A couple of days ago the crypto-currency industry was shaken by news of Facebook’s new payment infrastructure: Libra, a crypto-currency, and its wallet, Calibra. This could be the Netscape moment of crypto currency. The moment when crypto currencies go from being the technophiles’ to becoming the currencies we all use. Whether you’re a Libra fan or not, this is a defining moment in the history of cryptomontages.
Throughout their ten years of existence, cryptomontages have had to strive to be easy to use. First, they had to figure out how to store the coins. Then, how to buy and sell bitcoins to people outside your social network. Now the question is how to get all of us to use cryptomontages in our daily lives?
With over two billion users worldwide, Facebook has the advantage of making the adoption of crypto easier and – dare I say it – reaching that turning point we’ve been waiting for a decade.
By 2018, four billion people had an Internet connection. The three main Facebook platforms: Messenger, Instagram and/or Whatsapp had half of this market. The Libra crypto currency, will be a stablecoin backed by “a collection of low-volatility assets, such as bank deposits and short-term government securities in the form of currencies” as read in the Libra technical documentation. Libra was not created to be used as an investment method, but rather for micro payments and/or remittances. As the currency evolves, Facebook will add “smart money” tools that will allow for blockchain-based loans or insurance.
At the moment, the concept is simple: send payments to family and friends within the chat. Facebook will connect Calibre to both message platforms so that anyone can log into the account, verify their identity and send Libra within their messages. Sending Libra is going to be just as easy as sending an email, they say.
The Calibra wallet will hold the users’ access keys. This is beneficial as it removes responsibility from users in the event that they lose their password. If they lose their password, Calibra can grant them access again. The care of private keys has been a detriment to the adoption of crypto as the fear of losing access to the account is common. On the other hand, this will also allow Calibra to access the coins and move them between wallets without using its blockchain.
To build its technological network and governance structure, Facebook created a non-profit organization, La Asociación Libra. Companies can become members of this association for the modest amount of $10 million. This fee pays for the operation of the network and each member is given the option to operate a node that verifies the transactions of the Libra network. As a bitcoin, the blockchain will be public and the records will be permanent and use pseudonyms. Unlike Bitcoin, transactions will be recorded in a permissioned blockchain, which means that it will not be as decentralized with only 100 corporate members in charge of logging and fraud prevention. The long term plan mentioned in the technical documentation is that the Libra network will evolve from a permissioned blockchain to a permissionless blockchain, this is estimated to take effect in 5 years.
Currently, the foundation is comprised of twenty-eight partners, including payment networks such as MasterCard and Visa; fintech companies such as Paypal, Coinbase and Stripe; venture capital companies such as Andreessen Horowitz; and service companies such as Lyft, Uber, Spotify and Ebay. It has been reported that some are interim members and are about to pay the foundation fees.
A new era for crypto currencies is beginning and it is time for users to decide which is more important: comfort or privacy, can you have both?
The exact date is not yet known, but it is rumored that Libra and Calibra will be launched in mid-2020.