Facebook is, right now, the dominant player in social media with more than 2 billion users on a planet of around 7.7 billion. This enormous scale comes with incredible power and lots of scrutiny.
Libra Facebooks new cryptocurrency seems like a way to capitalize on Facebook’s dominance of today’s social media (and its partners’ industries) to kick-start a real, global network effect around a supra-national digital currency.
If even a fraction of Facebook’s user base converts to Libra, it’s on the path to becoming the largest and most profitable “financial institution” (albeit decentralized) in the world.
Libra is essentially a stable coin as it is pegged to government-issued currencies such as USD, EUR, SGD, etc. Many decentralized cryptocurrencies like Bitcoin or Ethereum, are volatile in its valuation. Facebook seeks to create a more stable cryptocurrency to encourage it as a means of facilitating ordinary online consumer transactions.
Traditionally, to make financial transactions, one has to go through banks or what is available today as online money transfers such as PayPal, Transferwise, and many more. However, it is important to note that existing financial systems today are of their own technology. For the sake of being brief, what makes Libra special as compared to other financial systems, is that it is powered by the blockchain.
Develop & Trade Your Own blockchain
Parity Technologies, a well-known development team in the Ethereum ecosystem, launched Substrate, which is their tool that aims to radically simplify blockchain development. Overall, to conceptualize Substrate’s utility, imagine a toolkit with which developers can develop their own blockchains in several different programming languages. On top of this, the entire environment is open source and even allows users to choose between using existing, trusted consensus algorithms or creating their own.
Reportedly, what makes all of this possible is a protocol called Polkadot, which was created by Parity to enable interoperability between many different blockchains. Allowing the same open trade as other blockchains like Facebook's new Libra & Ethereum.