Libra: Can Facebook's Bitcoin replace the American dollar?

A week ago, on June 18, 2019, the biggestsocial network in the world Facebook has announced the creation of its own digital money - Libra. This cryptocurrency will work on the company's blockchain, developed by a Swiss foundation - that is, not by Facebook itself, but by a third party, and supported by hundreds of companies, including FB. Considering the enormous audience of Facebook and its other services, such as Whatsapp and Instagram (yes, Instagram belongs to Facebook), an opinion has emerged that the “libra” will be able to replace the ordinary dollar.

Will there be enough silenok? Let's see.

Libra cryptocurrency from Facebook: what is it

If you know what bitcoin is (and if notyou know - rather read), you should know that the world is gradually moving to digital money. Yes, there is a high probability that in twenty years banks will not be needed, and money can be stored in digital form on your phone or on a flash drive, like in a wallet. Hence the growing popularity of Bitcoin - it has already “punched” $ 11,000 in value, and it seems that it is not going to stop. It grows by leaps and bounds, stirring up a sense of missed opportunity. Everyone wants bitcoin.

And now about Libra. Zuckerbax, as hot fans of Mark Zuckerberg, creator of Facebook, immediately called him, wants to take dollars from the world in the long run and turn them into digital currency. The real currency will stand behind the cryptocurrency: the dollar (USD), the euro (EUR), the Japanese yen (JPY) and the pound sterling (GBP), which will be stored in the special fund Libra Reserve. In the next 18 months, a libra will be built into the Facebook ecosystem and receive its own wallet, Calibra. For a minute, the total audience of Facebook, Instagram and Whatsapp is 2.4 billion people. With the help of Libra, you can send or request a currency pegged to the dollar to anyone.

Obviously, even in the medium term, suchcryptocurrency can change the entire cryptocurrency market. If soars, of course. And if she is allowed. At the moment, her support is low - more on that below, so if Libra gains value, it will be only due to a massive audience.

On which blockchain will Libra

Comparing Libra and Bitcoin, let's understand howdigital gold works. Bitcoin is based on a blockchain, or a distributed registry based on consensus with cryptographic encryption. How it works is a topic for a separate article. The main thing that you need to understand is that Bitcoin works. To make it work and make it hard to hack, hundreds of thousands of machines (miners) around the world multiply huge numbers many times a second, selecting a certain combination. As soon as the combination (hash) is found, a block is signed in which all pending transactions are collected. The complexity of calculating the hash is automatically adjusted so that the block is signed on average once every 10 minutes. If someone tells you that bitcoin can be hacked, do not believe it. This is possible, but only in theory.

Another thing is Libra. It is also impossible to crack this cryptocurrency, but it is based on another consensus mechanism - PoS with a system of two tokens. Read about the task of the Byzantine generals to understand how such an algorithm of consensus works. Libra does not have to spend a lot of electricity to maintain security, and the transactions themselves will be instant and cheap, if they have a commission at all.

More importantly, the libra network will be usednot only for transferring value - sending money - it will be open for creating digital applications, websites, e-commerce. A brave new world will open for 2.4 billion people: a new, growing market of cryptocurrencies and everything that builds on them. A portal to the world of Bitcoin. In part, this is why they believe that Libra will push the course of Bitcoin upwards - just more people like you will find out about it.

In the long run, the whole can exchange industry. In essence, Facebook will declare itself a new central bank that regulates the issue (that is, the printing of new money) and the circulation of funds. Do you think the US central bank will like it? Of course not. Sticks in the wheels will start to put now. The rating agency S & P has published a report that says that Facebook is creating another payment system, not a new dollar, that is, they are not afraid yet. But we all know the ambition of Mark Zuckerberg - read, for example, how he wants to get into your head.

How much will Libra cost and where to buy?

The question that concerns many is how much willcost Libra. After all, if such a giant like Facebook creates this cryptocurrency, there will be many who want to buy it, which, in turn, will push the cost up. But this, most likely, will not happen. Libra course will really be free - this cryptocurrency is not thought of as a stableblock, or a digital “analog” of the dollar, equal to it. But it will be very stable, because it is tied to real assets and carefully controlled.

Be a friend buy a libra

Libra: is it good or bad?

I think it is good. But many will disagree. From the pros: this is the future, cryptocurrencies will not go anywhere simply because it is convenient. Facebook will open the way for a huge audience in a new cryptocurrency world. Of the minuses: this is Facebook. He lost the trust of his users, and he hardly deserves the trust of lovers of cryptocurrency, because it is a very centralized system, in which Mark Zuckerberg will have the last word anyway.

Can Libra replace the American dollar? What do you think? We offer to discuss in our chat in Telegram.