Pound is a cryptocurrency initiated by Facebook which is expected to launch in 2020. It is supposed to make it as easy to buy goods or send money as an instant message.
What is a cryptocurrency, what differences with other cryptocurrencies, what is the Libra danger, what are his bespoke ? Discover all my explanations on this new cryptocurrency !
What is a cryptocurrency?
A cryptomonnaie is a virtual currency usable only on a computer network. We often speak of alternative currencies, insofar as they are not validated by any State. The first, and best known, is the Bitcoin, launched in 2009.
Unlike state currencies, cryptocurrencies have no physical counterpart. If a state currency has its value guaranteed by its gold equivalent, a cryptocurrency does not have this assurance. But Libra makes an exception.
La cryptocurrency is stored in a digital wallet (a downloadable application), the transactions are encrypted: we do not know who sends and who receives the money which, for some, would favor illicit businesses such as on the darknet.
What are the benefits of Libra?
THEmain objective of Libra is mostly from you will allow you to buy there products directly in one click, without going through your bank or use your credit card.
Everything will be simplified, Libra can be used to make online purchases, obviously, but also for “physical” payments. the partnership with MasterCard and Visa will allow you to use this currency on a daily basis, to buy a coffee, a bus ticket, order your Uber meals from your FB or WhatsApp profile. Soon everything will be able to go through Libra.
Libra will also offer an alternative to those who do not have a bank account. Facebook is also planning to install kinds of cash dispensers around the world that will allow people to exchange their paper money in Libra Coin or vice versa.
What are the differences with other cryptocurrencies?
All current cryptocurrencies have the same flaw. They are not linked to any value that can stabilize them.
The consequence ? From extreme fluctuations, and currencies whose value triples in a day, or collapses in a few hours.
Bitcoin has already exceeded $ 19000, before falling quickly, and staying around $ 9000. Difficult to trust a cryptocurrency under these circumstances, right?
This is where Facebook intends to make a difference, with the help of its partners. Libra will be managed by a non-profit foundation, made up of partner companies.
To avoid fluctuations, and to offer a currency with a stable price, the foundation will match the equivalent of each Libra purchase in foreign currencies. Let's imagine that 1 Libra = 1 €, well for each Libra that will be created, Facebook will have to have its equivalent in fiat currency.
What is the danger of Libra?
Behind the laudable objective of helping people without bank accounts to access an international currency, we nevertheless find a foundation made up of private companies. Companies which, let's be honest, tend to favor profit rather than solving global problems. Is it really wise to entrust them with a huge share of the economy?
Another point that would be good to question: individual freedoms and privacy. We know it, we live with it: our every move can be tracked, our bank card payments too, and let's not talk about the use of our smartphones.
With Libra, our entire life, including finances, can be observed. What guarantees do we have regarding the protection of our data? What guarantees do we have that the use of this currency will not be controlled, that our account will not be blocked one day, due to an action carried out on Facebook or a photo posted on Instagram?
The Facebook business model is the next : recover and monetize users' private data. It is this question that should be on everyone's lips. And it is for this reason that Libra could prove to be dangerous.