Larry Magid, is the CBS technology consultant and joined Brian to talk about how Facebook plans to implement its own cryptocurrency.
Cryptocurrency is a type of digital currency which is built with cryptographic protocols that make transactions hard to fake and more secure. This digital currency is not controlled by any central authority which makes easier transactions and more simplified transfers through the use of public and private keys for security and privacy purposes.
What is the Libra Project?
Facebook announces the “Libra Project” as a plan to bring cryptocurrency to billions of people. Magid explains how it will work. First, it will be necessary to deposit money into some type of account. From there, you will be able to use the currency wherever it is accepted. This will be first distributed to apps such as Messenger, Instagram or Whatsapp, but the project is set to go outside Facebook to a number of outside and potentially reach more than the actual 2.7 billion users globally.
Who will use Libra?
Most people only view Facebook and its potential through the lens in which they use it. So Libra’s use in the US would likely be through partners that we regularly associate with. Magid reminded Brian that Libra will also be good in the developing world since they make no use of cards banks or checks. A good example of this as Magid mentioned is with the Farmers, they carry huge stacks of cash with them when they get paid after doing their services in the crops
As it might seem that Facebook is alone on this project just because it is a social media app, other companies are actually coming along on this “Libra Project”. This global cryptocurrency led and controlled by Facebook is also supported by Pay Pal, Mastercard, Visa, Spotify and other companies that are interested in running things smoother for international transactions and avoid time consuming currency exchanges.
What does the Facebook cryptocurrency means to Visa and Mastercard?
People might think that since one of the ideas of the Facebook’s Libra project is to create an easier and cheaper way to financial services, Visa and Mastercard could feel threatened. But in reality, according to Magid, they are charter members of the Libra Project. “Visa and Mastercard are trying to become “future proof” because they know that if they stick to their traditional business models, eventually, technology and social changes are going to make them a dinosaur” said Magid. It is into Visa and Mastercard’s interest to get into different ways to exchange currency and this project is a great opportunity for them to do so