If think you have fallen into some new Netflix sci-fi series when you hear people talking about crypto-currency, Bitcoin and Libra then don’t worry here is a guide on everything you need to know about Facebook’s up coming digital currency Libra!
Libra which will be launch early 2019 is a digital currency that can be used world wide and unlike Bitcoin, Libra will allow you to buy your Soy Latte with a tap of the phone.
So what is Libra?
Libra is like a new digital bank account with it’s own currency only all the cash is in your phone rather than in a vault. Libra will be bought via wallet apps and from some shops like topping up your electricity card and then you will be able to use Libra to pay for Uber rides or on Ebay. So far 27 global companies have partnered with Facebook on this new venture inc Spotify, Vodaphone, Visa and even paypal.
Up until Libra, cryptocurrency has been seen largely as an investment rather than a usable currency like dollars or sterling. Bitcoin for example is pretty volatile which is why it has been seen to be a great investment whereas most currencies are largely stable and therefore not in the race as an investment.
How does it work?
It’s free to move Libra which will cut costs when shopping abroad or paying credit card fees and you will be able to send and request money from friends and associates similar to PayPal or Venmo. In fact Facebook have built their new Wallet app called Calibra which will live inside Facebook owned apps such as Whatsapp, Messenger and likely to be inside the new Instagram shopify features.
Calibra promises to keep your transactions separate to anything online linked to your identity such as your Facebook profile which means you shouldn’t be able to be targeted by ads according to your purchases.
How is it policed?
Facebook’s biggest hurdle is convincing the public to trust it with their money after the last year of data controversy so it’s run by The Libra Association which is not a for profit organisation made up of global brands such as Visa, Ebay, Paypal & MasterCard to name a few. This organisation will look after the Libra reserve which is the actual money you pay to convert into Libra meaning you can buy back to normal currency at any time.
The downside is Facebook has claimed it won’t police app developers who use Libra which leaves it open for hackers to steal your digital currency.
Libra vs WeChat
China already has a similar currency attached to it’s social media app WeChat with services up to 1 billion users however outside of China it is relatively unknown. Facebook is counting on this being a dominant force as FB has nearly 3 billion users meaning a bigger market including countries who’s population traditionally don’t have bank accounts due to living in poverty and are exploited by money sending services like Western Union and Moneygram who have high fees to use.
There are plenty of questions raised that need answering over the next 12 months before it launches however the positives for poorer countries could mean a more positive balance in their economic structure and new areas of opportunity for creatives and entrepreneurs.
Libra won’t be replacing money as we know it (or at least for many years to come) but does give an alternative currency when travelling abroad, trading globally or just having something else to moan about around the water cooler.
So will you be buying into Zuck-Buck’s as an alternative to shouting at the ATM in another country when it wants to charge you to withdraw your money at the worst exchange rate or have you had enough of ‘Big Brother’ and it’s all seeing eye?