Mark Zuckerberg wants to change the financial world: Facebook invented a new global currency. The digital money with the name Libra is similar to the Bitcoin on the so-called blockchain technology, but should do without price fluctuations. Facebook will have no access to the transaction data, assured the responsible for the project Facebook manager David Marcus.
In the early days, the digital money should be used mainly for transfers between different currencies, said Marcus dpa. This would allow Libra to compete with services such as Western Union or Moneygram, which charge high fees for international transfers. The vision, however, is to make Libra a full-fledged means of payment for all situations.
Payments via WhatsApp
It should be easy for consumers to exchange and make money between Libra and other currencies. So you should be able to execute Libra transfers, for example, directly in Facebook's chat services WhatsApp and Messenger. With a link to the bank account Libra should also be able to be exchanged directly on the smartphone in other currencies.
To reach the big goal of a digital full currency, Facebook has forged an alliance, the Libra Association. This alliance and not Facebook should manage the digital money. Among the currently 28 members are the financial service providers Visa, Mastercard, Paypal and Stripe ̵
Avoid Massive Price Fluctuations
Previous Blockchain currencies like Bitcoin are notorious for their massive price swings – something Facebook desperately wanted to avoid at Libra. Therefore, Libra will be fully covered by a reserve fund with various currencies such as the dollar, the euro and the yen. "For example, if someone buys Libra for $ 100, those $ 100 will go into reserve," explained Marcus. The Libra Association will also determine how currencies and securities such as bonds are held in reserve to maintain a stable price. Also unlike Bitcoin, Libra is not created by the users themselves, but has to be acquired from members of the alliance or on trading platforms.
Facebook leaves no doubt that Libra will eventually become a global currency with which to trade With the money you can buy anywhere and everywhere – whether online or in a store. At the same time, Marcus said, "I think every new currency will take a lot of time to grow as big as an existing national currency of a big economy." One reason for this is that in the developed world the payment channels are already well established with today's possibilities. "At least in the next ten years, we will all get our salaries and pay taxes in the currency of the countries we live in." At the same time there are also countries with high inflation and poorly developed banking systems – and a digital currency such as Libra could play a much bigger role here "because it can provide a solution to many problems". Libra will be unavailable in China.
Various vendors will be able to set up digital wallet wallets to store and use Libra. Facebook wants to be just one of many wallet providers, but founded the online network, the subsidiary Calibra with Marcus at the top. "Facebook and Calibra will not have any special rights or benefits, even though we've written all the blockchain and transaction source code," he said. Especially after the scandal surrounding Cambridge Analytica Facebook is under massive pressure to improve data protection.
Users can use the pseudonyms in the Libra system and have multiple accesses. "Transactions have no connection to the identity of users in the world," it said in a paper.
The usual regulation – for example, measures against money laundering – will take effect at the wallet level, said Marcus. "We talked to regulators around the world." For companies that want to become founding members of the Libra Alliance, a hurdle has been set: they must have a market value of at least one billion dollars (890 million euros) or more than 20 million customers. Members need to invest at least $ 10 million.
Bitcoin on the rise thanks to "Libra" rumors
Bitcoin's best-known blockchain currency is organized differently: it's where the units are generated by mathematical calculations on users' computers – " "as they say in the jargon. The total number of Bitcoin that can be produced is limited. And the calculations for it are becoming more complex. In the meantime, high-performance computers are needed to create Bitcoin, which is why commercial minining farms are currently the main target. This increases the energy consumption and the scarce supply can cause price jumps. At the top, a Bitcoin cost up to $ 20,000 at the end of 2016 – followed by a slump. Meanwhile, thanks to rumors about Facebook's plans, Bitcoin is working its way back to the $ 9,000 mark.
A blockchain crawls encrypted data about transactions and stores them in various locations. A comparison would make any changes noticeable, which provides security. Facebook has succeeded in his system to solve known problems of technology such as slowness. At Libra, it does not come to the high energy consumption as in Bitcoin. "We have developed a blockchain that can adapt to the needs of billions of people," said Marcus. Facebook also developed a new programming language called Move for the system.
Before moving to Facebook, Marcus was Paypal's chief payment officer. In the online network, he was initially responsible for the chat service Messenger until Zuckerberg entrusted him with the blockchain project.