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What if you could send money as easily and inexpensively as sending a message to your friend? This isn’t a pipedream anymore, as Facebook promises to make this possible. Facebook is dipping their toes in cryptocurrency waters to revolutionize the current financial fabric with a project known as Libra. Facebook announced this project in June 2019, and it is expected to launch later this year.
Libra is a blockchain-based cryptocurrency pegged with assets like USD, EUR, YEN, etc. Facebook is also set to launch its native cryptocurrency wallet Novi (formerly known as Calibra), alongside Libra. Novi enables swift and frictionless transactions to every corner of the world with little-to-no fees.
Let’s have a closer look at Facebook’s cryptocurrency wallet Novi.
What is Libra?
To better comprehend Novi, it is crucial to start with understanding Libra.
Libra is a blockchain-centered cryptocurrency. It leverages blockchain features like decentralization, consensus, and security, while efficiently solving the volatility dilemma.
Closing the economic divide by providing financial services to the unbanked is at the heart of Libra.
The use case is simple, trade your local currency for Libra and utilize it at your convenience. You can exchange Libra for your local currency and vice versa.
Highlights:
- Libra is decentralized – Facebook does not rule Libra alone. It has a single vote in its governance. Several members, including Spotify, Uber, Andreessen Horowitz, and others, have a say in its administration.
- Libra is stable – If you trade $5 for Libra, it will remain $5. Volatility is the major roadblock for cryptocurrencies to become mainstream. Libra is collateralized in a 1:1 ratio to stable international currencies such as the dollar, Swiss franc, pound, euro, and yen. Owing to this large collateral pool, Libra remains mostly stable, and thus, it is a trustworthy medium of exchange.
- Libra is secure. Libra is built on top of a blockchain network. As a result, all transactions are cryptographically authenticated. The transaction fee is negligible. However, when added up, it will prevent bad actors from hijacking the network.
- Libra is scalable and fast. It can handle 1000 transactions per second, and this number is only expected to grow.
Also, Libra transactions are free for consumers. However, merchants would be required to pay a negligible amount. Considering these specifications, it is wise to predict that Libra is set to become a global currency.
What is Novi?
Novi is a digital wallet for the Libra payment network. Initially, Novi will support digital currencies like LibraUSD, LibraEUR, LibraGBP, LibraSGD. These crypto coins have the same value as the pegged international currency. For instance, 1 LibraUSD is equivalent to 1 USD. Novi also supports a combination of these cryptocurrencies – LBR.
Upon its release, Novi will be a stand-alone app. Moreover, it would also be inter-woven in Facebook’s current list of apps like Messenger and WhatsApp. With Novi, you can save, send, and spend Libra as easily as you would send messages. Sending Libra is a simple three-step process – select the amount, see the exchange rate, and hit transfer. Novi also adds a more human touch to these transfers as you can add notes to your transactions.
Libra transfers are instantaneous, and the amount is reflected in the respective wallet within seconds. In addition to this, you can withdraw your funds in your local currency whenever you want. Negligible transaction fees make Novi more attractive.
Novi leaves no stone unturned to ensure that you trade in a secure environment. All the wallet holders are verified with a Government-issued ID to avoid scams. Novi also boasts built-in fraud protections and in-app reporting. 24×7 customer care support via chat adds more convenience. If you are still fearful of losses, don’t worry, Novi promises a refund in a fraud case.
Also, your Novi data won’t be accessible to Facebook. Yes, you heard it right. Your data won’t be exploited for directing ads to you, nor will it be used for any ill-purposes. Your data is kept confidential and secure.
“We realize people don’t want their social data and financial data commingled,” says David Marcus, Head of Novi project.
Wrapping Up
Facebook’s cryptocurrency project, Libra, is built on robust blockchain technology. Libra solves the scalability and volatility issue, and thus, it is ahead of the competitors by miles. It is developed to become a global digital currency that is fast, secure, and affordable. Facebook’s digital wallet, Novi, fuels the Libra project by providing a secure platform for transactions.
To sum up, Libra and Novi together can bring the next crypto revolution.
FIGURE 1: Libra Partners
