A Brief History of Facebook
Facebook was originally called Facemash at Harvard University when Mark Zuckerberg developed the first version in 2003. Eventually, in 2004, Zuckerberg and his friends launched Facebook officially and by the end of 2005, Facebook had over $9 million in revenue and six million monthly users.
Today, Facebook is considered one of the Big Four technology companies along with Amazon, Apple and Google with a total asset of $97.3 billion.
Facebook revealed the details of its cryptocurrency project called Libra last week Tuesday. Together with partners like Uber, Spotify, PayPal, Visa and Mastercard, they want to create a globe-spanning currency. Furthermore, the cryptocurrency will be presided over by the non-profit Libra Association while a unit of Facebook called Calibra will release products based on the new digital currency including a digital wallet for Libra tokens.
The currency is set to launch in 2020 but facebook launched a test version of its blockchain, the technology which cryptocurrencies are built on.
“Libra’s specific mission is to be a simple, global currency and financial infrastructure that empowers billions of people,” said Facebook’s David Marcus, who runs Calibra and headed up the Libra project. Facebook’s desired goal is to launch a virtual token available to everyone who has a smartphone across the globe even if they do not have a bank account.
Let us consider one key fact about cryptocurrencies, which is that THEY ARE NOT STABLE. So what is Facebook’s innovative solution to this? Libra blockchain is not completely open like bitcoin and ethereum and the Libra Association will keep the price stable by maintaining a real-world asset reserve using a basket of multiple currencies including the dollar, pound, euro, Swiss franc, and yen.
Will it Work?
Given that Facebook is facing massive distrust from the public now because of the privacy scandal from 2018, there have been many outrages about the announcement of Libra. Which begs the question, will it work? Facebook announced that Libra will be properly overseen by a non-profit organization called Libra Association and products will be developed by a subsidiary called Calibra and that Facebook’s active involvement will only be as one of the executive board members.
The fact that Facebook has a large number of subscribers, about 2.3 billion of them makes it very likely to succeed and the users will be motivated to use Libra. Furthermore, subscribers to other members of the association could also be induced to participate.
Libra Association will oversee the development of the token and the reserve of real-world assets. Each founding member of the association paid a minimum of $10 million to join and gain one vote in the Libra Association council. They will be entitled to a share of the dividends from interest earned on the Libra reserve.
The founding members of the nonprofit association reported by The Block’s Frank Chaparro, include;
Facebook/Calibra, Mastercard, Andreessen Horowitz, Vodafone Group, Kiva, Booking Holdings, eBay, Farfetch, Breakthrough Initiatives, Anchorage, PayPal, Spotify AB, PayU (Naspers’ fintech arm), Uber Technologies, Inc., Union Square Ventures, Visa, Coinbase, Stripe, Mercy Corps, Iliad, Bison Trails, Inc., Mercado Pago, Creative Destruction Lab, Ribbit Capital, Xapo Holdings Limited, Lyft, Thrive Capital, Women’s World Banking.
The Libra Association will recruit more members to act as validator nodes for the blockchain. Each member will only get one vote in the Libra Association council. This is to guard against any member of the association from hijacking Libra for its own. Consequently, this guards Facebook against scrutiny from regulators investigating it against the privacy scandal.
Yes, Move. Move is a secure and flexible programming language for Libra. According to the official documentation, Move will make life easier for blockchain developers by providing a smooth and convenient environment where developers can execute their ideas with minimal risk of introducing bugs (errors) in the process. The name Move was coined because its primary task is to move Libra coins from one wallet to another. Furthermore, Move will allow developers to develop smart contracts on the Libra blockchain. Libra ecosystem and Move language will be completely open to use and build.
There is one other thing to also consider, and that is because Move is open to use this makes it possible for unethical developers to develop their own products and gain access to financial information of the users of their products or just plain rip people off. Obviously, you would have thought that the Libra Association will include a process of vetting such developers. Sorry to burst your bubble, but there are no plans for the Libra Association to play an active role in vetting developers. For more check here.
This is a groundbreaking innovation by Facebook but let us wait and see how it works out when it launches by mid-2020.