Yesterday, Facebook launched its own global currency called Libra. It is built on blockchain and it carries Facebook ambitious bet to redefine how money works in the internet (you can see it in this video). Theres lot of interesting aspects of Libra, from its underlying technology, the management model and privacey features. TechCrunch explain it beautifully in this 4000 words explainer.
My key takeaways from Facebook Libra are these :
- Libra is crypto-based digital currency. It is a cryptocurrency hence decentralized, open and secure. However, unlike other cryptocurrency, it is blazingly fast (1000 TPS compared to 7 in Bitcoin and 15 in Ethereum) and financially stable due to the backings of real-money reserve. To use Libra, you will need Calibra, its digital wallet. You can cash-in, store, send and cash-out in Calibra similar to Paypal, Gopay, OVO and other digital wallet. However, Calibra will seamlessly handle multi-currency remittance, available around the world and integrated with FB Messenger and Whatsapp. Calibra itself is built by Facebook however since Libra is open infrastructure, in the future other companies might built other wallet apart from it.
- Libra is mainly targeting unbanked population. In the intro video, Libra is designed to be fast in Lagos, simple in Manila and convenient to send money to Mexico City. To use Libra and Calibra, user only need feature phone, internet and any kind of government-issued identification. It doesnt require smartphone hence highly inclusive. Libra also claimed to utilize blockchain to drasticly reduce fees.
- Libra is backed by lots of prominent organization. Apart from Facebook, Libra is supported by giants and whales of global institution. Visa, Mastercard, Paypal, Stripe are onboard. Theres also telco (Vodafone), venture capital (Andreesen-Horowits) and non-profits (Kiva and Mercy Corps). Full list of Libra backers can be read here.
This is an interesting slash scary things for fintech and crypto development going forward. If you work in wallet or digital money business, Facebook is eye-balling your lunch. Every penny that went into Calibra wallet is a penny less from other wallet. If youre in fintech focusing on unbanked, like me, this could be potential to do cashless financial service delivery. If you work in blockchain, Libra could be the key use case to bring the crypto to the masses. Global bitcoin users currently is 35 millions while Facebook itself has 2.3 billion userbase.
So considering this development, what can we do to anticipate? heres my initial thoughts :Continue reading “Anticipating Facebook’s Libra”