13 Key Things about Libra

Unless you were on a desert island tin June 2019, then you would have heard the announcement about Libra, a new cryptocurrency announced by Facebook and backed by a consortium of industry and tech heavy-weights. The purpose of the new cryptocurrency is purported to be

A simple global currency and financial infrastructure that empowers billions of people.

The whitepaper and website contain a treasure trove of information but if you’re short on time and want the headlines, here they are:

1. The network will be governed by the Libra Foundation which is based in Geneva Switzerland. The Foundation is a not-for-profit with 28 members and a goal to reach 100 members, with a maximum of 30% from blockchain-related companies.

2. There are two cryptocurrencies within the Libra ecosystem — Libra which is publicly available, and the Libra Investment Token for members of the Libra Association.

3. Libra coin will be backed by a basket of fiat currencies and short term government debt with the aim of creating a stablecoin (What’s a stablecoin? Read about them here: https://www.linkedin.com/pulse/strong-stablecoins-tara-annison/)

4. An investment of $10million (plus additional criteria such as being a Fortune 500 company) secures your place in the Libra Foundation and rewards you with Libra Investment Tokens. As such you’re entitled to one vote and a place on the decision-making council as well as the ability to be a validator (What’s a validator? Read about them here: https://www.linkedin.com/pulse/consensus-do-you-agree-we-dont-tara-annison/) and gain interest from funds held in reserve.

5. The network is permissioned so only Foundation members can be validators, however, a future aim is to move towards a permissionless network.

6. The consensus model used is LibraBFT where a number of voting rounds are conducted, led by a validator who chooses the next batch of transactions.

7. The transaction speed will be 1,000 transactions per second. That’s roughly half the TPS of the Stellar Protocol but nearly 140 times faster than the Bitcoin blockchain.

8. Finality time between a transaction being submitted and committed will be 10 seconds.

9. Whilst no specific information has been released about network fees, much of the marketing information is focused on the underbanked and current cost of cross-border payments. It is therefore expected that fees will be ultra-low, enabling Libra to take a slice out of the nearly $700 billion global remittance market.

10. The network is being built using a new programming language called ‘Move’. This appears to have landed well with the developer community and improves on many of the known drawbacks of other blockchain-related programming languages such as Solidity. For a full developer focussed review of Move I’d recommend reading: https://hackernoon.com/move-programming-language-the-highlight-of-libra-122a910d6e0f

11. There are only two monetary policies for the protocol. Coins are minted when fiat is deposited and burned when coins are exchanged back for fiat. This is similar to Tether’s policy on coin issuance and redemption so strong audit trains and proof of reserves will be required in addition to the open source nature of the protocol.

12. Libra is mobile focussed with on-ramp via Facebook’s Calibra Wallet. The intention is for this to be deeply integrated into Facebook’s product suite including Whatsapp, Messanger, Instagram etc. This appears a smart move with smartphone use globally topping 3 billion in 2018.

13. The testnet is now available for developers to put through its paces, with a public launch timetabled for the first half of 2020.

Libra Whitepaper: https://libra.org/en-US/white-paper/#the-libra-blockchain

Libra Website: https://libra.org/en-US/

Libra Testnet: https://developers.libra.org/

For more blockchain and cryptocurrency information, follow me on LinkedIn @TaraAnnison