Facebook currency four

Facebook Currency, four



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They’re not called “Zucker Bucks”, but Facebook just reinvented digital money. Facebook’s Libre cryptocurrency will launch early next year, and it’s more like Paypal than Bitcoin.

It’s designed to be easy enough for everyone to use . . . but it’s still complicated to understand. So I’m going to break it down for you, nice and simple.

Libra is like cash that lives inside your phone. You’ll be able to buy Libra through Libra wallet apps on your phone or from some local grocery and convenience stores.

You cash in your local currency like dollars and get nearly the same number of Libra coins, which are represented by this wavy three line emoji instead of the dollar symbol.

But first, you have to verify your identity with a photo ID.

You’ll then be able to spend your Libra while online shopping, or potentially pay for things like Uber or your subscription for Spotify, since those companies have partnered with Facebook to make Libra popular.

Since it’s almost free to digitally move Libra from one account to another, you won’t have to pay high credit card processing fees that can add almost four percent (4%) to your total.

And some Libra Wallet apps and shops will give bonus discounts or free coins for signing up and paying with Libra.

You will be able to send and request money from friends like you would with venmo or PayPal, and it’s easy to send Libra just like a message. In fact, Facebook is building its own Libra Wallet app called Calibra, that will live inside of WhatsApp, Facebook Messenger and its own standalone app.

You won’t have to attach your real name and identify to any of your payments, but they will be public.

Facebook knows its a little bit creepy, and you probably don’t want it spying on what you buy, so Facebook set up a new company called Calibra that will keep all of your financial data separate from your Facebook profile. That means it can’t use your transaction data to target you with ads, reorder your news-feed or sell your info to marketers.

Eventually Facebook hopes that you’ll use Libra to pay your bills, scan your wallets QR code to purchase coffee or tap your phone to buy your public transit ticket.
At anytime, you can cash out of Libra and get your local currency back in your bank account or handed to you at a local store.

But how does the Libra work without a bunch of blockchain buzzwords?

Well, Libra is coded to have a stable price, be secure and be controlled not just by Facebook. Instead, Libra is run by the twenty-eight (28) member Libra Association that it hopes will grow to a hundred members by the time it launches in the first half of 2020.

Financial companies like Visa and MasterCard, merchants and apps like eBay and lyft, venture capital funds like Anderssen-Horotitz and Union Square, ventures and non-profits like Kiva are all members.

They each paid at least ten million dollars ($10 million) to get one vote on the Libra Council that controls what happens to the currency. They’ll be responsible for checking to make sure Libra transactions are real and creating the Libra reserve.

See each time you cash in a dollar, that money goes into a big bank account called the Libra reserve that creates and sends you roughly one Libra token.

The Libra reserve is made up of a collection of the most stable international currencies like the US dollar, British Pound, the euro and the Japanese yen.

The idea is that even if one of those currencies goes up or down in price, the value of the Libra will stay stable. That way, shops will accept the Libra payment without worrying that the value of the coin will drop tomorrow.

Big swings in price are the reason why older crypto-currencies like Bitcoin and aetherium haven’t grown popular as payment methods.

Libra can also handle one-thousand (1,000) transaction per second, while Bitcoin can only handle seven.

So how do Facebook and other Libra Association members earn money? Off of interests on all the assets held in the Libra reserve. After the Libra Association
pays for its operations and investments in technology, members earn a cut of the remaining interest in proportion to how much they invested when they joined.

If Libra gets popular, and tons of people cash in, then the reserve grows huge, and the interest could add up to serious revenue for Facebook.

But there’s also a subtle second way that Facebook could get rich from Libra. If the currency makes it easier for small businesses to accept payments online, they’ll sell more stuff. They’ll then have extra money to spend on Facebook ads which will make it extra quick to buy things with Libra. Ninety percent (90%) of small businesses already have Facebook pages, but only seven million advertisers currently exist on Facebook.

If Facebook can turn more of those local merchants into ad buyers, Facebook’s revenues could skyrocket.

The big risk for Libra is that anyone will be able to develop apps for it. That could lead to another Cambridge analytic scandal.

Instead of some shady app maker snatching your personal info, they could steal your digital currency, and Facebook and the Libra Association say they won’t vet Libra developers, which leaves the door wide open to abuse.

And if people get scammed, they’re still gonna blame Facebook.

But if Facebook succeeds, the real win could be for the 1.7 billion people left in poverty with no bank account around the world. They’re exploited by international money sending services like Western Union of Money Gram. They charge a steep seven percent (7%) fees that take fifty billion dollars away from families per year.

And if they’re mugged, they could lose all their money since they have nothing stored online. But all they need is a photo ID, and Libra could give them an alternative to a bank account, that’s tougher to steal, and can make it easier to pay for what they need.

There are plenty of reasons to worry that Libra could give Facebook and other tech giants more power or lead to people getting scammed. But it could also give disadvantaged people everywhere a way to join the modern economy.

And at least it’s not called “Face Coin”.


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1. The new Facebook cryptocurrencies is both technically very complicated, but also very user-friendly. True or false?

2. Is Libra physical cash consisting of bills and physical coins?

3. Can anybody simply register or sign up and open a Libra account?

4. Which will be cheaper (more expensive), money transfers with credit cards or Libra?

5. Are or will there be any limits to Libra transactions? What are some of the things people will be able to do?

6. Facebook will know everyone’s personal purchases and buying habits and send targeted ads to people. Is this correct or incorrect? Will Facebook control and run everything on Libra?

7. Will the value of the Libra coin fluctuate much? What safeguards do they have?

8. The backing (supporting) companies are donating money. Is this right or wrong? How will Libra generate profit for its holders (investors)?

9. Will only the giant tech companies benefit from Libra?
A. How do your friends pay for purchases and make monetary transactions? Are there demographic differences?

B. How have purchasing and monetary transactions changed over the years?

C. What do you and your friends think of the Facebook Libra? Would you use it in its intended form? Who would welcome the Libra?

D. Everyone is excited and enthusiastic about the Libra. What do you think? Is there anyone who is anxious? What do banks, money exchanges, card companies and governments think? How do they feel?

E. What will happen in the future?

F. Are there suspicions or doubts about Facebook and the Libra?

G. Could or should anything be done by people?

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