Science and Technology- developments and their applications and effects in everyday life Achievements of Indians in science & technology; indigenization of technology and developing new technology.
Facebook’s new cryptocurrency- Libra
What to study?
For prelims and mains: various cryptocurrencies, their uses, concerns over their regulation and issues associated.
Context: Despite several high-profile defections and intense criticism from US regulators and politicians, Facebook officially launches Libra.
The Libra Association, the nonprofit that will govern the currency, officially signed on 21 charter members at the organization’s inaugural meeting in Geneva.
What is Libra?
Facebook says Libra is a “global currency and financial infrastructure”. In other words, it is a digital asset built by Facebook and powered by a new Facebook-created version of blockchain, the encrypted technology used by bitcoin and other cryptocurrencies.
Who is in charge of Libra?
The currency will be serviced by a collective of companies called the “Libra Association”. It functions as what is known as a “stablecoin”, pegged to existing assets like the dollar or euro, in the aim of making it less subject to the volatility that many cryptocurrencies experience.
The Libra Association is described by Facebook as an independent, not-for-profit organisation based in Switzerland.
Privacy concerns surrounding cryptocurrencies:
- Cryptocurrencies allow anonymous funding potentially acting as conduits for money laundering and terror financing.
- The anonymity of cryptocurrency has made way for cybercriminals to hold victims hard drives hostage to extort payment from them in terms of bitcoins.
- Since cryptocurrency is borderless, it can be really attractive for terrorist finances as they can transfer funds across countries in a cheap way.
- Certain characteristics of cryptocurrency like speed, cost, security make it a lucrative source to finance such activities
- Cryptocurrency is being used to fund child pornography, sexual exploitation, and human trafficking
- Most new users know close to nothing of the technology, or how to verify the genuineness of a particular crypto currency.
- Intense volatility of cryptocurrency.
Sources: the Hindu.