Facebook has unveiled its new global cryptocurrency named Libra, which will run on a decentralised blockchain.
Libra is built on a secure, scalable, and reliable blockchain and is governed independently by the Libra Association, which is tasked with evolving the platform.
The cryptocurrency is backed by a reserve of assets to keeps its value stable and is designed to function as a secure transactional global currency which is very easy to use.
By creating a cryptocurrency backed by a basket of real assets and governed by an independent organisation, Facebook hopes to help build a truly decentralised and widely-adopted payment system.
Below are the details of the Libra cryptocurrency, its blockchain, and the association which governs its development.
In its white paper, the Libra Association states that it aims to build a simple global cryptocurrency and financial infrastructure which empowers billions of people.
The cryptocurrency will be a low-volatility token which runs on an entirely new and decentralised blockhain and will include a smart contract platform for further decentralisation of financial services.
The Association said Libra was designed to facilitate the easy transfer of money on a secure platform. The currency is designed to have an intrinsic value due to being backed by real-word assets.
“Libra will need to be accepted in many places and easy to access for those who want to use it,” the Association said.
“In other words, people need to have confidence that they can use Libra and that its value will remain relatively stable over time.”
This cryptocurrency ecosystem will be entirely open-source, allowing messaging apps and other platforms to seamlessly integrate Libra cryptocurrency payments into their systems.
According to the white paper, the Libra blockchain will be able to scale to “billions of accounts” while maintaining high transaction throughput, low latency, and a high-capacity storage system.
It is also designed to be secure and flexible, accomplishing all of this by combining a number of well-understood and innovative techniques.
The Libra blockchain can host smart contracts created using the new “Move” programming language.
“Move takes insights from security incidents that have happened with smart contracts to date and creates a language that makes it inherently easier to write code that fulfills the author’s intent, thereby lessening the risk of unintended bugs or security incidents,” the association said.
The blockchain will also use a Byzantine Fault Tolerant (BFT) consensus approach for maximum resilience against attacks, and it will offer addresses which cannot be linked to a user’s real-world identity.
Initially, the blockchain’s consensus will be reached among validator nodes operated by the association’s membership, but this will later be expanded to include consumers and other entities for maximum decentralisation.
Reserve and Association
Libra is backed by a basket of low-volatility, real-world assets called the Libra Reserve and is supported by a competitive network of exchanges for buying and selling the cryptocurrency.
“It is important to highlight that this means one Libra will not always be able to convert into the same amount of a given local currency,” the Association said.
“Interest on the reserve assets will be used to cover the costs of the system, ensure low transaction fees, pay dividends to investors who provided capital to jumpstart the ecosystem.”
The association is governed by a council of one representative per validator node and is designed to facilitate the operation and development of the Libra blockchain.
“While final decision-making authority rests with the association, Facebook is expected to maintain a leadership role through 2019,” the association said.
This group already includes more than 30 firms, including payment giants MasterCard and VISA, blockchain companies Coinbase and Xapo, and many other well-known firms like Uber, Spotify, and PayPal.
The Libra Association aims to publicly launch the cryptocurrency in the first half of 2020, by which time it hopes to have around 100 members.
Facebook has also announced the launch of its Calibra cryptocurrency wallet, which will be available in Messenger, WhatsApp, and as a standalone app in 2020.
“The first product Calibra will introduce is a digital wallet for Libra, a new global currency powered by blockchain technology,” Facebook said.
“From the beginning, Calibra will let you send Libra to almost anyone with a smartphone, as easily and instantly as you might send a text message and at low to no cost.”
“In time, we hope to offer additional services for people and businesses, like paying bills with the push of a button, buying a cup of coffee with the scan of a code or riding your local public transit without needing to carry cash or a metro pass.”
Calibra will include strong verification and security measures to protect user funds upon launch, along with dedicated live support.
Facebook said it will be consulting with a wide range of experts to ensure the safety and privacy of its cryptocurrency wallet.