Please Give me Briefs Explanation for this question. Thank You. I hope you all understand my query else comment down.
It grows when underlying assets appreciate I guess
From the whitepaper: “Users of Libra do not receive a return from the reserve.”
From what I could gather, I think the purpose of the Libra token is to be as stable as possible in price, and the profits from the reserve will be used to increase the adoption of the platform. So I don’t think users will gain interest from owning the currency. Maybe this is something they should look into though, as at ICO to obtain the currency, users would be effectively paying money into the reserve.
Thanks for your Interaction
Thanks for your Interaction… But why I use Libra as a Normal Person?
Yes if the shop accepts it. The value will not be so volatile like Bitcoin
From what I understand I think its similar to putting money into PayPal, you just have it in there to spend it on something in the future - it doesn’t grow in value.
I don’t think so … different country , different GDP , Currency rate can’t be same for all the countries.
Abhi, you’d use Libra if you wanted to send money to the North America from Asia or vice-versa. It is much cheaper than existing solutions and operates on infrastructure that most people have access to, such as Whatsapp or India. This isn’t the only use-case but it is one the company seems to be pushing.
Thanks for your feedback
Libra is not be intended to generate any kind of income a/o interest, the main purpose is to let everyone around the world to get access to Financial Services.
It target all those who cannot applied for basic bank account or any other kind of financial services ( like mortgage etc)
I am having trouble to understand whole mechanism. 'Cos I think not used Libra for a long time in a wallet should increase the correspondent FIAT value… as we will burn Libras in transactions (GAS), the number of Libras avaiable decreases, but, the Reserve keeps the same value in assets. So, wouln’t each Libra have more correspondent value in the Reserve?
Not intended but it will generate some kind of interest, or, am I wrong? If some Libra stands in a wallet for a decade, wouldn’t I need less Libra to have in return the same value in assets after a decade of GAS spent (by others) on the networking? How it will work?
In order to understand the mechanism you think the Reserve and Libra like two separate entity.
The amount of Reverse, in fiat currency, will be invested in government bond or cash; the interest a/o return arising from this investment will be use to repay the initial Foundation Member.
The Libra intrinsic value is instead just the Fx rate, like any other fiat currency like USD and EUR.
ie. let say that at T(0) 1 Libra is equivalent to 1 USD. So you sell your USD to the Association and receive 1 Libra in your wallet. The Association decide then to use your 1 USD to buy EURO instead, so from now on the Libra equivalent is linked to the fluctuation of the EUR/USD currency, because whenever your want to convert your 1 Libra in your local currency the Association have to exchange the EURO hold in the reserve back to USD in order to refund you.
Hope this will help you
I wanted to be a founder member also… That’s a great mechanism! Reserve keeps assets while users slowly burn GAS in transfers. After 1 year if everybody withdraws their wallet, the reserve will refund all assets less the ammount of GAS burnt during the year of transactions because nobody will have the correspondent Libras to be refunded. I will still have to study this more as I am excited and I think many cryptos should also learn from Libra (as Libra learnt from so many others technologies).
Hi @amuccini01, you said:
Well, this is good only for countries using those 4 currencies because their currency will equivalent to 1 Libra, but how about countries from emerging for example, they should exchange to those 4 first, right? To get 1 Libra? CMIIW. So, if someday let say, Amazon sell book for 2 Libras, those emerging countries should exchange to one of those from 4 currencies, right? Hope you can give me more enlightenment for this.
Take the Iphone, as an example, if you wanna buy it you need : 999$ or 19,105 MXN mexican pesos. Does not matter the currency as, at the end, Apple with collect the equivalent of 999$.
Libra could NOT increase/decrease your spending value, as you still need 999$ equivalent in Libra’s to get the phone.
So, what is the benefit of holding Libra in your wallet:
- Is a stable currency, so no matter what will happen to your own currency ( Mexican Pesos or USD ) as it value is not linked any more to the monetary policy of one single state.
- With Libra you can have access to any goods available around the world at low transaction cost, as there will no more need to pay for FX trade or expensive wire transfers ( same benefits are on the seller side as well ).
Hope this will help you
While hoping PayPal does not freeze it, I would add
Thanks @amuccini01, for the explanation. So, base on your comment, Libra will only become a transactional tool, right? Not, going to be a wealthy tool, which mean it’ll be useless for us to keep Libra in the wallet for a long time, because it can’t increase or decrease in value like fiat, right?
I would think that as there is mass adoption of Libra, there will be more products coming out such that you can lend Libra directly or through a service and receive interest on Libra.
It grows when all other market assets in your area depreciate. All revenue generated from market growth in Libra is income for Facebook/Investors. Not to be mistaken with you as an investor when you purchased their currency because in their model you are only a consumer.