The release of the white paper about Facebook’s digital currency resulted in extensive media coverage, ensuring information about it was widely accessible. In this post, we’ll be covering the 7 important things you need to know about Facebook’s “revolutionary” currency, Libra.
It Is a Stable coin
A stable coin is a type of cryptocurrency that is tethered to other stores of value like gold, securities, fiat money or other cryptocurrencies in order to reduce volatility. When launched, Libra will be a stable coin because its value will be based on a group of existing currencies including the Euro, British Pound Sterling, Japanese Yen, and the US Dollar. It will also be pegged to a security token called Libra Investment Token.
From Permission to a Permissionless Network
On a permission-based network, Libra would be in charge of authorising those who can have access to the Libra blockchain. On the permissionless network, anyone who meets certain technical requirements can have access to the blockchain. Libra is taking this route to monitor the blockchain closely in its first few months before opening it to the public.
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It Is Built on The Libra Blockchain
The Libra token is built on the Libra blockchain. Unlike the Bitcoin and Ethereum blockchain, a new programming language has been drafted for this blockchain. The name of the programming language is Move.
The Libra white paper also states that transactions that would be carried out on the Libra blockchain would be private transactions. Users identity would not be visible as users would only need their public and private keys to carry out transactions.
It Is Not Run by Facebook
Unlike what most people assume, Libra is not run by Facebook. Instead, it will be run by an independent body known as the Libra Association. Even though this body is an offshoot of Facebook, the white paper states that it works independently of it. Many people believe that this is a move by Facebook to remove this new finance project from the privacy controversy that Facebook is known for.
Another fascinating thing is the white paper is not signed by Mark Zuckerberg or Facebook’s Head of Blockchain Engineering, Evan Cheng. According to the White paper Facebook would only Facebook is only a partner.
It Will Operate Smart Contract
A smart contract operates pretty much like a normal contract except that it is a set of codes on the blockchain which automatically means that it is decentralized. The Ethereum blockchain was the first blockchain to enable smart contract functionality.
Backed by Star-Studded Companies
Its Founding Members as they are called, are companies that are in partnership with the Libra team on this project. Founding members participate in the responsibilities of governance, implementation and strategy.
Some of its founding members are Booking Holdings, Facebook’s Calibra, Amazon, eBay, Paypal, Mastercard, Uber, Visa, Vodafone, Coinbase, Women’s World Banking and a group of others.
There Have Been Mixed Reactions
Reactions to the release of the Libra white paper haven’t been entirely positive. For a start, it has been hit by a host of regulatory hurdles in Europe. As there’s concern about the challenges it would pose for already established financial institutions like banks.
Then there’s also the privacy issue. Facebook has a bag of privacy issues attached to its name which raises red flags in some quarters.
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This article is in partnership with Quidax. Quidax is a European based cryptocurrency exchange with a focus on Africa. We provide a seamless platform for users to send, receive, buy and sell cryptocurrencies using their local currencies.
Bitcoin posts biggest daily drop since market crash of March 2020
Some crypto experts anticipate such losses are coming from widespread profit-taking by U.S. and European investors.
The flagship crypto, Bitcoin, suffered massive losses in the early hours of Friday, as almost all the gains recorded in 2021 vanished into thin air, thus posting its largest daily drop since the market crash of March 2020.
- Some crypto experts posit that such losses are coming from widespread profit-taking by U.S. and European investors, and that worries about extra regulation has driven the crypto asset toward a weekly loss of more than 25%.
- Top-rated crypto assets like Ethereum plunged by almost 16%, while Chainlink also recorded double-digit percentage losses.
Also weighing on prevailing market conditions seen across the crypto-verse, data retrieved from Glassnode, a crypto analytic firm, reveal bitcoin $BTC Supply in Profit (1d MA) just reached a 3-month low of 16,899,766.137 BTC.
The previous 3-month low of 16,903,691.779 BTC was observed on 11 December, 2020
Previous 3-month low of 16,903,691.779 BTC was observed on 11 December 2020
— glassnode alerts (@glassnodealerts) January 21, 2021
What this means: Consequently, Jesse Cohen, a senior crypto analyst, in a note to Nairametrics, spoke on the outlook for Bitcoin in 2021.
“I expect Bitcoin to remain highly volatile to the downside in the new year, given the potential for more scrutiny and tighter regulation. That should see prices fall back from their record highs, with the prospect of increased regulation being the most important factor affecting Bitcoin in 2021.”
However, as it gained more than 300% in 2020, many crypto experts wonder if BTC can continue such rally this year.
Investors get burnt, lose $1.6 billion in crypto within a day
The prevailing market condition at the crypto market led to heavy losses of global investors’ funds, when roughly $1.6 billion worth of crypto positions evaporated into thin air within a day.
The mass liquidation of such crypto holdings, according to data retrieved from Bybt, showed that such occurred before the flagship crypto dipped from $34,300 to around $29,700 at press time.
For the day, about 192,005 crypto traders got liquidated.
The global crypto market value at press time was around $842.75B, a 16.40% decrease over the previous day.
- Total crypto market volume for the day stood at $169 billion, which makes a 12.17% increase.
- Total volume in DeFi is currently $14.53 billion, 8.61% of the total crypto market 24-hour volume.
- The volume of all stable coins is now $140.71B, which is 83.36% of the total crypto market 24-hour volume.
- The flagship crypto traded at $29,196.15.
- Bitcoin’s dominance is currently 64.77%, an increase of 0.16% over the day
What this means: Record sell-offs have pushed Bitcoin’s year-to-date gains below 1%. The record sell-off in the crypto market is likely due to widespread profit-taking by U.S. and European investors.
Some days ago, the leading United Kingdom financial regulator, the Financial Conduct Authority, issued a piece of stern advice on crypto investments.
The statement highlighted the risks associated with investing in Bitcoin and other crypto assets, and warned the public that there were high chances that all their funds could be lost.
“The FCA is aware that some firms are offering investments in crypto assets or lending or investments linked to crypto assets, that promise high returns.
“Investing in crypto assets, or investments and lending linked to them generally involves taking very high risks with investors’ money. If consumers invest in these types of products, they should be prepared to lose all their money.”
Ex-Real Madrid Striker, David Barral becomes first-ever footballer to be bought with Bitcoin
Former Real Madrid Striker, David Barral has become the first-ever footballer to be bought with Bitcoin.
Former Real Madrid striker, David Barral, makes transfer history as he became the first-ever professional player to be bought solely with virtual currency, Bitcoin.
Spanish third division side, DUX Internacional de Madrid, simply known as Inter Madrid, has officially signed the 37-year-old after teaming up with their new sponsors, Criptan that deals in cryptocurrency, The SUN reports.
Inter Madrid who are part of DUX gaming, eSports club owned by footballers Borja Iglesias and Real Madrid star, Thibaut Courtois, is yet to disclose the total value of the deal.
The Segunda Division B club went to Twitter to welcome their new signing and thank their sponsor.
“David Barral new player of DUX Internacional de Madrid, welcome to the infinite club! He becomes the first signing in history in cryptocurrencies. Thanks to Criptan, our new sponsor, for making it possible,” the club tweeted.
The 37-year-old, who made over 50 appearances playing in the Real Madrid reserve side, expressed his delight at his latest move. Barral has also played for Spanish La Liga clubs Sporting Gijon, Levante, and Racing Santander.
“Glad to join the project of @interdemadrid with eager ambition and responsibility to continue competing and achieve important challenges in my sports career,” he wrote on his official Twitter handle.
What you should know
- A similar deal was when a Harunustaspor, Turkish amateur side, paid 0.0524 Bitcoin (£385) plus 2,500 Turkish Lira in cash (£841) for Omer Faruk Kıroğlu in 2018.
- Back in December, Carolina Panthers offensive tackle Russell Okung became the first high-profile athlete in the United States to be paid in bitcoin.
- Similarly, the Mark Cuban-owned Dallas Mavericks became the second NBA franchise to accept Bitcoin as a means of payment for both game tickets and merchandise.