What’s in news?
Facebook officially launched libra.
- The Libra Association, the non-profit that will govern the currency, officially signed on 21 charter members at the organization’s inaugural meeting in Geneva.
- The currency will be serviced by a collective of companies called the “Libra Association”.
- It functions as what is known as a “stablecoin”, pegged to existing assets like the dollar or euro, in the aim of making it less subject to the volatility that many cryptocurrencies experience.
- The Libra Association is described by Facebook as an independent, not-for-profit organisation based in Switzerland.
What is Libra?
- It is a digital asset built by Facebook and powered by a new Facebook-created version of blockchain, the encrypted technology used by bitcoin and other cryptocurrencies.
How similar is it to Bitcoin?
- It is true that Bitcoin and Libra are both based on block chain technology, which refers to a form of distributed ledger — not centralised — of transactions.
- These are created by complicated math functions that make them almost incorruptible. But beyond this, there is very little in common between Bitcoin and Libra.
- Libra is an initiative of 28 influential corporate entities.
- Bitcoin, which the world first came to know of in 2008, is seen as a product of libertarian values. Its founder, whose identity remains a mystery to this day, is referred to as Satoshi Nakamoto.
- Libra is going to be nothing like Bitcoin.
Privacy concerns surrounding cryptocurrencies:
- Cryptocurrencies allow anonymous funding potentially acting as conduits for money laundering and terror financing.
- The anonymity of cryptocurrency has made way for cybercriminals to hold victims hard drives hostage to extort payment from them in terms of bitcoins.
- Since cryptocurrency is borderless, it can be really attractive for terrorist finances as they can transfer funds across countries in a cheap way.
- Certain characteristics of cryptocurrency like speed, cost, security make it a lucrative source to finance such activities
- Cryptocurrency is being used to fund child pornography, sexual exploitation, and human trafficking
- Most new users know close to nothing of the technology, or how to verify the genuineness of a particular crypto currency.
- Intense volatility of cryptocurrency.
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