We deal with the cryptocurrency Libra. Details

Libra is a cryptocurrency project from Facebook. The cost of cryptocurrency which will be stable and tied to a basket of currencies, for starters it will be dollars, euros, Japanese yen and pound sterling. A lot of articles have been written about him, but there was a lot of unknown in the details of the functioning of the project. Now, Facebook is slowly starting to tell the details. What role will Facebook have in the project? Who will get the money? Or maybe corporations quickly pushed the founders into the background? Let's get it right. Spoiler in the picture.



The public start of the project is scheduled for the first half of 2020. Now the project is completely owned and developed by Facebook alone. But this will not always be. Already to a public start, power will transfer to a newly created independent non-profit organization - the Libra Association, based in Geneva, Switzerland. This organization will become the main one in the project and the formal owner. Members of this association will be a number of authorized founding companies, including Facebook. By 2020, the membership of the association should be about 100. And here the fun begins. Facebook is only one member of this association on an equal footing. First among equals. The association acts in accordance with the charter. The most important decisions related to the functioning of the network will be made by voting members of the association. To make a decision, two-thirds of the votes cast are required. Such decisions will include, for example, new software versions, the composition of the currency basket, and more. Thus, Facebook will have only about 1-5% of the vote and influence. I note that membership in the association is starting from 10 million dollars. For every 10 million invested, 1 vote is expected, but there is also a restriction from above so that one rich man does not control everything.



Each of the members of the association has an active blockchain node, they are networked and will ensure the functioning of the project. Total nodes at the start of about a hundred. This is due to difficulties for quick transaction processing. The blockchain database itself will be public, you can download it and validate and research it yourself. Coin holders are anonymous. Moreover, the entire transaction history is public and visible.



The software is written under the Apache License 2.0 public license. Who cares, they write it in Rust. The network will be able to process up to 1000 transactions per second for a group of 100 validation nodes. In comparison, Visa claims to process up to 65,000 transactions per second. The Bug Bounty program will also work to reward for found bugs and vulnerabilities. In addition to the functionality for coin transactions, the blockchain also supports the work of smart contracts, similar to Ethereum. For this, the Move programming language is used.

About money

All members of the association, not just Facebook, can change fiat to libra and back. The audit is conducted by the Swiss head office. Received fiat is stored either in money from members of the association, or transferred to the so-called Reserve. The reserve is invested in highly reliable liquid instruments distributed around the world: government bonds and bank deposits, stocks are not going to buy. Income from investments will not get to users. He will pay for the work of the association and the network itself. Association members can apply for grants to pay for research, development and popularization of cryptocurrencies, which will be paid by the head office.



The conversion of fiat money into crypto is carried out in any currency, at the rate set by a particular organization. Thus, courses may vary slightly between different exchanges and sellers. Despite the fact that the cryptocurrency rate is tied to a basket of currencies, its composition can change in the event of significant changes in the market, crisis, etc. Most members of the association’s council should vote for the changes.

Future plans

Immediately identified the problems and plans for the future. The first is transaction speed. 1000 transactions per second - can not ensure the global dominance of cryptocurrency. More developers want to “somehow” provide in the future the opportunity for anyone who wants to have an active blockchain site. We have not yet figured out how, while linking the increasing load on the volume of transactions. And also give users the opportunity to make decisions themselves related to the functioning of the network in the concept of “more coins - more votes”.



From myself I will add one more problem. After converting fiat to cryptocurrency, fiat money does not go out of circulation, but through investment instruments it returns to the economy. At the same time, a new currency is formed - Libra. Thus, the total amount of money rotating in the economy doubles, which can lead to inflation. But many financial instruments are subject to this effect, so it’s too early to panic.



Additional information can be found on the website libra.org/ru-RU/