Since Facebook announced the launch of its digital currency, the entire digital currency space has been buzzing. There have been lots of speculations about the forthcoming launch of Facebook’s Libra Coin. Many analysts are predicting the possible impact of the digital currency on the entire cryptocurrency market. While some are very bearish that the new digital currency will cripple some of the top coins in the market such as Bitcoin (BTC), XRP (XRP), and other top coins, some analysts are pretty bullish about it.
Bitcoin (BTC) Price Today – BTC / USD
Some analysts believe the introduction of Facebook’s Libra Coin will be of great benefit to the cryptocurrency market, with the belief that it will further boost the adoption of Bitcoin (BTC), XRP, and other top coins in the market. However, as clearly pointed out, Facebook’s Libra Coin will do the crypto space more good than, as it would see the return as well as the entrance of more digital asset investors into the crypto space. Notwithstanding, no one knows exactly how everything will turn out to be until the launch of the coin is which slated for next year. For the meantime, here are some things you should know about Facebook’s Libra Coin.
The Libra System Uses Two Digital Currencies
Many digital asset investors, traders, and crypto enthusiasts only know about Libra Coin. Well, as we reported yesterday, Facebook also disclosed plans of its second token – Libra Investment Token (LIT) – in its whitepaper. According to the whitepaper, Libra is the digital currency that Facebook users and the general public can access and purchase. The Libra Investment Token is the Associations fundamental source of funding the project. The investment token will only be available to partners of Libra Association. To become a partner of the Association, a business needs to invest a minimum of $10 million and meet other requirements too.
Libra Is Backed by Several Fiat Currencies, It’s Not a Stablecoin
Rumour has it that Facebook’s Libra Coin is a stablecoin. However, it is not, there is a little misconception about this. Libra Coin is not technically a stablecoin. The digital currency is backed by several fiat currencies such as the US dollar, EUR, GBP, and JPY. According to the whitepaper, more fiat currencies will be added later. It is vital to note that the price of Libra Coin is not pegged to any one value. A snippet of the whitepaper states:
“It is crucial to highlight that one Libra coin will not always be able to convert into the same amount of a given fiat currency. This means Libra is not a peg to just one fiat currency.”
The Protocol of Libra Doesn’t Technically Act as a Blockchain
After a thorough analysis of the whitepaper of Libra, the Chief Technology Officer of Casa (Bitcoin security firm) – Jameson Lopp – discovered that the libra network does not technically act as a blockchain. The CTO disclosed his findings and thought via a tweet on Twitter.
Libra sounds fairly well designed as a permissioned system, but it is facing quite a few long-term challenges. Oh, and it's not a blockchain. https://t.co/B3pRC8860J
— Jameson Lopp (@lopp) June 18, 2019
Lopp further added that the protocol of Libra does not have an actual blockchain data structure – blocks are a virtual/logical construct that validators use for coordinating confirmed snapshots of the state of the system.
A lot of stories have been heard about the forthcoming launch of Facebook’s Libra coin. The project has also seen support from a lot of top players in several industries. Libra coin will have a huge impact on the entire digital currency market, but no one is sure if that impact will be positive or negative.