The social media giant Facebook recently took everyone by a storm after the launch of its cryptocurrency Libra. After much hype, details about Facebook’s cryptocurrency were made official and it saw an immediate reaction from the crypto world, some of it was positive and some of it was negative. But there is one unique prospect of Libra which differentiates it from the rest of cryptocurrencies and that is it is not pegged to any one currency.
But how exactly is this cryptocurrency going to affect the crypto world overall? Is it going to increase the adoption or is it going to disrupt the market capitalizations of other cryptos? In order to understand the possible ripples, BlockPublisher recently got in touch with some industry experts as they answered the question, “What effects will Libra cryptocurrency of Facebook have on the crypto world?”
Here’s what’s being said about it:
Facebook’s Libra project is an ambitious effort that validates the concept of blockchain and its utility in moving currency. That said, the project raises questions as to whether a stablecoin not tied to one specific fiat currency will have utility given there is not a real-world equivalent to this type of currency now. – Charles Cascarilla, CEO of Paxos
Libra is a blockchain like Ethereum for running smart contracts, backed by other assets so the price remains relatively stable. Technically, the project has a lot going for it: nice type theory, safety and liveness proofs, Libra Core is written in Rust, and it’s more efficient and scalable than proof of work systems like Ethereum and Bitcoin. Ideologically, however, this chain is the polar opposite of most other blockchain projects. – Mike Stay, CTO of Pyrofex
“Libra will create stiff competition to existing crypto currency providers. Facebook have a massive 2.4 billion users to market their products to. Most existing providers would need to pay millions of dollars to reach this type of audience. Facebook already have a loyal audience.
Not to mention their ability to make this the only payment method on many of their partner apps and services. I expect to see big short-term profits for Facebook, but at the same time massive corporate lawsuits for a potential monopoly on the crypto industry. Interesting times ahead.” – Angelo Frisina, Founder / CEO Sunlight Media LLC
The first major effect that is expected from Libra is the increased adoption of cryptocurrencies worldwide. Facebook has a user base of more than a billion and exposing a major part of the world to cryptos will help increase the adoption of this nascent space which has not been able to gain as much exposure as it expected. As a result of this exposure to cryptos, market caps of other cryptos might just increase as people will get enlightened with prospects that cryptocurrencies offer.
Secondly, Libra is expected to disrupt the markets of some other cryptos that resemble it in nature as Facebook has a big user base and a strong trust among big payment providers of the world. It is a stablecoin which is going to have pegs with multiple currencies across the globe so that maximum facilities and ease-of-usage can be provided to the people.
With these pegs, the price of the asset is expected to remain stable. But with Libra’s launch, the market of other stablecoins such as Tether comes under threat. It is likely that Facebook’s crypto coin will take over the other prevalent stablecoins.
Thirdly and most importantly, Libra is expected to increase the level of trust regarding cryptocurrencies among big corporations and institutions as Facebook itself is a trusted name. The prospects offered by blockchain are also expected to get mainstream exposure which in turn will likely increase the adoption of this technology and will establish a more positive aura around the blockchain and crypto space.
But Facebook’s cryptocurrency is not a “pure cryptocurrency”. It is a stablecoin meaning the inherent problems of the fiat world get transferred into its ecosystem. Though it is not expected to challenge the big crypto king bitcoin, yet it is still expected to affect the banking system to some extent.
While Facebook’s Libra doesn’t compete against any open, public, permissionless, borderless, neutral, censorship-resistant blockchains, it *will* compete against both retail banks and central banks. This is going to be fun to watch.
— Andreas M. Antonopoulos (@aantonop) June 18, 2019