Is Facebook Libra Coin Decentralized?
The biggest social media platform Facebook is taking its first step in the cryptocurrency market. The question arises here is the Facebook libra coin decentralized or centralized?
The short answer to this question is Facebook Libra coin is a centralized cryptocurrency. Regulators and institutional investors are watching closely the Facebook Libra project.
The founder of Facebook Mark Zuckerberg doesn’t go to gamble his public image by creating a speculative coin. The Facebook Libra coin is a stablecoin which is pegged by multiple fiat currencies.
The coin may not be listed on popular cryptocurrency exchanges or available for trading for the public. The coin is just a digital method to transfer payments for Facebook Apps (WhatsApp, Messanger, Instagram).
The coin is a stablecoin means the supply and price of the coin are controlled by a centralized entity. The main goal of the Libra project is to provide users with a payment platform which works on Blockchain. Users can buy stuff using the Libra coin that is expected from Bitcoin but not achieved yet.
Libra coin is powered by the Libra Blockchain which will be launched later next year. Some of the Facebook or Libra association members can run master nodes to secure the network, most likely they hold the majority of the nodes. This means that they can reverse or deny any transactions on Libra Blockchain.
The Libra coin will be launched before Q2 of 2020, that’s a long way. The coin is developed to serve as a global currency. We only know how Libra coin behave when enters into the global market.
Facebook is not making much revenue from the payments and other fees, last year the payment revenue is less than 2 percent of $55.8 Billion. Libra coin may boost the payment revenue for Facebook.
Price stability is another issue for the coin, the cryptocurrency market is known for volatility and manipulation. How Facebook deals with price stability is another major concern. on the other hand, Bitcoin rises from $0.01 to $19670 in the past 10 years and now trading above $9000. Other issues are how regulators react on the cryptocurrency, how Facebook uses the user’s data?
Earlier today Facebook launched the whitepaper of Libra coin with all details of the project. Facebook also announced a global wallet named Calibra.
