Libra, a digital currency that disrupts the existing financial system

Libra is a brand new digital currency. Different from the previous blockchain project, it has a strong background, but at the same time has a "decentralized" vision, and its emergence has a real subversive significance to the existing financial system.

1

Weakening the country

As a globally-secured stable currency, Libra is distributed through blockchain technology and has nodes all over the world, meaning that Libra can be transferred, paid and purchased as long as there is a network. When the official version of Libra is launched, the giant financial system will start running. When it works, even if some countries do not agree, it will not be able to block Libra from its technical level. The multi-node will make the firewall helpless. . Through the network and blockchain, Libra will flow to every corner of the world, and the trend of currency globalization is unstoppable.

Because it can be circulated globally, Libra can truly achieve "Libra is at hand, want to go and leave." This digital currency, jointly maintained by global giants, will certainly be supported by the businesses of these giants, that is, Libra will be able to consume in the mainstream market after it is launched, and then transition from the mainstream consensus to the consensus. In particular, users who often go abroad and Haitao, when they find that Libra does not need to exchange money, they can be used globally, will they still have trouble to purchase foreign exchange?

The digital currency world once wanted to bring bitcoin to market as a global payment currency. Bitcoin has a long time to confirm, the price is unstable, and the TPS is low. It can't meet the demand for money. Even so, according to the statistics of Chaininalysis in 2017, consumers use Bitcoin to pay for merchant services, and they have reached the monthly average amount. $192 million. And a Libra token generated by 100 international top companies can achieve high TPS and fast confirmation while maintaining stable value. Its global currency property is worthy of our expectation.

2

Intensive currency

Unlike the existing stable currency in the digital currency market, Libra is more stable. Currently, the stable currency on the market can only be issued and redeemed by large funds and users in limited regions. Libra accepts the generation and redemption of tokens at multiple nodes around the world. When Libra value becomes higher or lower than itself, Users around the world can use the 100 “big but not down” partners to generate sell and buy redemption operations to maintain the stability of the token value.

From the perspective of distribution methods, Libra is even more stable than the value of national currency. Libra is a digital currency issued through legal moats with multiple countries around the world. Its value is determined by the monetary value of many countries. The fluctuation of the foreign exchange market is small, and Libra's fluctuations are smaller. For example, a Libra may correspond to 25%, 25%, 25%, 25%, and when the US dollar falls by 1% in the foreign exchange market, Libra will only fall by 0.25%. Reason. At the time of the actual release, Libra anchored more of the currency, so that it was affected by exchange rate fluctuations and was very small, which would well guarantee Libra's global purchasing power.

Libra is sufficiently distributed. Although the Libra project is led by Facebook, it is also known as Facebook's digital currency project, but when Libra is actually online, Facebook is only one of 100 "super nodes", its rights and 99 other The cooperation node will not be any different. Libra has stated in the development plan that the project will be promoted and network maintained by the introduction of 100 giants in the early stage, but as the project develops, Libra will be driven by global users, and anyone who meets the standards in the future can do Libra's consensus node for the project. Development contributes.

Libra itself is a currency, not a digital dollar or renminbi. Nowadays, Libra is a global “Alipay”, but only one Alipay is behind Alipay, and Libra is driven by 100 companies or organizations like Alibaba. And the essence of Alipay and Libra is different. Access to Alipay is to accept this software, and believe that the numbers shown on it can be exchanged for RMB; access to Libra is accepted in this currency, just like accepting US dollars and RMB payments. The concept, Libra as a currency can also be connected to Alipay, WeChat, Facebook, Twitter and other applications, including existing games, financial and other products, can be directly connected to Libra currency payment.

3

Inadequacies

Libra wants to build a new Big Mac financial system around the world, but the project is still facing many problems. The first is the issue of regulation. Governments have different attitudes. At present, many organizations and individuals have called Facebook to stop the development of the Libra project, including several US members of Congress. At present, Libra's white paper has just been released for half a month. More than half a year from the expected date of the launch, it is foreseeable that they will face the obstacles of traditional forces.

On the way to decentralization, Libra faces many technical and institutional challenges. The Libra project believes that only non-licensed systems can ensure that the project "runs on an open network." At the same time, they also saw that there is no mature solution in the blockchain market, which can support the scale, stability and security required by billions of people and transactions around the world through unlicensed networks. These require the Libra community to think about solution, and the internal evaluation of the project will set the transition period from a licensed network to an unlicensed network for five years. That is, it may take another five years for ordinary users to participate in the Libra project. There are still many challenges for Libra, which can be manifested in two ways:

First, on the technical and economic models: chain governance mechanisms, market design, expansion, understanding of anti-witch attack hypotheses, determining fair and effective models for equity commissioning and responding to verifier node misconduct, and determining on non-permitted networks Expand the strategy of the Move platform and decentralize the reserve function.

Second, in governance: determine the evolution of the agreement, understand how the association maintains a healthy ecosystem, identify emergency management, and respond to disruptions.

4

Libra's value to the currency

We saw that the previous ordinary users of the currency were not eligible to participate in the Libra project, but the entire currency circle is paying attention to this matter. The reason, Libra's value to the digital currency market, I think there are two aspects:

First, bring people. It will enhance users' understanding of digital currency and allow ordinary users to use digital currency directly. Now the volume of the digital currency market is still very small, many users do not know the digital currency, and through the widespread use of Libra globalization, people will find that it is easier to enter the digital currency market than stocks, and there is no restriction like stocks. There is no shortage of rich myths in the digital currency market, and it is a global market that can accommodate users everywhere. Libra's access may make the number of “coiners” in the world exceed the number of investors.

Second, bring money. The security of funds guaranteed by 100 multinational corporations allows funds to enter the digital currency market more securely and steadily. If you have 1 billion in your hand and want to invest in digital currency, how would you enter the market and how do you play? A big problem in the market now is that there is no place to safely accommodate large funds. The existing stable currency retail investors are forced to use it, let alone those savvy capitalists. The release of Libra will fill the gap in the security of funds in the market, allowing funds to participate more confidently in the digital currency market, and more funds entering the market means that the market has the opportunity to do even greater.

Libra is in line with the trend of currency globalization, and with the strong network effect, it will form a dimensional strike against the existing financial system.

Author: Allin