The year was 2017, where millions of people heard of “Bitcoin” for the first time in their lives. Starting from a laughable conversion rate of 1 BTC = ~$22 Dollars in February 2013, Bitcoin’s value on 17th December 2017 went up to 19 thousand seven hundred and eighty three dollars. I wrote it out so you can get the idea of how serious this is. As of the time and day I’m writing this article, it’s at ~$9,000ish thousand, but who’s keeping track?
I am. I am 100% keeping track.
Real quick, if you don’t know the basics of cryptocurrency (or Bitcoin, specifically), I highly recommend checking out the beginner’s beginner guide I wrote back in the day – this post will be much easier to understand. Promise.
Libra, Facebook’s new cryptocurrency (along with a partnership of 27 companies including Mastercard, Uber, Spotify, Ebay, and several others) is a new digital coin that will let you purchase goods/services, or even send money to others, with very minimal fees.
Think of Libra like Bitcoin with a splash of your favourite money transferring app (Paypal, Venmo, Cash App).
What’s the difference between Libra and other cryptocurrencies?
The core concept is the same.
Libra and other cryptocurrencies operate on a technology known as Blockchain, which is essentially is a decentralized ledger.
Blockchain is a way for technology like cryptocurrency to not be controlled by 1 single entity; i.e. NO one person, or one company, or one organization, or even one government can control Libra. In this case, 27 companies together do.
Why did thousands, if not millions of people invest in Bitcoin and other cryptocurrencies? For fun? No. They did, because the “value” of Bitcoin was rising significantly – from $22 USD to close to $20,000.
If you still don’t understand: imagine I bought exactly 1 Bitcoin when it was valued at $22, i.e. I paid $22 USD for 1 BTC. That same (1) Bitcoin was eventually valued at almost $20,000 USD.
Please note: this is the same Bitcoin I purchased at $22. I’m not a math whiz, so just go ahead and calculate the percentage of profit you could have made from $22 to $20,000 if you happened to sell your Bitcoin(s) then.
That being said, this does not apply to Libra. This will be what’s known as a stablecoin. The value of Libra will be directly tied to a real-world currency, say the US dollar. In the same way $1 dollar is always worth $1 dollar, the Libra will never rise or depreciate in value.
What are the benefits of using cryptocurrency?
With everything being digitalized, it’s almost weird that we’re still using paper currency (if you think about it). There are almost too many perks of/for using digital currency.
- Accessibility: You don’t need to be at a bank or financial institution to be able to manage your finances – it’s all done on your smartphone.
- Fast: You know how you have to pay something online on a Friday but it says “2-3 business days” and you’re cursing under your breath because Saturday and Sunday are not business days? It doesn’t matter anymore. Transactions with cryptocurrency are literally almost instant.
- Global: I can’t use Venmo outside the U.S. and PayPal charges crazy fees for international transfers. Cryptocurrency is (Mr.) worldwide.
- Secure: This has to be the biggest pro (coming from a cyber-security major) to not only cryptocurrency, but Blockchain in general. This is for a whole different post, but just know that Blockchain is tons more secure than you keeping your wallet in a safe at home.
And now, get ready for the hot fire round because here come the speed questions.
Just to be clear, what can I do with Libra?
Send and receive money, mainly. But (even though the initial features might be limited to very few geographical locations), you might even be able to go around buying your coffee with Libra, like it was Apple Pay.
When can I have access to Libra? CAN I have access to Libra?
Starting 2020, and yes. Everyone can. You don’t necessarily have to use it though. But may it be Bitcoin, Ethereum, JPM Coin, Libra, or any other cryptocurrency – the future is digital and you better start getting used to it, pal.
I’ve read “Calibra” a lot, is that another currency?
Again, definitely read up my guide to Bitcoin because it will all make so much more sense. Until then, know that Calibra what will allow Libra to… exist.
Long story short, where do you store your paper money?
A wallet, good job. Calibra, a Facebook subsidiary, will introduce the first digital wallet for Libra. To explain briefly, if you open up your phone’s app store and look for digital wallets, you’ll easily find over 100. These wallets are what allow you to store your digital currency uniquely (you can’t mix Bitcoin with Libra in one wallet). In terms of the CURRENT cryptocurrency, each wallet has its own identifier (a series of letters and numbers that make up your wallet’s “address”); like a fingerprint but for a digital wallet. You’ll probably not be able to remember this identifier, so you’ll have to write it down each time you want to send or receive money to or from someone.
In the case of Calibra, it’s officially being integrated with Messenger, WhatsApp, and as a standalone app; a.k.a. it’s very likely we’ll be able to send and receive money internationally simply by texting. And remember, this sending and receiving of money will literally be low cost to free.
I have just summed up a lot of what Libra and Calibra actually are in what (I promise) is a short post. But there’s a lot more and you can read all about the documentation on their page. There is a lot about Libra that can be said and questioned; specifically because Mark Zuckerberg is behind it and 6 year old kids are better at keeping secrets than Facebook is. But the idea is good, and is backed by 27 major companies, and I definitely see more of a potential in this than in Bitcoin, which as of today is more like “gold” than an actual currency.