10 things to know about Facebook's cryptocurrency Libra

Small toy figures are seen on representations of virtual currency in front of the Libra logo in this illustration picture, June 21, 2019. (Photo by Reuters)

Notwithstanding several high-profile defections, Facebook went ahead to create a new digital currency called Libra, on Tuesday, amidst intense criticism from US regulators and politicians.

Here are ten things you need to know about the new cryptocurrency:

1. When is it going to be out?

Facebook director-general Bertrand Perez said that the cryptocurrency launch was originally planned for mid-2020,  but he had not ruled out a later start date.

2. What is the Libra Association? Where is it located?

The Libra association, which is a collection of institutions to run the cryptocurrency, which has various subsects such as 'Payments', 'Technology and marketplaces', Telecommunications', 'Blockchain', 'Venture Capital' and 'Nonprofit and multilateral organizations and academic institutions'.

Companies sush as Mastercard, Paypal, eBay, Lyft, Vodafone group, Women's World Banking etc., are a part of the Association.

Calibra, Facebook's financial subsidary, will build and operate services on its behalf on top of the Libra network.

The association is to be located in Geneva, Switzerland, so the neutrality laws of the country can be taken advantage of by the company, according to reports.

3. Is it like Bitcoin?

Bitcoin is the most notable cryptocurrency currently in the market. It has been the front runner in the game, but its value is under constant fluctuations. 

Libra intends to bring a more stable version of cryptocurrency, which has an average value running throughout a said period of time.

The added advantage to Libra is its connection to Facebook which means the reach is wider as compared to Bitcoin, which is restricted to users who know the field.

4. What is their success strategy?

According to the association, success is defined as "enabling any person or business globally to have fair , affordable and instant access to money".

"Success will mean that a person working abroad has fast and simple way to send money to family back home, a college student can pay their rent as easily as they can buy a coffee."

5. How to acquire a Libra coin? What are the mining methods?

Libra is a currency where miners compete to generate blocks in exchange for rewards or cryptocurrency. Libra is backed by a "reserve of assets designed to give it intrinsic value", unlike any other cryptocurrency and is going to have a one-on-one value with the currency used in the user's location. Hence, a minimum amount is to be paid in order to acquire a Libra coin.

The fluctuations in the currency value would not much affect the Libra coins, as the underlying assets will be distributed accordingly.

"Each Libra coin generated will be matched by real-world assets such as bank deposits, government securities in currencies including Dollar, Sterling Pound, Euro and others from global reputable and stable financial institutions," the Association's statement said.

Facebook claims that each Libra coin generated will be matched by real-world assets such as bank deposits, government securities in currencies including Dollar, Sterling Pound,  Euro and others from global reputable and stable financial institutions.

6. What are the permissions required to access Libra?

Libra aims to create a "permissionless blockchain" which is compatible with the technical needs of the validator node(individual who maintains a node on the network that validates transactions and commits new blocks to the blockchain).

"The challenge is that as of today we do not believe that there is a proven solution that can deliver the scale, stability, and security needed to support billions of people and transactions across the globe through a permissionless network, " the Association said in the statement. 

7. What is the programming language?

Move, a customised programming language is said to be used for the Libra blockchain, which aims to be an easier coding language, lessening the risk of unintended bugs or security incidents, cloning of accounts and facilitate certain properties, such as payment transactions only changing the account balances of the payer and receiver.

8. Can I have only one Libra account?

"The Libra Blockchain is pseudonymous and allows users to hold one or more addresses that are not linked to their real-world identity," the Association statement says.

The accounts will be protected by LibraBFT (BFT - Byzantine Fault Tolerant, a protection service that prevents to bring order among validator nodes).

9. Where do I find the coins?

The Association plans to start libra.org as a home website for containing all its attributes. The code for the blockchain will also be open-sourced. This will be beta tested by developers, and after their approval, it will be released.

10. What are the locations Libra will be available?

Libra has not given the list of areas, but mentioned that about 100 locations will be a part of it initially, with individual charters and Managing Directors and Social Impact Advisory Board.

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