Facebook unveiled its eagerly awaited Libra cryptocurrency project on Tuesday, releasing a white paper along with other groups involved in the nonprofit Libra Association.
The announcement is significant, as it is the first time that a large technology company is leading a digital currency that could further legitimize the overall category.
"The existing blockchain systems still have to prevail," says the White Paper. "The mass market use of existing blockchains and cryptocurrencies has been hampered by their volatility and lack of scalability, which has previously made them poor value stocks and mediums of exchange."
The document describes various facets of the project.
- How the Currency is Financed: The Group emphasizes that the Libra has a different currency, backing up a reserve of real assets, including short-term securities from central banks. The assets will be distributed to a globally distributed "custodian bank" infrastructure. The money for the reserve comes from individuals who use Libra and Libra Investment Tokens and are purchased by founding members of the charitable association. Interest on the assets in the reserve will be used to cover the costs of maintaining the system. Only the association can create or delete balance currency coins.
- The underlying blockchain: In general, cryptocurrencies such as Bitcoin and Ether use a technological concept called blockchain, which uses a set of computers distributed among different owners and sites to track all transactions in the system , The idea is that this computerized ledger makes it impossible for bad actors to manipulate the system by making new coins from the air or duplicating old ones. The Libra currency is dependent on a new Libra Blockchain database. This database can track resources such as scale coins. The blockchain uses a Byzantine Fault Tolerance (BFT) implementation for its consensus protocol. This is a system where different "validation nodes" decide to accept or reject a transaction. "This approach strengthens network confidence, as the BFT consensus protocols work well even if some validation nodes ̵
- A programming language: Facebook has developed many open source projects over the years, and since Facebook leads the initiative, it's not surprising that Facebook unveiled a whole language called Move, with the developer on the Libra Blockchain can build. The new language code and other components of Blockchain are available online on GitHub under an open source license. The open source approach is "designed to allow anyone to build on it, and billions of people can count on it for their financial needs," says the organization.
- Organizational Plans: Although the Organization Already Has More Than Two dozen businesses and nonprofits plan to build 100 members by the planned launch of the entire system, which is scheduled for sometime in the first half of 2020. The group also wants to appoint a managing director.
- More information: The group references detailed technical documents that describe the blockchain, the Move language, and the implementation of BFT.
WATCH: Facebook's cryptocurrency is far more ambitious than Bitcoin, says Tally CEO Jason Brown.