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Facebook is unveiling a digital currency called Libra as the company seeks to make its ads more valuable by enabling smoother transactions and payments online, particularly among those without credit cards or bank accounts.
Libra will use the same security and record-keeping principles as Bitcoin, the most popular digital currency system today. But unlike Bitcoin, Libra is backed by several traditional financial companies, including PayPal, Visa and Mastercard, and will base its value on multiple real-world currencies such as the U.S. dollar and the euro. Libra also faces additional scrutiny over privacy, given Facebook's poor record on the matter.
Look - Libra - Cryptocurrencies
Here's a look at Libra and other cryptocurrencies.
WHAT'S A CRYPTOCURRENCY ANYWAY?
Form - Cash - Encryption - Technology - Cryptocurrencies
It's a form of digital cash that uses encryption technology to make it secure. Cryptocurrencies exist not as physical bills or coins but rather as lines of digitally signed computer code. Records are typically kept on ledgers known as blockchain.
People can store their cryptocurrency stashes in virtual wallets that resemble online bank accounts. Facebook is developing a wallet app for Libra. As with other cryptocurrencies, people will be able to buy and sell libras on exchanges for traditional currencies. It's not clear what fees, if any, consumers will have to pay for such transfers, although Facebook says they should be low.
NOT - USE - BITCOIN
WHY NOT USE BITCOIN?
Although Bitcoin has gotten a lot of attention, it isn't widely used. For one thing, its value fluctuates wildly, meaning that $100 in bitcoins today might be worth $300 a month from now — or $2.50. Only a handful of merchants accept bitcoins as payments.
Facebook - Libra - Value - Currencies - Cryptocurrencies
Facebook is hoping to keep the libra's value stable by tying it closely to established currencies. Unlike most other cryptocurrencies, the Libra will be backed by real-world bank deposits and government securities in a number of leading currencies.
Facebook is also recruiting partners ahead of time. Lyft,...
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