They're not called Zucker bucks, but Facebook just reinvented digital money. Facebook's Libra cryptocurrency will launch early next year and it's more like PayPal than Bitcoin. It's designed to be easy enough for everyone to use. But it's still complicated to understand.

Libra is like cash that lives inside your phone. You'll be able to buy Libra through Libra wallet apps on your phone or from some local grocery and convenience stores. You cash in your local currency like dollars and get nearly the same number of Libra coins which are represented by wavy three-line emoji instead of the dollar symbol. But first you have to verify your identity with a photo ID. You'll then be able to spend your Libra while online shopping or potentially pay for things like uber’s or your subscription for Spotify since those companies have partnered with Facebook to make Libra popular.

Since it's almost free to digitally move libra from one account to another you won't have to pay high credit card processing fees that can add almost four percent to your total. And some Libra Wallet apps and shops will give bonus discounts or free coins for signing up and paying with Libra. You will be able to send and request money from friends like you would with venmo or PayPal and it's easy to send Libra just like a message.

Eventually Facebook hopes that you'll use Libra to pay your bills, scan your wallets QR code to purchase coffee or tap your phone to buy your public transit ticket. Anytime you can cash out of Libra and get your local currency back in your bank account or handed to you at a local store.

In fact, Facebook is building its own Libra Wallet app called calibra that will live inside of whatsapp, Facebook Messenger and its own standalone app. You won't have to attach your real name and identity to any of your payments, but they will be public. Facebook knows it's a little bit creepy and you probably don't want it spying on what you buy. So, Facebook set up a new company called Calibra that will keep all your financial data separate from your Facebook profile. That means it can't use your transaction data to target you with ads, reorder your newsfeed or sell your info to marketers.

Well Libra is coated to have a stable price to be secure and be controlled not just by Facebook. Instead Libra is run by the 28-member Libra association that it hopes will grow to a hundred members by the time it launches in the first half of 2020.





Financial companies like Visa and MasterCard merchants and apps like eBay and lyft, venture capital funds like Andreessen Horowitz and Union Square Ventures. They each paid at least ten million dollars to get one vote on the Libra Council that controls what happens to the currency. They'll be responsible for checking to make sure transactions are real and creating the Libra reserve.





Image Courtesy: lifars.com





See, each time you cash in a dollar that money goes into a big bank account called the Libra reserve that creates and sends you roughly one Libra token. the Libra reserve is made up of a collection of the most stable international currencies like the US dollar, British Pound, Euro and the Japanese yen. The idea is that even if one of those currency goes up or down in price the value of the Libra will stay stable. That way shops will accept the libras payment without worrying that the value of the coin will drop tomorrow. Big swings in price are why older crypto currencies like Bitcoin and Ethereum haven't grown popular as payment methods.



