When the concept of social media giant taking part in the cryptocurrency world first became publicly known, the reactions were quite concerning. The central banks expressed their worries about financial stability, while users themselves once again pointed out Facebook’s controversial approach to data privacy.
The mystery that is Libra officially came to the spotlight on June 18, when Facebook’s founder Mark Zuckerberg announced his latest business and invention venture. Libra promotes financial inclusivity, online security and fast and efficient use of your money. It will be based on the blockchain technology, which means it will be part of a global financial system and include all its greatest advantages. The Libra Blockchain is operated by the network of validator nodes and overseen by the Founding Members of Libra Association.
Libra is backed up by a reserve of real assets, where the basket of currencies is held for every Libra created. This way, it will always keep its core intrinsic value, with the minimum effect of the outside factors.
Everyone is aware of the concerns regarding security when it comes to Facebook and its many endeavors. That’s why Libra has a special section on the website proving long and hard that safety, transparency, and reliability are its top priorities. The currency aims at preventing the “double spending attack” which is the term used for tricking someone into thinking they were paid when they weren’t. The software is created with great details so it can protect your funds from vulnerability and exposure. In addition, the Libra network does not store any private user information, while the transactions are kept solely in nodes and added to the blockchain.
To conclude, the Libra network takes responsibility for taking part in the world of finance by working with law enforcement in case any outsiders try to exploit the cryptocurrency or any of the values it stands for. The open and transparent financial system that is planned to launch in 2020 will be managed by several of the largest companies such as Spotify, Uber, and Vodafone.
Despite all of this, the concerns kept coming up in the following months. So much so that Zuckerberg hired a group of lobbyists to compromise with the regulators, both US and European, and prove to them that Libra will work completely within the already established legislation and monetary system. To show that Libra is open to helpful suggestions and improvement, the Association released a bug bounty program, which promises a $10.000 reward for anyone who finds a security vulnerability.
Still, Libra can’t be released until it satisfies the highest standards of the US legislation. The main concern the US Federal Reserve expresses is the potential for the currency to be exploited for illegal use, including fraud and money laundering.