August 12, 2020

Cryptocurrency Facebook Libra - launch date and prospects in Russia

Cryptocurrency Facebook Libra - launch date and prospects in Russia

Facebook head and founder Mark Zuckerberg posted a post on his page on the social network Libra Association - a consortium of 27organizations that will jointly with Facebook (and he has access to a user base of 2.4 billion people) develop the new cryptocurrency ecosystem Libra. A white paper project was published on the Libra website. From the document you can learn about the goals and objectives of the platform, as well as the mechanism of its operation.

Any white paper starts with market problems,which the startup will decide. Judging by the positioning of the project, Libra is primarily a fintech startup. The authors of the project present LibraCoin as a new global currency that will facilitate cross-border money transfers and reduce their cost, as well as help integrate 1.7 billion people into the global economy without a bank account.

Libra must provide its usersreliable currency and infrastructure, which ultimately will lead to the creation of the Internet of money, and cross-border transfers should become as easy and simple as sending text messages or exchanging photos. Thus, the mission of the project (another classic turnover for such documents) is to create an international currency and financial infrastructure that will expand the capabilities of millions of people.

The authors of the document see the advantages of the project in the following:

  • Secure, scalable and reliable blockchain.
  • Liquidity of LibraCoin, which is backed by assets.
  • The ecosystem is managed by an independent consortium - the Libra Association.

The white paper Libra lists the founding organizations of the ecosystem, including:

  • Payment systems: MasterCard, PayPal, PayU, Stripe and Visa.
  • Technology companies and marketplaces: Booking Holdings, eBay, Facebook / Calibra, Farfetch, Lyft, MercadoPago, Spotify, Uber.
  • Telecommunications companies: Iliad and Vodafone Group.
  • Blockchain companies: Anchorage, Bison Trails, Coinbase and Xapo.
  • Venture companies: Andreessen Horowitz, Breakthrough Initiatives, Ribbit Capital, Thrive Capital, Union Square Ventures.
  • Nonprofits: Creative Destruction Lab, Kiva, Mercy Corps, Women’s World Banking.

Cryptocurrency Facebook Libra - launch date and prospects in Russia

</p>

The basis of the new cryptocurrency Facebook isthe open-source Libra blockchain, which will be public and accessible for integration to millions of users and companies (cryptocurrencies from JPMorgan Chase, on the contrary, are not public). Initially, the Libra blockchain will be closed: to connect to the network of new validating nodes, the approval of the rest of the ecosystem participants will be required.

In the future, it is planned to switch the project toopen blockchain, which will become one of the main tasks of the ecosystem. The Libra blockchain will allow the integration of billions of users; it will be written in the specially developed Move programming language specially developed for this. The Libra consensus protocol will be called LibraBFT. It is resistant to the Byzantine error, which means that the Libra blockchain infrastructure will function normally, even if some nodes fall into the hands of attackers or start to work incorrectly.

Smart contracts will be written in the Move language,designed specifically for the Libra blockchain. According to white paper, Move is "an executable bytecode language used to implement user transactions and smart contracts." At the time of the launch of Libra, only pre-approved Libra Association smart contracts will be used. This may be a limitation, given that many organizations plan to use the network. Developers can familiarize themselves with the testnet and study the documentation on the Libra Developer portal website.

Addresses of users in the Libra blockchain will bework on a system of aliases, as in Bitcoin and Ethereum, one user can have several accounts in Libra at once. However, this will not prevent law enforcement agencies from identifying wallet owners by their Facebook and WhatsApp accounts. The system provides for the creation and execution of smart contracts.

The new currency will bear the same name asand the ecosystem itself is Libra. The authors of white paper emphasize that, unlike most cryptocurrencies, Libra will be a token with a stable value, but not a stablecoin in the usual sense. It will be used to make payments and accepted as a means of payment by ecosystem participants. Its liquidity will be provided by the reserve fund (Libra Reserve).

The portfolio of the fund consists of bank deposits andgovernment short-term bonds, all these assets are presented in 4 fiat currencies: USD, EUR, JPY and GBP. The reserve fund will be geographically distributed and held in different jurisdictions. It will be possible to sell and buy Libra on exchanges, which, according to the authors of the project, will allow it to be actively used for cross-border money transfers. Interestingly, the emission of cryptocurrency is not limited: the ecosystem can release or, conversely, burn any amount of Libra.

For the storage and transfer of Libra, the ecosystem createsCalibra wallet that will integrate with the Facebook Messenger and WhatsApp mobile apps. Calibra is already registered in the USA as a financial services provider, and also guarantees users reimbursement of wallet losses in case of fraud.

Ecosystem Management Will Be LibraAssociation. This is an independent non-profit organization based in Geneva (Switzerland). One of the important tasks of the association will be the creation and distribution of grants aimed at ensuring international financial integration. The association will include organizations that own the nodes of the Libra blockchain.

To obtain ownership of the node and participate inassociation, that is, to manage the network, its participants need to purchase the Libra Investment Token (LIT) security token in the amount of $ 10 million. They can be various international business structures, educational and non-profit organizations. The price of LIT depends on the value of any potential income or rewards on the network and is separated from the daily cost of the Libra token.

Cryptocurrency Facebook Libra - launch date and prospects in Russia

</p>

It is planned that by the time the ecosystem is launched inIn the first half of 2020, more than 100 members should join the Libra association. The white paper states that Facebook played a key role in creating the association, but the social network, like other participants, cannot have more than 1% of the vote in the association. The development plans for Libra announced the creation of APIs and libraries that make it easier for users to interact with the ecosystem.

Creating cryptocurrencies by such major players,like JPMorgan Chase and Facebook, this is good news that speaks of the growing demand and popularity of cryptocurrencies in the world. But not all community leaders approve the arrival of major players in their territory.

Binance CEO Changpen Zhao believes Facebook withAn array of big data for two billion people may not conduct any KYC, because the company already knows everything about users: their friends, relatives, hobbies and other confidential information, and now also a wallet. Obviously, in this way Zhao hints that you should not trust Facebook, which trades user data and uses it for personal purposes

Zhao also added that Facebook shouldIntegrate your applications (Messenger, WhatsApp and Instagram) with Bitcoin and BNB, because unlike Libra, Bitcoin already works. In addition, it is not yet clear how Libra will interact with other cryptocurrencies, which means there is a risk that the development of this ecosystem will not be able to increase the demand for other cryptocurrencies.

Prospects for cryptocurrency Libra Russia

What could be an obstacle for the appearance of Libra in Russia? Libra will be backed by “real assets,” including:

  • famous currencies
  • central bank accounts
  • government obligations of a number of countries.

Among the “well-known currencies” is the US dollar, howeversettlements in Russia with American currency or any monetary substitutes based on the American dollar are prohibited. The only means of payment in Russia is the Russian ruble. Even a stablecoin based on the Russian ruble in Russia from an American corporation did not have a chance of existence, since the Central Bank of the Russian Federation would have been perceived as a monetary substitute.

Moreover, no matter how the “distributedregister ”, the presence of a foreign company in its organizers would put an end to the question of the fate of such a digital asset in Russia. And in the end, we see the Libra project, which the organizers will integrate into Facebook, WhatsApp and Instagram, which means that in the end this could potentially mean blocking not only Calibra, but also these social networks.

Yes, Instagram is popular in Russia,however, this once again demonstrates that Russia urgently needs to create its own digital projects. The fact that this is possible shows a positive attitude towards the idea of ​​cryptocurrencies, which was recently demonstrated by Igor Sechin, chief executive officer of Rosneft, the world's largest public oil and gas corporation.

There is a general positive attitude of the President of RussiaVladimir Putin to new financial technologies. Russia should start developing its own cryptocurrency, which will be based on the Russian ruble, oil barrels and gold. This will help strengthen Russia's position in the BRICS, the SCO countries, and remove issues related to the fact that Chinese banks actually comply with US sanctions against the Russian economy. This will be able to provide a significantly higher growth rate of trade.

In addition, due to the multiplier effectbecome the only tool that is currently being viewed that can guarantee the implementation of the May decrees of the President of the Russian Federation. To make the implementation of national projects more effective and achieve, as a result, economic growth, as well as a noticeable and sustainable increase in the well-being of Russians.

</p>