The thoughts on Libra

I. From the Perspective of Currency

Firstly, use of credit endorsement.

Most people evaluate Libra in perspective of currency. Some people say it’s currency, while some people say not.

Secondly, the issuance of digital currency.

In fact, there are usually three types of digital currency issuers:

Thirdly, the use of digital currency.

When paying all public and private debts in the territory of the People’s Republic of China in cash, no unit or individual may refuse to accept them, but the bank currency does not have this function. In the United States, the deposit insurance limit was $100,000 before 2008 and $250,000 after the financial crisis. Therefore, it’s safer to use assets as collateral fully, such as Libra. If 100% of the reserve is in the central bank, that would be perfect, while if managed by a third-party market, it would be defective because of the risks.

II. From the Perspective of Finance

Libra is known to build a new generation of financial infrastructure. Why can we say that? Because it’s based on the blockchain. The three things at the bottom of the blockchain are used to build a new generation of financial infrastructure: a new bookkeeping method, a new system of accounts based on encrypted digital wallets, and a new unit of bookkeeping based on encrypted digital currency.

III. From the Perspective of Business

The feature of blockchain technology is that it is sufficiently digital, cross-border, cross-temporal and cross-organizational, as well as distributed, self-organized and decentralized. Being decentralized doesn’t mean the decentralization of social governance, but of business activities. To a certain extent, the applications truly based on blockchain should embody the above two characteristics.

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Wanxiang Blockchain

Wanxiang Blockchain

Wanxiang Blockchain is dedicated to building an open platform and offering resources to develop blockchain and promote its application in different industries.