Recently Facebook has outlined the objectives of its new cryptocurrency called Libra. Facebook has been developing this cryptocurrency for more than a year. Libra is designed to allow payment processing around the internet globally. It will incorporate 1.7 billion people all around the world who doesn’t have a bank account.
Rumours have been circulating about Libra for over a year, whether Libra is developed or managed by Facebook. Finally, we came to know Libra is a cryptocurrency managed by Libra Association. It lets the users exchange flat currency for Libra for online transactions. To reach wider people, Libra does not need users to have a bank account. They simply need to convert money for Libra.
Libra Association is just guiding hand for fledgling cryptocurrency. It is just made up of partner companies. The most important payment partners are Visa, MasterCard, and PayPal. Together the above partners have to ensure the payment processing is Fast, Accurate and reliable.
Working of Libra
There are certainly few components that make Libra, the main ones are Libra Association and Libra reserve.
Libra Association is responsible for running validator nodes, server clusters, process transactions. Association is responsible for add or removes Libra from circulation. At the start of Libra association, it will run 100 of nodes. The circulation of Libra will increase as more partners join.
Libra is centralised and computed only by Libra validator nodes. To validate the nodes, Libra uses a system known as Byzantine fault tolerance. In this system, each node finds a way to reach consensus even when the node can’t agree at all of its states.
The other major positive about Libra is that many decentralised cryptocurrencies like Bitcoin, suffer from the volatile valuation. It will prove lucrative for high-risk investment. To seek this risk, Facebook has decided to create a more stable cryptocurrency to encourage more online consumer transaction.