Mark Zuckerberg wants to change the financial world: Facebook has invented a new global currency. The digital money with the name Libra is based similar to the Bitcoin on the Blockchain technology, but without fluctuations.
Facebook will have no access to the transaction data, insured the responsible for the project Facebook Manager David Marcus.
In the beginning of the digital is likely to be used for money, especially for Transfers between different currencies, said Marcus of the dpa. So Libra would compete with services such as Western Union or Moneygram for international money Transfers high tuition fees. The Vision was to make a Libra finally a full-fledged means of payment for all situations.
For consumers, it should be easy to exchange money between Libra and other currencies and to make transactions with it. So you should be able to Libra Transfers, for example, directly in Facebook’s chat services WhatsApp and Messenger are running. With a link to a Bank account in Libra can also be directly exchanged on the Smartphone in other currencies.
to achieve the great goal of a full digital currency, has forged Facebook a Alliance, the Libra Association. This Alliance and not Facebook should manage the digital money. Under the current 28 members of the financial services providers Visa, Mastercard, Paypal and Stripe are likely to facilitate Integration into payment systems. On Board, the travel booking platform Booking.com as well as the music streaming service Spotify and car service mediator Uber and Lyft are also Vodafone and Ebay. The Libra-starting in the year 2020, he hopes to more than 100 members, said Marcus. Facebook will have no special role in the organization.
Previous Blockchain currencies such as Bitcoin are notorious for their massive price fluctuations – this is something to avoid Facebook in Libra necessarily. Therefore, Libra will be fully covered by a reserve Fund with different currencies such as the Dollar, the Euro and the Yen covered. “For example, if someone buys Libra for 100 euros, these 100 Euro in the Reserve,” explained Marcus. The Libra Association will also set the ratio of currencies and securities, such as bonds, are held in Reserve, in order to ensure a stable course. Also, Libra is not created differently than the Bitcoin of the users themselves, but must be purchased from members of the Alliance, or trading platforms.
Facebook is in no doubt that Libra is supposed to be at the end of a global currency that can be used in the same way as with today’s money in everything and everywhere to buy – whether online or in a Store. At the same time, Marcus restricted: “I think that any new currency will need a lot of time to be as large as an existing national currency of a large economy.” One reason for this is that in the developed world, the means of Payment are already recorded with the current possibilities well. “For at least the next ten years, we will all get our salaries and pay taxes in the currency of the countries in which we live.” At the same time, however, there are also countries with high Inflation and poorly-developed banking systems – and there is a digital currency such as Libra could play a much greater role, “because they can offer a solution for many problems”. In China, Libra will not be available.
For the storage and use of Libra will be able to set up various providers of digital wallets, so-called Wallets. Facebook wants to be just one of many Wallet providers, the Online network founded the daughter company Calibra with Marcus at the top. “Facebook and Calibra will have no special rights or advantages, although we have written the entire source code for the Blockchain and transactions,” he said. Facebook is, in particular, to the scandal of the Cambridge Analytica under massive pressure to improve data protection.
users are able to operate in the Libra System under pseudonyms, and several additions have. “Transactions contain no connection to the identity of the user in the real world,” it said in a paper.
The usual regulation – so, for example, measures against money laundering, will be at the level of the Wallets, said Marcus. “We have spoken with regulators around the world.” For companies that wish to become founding members of the Libra Alliance, was composed of a hurdle: you have to have a market value of at least one billion dollars or more than 20 million customers. Members must invest at least tens of millions of dollars.
The most well-known Blockchain-Bitcoin is organized differently: In the case of the units are generated by mathematical calculations on the computers of the users – “extracted,” as it is called in the jargon. The total is limited in the number of Bitcoin that can be produced. And the calculations are more complex. In the meantime, you need high-performance computers to create Bitcoin, therefore, especially commercial “Minining farms mining currently”. This increases the energy consumption and the shortage of supply can cause price jumps. In the top of a Bitcoin cost by the end of 2016, up to 20 000 dollars – then the break-in followed. In the meantime, the Bitcoin worked, thanks to rumors about Facebook’s plans to return to the brand of 9000 dollars.
In the case of a Blockchain encrypted data on transactions to be strung together and stored in different locations. By comparing any Changes would stand out, what makes for security. Facebook has succeeded with his System, to solve well-known problems of the technology, such as slowness. In the case of Libra there is also the high energy consumption, as is the case with Bitcoin. “We have developed a Blockchain, which can adapt to the requirements of billions of people,” said Marcus. Facebook developed for the System, a new programming language with the name Move.
Marcus was prior to his move to Facebook-in-chief of the payment service Paypal. The Online network, he was the first to use the chat service, Messenger, responsible to him, Zuckerberg with the Blockchain-in charge of the project.