What is Libra Cryptocurrency and Calibra wallet?

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Blockchain, cryptocurrency and Bitcoin were the buzzwords just few years ago. The hype around Bitcoin specifically died and so did its value. People lost of their hard-earned money in this venture. However, one good thing still came out of it. Blockchain is a secure system for creating decentralized currency. Facebook is launching its own cryptocurrency and it is called “Libra”. Apparently, this new currency learns from the mistakes of previous ventures as well as making new and smart choices to make it an actual viable option for payment. 

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In addition to Libra, FB is also going to launch a dedicated wallet app called “Calibra”. This currency would be exchanged via Messenger, WhatsApp and Calibra’s own dedicated mobile app. The main incentive behind this initiative is to make global payments and fast and painless. Moreover, countless people will get their own account for the first time, even if its a virtual one. All anyone got to do, is to buy Libra coins using real money. You can buy it using any currency around the globe. The exchange rates however are going to vary. 

How to Libra Cryptocurrency stable or volatile? The Libra Reserve

Take any cryptocurrency in past. The biggest disadvantage of using those was their volatility. Bitcoin reached an all time high of about $20,000 back in 2017. Then it dropped drastically to $6,000. This change of value cost lot of money to lot of people. The mining cards and mining business in general went into loss. Moreover, people who had invested in it, lost most of their savings.

bitcoin volatile cryptocurrency vs libra
This chart shows the change in Bitcoin to USD rate during last 5 years

It is pretty clear from this example why not even regular public but a lot of governments decided against cryptocurrency. 

Facebook wants to break this stigma and create a centralized and stable global economy. This is done thanks to a system called “The Libra Reserve”. In order to understand what it is, you need to understand how regular currencies like Dollars and Euro work. These are actually fiat currencies. The values of these currencies is based on solid valuable items like Gold for example. Moreover, the federal reserves decide the global value of these currencies and how they compare internationally. 

Similarly, Libra Reserves is a non-centralized system of reserves owned by various corporations. The reserve money is generated from various investors and the people buying Libra itself. These people are called “Founding members” of Libra

Following are the current founding members of Libra in industry:

  • Payments: Mastercard, PayPal, PayU (Naspers’ fintech arm), Stripe, Visa
  • Technology and marketplaces: Booking Holdings, eBay, Facebook/Calibra, Farfetch, Lyft, Mercado Pago, Spotify AB, Uber Technologies, Inc.
  • Telecommunications: Iliad, Vodafone Group
  • Blockchain: Anchorage, Bison Trails, Coinbase, Inc., Xapo Holdings Limited
  • Venture Capital: Andreessen Horowitz, Breakthrough Initiatives, Ribbit Capital, Thrive Capital, Union Square Ventures
  • Nonprofit and multilateral organizations, and academic institutions: Creative Destruction Lab, Kiva, Mercy Corps, Women’s World Banking

How to become a Libra Founding Member?

Organizations that invest their assets into Libra infrastructure before launch will be called founding members. However, not everyone can join this program. There are some strict rules and requirements. These are both expensive and painstaking. Businesses, organizations, institutes all can take part in this program. 

If any business or organization is interested in becoming founding member of Libra, then they must meet at least 2 of following requirements.

  • Market value/customer balances:
    • More than $1 billion USD in market value or greater than $500 million USD customer balances.
  • Scale
    • Reach greater than 20 million people a year, multinationally.
  • Brand sustainability

Below given requirements for those businesses that are not as developed as above mentioned. If these organization can meet following requirements, then they can become one of founding members too.

  • Crypto-focused investors:
    • Greater than $1 billion of assets under management (AUM).
  • Blockchain infrastructure companies (must meet all of the following):
    • Has been in operation for over 12 months.
    • Employ enterprise-grade security, privacy, and infrastructure operations backed by modern policies and processes — publicly disclosed by security audits and/or penetration testing reports.
    • Custodying or staking greater than or equal to $100 million in assets for customers or clients.

What is the benefit of becoming a Libra Founding member? Considering its future in global payments, the founding members will get special treatments and rebates in payments. Moreover, become eligible for exclusive incentives in future. Lastly, they can get low-yield dividends from these investments.

Calibra Wallet

calibra wallet libra cryptocurrency

Every cryptocurrency needs a virtual and secure wallet. Use it to buy, sell or share your coins with other people. Since Libra is associated directly with Facebook, users of Messenger and WhatsApp can make direct transactions to their contacts through the app. For those who have recipients out of their social media or they just don’t use these services, then choose the independent Libra app in form of Calibra.

Should you trust Libra?

The initial observation of Libra is actually very strong. It picks up on all the positives of previous cryptocurrencies and throws out all the shortcomings. It promises to be a stable form of currency thanks it reserves system. There are several protocols in place to protect the value or this currency even in case of an economic crisis. 

For now we think that this is a really good initiative. If Facebook successfully delivers what it is promising, then we could see a total shift in global payments system. PayPal, banks and other services like these could become totally irrelevant. It would be the fastest and most secure form of payment. Not to talk about convenience. The best part if that it works globally and all transactions are supposed to be instant! We no longer will have to wait 3-5 days to wire transfers with around 7% cut in transfer fees.

Final Words

The idea behind Libra is really promising. The official launch of this services with Calibra is promised to be in 2020. Therefore, we have our fingers crossed and looking forward to how it all turns out in the end. 

Feel free to leave your thoughts and comments below.

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Usama M, a software engineer by profession, is the founder and editor-in-chief at Techbeasts. At Techbeasts, he uses his expertise to craft solutions to solve everyday consumer tech problems. His main areas of interest are Android, iOS, and Windows. You can find him on YouTube at "Tech with Usama".

1 COMMENT

  1. Is this the end of a need for Banks? . Its not a good idea to make less work for people and become totally reliant on technology for everything

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