Can We Expect Libra to Build Trust Over the Loss of Confidence on Facebook?

When Facebook reported in June that it has plans to launch its Cryptocurrency named “Libra,” it gave the cryptocurrency sector the much-needed hype. With a major name like Facebook evaluating a Bitcoin-like offering, traders from crypto remarked that digital currencies can gain standard attention and can pull in more buyers. Libra was planned to be launched over 12 nations in 2020. This means there is a great deal of potential information and new avenues for income.

Libra, like any other cryptocurrencies, will utilize blockchain, a decentralized ledger technology, to offer a digital option in contrast to government-issued cash. Unlike Bitcoin, Libra will be pegged to various existing currencies, which include the dollar.

Big Companies Opted out from Libra

What made Libra solid regardless of Facebook’s trust issues were its associations with large organizations in the financial sector. However, that help had evaporated currently. MasterCard Visa, Booking, PayPal, Mercado Pago, and eBay are among the greatest names to pull back their association with the Libra venture. The first to opt-out of Libra was Paypal, which pulled back on October 4. At that point, through the span of few hours on October 11, Visa, Mastercard, Stripe, and Mercado Pago all opted out of the project with eBay following along for good measure.

Issues Concerned with Facebook Which Came into Limelight

• Complaint from CIPPIC

Director Phillipa Lawson, the Canadian Internet Policy and Public Interest Clinic (CIPPIC), On May 31, 2008, filed a 35-page complaint with the Office of the Privacy Commissioner against Facebook, which is based on twenty-two breaches of the Canadian Personal Information Protection and Electronic Documents Act (PIPEDA). This was one of the starting points for Facebook to face problems that went against it.

• Data mining

There have been a few concerns communicated over the utilization of Facebook as methods for data mining and surveillance. A second provision that brought criticism from certain clients permitted Facebook the privilege to offer clients information to privately owned businesses, expressing that Facebook may share the data to third parties and organizations where it is associated with. This concern was attended to by spokesman Chris Hughes, who interfered and expelled this condition from its privacy policy.

• Data Scandal of Facebook and Cambridge Analytica

Facebook admitted in 2018 that an application made by Global Science Research and Aleksandr Kogan, identified with Cambridge Analytica, was capable of collecting personal data of 87 million Facebook clients without their approval, by using their friendship as an association with the clients who sold their information through the application, which turned out to be a major concern.

• Decoded Password Storage

Earlier in March 2019, Facebook acknowledged that it had, by mistake, stored “several millions” of passwords of Facebook and Instagram clients in plaintext on various internal frameworks that are only accessible to Facebook engineers, dating from 2012. Facebook expressed that affected clients would be informed; however, there was no proof that this information had been mishandled or leaked.

Things About Libra That Are Disregarded

• Facebook says that it will not control the Currency

​​​​​Facebook’s objective for Libra is to turn into a unique medium of exchange over Facebook applications, like WhatsApp and Instagram and cross border Internet. Given blockchain technology, it is a distributed ledger technology over a wide framework of PCs. It empowers the secure and quick transfer of coins from client to client, in the process by replacing the transaction services presently offered by banks. Moreover, the Facebook founder stressed that Facebook is distancing itself from Libra and does not have any control over its operations, where it will be a separate entity.

• How Facebook intends to use Libra?

Facebook plans to install Libra into Facebook, WhatsApp, Instagram, and several other different businesses it acquires in the future. Moreover, Facebook plans to introduce Libra in ATMs everywhere throughout the world. It also plans to make vendor frameworks where individuals can trade money for Libra. Besides, it was planning to offer a different mobile wallet for use outside Facebook’s platform. It also stated that it would have its very own smart contracts and programming language.

• Can Libra be compared to the US dollar?

The US dollar is proven and essentially acknowledged anywhere on the planet. Utilizing dollars, especially over borders, can be costly because banks take charge to convert them into other local currencies. Despite the publicity, cryptocurrencies are not widely utilized. The values of cryptocurrency are highly volatile, which is frequently rising or falling over 5 percent per day, making it hard to feel whether it can be a long-term asset.

Wrap up

Facebook supported the project and the first clear sign that the founders of Libra may have taken on more than they can realistically handle. Nevertheless, Facebook CEO Mark Zuckerberg is still pushing hard for Libra project to take on, saying that the U.S. needs to stay a pioneer in the money related markets, not just as a follower.