The launch of Libra, Facebook’s cryptocurrency, is planned for 2020. Its success could give Bitcoin greater visibility and positively influence its price
Facebook’s cryptocurrency has generated great expectations, especially for what it might mean for Bitcoin and the ecosystem of crypto assets.
Below is a summary of the project, as well as some implications that this development of Mark Zuckerberg’s company and a corporate conglomerate called Libra could have.
Facebook’s Bitcoin
Although Libra has been presented as a cryptocurrency, its characteristics are not very close to Bitcoin.
This project has been supported by important companies such as Uber, PayPal, MasterCard, Visa, Mercado Libre, inter alia, and has attracted the public’s attention.
It is of paramount importance that each of these companies invested US $10 million to form part of the association that Libra will manage. This is the reason why its team ensures that neither Facebook nor any of the companies will control the crypto asset independently.
It should be noted that Zuckerberg’s company has created research and development teams for distributed accounting technology since 2018.
Despite this, technical details of the project have not yet been revealed: nobody knows which blockchain will be used or if one will be created, and nobody knows if the cryptocurrency will be compatible with other similar projects.
The launch of Libra, which was originally called GlobalCoin, is planned for 2020. It is expected to be an anchored cryptocurrency, like tether (USDT) or Paxos (PAX), but supported by a basket of assets from which its price will be derived.
The goal is to create a payment and exchange system that could be integrated into WhatsApp and Instagram, two other important social networks and platforms that are part of Facebook Inc. If this is fulfilled, said cryptocurrency could be within reach of more than 2.7 billion users of these networks.
This could mean competition between the Facebook system and far-reaching payment processors such as VISA, MasterCard or PayPal.
Facebook users could receive rewards in this cryptocurrency by viewing publications, having interactions and buying products on the platform.
Implications for Bitcoin and other cryptocurrencies
This launch is that Libra could give impetus and visibility to cryptocurrencies in general, especially to Bitcoin, the most capitalized cryptocurrency in the market.
The implementation of this cryptocurrency could translate positively into market prices. In terms of public opinion, it could mean a way of not losing track of technological development.
Millions of Facebook users would not only be exposed to Libra and its influence as a payment system, but they could also be induced to know more about the market and other active cryptocurrencies.
If Libra is successful, it could replace other digital payment methods such as PayPal, but it is unlikely that it will be able to bend Bitcoin’s decentralization as they do not compete at the same level.
Although Facebook’s cryptocurrency could gain relevance and weight, its characteristics could be different from those of Bitcoin. In any case, both would coexist, with the probability that the average Internet user prefers Libra, the credibility of the companies that support it, the project’s good progression and its visibility through social networks.
In case the Facebook project fails, either due to technical factors, differences between members of its association or lack of interest of the common user, the popularity of the topic could positively influence the perception of Bitcoin.
Due to the possible differences between both systems, a scenario where Libra fails would not have an impact on the community’s perception of the value or their trust in Bitcoin.
The corporate approach and the management of its operation by a business association call into question the possibility of making decentralized and censorship-resistant payments, as offered by Bitcoin.
Even though the launch of Libra may influence Bitcoin’s near future, this cryptocurrency will probably outlive it.
By Willmen Blanco
