It is fair to say that the financial markets move pretty quickly, and this is certainly true when it comes to cryptocurrency. With new coins being developed and released at a rapid pace, there is always something new happening. Despite all this though, Bitcoin has retained its place as the king of cryptocurrency. It is certainly the most well-known one among the general public and one that the average investor will put their money into. However, this may all be about to change after Facebook recently announced its own new cryptocurrency, Libra.
What is Libra?
In simple terms, Libra is a cryptocurrency in a similar way to something like Bitcoin. It is based on underlying Blockchain technology, which helps to keep it secure and provide a permanent record of any transactions made anonymously. To spend your Libra coins, you first cash in an amount of local currency at certified exchange spots (such as a grocer) before getting the equivalent amount of Libra back to spend via Facebook’s own Calibra e-wallet. This wallet will be built into apps such as WhatsApp for ease of use.
What makes it special?
So far, so normal – but what makes Libra such an exciting step forward for cryptocurrency? The first thing that makes it stand out is that there are almost no fees involved with it. However, perhaps the most exciting thing is Libra’s potential for use in everyday life, which is beyond most cryptocurrencies now. As Facebook is already integrated with millions of small businesses and advertisers, it is perfectly placed to tackle this pressing issue around spending crypto coins in normal life.
In short, Facebook is looking to make Libra the next-gen e-payment solution but based on a cryptocurrency. With aims to make it simple to set up and easy to use, and Facebook being only one party that gets a say on how it is run, it is an exciting development for cryptocurrency.
What does this mean for consumers?
As a consumer, it is worth thinking about how Libra may affect you in the future. Of course, the biggest impact that it could have is how you pay for goods or even complete other tasks such as sending money to family overseas. Libra could actually make this easier and be something that more and more consumers begin to take advantage of.
Libra may also change people’s attitudes towards banking and saving. After all, you may begin to use this as your main way to store your money and keep it safe for the future. As it is not controlled by one central agency or government, many consumers may feel that it is more secure than other currencies tied to world political affairs. For now though, it is probably worth sticking to using a respected financial advisory service to help manage your savings. Goldstone Financial Group is a great choice in this regard and is well-known across the US for providing its clients with effective financial planning advice. With Libra still being so new, listening to people such as Goldstone might be the best idea for now.
How will it affect crypto investors?
Of course, many consumers are also investors who may already have money in the cryptocurrency market. The key question if this applies to you is whether Libra will help or hinder your current crypto investments. This is especially true for the more popular coins such as Bitcoin. If everyone pulls their money out of other digital currencies to invest in Libra instead, then it could see prices drop. To date though, this has not actually happened, and many think that it will not as true cryptocurrencies such as Bitcoin are a separate proposition. In fact, the publicity that Libra has garnered may boost the whole cryptocurrency sector as more people feel confident enough to invest in it and other coin types.
What can Libra do for business?
Of course, the other important party in making Libra a truly comprehensive payment solution is business. After all, Libra coins are no good if you cannot spend them anywhere! The Libra Association, which governs the new currency, has already taken steps here. It plans to offer incentives to validator node operators who can get people using Libra. E-wallets that funnel users through anti-fraud measures are also planned to be rewarded. It is also thought that for every Libra transaction they process, merchants will be given a percentage of it back. All this is great news for any businesses thinking of getting on board with the new currency, and is certainly tempting in terms of courting the business world to use it.
Could we see a bright future for Libra?
It must be said that despite the understandable excitement around it, this is still early days for the new digital currency from Facebook. If it can meet its lofty ambitions to make paying for goods or transferring money simpler and more secure with almost no fees, then it certainly has a good chance of long-term success.
Featured image: France 24