Facebook libra foundation
Digital currency will let billions of users make transactions, but is already facing opposition from US lawmakers amid privacy concerns. Libra is being touted as a means to connect people who do not have access to traditional banking platforms. With close to 2. US lawmakers were quick to raise privacy concerns about the new currency. She also called on company executives to testify before the committee.
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Content:
- Welcome to the Diem project
- Regardless of the future, Libra has made its presence felt
- Libra – Cryptocurrency’s Moment to Reach Masses but Challenges Ahead
- Libra: Facebook launches cryptocurrency in bid to shake up global finance
- Facebook's Libra cryptocurrency could be a new opportunity for scammers to trick you
- POV: Facebook Libra
Welcome to the Diem project
Those problems can in turn be traced to the central paradox of Big Tech: The technological innovation that is supposed to liberate us from government ends up subjugating us to a handful of corporations. The key insight underlying Libra is that the transfer of money from person to person is similar to the transfer of information. Financial networks are information networks, just as social networks are.
And yet while the internet has revolutionized social networks, financial networks have not caught up. They remain hard to use and expensive, especially for international transactions—whereas, once you own the hardware and obtain an internet connection, social communications are essentially free.
Read: What Facebook could have been. Libra will be a brand-new currency, in spirit the same thing as a dollar or euro. People will obtain Libras by handing over national currency to organizations such as Calibra, the subsidiary that Facebook is creating to handle Libra transactions. Calibra will in turn transfer this money to the Libra Reserve—a group of accounts held by financial custodians around the world.
The money that goes into the reserve will be held there or used to buy other currency or low-risk government bonds. Meanwhile, people with Libras can transfer them over the internet, using them to buy things or make gifts.
You can exchange your Libras back into a national currency if you need it, with the money coming out of the reserve. While Facebook advertises Libra as a cryptocurrency, and Libra uses some of the same technology as bitcoin, Libra is actually quite different from bitcoin.
There is no bitcoin reserve. If you want to exchange your bitcoin for dollars, you need to find someone willing to buy it. If people decide that Libras are worth nothing, they can trade them in for cash from the reserve.
The problem of volatility is solved. But this solution comes at a price. And to understand how high this price is, we need some background. Bitcoin was promoted as a decentralized currency. No corporation, government, or other organization ran it. Its protocol guaranteed that a certain number of bitcoins would be produced at a predetermined rate, and this was supposed to guarantee that bitcoins would have a value stable enough for day-to-day transacting. The model was gold—a precious metal whose value remains relatively stable because of the economics of mining.
When the market price of gold rises, miners dig deeper, producing more gold, which causes the price to fall. When the price of gold falls, miners stop mining, producing less gold, which causes the price to rise.
The bitcoin protocol created a digital version of this process, with the important difference that bitcoins can be sent over the web, unlike gold bars or nuggets. And this meant that, unlike gold, bitcoin was supposed to be a usable currency for people who distrusted government management of national currencies. People could transact and save without worrying that the government would overborrow and then use inflation to wipe away debt. Once these large players were in place, they became an oligarchy that dominated the bitcoin world.
When the bitcoin protocol needed to be changed from time to time in order to address inevitable problems, the oligarchy made the decisions and profited from them. The early internet itself, along with some relatively simple applications such as email and chat rooms, created a decentralized system of communication over which no central authority—no government, no corporation—exercised much power. But ordinary people did not like the chaos of the early internet.
They wanted a more structured environment, and this gave rise to the big social networks, above all Facebook. Once that structure was in place, the system was no longer decentralized. Facebook kept claiming that it was, but made policy choices—about how information was displayed, about the use of data—that harmed a great many people. We now see that Facebook regulates speech and privacy for millions of people, domains normally left to government.
What started out as a libertarian utopia is now a highly regulated environment, albeit one regulated by a corporation rather than by our government. Facebook obviously knows this history. It knows that a fully decentralized Libra would not be usable. But it also knows that the natural solution—a centralized currency controlled by Facebook—would not be trusted. The white paper solves this problem by seizing both horns of the dilemma, claiming that Libra is both decentralized and centralized.
Libra is supposedly decentralized because it is based on blockchain, the technology used by bitcoin, which ensures that records are kept by multiple users rather than by one, and in this way enhances security and transparency. Facebook itself will not operate Libra. But Libra is also centralized via the creation of a governance body. That body is the Libra Association, to be located in Switzerland. This body is supposed to prevent the emergence of a bitcoinlike oligarchy to rule over Libra.
The white paper provides a few details about how the Libra Association will work. It currently has 28 members, with that number expected to rise to To get the system started, the members put money in the Libra Reserve, which will enable the creation and circulation of an initial pot of Libras. Major policy decisions will be made by a two-thirds vote. Ordinary people who buy and use Libras have no votes. The narrow money-transfer function that Facebook lays out in the white paper is just one possibility—the narrowest and least threatening one.
Facebook might sincerely believe that the association will manage the Libra as a kind of glorified Western Union. But Facebook has broken its promises before. The Libra Association will, after all, be overwhelmingly controlled by for-profit companies, not by charities. These companies want to make money. The structure of the organization gives them a direct financial interest in the management of Libra because their investment in the reserve entitles them to dividends, which in turn depend on the assets that the reserve holds.
If those assets appreciate, the members make profits. Again, the assets in the Libra Reserve will consist of national currencies and government bonds—at least at the outset. This will prove lucrative for association members if millions of people end up using Libra. Then again, government bonds pay low interest, and national currencies pay none at all.
If the Libra Association members want to increase their returns on their investment, all they need to do is change the composition of assets in the Libra Reserve—a policy shift that they could make by a two-thirds vote. They could then, for example, exchange some of the currency and low-risk debt for somewhat higher-risk debt—by making loans, or by buying loans from banks and other loan originators.
And with sufficient diversification, a more aggressive portfolio can be accumulated with relative safety. This is how banks work, and banks, of course, make a lot of money, especially when they are big. And Libra will be big.
Facebook has 2. Visa has issued more than 2 billion credit cards and is used by more than 40 million merchants. Vodafone has million customers. Uber has 91 million riders. As Libra becomes a juggernaut, expect other huge companies to sign up for membership and then integrate Libra into their operations, delivering millions or billions more users.
Currency, like communication, exhibits strong network effects—meaning that it becomes more valuable as more people use it. So the strategy Facebook used so effectively to build its social network—lure in customers with zero-pricing and then make money off them without their realizing it—will work just as well for Libra.
Here, though, customers will enrich Facebook and its partners through interest payments on the reserve rather than exploitation of their data—though that might happen, too. If the Libra Association takes this path, and the Libra Reserve gets big enough, its policies will have macroeconomic impacts throughout the world.
The reserve will, at a minimum, hold government debt, and buying the debt of one government rather than another has macroeconomic consequences. If the Libra Reserve lends or buys risky assets, it will affect the global money supply, just like a central bank.
The white paper is long on happy talk and short on details. For all the glitzy futurism of cryptocurrencies, Libra is a step backwards in social and political terms, the way bitcoin tried to throw us back into the age of the gold standard. Until central banks were created in the 19th and earlyth centuries, dead-tree versions of the Libra Association were plentiful. They included family dynasties such as the Medicis and the Rothschilds, and massive private banks.
Driven by profit and able to operate across national borders, they accumulated massive political power without feeling loyalty to any particular nation—until governments finally reined them in. Of course, Libra could fail, or become nothing more than a niche product like Venmo. And it could certainly do some good by reducing the cost of transferring money. The company has already shown that a successful tech platform can scale up quickly to a once-unimaginable size.
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Regardless of the future, Libra has made its presence felt
Due to our new system upgrade, we are requesting all existing users to update their password. Create a new password. Forgot your password? The Libra Foundation is making a significant investment in Piscataquis County, initially focusing on acquiring and developing several vacant properties in Monson. Additional money is being spent on renovations, many of which are already under way.
Libra – Cryptocurrency’s Moment to Reach Masses but Challenges Ahead
Facebook still faces problems before the launch of their Libra coin. Right after rebranding its Libra Foundation to The Diem Association, the company faces a lawsuit from a startup with an identical name. The company had to review its cryptocurrency ideas, as CoinIdol, a world blockchain news outlet previously reported. After facing many challenges from regulators, Facebook thought that rebranding its cryptocurrency product would help it enter the market smoothly. However, it seems the new path is also a bumpy one. Now, a small startup with over , followers in the fintech industry with the same brand name has revealed that it will take Facebook to court for copying its name. The startup is doing this to protect its customers from getting confused while using its financial services. Once the customers get confused with the brand and services being offered, the startup will automatically register a significant impact on their growth.
Libra: Facebook launches cryptocurrency in bid to shake up global finance
We recently connected with Crystal Hayling and The Libra Foundation team about their growth and vision for , which organizations are giving them inspiration in this moment, and why they continue to invest in NFG with their renewed and increased membership. We love to connect with our members! The organizations Libra supports are building a world where low-income communities of color have the power to determine their own freedom, define safety, and thrive in healthy environments. We are centering organizations building power through grassroots community organizing, deep network and coalition building, and progressive advocacy for lasting solutions that work for all. Transformation is a daily practice - a collection of intentions and ideals - with no clear point of arrival.
Facebook's Libra cryptocurrency could be a new opportunity for scammers to trick you
Since Bitcoin launched in , proponents have continually touted it as a currency on the cusp of revolutionizing the way we think about money. But despite making some serious waves in the investment world, such a revolution has yet to materialize. As Facebook tees up its own entry into the cryptocurrency market, speculators are wondering if it might have a better shot at dragging the blockchain into the mainstream. Called Libra , after the basic Roman measurement for weight, the digital currency is poised to shake up finance when it launches in That is, if it launches—lawmakers are already putting Libra under serious scrutiny, with at least one calling for a moratorium on the project. To some, the idea of the powerful, scandal-prone , and privacy-hungry social media behemoth dipping their toes into the world of international finance sounds truly dystopian.
POV: Facebook Libra
VentureBeat Homepage. Did you miss a session from the Future of Work Summit? Head over to our Future of Work Summit on-demand library to stream. Facebook has announced its cryptocurrency Libra and a global association of organizations that will govern it. The company also announced Calibra , a new subsidiary that will build a digital wallet for Messenger, WhatsApp, and a standalone app on iOS and Android. The move, which has been expected for a while, represents a big endorsement for cryptocurrency and the underlying technology of blockchain, which is a secure, transparent, and decentralized digital ledger.
Libra Blockchain was born on 18 June , initially from a deal club of Founding Members belonging to the world of payment systems, of which Facebook is one of the most relevant. They designed a decentralised programmable database in order to achieve low volatility of the cryptocurrency that should serve as a means of payment for millions of people around the world. A stablecoin or cryptocurrency with an underlying fiat money, in various currencies, that would serve as a means of payment under the umbrella of large private corporations. After more than a year of iteration, on 1 December , they have decided to go for issuing a stablecoin with an underlying only in US dollars to facilitate its approval and marketing in the United States.
These patterns — a broken politics of division, an economy of exclusion and extraction, and a punishing civic life for so many — were accompanied by a clarion call from community leaders for Libra to undergo a profound transformation and change its approach. Conversations with leaders the foundation supports revealed that Libra needed to do a better job supporting organizations led by and for those most impacted by injustice, who are leading the way toward solutions. Significant changes, following the guidance and input of community leaders, began in earnest. The first step taken by the Pritzker family board was to hire Crystal Hayling as executive director.
Diem formerly known as Libra was a permissioned blockchain -based stablecoin payment system proposed by the American social media company Meta Platforms. The plan also includes a private currency implemented as a cryptocurrency. The launch was originally planned to be in , [3] [4] but only rudimentary experimental code has been released until the project was abandoned in January The project, currency and transactions would have been managed and cryptographically entrusted to the Diem Association, a membership organization of companies from payment , technology, telecommunication , online marketplace and venture capital , and nonprofits. Before December , the project was called "Libra".
Richie Hecker. This post is part of CoinDesk's Year in Review , a collection of op-eds, interviews and takes on the state of blockchain and the world. Transformative in potential and huge in aspirations, Libra was the seminal crypto event of
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