nodes. This consensus also supersedes proof-of-work which is widely used in other blockchains.
Similar to other blockchains, Libra utilizes Merkle trees to protect data in order to secure transactions. The Libra blockchain also deviates from the previous blockchains in that it is a single data structure that records the history of transactions and states over time. This offers simplicity to applications accessing the blockchain. The Libra blockchain also enhances privacy because it allows users to hold one or more addresses that are not linked to their real-world identity.
The Libra association is governed by the Libra Association Council, which is comprised of one representative per validator node. Initially, it consists of founding members from around the world. Major decisions require the consent of two-thirds of the votes of the council in order to be effected.
In my opinion, currently, Libra is not a threat to the use of the US dollar. However, we may observe some changes depending on how readily Libra will be adopted by consumers. I also do not suppose that government and financial institutions will stay still as tech companies continue to pose a major threat to occupy their space in this digital age. Though the future is quite uncertain, it is clear that a disruption in how business is done is highly inevitable.
This is the goal for Libra: “A stable currency built on a secure and stable open-source blockchain, backed by a reserve of real assets, and governed by an independent association’’.
