3. What is the currency?
The currency is the third things to know about Libra. A Libra is a unitof the Libra cryptocurrency. Three wavy horizontal line unicode character ≋ represents Libra. The value of a Libra is going to be largely stable. Thus, it’s a good medium of exchange. Merchants can be confident they won’t be paid a Libra today that’s then worthless tomorrow.
The Libra’s value connects to a basket of bank deposits and short-term government securities. The Libra Association maintains this basket of assets. Moreover, they can change the balance of its composition if necessary to offset major price fluctuations in any one foreign currency. All of those efforts aim to keep the value of a Libra stays consistent.
Also read: 5 Things to Know About Libra (Part 1)
The Libra Association is still hammering out the exact start value for the Libra. Yet, it will be somewhere close to the value of a dollar, euro or pound. Since they want it to be easily conceptualized. That way, a gallon of milk in the U.S. might cost 3 to 4 Libra, similar but not exactly the same as with dollars.
4. How does Libra work?
Every Libra payment is permanently written into the Libra Blockchain. Libra Blockchain is a cryptographically authenticated database. It acts as a public online ledger designed to handle 1,000 transactions per second. That would be much faster than Bitcoin’s 7 transactions per second or Ethereum’s 15. The founding members of the Libra Association constantly operates and verifies Libra.
When someone submits a transaction, each of the nodes runs a calculation based on the existing ledger of all transactions.
Also read: Libra and Bitcoin: Which One Will Gain a Million Likes?
5.How can Libra help early business?
It is the last things to know about Libra. The Libra Association aims to encourage more developers and merchants to work with its cryptocurrency. Thus, it plans to issue incentives to validator node operators who can get people signed up for and using Libra. The incentive can be in the form of Libra coins. Wallets that pull users through the Know Your Customer anti-fraud and money laundering process will get a reward. Besides, the reward will also be given to wallets that keep users sufficiently active for over a year. For each transaction they process, merchants will also receive a percentage of the transaction back.
Businesses that earn these incentives can keep them. They can also pass some or all of them along to users in the form of free Libra tokens or discounts on their purchases. This could create competition between wallets. The competition is in which wallets can pass on the most rewards to their customers and thereby attract the most users.
You could imagine eBay or Spotify giving you a discount for paying in Libra. At the same time, wallet developers might offer you free tokens if you complete 100 transactions within a year.
Now, after you understand these things to know about Libra, let’s wait. When the time comes, try Libra.
