Would today mark the day cryptocurrency went mainstream? No, probably not. I would argue we hit that pinnacle some time in December 2017 – but in the same way the internet went mainstream with Netscape, Yahoo and chat rooms. Crypto doesn’t quite have its Google yet (although Bitcoin is here to stay!), and today could very possibly mark the day we see something of the sort.
Facebook announced their very own cryptocurrency back in May, after Bloomberg got wind last year December that they were going to trial crypto payments via Whatsapp in India. Facebook then made it clear earlier this month (June) that they would be announcing the full details of their cryptocurrency project today, 18th June.
Named “Libra”, Facebook officially announced it with a new website and a very 2017-like white paper.
Here are some key take aways from the Project Libra website…
1- The name “Libra” is a huge clue to Facebook’s ambitions
A Libra was a unit of weight in Ancient Rome, and was the last unit of weight before the “pound” became widely adopted. The pound became so widely adopted that it became the unit of account for Sterling Silver in the United Kingdom. Are Facebook hinting at their goals for their Libra coin? Or is it just a cool backstory?
2- PayPal, Uber, VISA, Naspers, eBay, Spotify, Vodafone, & others have all chipped in $10 million to run a node
The cryptocurrency will run validating nodes, in a similar structure to Bitcoin and other cryptocurrencies, but the big difference? The qualifications to run a validating node is to pay $10 million, have a market value of $1 billion, and be recognized as a top 100 industry leader by S&P. Running a node will cost $280,000 annually. Yes, that’s right. Centralized decentralization anyone? One thing I do note here is: A lot of companies will now be setting up “Libra” divisions – sharpen that CV, friends.
3- They want to build the next PayPal
In the same way PayPal was built to service the marketplaces of the internet (it was built in part by eBay), Facebook recognise that the future of commerce is global. Hence they want to build an infrastructure that services this global economy.
4- It is a “stable coin”
Their goal is to ensure the value of the token remains stable. Facebook have not officially given which value they will peg it to as yet (ie. it won’t be $1 per Libra), but instead have said the token’s value will be determined by a number of economic factors tied to their bank deposits, securities, and historically stable international currencies.
5- It already has its own symbol
Just like the Euro (€) or the Dollar ($), along with every accepted currency in the world, Libra has its own symbol. Three “waves”, that could represent baskets?
6- Its blockchain will handle 1000 transactions per second
Its blockchain will be able to handle 1000 txs per second, 4 billion accounts, and transactions will be 5kb each, and will run on a Byzantine Fault Tolerance system.
7- Facebook’s primary goal in this was to “bank the unbanked”
In the White Paper, Facebook said the were working toward two primary goals: Banking the unbanked, and facilitating low-fee global money transfers. This is exactly what Bitcoin evangelists propagate as a massive goal for Bitcoin, so what now? Bitcoin officially has a competitor. This is going to get interesting.
8- The project is governed by a Geneva-based non-profit
Facebook created the “Libra Association”, a non-profit headquartered out of Geneva, Switzerland, which includes all of the above mentioned companies in point 2, along with Coinbase, Xapo, Lyft, Stripe, Mastercard, and more. This association will govern the Libra project, and no member can get more than 1% of the vote – not even Facebook. That’s some serious belief in decentralization.
9- Calibra launched today as a custodial wallet
Calibra is the blockchain’s consumer wallet and regulated subsidiary. While Libra technically won’t be regulated, software developers will need to abide by jurisdictional laws – which is the realm within which Calibra, the custodian wallet, will operate in (jurisdictional regulation and KYC laws).
The bottomline? It is clear to me that Mark Zuckerberg has seen the promise of Bitcoin. You could argue it came from other executives pushing him to do something, but there is no way this much would have been achieved with so many companies without him spearheading much of its narrative. Zuckerberg and his execs have seen what Bitcoin brings to the world, and have said “we like this, but we don’t see how it can work in such a heavily regulated global economy.”
Facebook believe that with their resources they can build what Bitcoin promised within the complex regulatory environment of today’s geo-political arena. And I admire their efforts for doing so.
Does this mean Bitcoin is over? No ways. Not only will the KYC and data/privacy requirements of Libra leave much space for Bitcoin to operate, but Bitcoin is already its own commodity. A new form of money not seen since gold was bartered off the grid of tax-hungry monarchs. Bitcoin has its own story, and part of it was providing a platform for Libra to be developed – a project which might just have equally as big a story.