Initially announced back in May 2018, the Facebook cryptocurrency didn’t make the news until May 2019. Now it is treated as either “the next big crypto thing” or “the greatest threat to the financial world as we know it”.
But how did it come to this?
First of all - what is it?
Libra is a blockchain digital currency developed by social media giants Facebook. What’s special and radically different when compared to other cryptocurrencies like Bitcoin, is that Libra is permission-based, meaning anyone willing to be involved has to be officially approved to join the official Libra network of validators. In order to achieve that, a potential validator has to have a large and valuable collection of menegeable assets.
And while Bitcoin validators (or miners, if you wish) have to solve complex mathematical equations in order to approve a transaction, Libra validators do so by proof of stake. Libra validators are speculating that as the currency grows in popularity, their investment will provide profit.
Curently, the currency does not yet exist, and only an experimental code has been released. An official launch is expected in 2020, although no certain date has been announced.
The best thing, at least on paper, is that Libra will have its own blockchain, and because of the fact that it will not be dependent on mining, it will be more stable.
The prospects of Libra becoming an instant 2020 hit look great - PayPal, MasterCard, VISA and Uber have already expressed support for it - marking the first time a cryptocurrency will go mainstream. Yes, potentially much bigger than Bitcoin.
Of course, not everyone is happy about Libra.
And, who, but the Twitter star of all Twitter stars to start the anti-Libra campaign - Mr. Donald J. Trump himself. But even if you don’t entirely trust Trump’s point of view, you might still consider the major concerns of US financial institutions.
As Deutsche Welle asserts, “skepticism is fueled by by the fear that widespread adoption of the new digital currency by the social media giant's 2.38 billion users could upend the financial system”. "Facebook has demonstrated through scandal after scandal that it doesn't deserve our trust," Democratic Senator Sherrod Brown, the ranking member of the Senate Banking Committee, said. "We'd be crazy to give them a chance to let them experiment with people's bank accounts."
With an uncertain IPO date and a still unannounced launch date at all, future of Libra seems vague. However, when and if an IPO is announced, TradeApp will most likely offer you the opportunity to trade Libra shares via CFDs.
What’s more, a Libra IPO will most likely affect the value of Bitcoin and Ethereum - in one way or another. Keep your eyes and ears peeled.
Past performance is not an indication of futures outcomes. Trading is risky, you may lose all your capital