The power of the names involved in Libra, as well as the scope of the project, are serious business. Its initiator is the largest social network in the world. Its partners include some of the world's largest finance, technology, cryptography and retail companies. It will be integrated with some of the most popular apps in the world.
Last week, I had several meetings with Facebook executives and experts involved in the project and I read more than a dozen documents describing various aspects of it. Libra is still in its infancy and many details are unknown. some will probably remain unknown until the first half of 2020, when the project is to be officially launched. But here's a complete overview of what we know right now.
With BalanceFacebook renews its old dream of building a payment network; the company tried in 2015 with Messenger Payments, but the feature, which allows users to send and receive money, never goes away.
We are in 2019 and the times are very different. Crypto-currencies such as Bitcoin have shown that it was possible to create a digital network and a decentralized secure network of equals, and that everyone could use it. Ethereum used the same underlying technology, the blockchain, to create a platform of decentralized applications. And stable pieces, such as DAI, USDC and TUSD, have shown that it is possible to create a cryptocurrency whose value is not as volatile like bitcoins value and ether.
With all these elements in place, Facebook is trying to transfer money, but this time, with a system incorporating some of the best assets of the crypto-currencies available today, as well as a small army of partners responsible for providing support and promoting adoption.
January 2018 was perhaps the first serious sign that Facebook was preparing something in the blockchain space. In a seemingly out of character move, CEO Mark Zuckerberg spoke on the power of decentralized networks.
"Encryption and cryptocurrency (…) take the power of centralized systems and put it back in the hands of people," he said. "But they run the risk of being more difficult to control.I am interested in deepening and studying the positive and negative aspects of these technologies and the best way to use them in our services."
In May 2018, things became serious. Facebook reassigned David Marcus, formerly at the head of Messenger, ran an internal blockchain project. This has led to many reports on the size and scope of The Facebook blockchain effort, although Marcus and – subsequently – Facebook, insisted that the team is small.
"I'm setting up a small group to explore the best way to take advantage of Blockchain on Facebook, starting from scratch," Marcus said at the time.
After that, rumors intensified. and details of the Balance project, as it would have been called internally, began to take shape (the nickname of Libra mentioned in these reports remained, but "GlobalCoin"seems to have been abandoned." Facebook has continued to add people to its "small" blockchain team; in February 2019, the company acquired the main responsible for starting crypto. Chainspace. According to the official rumor, Facebook's blockchain team "was exploring many different apps", but even then, the plans for Libra – which turned out to be a not-so-small project after all – had to be well advanced.
Now that Libra has been officially announced, let's dispel an inevitable confusion. Libra has several characteristics: the Balance Blockchain, the Libra Balance and the Balance Association.
The Libra Association is a non-profit organization based in Geneva, Switzerland, which governs Libra. It is run by founding members, including Facebook, but the social network has no particular preference in decision-making.
The Libra Blockchain is a new type of blockchain, designed primarily to support the Libra cryptocurrency, but which also allows anyone to create smart contracts, like Ethereum.
The Libra coin is a special type of cryptocurrency, a stablecoin, which means its value should not change much in comparison to a stable real-world asset like the United States. dollar. It is backed by fiduciary money and the current equivalents held by depositories chosen by the Libra association.
Finally, Calibra is a cryptocurrency wallet that allows users to send and receive Libra coins. Unlike the three projects above, Calibra is built and maintained by Facebook and will be integrated with WhatsApp and Messenger.
Facebook and its 2.38 billion monthly active users, associated with the 1.5 billion users of WhatsApp, should provide a good base user base for Libra. But history has shown that sometimes a giant like Facebook is not enough to promote adoption by users. Facebook, for example, is associated with many businesses in the financial and retail sectors, as well as non-profit organizations, to promote user adoption and usually makes Libra less a Facebook project but more a global project.
Here is the complete list of the founding members of the Libra association at its launch: Mastercard, PayPal, PayU, Stripe, Visa, Booking Holdings, eBay, Facebook, Farfetch, Lyft, Payment Marketplace, Spotify, Uber, Iliad , Vodafone, Anchorage, Bison Trails, Coinbase, Xapo, Andreessen Horowitz, Innovative Initiatives, Capital Ribbit, Capital Thrive, Union Square Ventures, Creative Destruction Laboratory, Kiva, Mercy Corps and Women's World Banking.
The list deserves to be browsed. The equation of payments is solid, with MasterCard, Visa and PayPal on board – but not a big bank. On the retail / technology side, the participation of Uber and Spotify will certainly lead to adoption, and the e-commerce giant eBay is also here. Remember the rumors about eBay accepts cryptocurrency? Well, it's happening. It should be noted that Amazon is not on board at the moment, nor Apple, Microsoft or Google.
It is also remarkable that, intentionally or not, there are some big partners on the blockchain side. Yes, Coinbase is one of the world's largest cryptocurrency markets, but there is no mention of blockchain corporations and foundations such as the Ethereum Foundation, EOS, Ripple and others.
I interviewed Tomer Barel, vice president of operations at Calibra, about it. He said that the Libra Association was willing to accept more members in the future and that there was no direct obstacle to the accession of one of these, even though he noticed that Libra is an entirely new blockchain product and as such different (although to some extent, interoperable) from other blockchain projects.
The blockchain Libra is a new blockchain, based on (strongly modified, said Barel) HotStuff protocol, launched a few months ago by VmWare. It will take many experts to go through his white paper and code (which will be published today and I have not seen it) until we have an objective idea of its strengths and its weaknesses compared to other blockchain projects. But here are some things to remember.
The Libra will start as a permission blockchain, then move slowly through a blockchain without permission.
This is very important: Bitcoin and Ethereum are networks without permissionwhich means that everyone can participate and run on a node, thus becoming part of the infrastructure of the blockchain. But on Libra, initially, only a small list of approved companies and organizations will be able to run. In simple terms, this means that it will be easier to make the Balance scalable (Barel told me that the goal is to have thousands of transactions per second), but that this will not be exactly a fully decentralized project at launch.
From the White Paper of Libra:
"The Libra Blockchain will be decentralized and will consist of a collection of validators who work together to process the transactions and maintain the blockchain status. (…) Initially, the association (and validators) will consist of a diverse and geographically distributed group of founding members, who are organizations chosen on the basis of objective participation criteria, and who have an interest in strengthening the Libra ecosystem and investing resources for its success. "
The timetable for turning Libra into a chain of blocks without permission is quite generous: the association plans to launch the process "within five years" following the launch of Libra.
Libra will be an intelligent contractual platform
Like Ethereum, Libra will allow third-party developers to create decentralized applications over their blockchain. However, unlike Ethereum, which is a versatile decentralized intelligent contract platform, Libra will have a strong predilection for financial applications.
Balance comes with a new programming language called Move
Move is a new language, which means that developers will have to adapt to a new programming environment. Facebook says that it is designed with "safety and security as absolute priorities".
Libra is an advanced blockchain
In the world of blockchain technologies, it is difficult to find two experts who agree on the type of blockchain that works best. But one thing is certain: Libra is not an obsolete technological element. It uses several advanced techniques and solutions, such as using Merkle trees to store the full registry history, and a fault-tolerant Byzantine consensus model (which means that it resists one-third of network nodes that are faulty or dishonest), as in the modern world. proposals such as Casper and Tendermint.
Fully evaluating the advantages and disadvantages of the technical solutions of the Libra goes both beyond the scope of this text and the capabilities of its author, but, again, I am sure that the experts will have their say in the weeks and months to come.
Libra is not a proof of work
Unlike Bitcoin, which in its current state requires immense computing power, Libra does not use a consensus algorithm for proof of work. This means that Libra does not waste huge amounts of energy.
Libra is pseudonym
Just like Bitcoin and Ethereum, Libra does not link network accounts to a real identity.
Libra is open source
Everyone can look in the code of Libra.
The currency is a stable type of currency, but it differs from most stable coins currently available on the market. Instead of closely monitoring the value of a real asset, such as the US dollar, Libra will have its own value. However, it will be supported by a basket of "low volatility" assets to ensure its stability.
Even if it is designed to be stable, the value of the Balance will fluctuate. If you buy a $ 100 balance today, its value might be slightly different in the future. According to a document that Facebook has sent me, "reserve assets are chosen so as to minimize volatility, so that Libyan holders can trust the currency's ability to preserve its value over time. ".
Sending and receiving Libra will be very inexpensive (or nonexistent), although the details on the price are unclear. So how are the entities going to hold the balance assets of Libra to make money? One word: interest. According to a document that Facebook has sent me, "interest on reserve assets will be used to cover the costs of the system, to guarantee minimal transaction costs, to pay dividends to investors who have provided capital to revive Ecosystem and support growth and adoption. " Note that Balance users will not receive a return from the pool.
The Libra Association will be the guardian of Libra and the only entity able to burn or hit the Libra currency. And this will be done in response to market demand. With the increase in demand for Libra, more Libra will be issued and the supply will increase – and vice versa.
For most users, Libra will be largely attributed to Calibra, the wallet created by Facebook that allows you to send and receive Libra currency. It will be integrated with WhatsApp and Messenger, allowing users of these applications to register easily, reload their portfolios with funds and send, receive and pay with Libra (with "small" transaction fees), all from the applications. Calibra will also be available as a stand-alone application for iOS and Android.
Registration at Calibra will require a verification from KYC (know your client), which means that users will need to download some kind of government issued identifier before they can start using the service. Kevin Weil, vice president of products for Calibra, said the process of integration would be as simple as possible, "almost like a discussion."
Reloading funds should be as simple as typing credit card information. For unbanked people, in certain areas, it will be possible to go to physical places where they can refuel by handing money.
Regarding confidentiality, Facebook claims that Calibra "will not share account information with Financial, Facebook or any other third party without the consent of the customer".
In terms of security, Calibra will have built-in anti-fraud protection, a password recovery option and multifactor authentication. A characteristic of Calibra is that cryptocurrency portfolios will not benefit from 24×7 customer support.
Important: Due to the open nature of Libra, Calibra will not be the only Libra wallet that you can use. In fact, it should be quite possible to sign up for Calibra, fill it with money, and then move the books you received using a third party portfolio that has no connection with Calibra and the outside. of the Facebook ecosystem.
More information on Calibra is available at the following address: calibra.com; You can also sign up to receive notification when the portfolio becomes available.
Creating new forms of money and letting billions of users send it around the world is not as easy as building a platform: there are rules and regulations that vary from jurisdiction to another.
I asked Weil questions about the potential problems, and about the fact that Calibra will be a fully regulated entity and that Facebook is already discussing with regulators around the world and is applying for licenses to make it fully compliant . With the law Even though the entire project is envisioned as a global project, Weil has said that Calibra "would only work where it is legally allowed".
The blockchain and the Libra coin, as well as Facebook's Calibra digital wallet, are still not ready for public use. Facebook indicates that it intends to embark on the first half of 2020. However, the "Start Cycle Code" for Libra Blockchain will be open today, and Libra is pleased with the comments community on the project.
As for Calibra, Kevin Weil said that Facebook still had "a lot of work to do" before Calibra could be made public.
Libra is one of the most ambitious cryptocurrency projects ever conceived. It includes a blockchain, an intelligent contract platform, a low volatility cryptocurrency and a portfolio that will be integrated with some of the most used applications today.
Many questions remain: Facebook has not exactly had a stellar privacy record in the last two years Society seems to have done a lot to make Libra a common, open and global effort. Still, the public and regulators will want to know if Libra and Calibra are opening new avenues for misuse of user data.
There is also the question of technical execution. Balance and Calibra are at an early stage of development and unforeseen obstacles may arise.
Nevertheless, Libra is a large-scale project, backed by a long list of hitters in the areas of payments and online retailing. Companies such as PayPal, eBay, Mastercard and Visa have so far hesitated to openly adopt cryptocurrencies. This is changing today and it is a big problem – both for the companies involved and for crypto-currencies in general.
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The Attorney General's Office in New York today charged iFinex Inc., the company behind the two the cryptocurrency exchange Bitfinex and the stablecoin Attached, massive concealment intended to mask the loss of 850 million dollars of client funds. According to the Attorney General, it seems that Tether is not supported personally by the United States. dollars (as reported by the company until March this year) and that Bitfinex can not cover customer withdrawals.
This, to put it mildly, is a big problem. As the Wall Street Journal marksAbout 80% of all cryptocurrency exchanges are made in Tether. If the so-called stablecoin turns out to be worthless, the markets will not react favorably.
"Bitfinex has already taken at least $ 700 million of Tether's reserves."
"Our investigation revealed that trading platform operators 'Bitfinex', who also control the virtual currency 'Tether', pledged to conceal the apparent loss of 850 million dollars of funds from clients and businesses combined "Attorney General Letitia James would be quoted in to the press release.
The publication goes further, noting that Bitfinex has raised hundreds of millions of dollars in Tether's reserves.
"Bitfinex is given access to $ 900 million of Tether's cash reserves, which Tether has repeated for years to investors who have fully supported Tether's virtual currency" 1: 1, "the statement said. "According to the documents filed, Bitfinex has already taken at least $ 700 million of Tether's reserves."
Tether has long been accused of not being truly supported individually by the United States. dollar – a charge reinforced by the company's refusal to conduct an audit – but the press release issued today highlights the scale of the alleged fraud.
"Those [$700 million worth of] The transactions – which were also not disclosed to investors – view Tether's cash reserves as slush funds from Bitfinex. They serve to hide the massive undisclosed losses of Bitfinex and its inability to manage the withdrawals of its customers, "the statement said.
The court has now ordered Bitfinex to no longer access Tether's reserves to account for customer withdrawals. If Bitfinex has actually used these reserves to cover these withdrawals, many customers are on the verge of being seriously unlucky.
Take out the popcorn and SFYL. Things are about to heat up.
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Samsung is developing a blockchain network and potentially a cryptocurrency token called "Samsung Coin".
This is according to a report of CoinDesk Korea, which quotes an official family of the limited company with "the internal situation of Samsung".
Details are scarce and nothing is confirmed, but the chain of block chains could be public or hybrid – a combination of public and private block strings.
An important detail: This blockchain network would be based on Ethereum, a popular smart contract platform that facilitates the deployment of your own cryptocurrency token.
Once the development of the blockchain is completed, the company could launch its own Samsung Coin crypto-token, although "the direction has not yet been determined".
Samsung has been working on this project for at least a year, the source said.
Samsung has plunged its crypto-currents into cryptocurrency by introducing into its wallet cryptocurrency and distributed applications on its Galaxy S10 phone, but it's the first time the company has built a network based on a chain of blocks and a cryptocurrency / token of its own.
This is not a surprise, however – many high-tech companies, including Microsoft and Facebook, work on blockchain projects. It's unclear what Samsung plans to do with its blockchain, but the company has a payment / mobile wallet service, Samsung Pay, which could benefit from cryptocurrency integration.
We asked Samsung about its blockchain efforts and will update the article when we get news.
Disclosure: The author of this text owns or has recently owned a number of cryptocurrencies, including BTC and ETH.
The complete list of countries is Argentina, Mexico, Peru, Colombia, Chile, India, Hong Kong, South Korea, Indonesia, Philippines and New Zealand.
With these additions, Coinbase now supports 53 countries and territories on four continents.
The size of some of the relevant markets makes this news very important for the cryptographic space. With this launch, Coinbase opens up to a combined market of more than 2 billion people.
Coinbase is one of the largest and most reliable cryptocurrency exchanges that allows users to accept fiat repositories – a so-called fiat gateway. This makes it particularly important in markets that have not had a very good way to buy cryptocurrency with fiat.
Customers in these new markets will be able to store, exchange, send and receive cryptocurrencies on Coinbase Pro and Coinbase.com. However, it is not known when Coinbase will launch fiduciary bridges in these markets. A representative of Coinbase said that, for the moment, new markets offered crypto to crypto trading. "We can add additional assistance depending on the different demands and requirements of each country," he said by e-mail.
"The direct trade between cryptos is growing more and more the norm and last year it surpassed the traditional fiat of crypto trading around the world," Coinbase said in a blog post announcing the launch, and provided a chart showing how its customers are increasingly trading crypto-currencies for other crypto-currencies, as well as stablecoins (special cryptocoins priced at the price of a real asset, such as the US dollar), instead of fiat.
Coinbase has aggressively expanded its reach and service portfolio in 2017 and 2018, but appears to have taken a break in early 2019. It is now back to normal. a few days ago, the company launched a Visa debit card in the UK (with the rest of Europe to follow).
The company has also significantly expanded its portfolio of crypto-currencies supported over the past year or so; In addition to Bitcoin, Ethereum and Litecoin, it now supports 19 other crypto-actives (although not all are available in all markets, for a complete overview, go to right here).
Now Zain Qaiser, 24, who went through K! NG online, was sentenced to more than six years in prison, and we get a better picture of what the National Crime Agency call "One of the most sophisticated, serious and organized cybercrime groups" that he has ever seen.
The program, which, according to the British NCA, was set up jointly with a Russian-speaking organized crime group, had its tentacles in the computers of future victims via advertisements placed on pornographic sites. A person clicks on one of the Qaiser ads and then is redirected to a page containing the Angler Exploit Kit (AEK). If the computer was vulnerable, it would then install the malware.
Here is where things have become interesting. After installing the ransomware software, the victim's computer would lock on a popup screen – sometimes pretending to be the FBI – demanding that a ransom ranging from $ 300 to $ 1,000 be paid in virtual currency. The US accomplices then turned the money into cash, turned it into cryptocurrency, and sent it back to Qaiser.
"The campaign has infected millions of computers in several jurisdictions," reads NCA. Press release.
Some pornographic site operators have understood and tried to remove malicious ads from their sites, but Qaiser has not liked it too much. "I will first kill your server, then send spam abuse related to child pornography," he wrote to one of these operators.
According to the NCA, Qaiser has recognized 11 offenses, including blackmail, money laundering and computer abuse.
"Zain Qaiser was an integral part of this organized criminal group, generating millions of pounds in ransom by making innumerable victims sing and threatening them with fictitious police investigations," reads in the press release. the NCA. "In addition, when the criminal enterprise of Qaiser was thwarted by hard-line members of the online advertising community, I have been retaliating that caused misery and hundreds of thousands of pounds of financial losses. "
Qaiser, who was arrested for the first time in 2014, would have lived with his parents while he was scamming porn porn fans around the world. Officials say I earned at least £ 700,000 through his schemes, although "the total was probably much higher."
With Qaiser off digital streets, we can rest now knowing that ads on porn sites are safe again. No, wait, they certainly still are not. Be safe outside.