With the announcement of a new cryptocurrency that Facebook and other major tech industry players are throwing their considerable weight behind, they have taken some of the fire from the surging Bitcoin.
In an effort to make sense of these sudden changes in the cryptocurrency market, we spoke to Saleh Stevens. Stevens is a both an expert in computer technology and cryptocurrency. He works with individuals, consulting them in techniques that use financial modeling to determine the risk-to-reward ratio of investments. He also has a strong interest in blockchain and how it can revolutionize the world as we know it.
Digital Currencies Soon to Be Mainstream –
While Bitcoin was pressing on to the $10,000 mark, making a quick 12 percent gain in one week alone, Facebook announced the development of a new cryptocurrency called Libra. Bloomberg stated that the new cryptocurrency is actually backed by a group of powerful players in the technology and finance sectors, such as Visa, eBay, Lyft and Uber. This makes it clear that the way is being paved for cryptocurrencies to become mainstream. Bloomberg posits that things may move quickly for cryptocurrencies into everyday life as the year progresses.
Libra’s Pros and Cons –
LinkedIn speaks of the hurdles that Libra and other cryptocurrencies face, as users demand that they maintain their privacy, protect their data and ensure that they will not lose their assets in a cashless society that such developments portend.
On the other side of the argument, LinkedIn also makes the assertion that those who never or no longer have bank accounts or credit cards will be potential customers of Libra and other forms of digital currency. Stevens explains that Calibra, the digital wallet for the Libra currency, will be available to anyone with even a simplistic smartphone, so its adoption could come very soon. Also, the Verge stated that Libra would allow users to send money around the world cheaper than Western Union, a staple for people who have been left out of many traditional financial services.
Is it a Digital Currency or a Cryptocurrency? –
The Verge questioned experts in the field who have come to the conclusion that really Libra will not be a cryptocurrency, but rather a digital currency. The distinction is that cryptocurrencies trade by consensus, but Libra will trade by permission. Bitcoin has an autonomous system of granting trades by solving mathematical equations, so anyone can participate. Libra will be governed by the only entities that are trusted to enable trading. Thus, the idea that has been promoted for the past few years about the safety of many autonomous sites for tracking the ledger and the idea of decentralized control over the currency system will not be present in Libra. Bloomberg echos this idea, stating that what we have on the internet is not decentralized today, with Amazon in control of most of the cloud computing and Google in control of much of email and most searching.
Libra Wants to Be a Stable Currency –
Stevens states that the Libra will attempt to be more stable than other cryptocurrencies by being backed by several different types of assets – including multiple currency securities and bank deposits.
As the coming weeks provide more information about the new currency, Saleh Stevens explains financial forecasting techniques will help us better understand the implications of the Libra and how it fits in the current cryptocurrency landscape.