Learning about the cryptocurrency, Libra
Facebook has recently unveiled its ambitious project for a new global cryptocurrency, Libra. Facebook’s blockchain-powered currency will be backed by a basket of historically stable assets. This will lessen the high volatility experienced by other big crypto names such as Bitcoin, Ethereum or Ripple. Facebook isn’t embarking in this project alone. A large number of well-known players are endorsing Libra, including PayPal, Visa, Mastercard, Uber, Vodafone, eBay, and Spotify, to name a few. It is envisioned by some as a game-changer in the fintech space and potentially disruptive to the world’s economy. A few hours after its announcement, US policymakers have asked Facebook to delay the launch of Libra until they understand its likely impact on the financial system.
However, it isn’t Libra’s underlying technology where the hype is coming from; blockchain’s benefits have become quite familiar to the mainstream, even when most question, what is blockchain? It is Facebook’s attempt to take its most powerful intangible asset to the next level, the network effects of its ecosystem.
Whether Libra will become a mainstream currency or not is something yet to be seen. But it is remarkable how Facebook constantly aims to leverage its brand, data, software, and user base, to keep building layers of network effects that exponentially enrich and protect its entire ecosystem. Despite the recent data privacy scandals, it isn’t surprising why Facebook’s IP moat remains unparalleled.
What is learned
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