After the recent incident at US house…. Yes, the one where Facebook executive David Marcus grilled by committee members. Many of my friends wanted to buy the currency well…. They were not interested in any kind of crypto before but the incident sparked them to buy it.
Are you also searching libra to buy? Without knowing it what it is ? how it is different from Bitcoin? Is it safe?
Then you are at right place as here I will answer all the doubts that you have regarding Libra. In addition to this, I will highlight all the recent incidents and development progress happening around it. Let’s move forward and explore together to understand libra currency in a better way.
Table Of Contents
What Happened at Current Incident?
To make it lawful currency facebook presented the currency mechanism in front of a committee made by US senate. David Marcus, the Facebook executive was present to answer all concern of committee member over the currency. The questioning session on Wednesday goes on continuously for five hours. Several questions were asked regarding concerns over user data protection, accountability etc.
The hostile tone of hearing made it very clear that Facebook has to be very careful about their currency framework. Any weak fundamental will easily wipe out the currency legally. Senators repeatedly questioned.
Company Intention for Making a Currency?
The new currency is developed to introduce a new payment system which can replace the current ecosystem by providing faster and cheaper transactions. Which is an Obvious answer because as of now currency is controlled only by democratic agencies. In the case of libra, the association responsible to develope or control libra consist of big corporates including PayPal, Mastercard, Uber, Lyft.
It is still not clear how facebook and its associates will make profit from this virtual currency. Another interesting question was How will facebook.
Launch a Global Currency without Affecting Dollar’s Global Position?
Not only senator this a worldwide concern by banks and other govt institution. Several financial expert’s states that crypto can be the worst nightmare as it can easily destabilise the global economy.
To answer this Marcus said, the currency was never intended to dominate Dollar but to become a global currency that can facilitate a worldwide single unit of currency. He also adds that Libra will be backed by financial holding that too with dollars makes it less fluctuating and safe from other crypto’s.
As the hearing was made just after the Federal Trade Commission levied a Fine of 5bn for privacy violations at Cambridge Analytica Scandal. Which gave some lawmakers the opportunity to grill the organisation for censorship. It is also said that virtual currency can spark up Terrorist attacks by providing non-affiliated transfer that can benefit to drug peddlers, criminals etc.
Senators state that innovations are not always good? As the most innovative idea of the century is when Osama came destroyed twin towers using two passenger aeroplane. Recently President of America also tweeted regarding Libra.
….Similarly, Facebook Libra’s “virtual currency” will have little standing or dependability. If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations, just like other Banks, both National…
— Donald J. Trump (@realDonaldTrump) July 12, 2019
Who Owns Libra Currency?
Many of you will say Facebook but there is a grey area. The Libra currency is developed and regulated by an association that consists of several corporates. You can say facebook is a chief architect who is playing his role develop the currency.
Another concern is there as association members are known for their profit-making ambitions in previous projects including facebook. That creates a doubt for being a threat for global economy by overpowering physical currency network. It is somewhat like capturing entire world to rule without firing a single bullet. To clarify that company must issue a legal document stating holding of the currency.
How to Buy Libra?
The prototype of currency is ready but it still needs to be tested. That means the currency is not launched yet as per proposed mechanism it is said that.
This will be generated only when a person by Libra using real money and that money will be the part of reserve used to back the virtual currency.
It is accepted and transferred by current apps managed by Facebook allowing low transfer charger, faster transaction, low energy consumption and many more.
Bitcoin Vs Libra
Libra is an attempt to build a newer payment system to make it more quicker and easy. Facebook uses the bitcoin concept and wanted to improve it by reinventing. Currently, Bitcoin take some minutes to transfer with charges to be paid in dollars but Fb currency will take few seconds with a negligible fee. The Bitcoin has been seen floating like Tsunami in last ten years to avoid that Libra will be backed by real currency that will provide stability.
Another problem with bitcoin is single transaction need 1,000 kWh computing energy. This will use energy not more than a ordinary credit card transaction that makes it energy efficient as well.
Bitcoins are automatically made through a preset algorithm that can lower down its price. If production is more than demand. In case of Libra the coins will be generated only when a person buys the coin through real currency this deposite will be reserved to back the currency.
This is the same way which is used by world bank to produce currency by keeping Physical gold to back that currency. There are 5 million bitcoin users worldwide that means bitcoin doesn’t hold on major population.
Libra working prototype is not tested till now but if all facebook users move their 10% saving to Libra than it will be the world’s biggest financial entity. That can easily affect global financial authorities easily.
To sum up I would like to say that Libra is a new innovative step to lower down the charges on financial transaction. With the intentions of making is easy to use and quicker transfers are good. Before launching they have to work on national security issues like misuse of currency by illegal entities can make situations worse. How do you find the innovative step of introducing a currency by Facebook? Mention it below in the comment box.