Libra Money flow mapped
Libra coin is a very ambitious project that attempts to create a global payment infrastructure utilising Cryptocurrency tokens based on Blockchain technology.
Facebook announced its launch here stating that it will be ready for launch in 2020 at the earliest.
Facebook states the mission of the Libra Project as follows:
For many people around the world, even basic financial services are still out of reach: almost half of the adults in the world don’t have an active bank account and those numbers are worse in developing countries and even worse for women. The cost of that exclusion is high — approximately 70% of small businesses in developing countries lack access to credit and $25 billion is lost by migrants every year through remittance fees.
It is strikingly similar to the mission of Facebook’s previous major attempt to become an infrastructure layer: www.internet.org
The stated mission of Internet.org is :
The internet is essential to growing the knowledge we have and sharing it with each other. And for many of us, it’s a huge part of our everyday lives. But most of the world does not have access to the internet. Internet.org is a Facebook-led initiative with the goal of bringing internet access and the benefits of connectivity to the portion of the world that doesn‘t have them.
Imagine the difference an accurate weather report could make for a farmer planting crops, or the power of an encyclopedia for a child without textbooks. Now, imagine what they could contribute when the world can hear their voices. The more we connect, the better it gets.
It appears that Facebook’s previous failed attempt to wrest the infrastructure initiative didn’t prevent it from leading a crypto based payment one.
The white paper can be accessed here: https://libra.org/en-US/white-paper/
After reading through the revealed description in the White paper, I sketched a high-level map of the system here:
What the Libra initiative attempts to do is to bolt on a payment processing company on top of a money-market fund.
It is not unique as several other companies have succesfully implemented this traditional business model, without using a blockchain. For instance, PayTm in India & AliPay in China
Why use Blockchain then? Cryptocurrency provides considerable room to manoeuvre by providing cost savings, unique incentive mechanisms and Cryptographic security.
This is a high level description of the white paper. Detailed analysis will follow over the summer.
If you liked this article, or if you have more questions, you are invited to my Telegram Group to have a chat. Let’s get to the bottom of this!
