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Bitcoin- Shanmugam IAS academy in coimbatore - UPSC
Bitcoin

LIBRA

What’s in news?

Facebook officially launched libra.

Key data:

  • 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.

 

Links to note:

https://www.iasipstnpsc.in/indias-1st-cryptocurrency-atm-installed-in-bengaluru-unocoin/

https://www.financialexpress.com/industry/technology/facebook-launches-its-cryptocurrency-libra-despite-high-profile-defections/1735809/

https://www.theverge.com/2019/10/14/20914577/libra-association-new-board-members-bylaws-executive-staff-facebook-visa

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