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Can Libra and Blockchain Technology be so disruptive?


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Why governments are so restless over Libra, the cryptocurrency based on Blockchain Technology?

With Facebook and a group of few other caretakers introducing a new cryptocurrency Libra and wallet called Calibra, the question of a cryptocurrency taking over as the mainstream society currency is again looming large. It was not that Blockchain Technology or cryptocurrency transactions were not taking place before Libra’s announcement, but a global currency and financial infrastructure with such magnitude supported by billions of Facebook users; have so far made the best conventional economy brains around the world nervous and lose their sleep.

Suspense and excitement all around!

People are curious and governments are restless. Both have their partial share of knowledge about cryptocurrencies and Blockchain Technology. People are curious to know if the new economic infrastructure brought to them from reputed names like Facebook helps them pay less but they are equally skeptical if the system will be safe and the government will take over if some mishap happens. The lawmakers are trying their best to halt the marching of the plan of introduction of this new cryptocurrency, Libra. They are fearful if the new cryptocurrency will make the conventional model of the economy; irrelevant and this way the government lose absolute control over the transaction currency and minting money becomes useless. US lawmakers are at war with Facebook and 27 companies plan on introducing Libra and Calibra to people.

I just got the inspiration to write about the immediate future of the cryptocurrencies from the LinkedIn wall of a friend who has written about the 10 most cryptocurrency friendly countries. Yes, there are countries who are open to Blockchain Technology but will they be equally welcoming for a currency where the government will have to put fewer taxes on people? If not then how they will finance the bigger project of the country if they are not able to levy more tax on common people?

The Irony with Blockchain Technology

The irony is that most of the governments are welcoming for the idea of Blockchain Technology but they are not open to the idea of a cryptocurrency as an economic mean of transactions which ardently follows the Blockchain Technology rules to the core of the concept!! The government believes that Blockchain Technology is good but not necessarily the products forked from the Blockchain Technology are also good. They fear the vast spread of the cryptocurrency in mainstream society to make the government irrelevant.

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Blockchain Technology is unparalleled

Well, going with Blockchain Technology, it is going to be a path-breaking technology. The reason is it’s being de-centralized and thus, free from any manipulation. It has so many applications even for those countries which are against the cryptocurrencies. And a country like India and other so many countries where healthcare and real estate are some of the examples which need immediate attention in terms of data manipulations at every level; are going to be highly benefitted with Blockchain Technology. In these places, taking advantage of the loopholes of the existing systems, the data are forged by the government officials with payment of bribes. A Blockchain system in such places gives a blanket cover from any kind of data manipulation.

So many still believe that Blockchain Technology and cryptocurrencies are the same. It would be wise in knowing that Blockchain Technology is different from a cryptocurrency. The cryptocurrencies are dependent on Blockchain; not another way around. These areas where I just mentioned about India are bound to come under Blockchain and I am sure even the government would be agreeing for implementation of Blockchain Technology for improving the records and a proven system to stop the tempering of the data.

Why governments are so worried?

The biggest of all the challenges with cryptocurrencies is that it is highly disruptive for any economy of India’s scale; at least that is what the government and the economists of present time think. The reason being, the government loses control over its currency because unlike the conventional currency, a cryptocurrency is free from any individual or entity’s control. There is no central bank to control it. In this situation, the government cannot manipulate the market something every government has been doing it in its favor.

It can’t print the currency if the inflation is moving towards the northern direction. It is also a fact that a government has huge projects at hand at a given time. All these projects in government kitty need funds, a lot of funds. A cryptocurrency encourages for a lesser taxation system. So if the government won’t be able to collect more tax, how it would sponsor the megaprojects? So, I don’t think any government would allow a cryptocurrency in the country at least in the immediate future.

This is why there is too much hue and cry for Libra and Calibra. So far, BTC and other crypto haven’t dented the present economic system due to the lesser volumes of transactions. The user numbers are less. But the story of Libra and Calibra would be entirely different. It will shake the existing transaction models on a huge scale. There will be much political and economic turmoil across the globe. So many governments will fall and many countries may go bankrupt.

In fact, I wrote an article on my blog on Facebook launching cryptocurrency at here: https://techmounal.com/2019/06/20/libra-this-is-how-you-will-soon-transfer-the-money-through-whatsapp-and-facebook/

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Blockchain Technology has its own problems

It is not the Blockchain is free from any glitch either. The problem with Blockchain Technology is that it is still very very slow. It takes a lot of time to confine the transacted data into blocks. Now, at the world level, the transaction numbers are in millions per second whereas an efficient Blockchain system still takes a few seconds for one transaction to get crystallized. Despite Bitcoin and other cryptocurrencies being relatively successful have not been able to make a significant place in the main economy.

This for two reasons that people still don’t want to put money to something which doesn’t have a government backing and second that cryptocurrency is so slow and complicated to operate into. Nobody knows who is Satoshi Nakamoto, the inventor of Bitcoin and people are still hesitant about going with Bitcoin. Satoshi Nakamoto is Faceless but Libra has the backing of Facebook and 27 other well-famed entities. People will believe them and adopt Libra for sure.

Having written all that is above, what I am trying to convey here is that:

1. Bigger economies will not let cryptocurrencies take over their economy. So BTC or any crypto for that matter; will not be much welcomed in immediate future.

2. Blockchain Technology despite being so good is still at nascent stage and it will take time to be a part of the mainstream businesses.


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