Facebook currency 3
Facebook Currency, 3
Vocabulary
| declare | initiative | authority |
| remove | centralize | account (2) |
| instant | transfer | ability (2) |
| aim | platform | undertaking |
| asset | back (3) | range (2) |
| adopt | regulator | major (2) |
| goal (2) | note (2) | securities |
| emerge | embrace | approach (2) |
| pursue | giant (2) | specialize |
| means | alliance | consumer |
| effort | store (2) | significant |
| rely | currency | technology |
| wildly | clear (3) | mainstream |
| forge | commit | contribute |
| join (2) | integrate | venture capital |
| found | head (2) | association |
| flaw | estimate | minimum |
| launch | counter | kick-start |
| version | store (2) | exchange rate |
| fix (2) | prevent | swing (2) |
| erratic | modified | operate (2) |
| robust | based on | transform |
| innate | capacity | potentially |
| allow | pool (2) | transaction |
| node | trade-off | target (2) |
| run (2) | approve | backbone (2) |
| disrupt | slice (2) | intermediate (2) |
| retail | observe | steal/stole/stolen |
| cash | propose | border (2) |
| hope | plug (2) | penetration |
| gap | grant (2) | untouched (2) |
| exist | approval | stay away |
| hinder | logistical | couple (3) |
| sign up | cautious | hurdle (2) |
| resist | stability | commission |
| impact |
Video
Transcript
Facebook has declared its entry into the financial services market space with its new global digital currency initiative.
Its new proposed currency called “Libra” will target the 1.7 billion people around the world without a bank account, giving them the ability to make instant and nearly free international money transfers from their mobile phones.
Aimed at transforming the world of financial services, the project’s massive undertaking will be backed by its own assets, as well as by over two dozen partner companies ranging from huge financial players such as Visa, MasterCard and Paypal to service from Uber, Lyft and Spotify.
While regulators, traditional banks and even the major tech companies have generally adopted a cautious observe and note approach to the digital currency in general, Facebook has decided to be the first of the tech giants to embrace the emerging market by pursuing alliances with merchants to use Libra as a means of payment, with the goal that consumers will see it as a safe store of value.
Facebook’s move is the most significant effort yet to bring blockchain technology which does not rely on a central authority to issue money into the mainstream, and comes after a decade of wildly popular growth and coupled uncertainty of the cryptocurrency market.
Headed by David Marcus, the former president of Paypal, who joined Facebook in 2014, the Libra project has forged partnerships with twenty-eight (28) companies, e-commerce groups and venture capital companies who have committed to becoming backers and will integrate the technology into their service.
With each founding partner in the Libra association contributing a minimum of ten million dollars ($10 million) to help kick-start the project, Facebook estimates over a hundred partner groups by the launch of Libra.
To counter the flaws inherent in the existing cyptocurrency market, Libra will be backed by a pool of currencies and assets stored around the world. It will not have a fixed exchange rate against traditional currencies such as the dollar or the euro, preventing it swinging in value as erratically as traditional cryptocurrencies.
Libra is based on an entirely new blockchain, a heavily modified version of VMware’s hotstuff. It will operate similar to Aetherium in that it’s a smart contract platform that also carries a store of value mechanism innately.
Its network capacity will potentially allow for thousands of transactions per second, making it faster and more robust than most cryptocurrencies, but with the trade-off of being less decentralized as it currently only allows approved partners to run a node, which is a backbone of the network.
If successful, the project could dramatically disrupt a significant slice of the financial industry, removing intermediate parties from payment platforms and stealing business from retail banks and financial technologies companies, specifically those that specialize in sending payment across borders.
With over eighty-five percent (85%) of the world’s transactions being made in cash, the Libra project hopes to plug the world’s payment gap by granting payment access to the developing world.
Embracing these ideas mean retail market penetration into untouched markets where banking doesn’t exist.
Major players such as Apple, Google, Amazon and Microsoft have not yet signed up, and banks have mostly stayed away due to the uncertainty about regulations and concerns over logistical issues that could hinder adoption.
It’s still unclear whether Libra will clear the steep regulatory hurdles such as reaching approval by the US Securities and Exchange Commission, it also remains to be seen if the project is embraced or strongly resisted y the financial services industry.
Central banks in general have already questioned the impact of company created cryptocurrencies on financial stability.
Questions
1. Facebook’s Libra currency is already in operation and many people are using it. True or false?
2. Is the stated aim of the Libra to benefit big corporations and the rich?
3. Did Facebook invent and pioneer blockchain and crypto-currencies?
4. This enterprise will be owned, controlled and operated solely by Facebook. Is this right or wrong? Is there a “membership fee”?
5. Would Libra has similar characteristics of bitcoin in that its value will fluctuate greatly?
6. There would be long delays in financial transactions. Is this correct or incorrect?
7. Traditional banks, money exchanges, tech giants and the government are all very excited and enthusiastic about Facebook’s new crytpo currency. Is this entirely true, mostly true, in the middle, yes and no, maybe, largely false or completely false?
A. How do your friends pay for purchases and perform other monetary transactions? Are there demographic differences?
B. Has it changed over the years?
C. Do you think your friends would benefit from the Facebook Libra? Who might benefit the most?
D. What might happen in the future?
E. Are there or could there be disadvantages, drawbacks or cons of the Libra?
F. Should people do anything? Can people do anything?
