Swiss based Libra Association of which Facebook is a leading member has announced its cryptocurrency project Libra, a stablecoin that will be built on the Libra blockchain, which will start as a permissioned based Blockchain with an aim to become permissionless. Facebook stated that Libra may one day outrival Bitcoin and the US dollar. Social media users will be able to shop and send Libra on Messenger and Instagram, as well as use it with Uber Spotify and MasterCard.
According to Tarun Chitra, CEO and Founder, Gauntlet Network” Libra’s decision to use a more traditional distributed consensus algorithm, is likely to pay off in the long run. This is because the competitive landscape is focused on applying riskier consensus algorithms that rely on unconventional security models and/or novel cryptography that has not yet been deployed at scale. The top-notch team at VMware Research that developed the majority of this algorithm took the best features from experimental consensus protocols, like Ethereum’s Casper CBC, and gave them a relatively easy to understand threat model.
Libra will not be launched until April of next year in 2020. Alongside Libra the digital currency is the new digital wallet Calibra, which Facebook will operate as a separate subsidiary giving users a way to store and spend Libra.
Facebook created Calibra, a regulated subsidiary, to ensure separation between social and financial data and to build and operate services on its behalf on top of the Libra network. According to David Marcus, a former PayPal executive who is leading Project Libra for Facebook, one of the initiative’s main goals is to reach the 1.7 billion people worldwide who lack access to the banking system.
More than 27 entities have joined the Libra Association so far. Anchorage, digital asset custodian, Diogo Mónica, Co-founder and President stated, “ Today, we are honored to announce that Anchorage will be a Founding Member of the Libra Association” Each member of Libra will has been required to contribute minimum of $10 million to help the currency gain traction, an effort that will likely see users receive a small amount of Libra to test it out.
Initial members of the foundation are Facebook and 27 other partners, including Visa, MasterCard, PayPal, Coinbase, and venture capital firms like Andreesen Horowitz and Union Square Ventures. Marcus hopes as many as 100 partners will be onboard by the time the currency debuts, by which time the group will have crafted a formal charter that sets out voting rights and other rules. In addition, to hosting nodes for the Libra Blockchain within the consensus protocol, eventually the members and others will participate in proof of stake utilizing Byzantine Fault Tolerant (BFT) consensus protocols, members will also maintain the supply of Libra in response to demand—meaning they will issue new Libra as needed, and destroy the digital currency when people redeem them.