The official announcement and details around Project Libra were provided to the world on June 18, 2019. Firstly, Libra was introduced: a new global reserve-backed cryptocurrency built on top of the new Libra Blockchain, with everything governed by a not-for-profit consortium dubbed the Libra Association. It was clear that each of these products and technologies will play an integral role in the project’s overall mission of creating a simple global currency and financial infrastructure that empowers billions of people.
Additionally, Facebook (NASDAQ:) also announced the creation of Calibra, which is developing the initial business of Libra and its own product outside of the Libra ecosystem (i.e., an eponymous digital wallet app).
Libra is an open-source projectLibra will be run by the Libra Association, not by Facebook
Transition to a permissionless governance and consensus node operation.Minimize the Association’s role as manager of the Libra Reserve.Coordinate the open-source community to define and operate the technical road map of Libra.Oversee and govern the operations along with the technical road map for the Libra blockchain.Recruit new founding members, raise funds from the members as well as other investors through the sale of Libra Investment Tokens (a token that grants rights to a share of the future interest accumulated in the Libra Reserve). Design and implement incentive programs, including the distribution of such incentives to members of the association. Distribute dividends to Libra Investment Token investors. Libra is not a public decentralized blockchain, but does avoid central points of failure Libra: a different type of cryptocurrencyWhat makes Libra different:The major outstanding issues:
Can a company like Facebook leverage its monopoly power in one industry to create a competitive advantage in another? In the case of Libra, Facebook is not directly doing this because it will not control the overall governing body — i.e., the Libra Association. To the contrary, Facebook’s Calibra wallet will not only use the Libra currency but also allow for additional payment types.Will Libra become the catalyst the market has been searching for to create mainstream consumer adoption for cryptocurrency? The outstanding issues around liquidity for those instruments suddenly disappear due to the 2.4 billion users.Given Facebook's poor track record in monetizing data-driven platforms, is it the right company to be leading such an effort? Perhaps it is. Facebook drew on its strengths as open source contributor to create a meaningful roadmap. In addition, the thoughtfulness around how Libra has been created and communicated gives comfort that Facebook did learn from its previous mistakes and is giving consideration to doing the right thing. The real subject of concern is how Facebook limited university inclusion only based on the computer science departments when Libra will require the full power of many other departments — including economics, finances, sociology and others.Will Facebook be successful in creating a community around the Libra cryptocurrency? For this effort to be successful, a massive amount of new ground has to be covered. It will require a great deal of thought around this new type of partnership as well as corporate governance improvements.How is Facebook going to benefit from this all? As it is very early in the project's lifecycle, it is understandable why Facebook is not communicating on this topic, yet. Facebook should be putting forward a grander vision on how this is going to fit with the company's overall business strategy. Of course, this could be disastrous, as the project is still not yet fully formed, but it would help the public better understand Facebook's thinking about how it is all going to play out and how it will benefit from it directly. Continue Reading on Coin Telegraph