Imagine a world in which we can instantly send money to anyone, in any country, and for a very tiny fee. How might we be able to do that soon? Listen and find out.
Welcome to Dictize English Podcast, where we discuss topics slowly and clearly to learn new phrases and vocabulary. My name is John, and today we are going to discuss LibraCoin
So what is LibraCoin? Libra coin is a digital cryptocurrency. And what is a Digital cryptocurrency? Well, a Digital cryptocurrency is money, or currency, that is not physical, in other words, we can't touch it. I can't hold it in my hand because it is on the internet. What are some examples of digital things? Well, we have digital images, digital videos, digital audio, and now finally we have digital currency or money.
There are many cryptocurrencies and they have become very very popular. In fact there are over 1000 digital currencies. The most popular, or well-known, is Bitcoin. Maybe you’ve heard of it already?
Bitcoin is a digital cryptocurrency also. The dollar, the euro, the sterling pound, the yen, these are just called currencies. They are not digital, they are physical currencies.
Ok, so why are we going to talk about LibraCoin? Is it the same as bitcoin? No, not really. So, how is LibraCoin different from other digital coins.
LibraCoin is a cryptocurrency that is designed, or created, to be stable. And what does stable mean? Stable means that the value, or the price, doesn't change quickly.
For example, the dollar is stable. I can buy a Coca Cola today for $1, and then next week, or even next year, it will be still $1, because the dollar is stable. The prices don't change quickly.
On the other hand, Bitcoin is unstable. Bitcoin's price changes so fast. I can lose 10% of my money in just one night!
Or I could buy Bitcoin instead and hope to make money. So, why would we use a stable cryptocurrency like LibraCoin that doesn't change in value? Well, because we are going to use LibraCoin for sending, or transferring money. Okay, to transfer means to move from one place to another. So I will transfer money from my account to my sister's account. This is a transfer of money.
Let's talk a little about how currency is transferred internationally today. Internationally means between nations, for example I want to send money Internationally from America, to France.
How do you transfer money to people in other countries today? Well, we have some options or choices today like Moneygram, Paypal, WesternUnion. For example, with Western Union I can send Money from my bank account and you can receive, or get, this money in Cash at your location. In this example, I have to wait at minimum, or at least 3 days for the money to send.
This is very slow and inconvenient. Inconvenient means not comfortable, or not desirable. If I want to send the money faster, I must pay a larger fee. A fee is the money that you pay for the service. So if i want to send $100 dollars, I actually need to pay $107. Now, that is a big fee! I could buy 5 double cheeseburgers with that money.
On average, the fee in the industry is around 7%. “Industry” means a group of related companies. For example, the food industry has McDonald’s, Burger King, Pizza hut. The Tech industry has Google, Facebook, Apple, and may more. Alright.
So, it would be convenient, or comfortable, to send money for a small fee of less than 1% AND we could transfer the money instantly. We don't need to wait.
With Bitcoin you can send money quickly. But the value of Bitcoin is so unstable, that people don't want to have too much bitcoin, because it is risky. Risky means there is a chance, or a possibility of danger or loss.
Umm… It is risky to swim during a thunderstorm. It is risky to bet all of your money at the casino. And, It is risky to hold bitcoins, because you can lose your money. On the other hand, you might make money, or you might lose money. This is risk.
With LibraCoin, it is not so risky, because the price is more stable. Okay, great, we have a new way, or method, to send money to another person, and it is not expensive. But first, we need to persuade people to use LibraCoin. Persuade, or to convince, means to make someone want to do something. I want to persuade my boss to give me a vacation. Or, I convinced my sister to give me some of her candy. So, the creators, or inventors of LibraCoin need to persuade people to use LibraCoin. We need many people to use LibraCoin if we want it to be successful and popular.
Well now we need to talk about who created LibraCoin. So, who created LibraCoin? Facebook! Of Course. Now you might think LibraCoin is Risky because Facebook has been in trouble for Data Privacy violations.
Wait a minute. What is Data Privacy? Data Privacy is guarding, or keeping secret our personal data. And, what does that mean? If I send a private, or not public, message to my friend. I don't want anyone else to see it. Only my friend should see these private messages. We need to trust, or to believe in the Companies to keep our data private. But, Facebook has shared private messages to other big companies like Netflix and Spotify. This is a huge problem.
So, why is this a problem? If I tell my friend in a private message that I like cats and dogs, what’s problem if everyone knows this? Well, okay, in this example, maybe there’s not such a problem. But, if facebook tells everyone, every purchase, or every thing that I bought, then yes this is a problem! I don't want anyone to know that I buy diarrhea medication every week. That’s personal, it’s private.
It seems, or it appears, or it looks like, that Facebook already anticipated these trust issues. To anticipate means to expect, or to foresee. Facebook anticipated trust issues or problems, so they created a foundation. This foundation, or organization, will work together on LibraCoin. Which companies are part of this foundation? Well there are more than 25 companies that are part of this organization. The most well-known companies are Visa, MasterCard, Uber, Spotify and Vodafone. As you see, this is much bigger than Facebook.
How do these companies make money from LibraCoin? Well, each company had to contribute, or to give $10 million dollars to be part of this organization. This money will be used as a supply, or fund for the coin. It is important to have a supply of real money, so people can sell LibraCoin they can receive real money. This money supply will change over time, but money generates interest that will be paid to the companies. What does generate interest mean? When you hold your money in your savings account at the bank, they will pay you a small percentage. Right? It will be the same for LibraCoin, this supply of money is like a bank, and they are paying interest to the investors.
Alright, Alright, so know we know what Libra Coin is and that we can use it to send money quickly, with small fees. So what's the big deal? who cares?
In my opinion, a stable coin like LibraCoin has a chance, or a possibility to change the world drastically. Drastically means by a great, or a huge amount. How can LibraCoin drastically change the world?
First of all, sending money internationally will be so inexpensive, or cheap, that it will affect companies like WesternUnion, MoneyGram. They will have to lower their fees. Otherwise, everyone will use LibraCoin.
Second, physical stores all over the world could begin to accept LibraCoin. So I could go to the market, and buy my food with LibraCoins instead of dollars. Now why would a company want to accept, or to take LibraCoins? Because of the fees! It all comes back to the fees. Currently, or today, when you buy things with a credit card, Visa wants at minimum 2%. This is why stores prefer, or like, when we pay in Cash. Many stores will say they will not accept credit cards if the total bill is less than $5. That’s because they want to avoid this fee. They don’t want to pay this fee if they don’t have to.
Companies like Visa and MasterCard currently make so much money, that they have to be involved with, or be part of, LibraCoin. LibraCoin could destroy, or ruin, many areas of the financial industry. This is not a secret. Many people are worried, or concerned, about the effects of LibraCoin.
One of the groups most concerned with LibraCoin is the US Government, and many other governments of course. But why? Well, because they want to be able to regulate, or control it. Regulation is important because the currency could collapse. So what does collapse mean? Literally it means to fall down. A building or a house can collapse when a storm comes. If a currency collapses, that means the value falls, and people lose money.
Regulation is also important because the government wants people to pay taxes. With digital cryptocurrencies, it is easier to avoid, or not pay taxes.
Finally, digital cryptocurrencies can cause instability, or changes, in other currencies. How do governments maintain stable currencies? Well, the simplest, or easiest way is it to change the supply of money in the system. A government can print more money, which decreases or lowers the value of a currency. A government makes these decisions to create and maintain a stable economy.
But how will it work with LibraCoin? We don't know yet and that’s a big problem. In the USA, the government serves the people. But do the companies in LibraCoin serve, and work for the people? This difference could be a problem. We will see.
So, Will LibraCoin become popular? It seems, or appears, that the companies involved in the organization will work together to make LibraCoin popular. For example, Uber can accept LibraCoins. Facebook owns, or controls, Instagram, and WhatsApp, so naturally, it will add LibraCoin to Messenger, Instagram, and WhatsApp. These large companies could make LibraCoin popular very fast.
To summarize, or to talk about the main points again, LibraCoin has the potential, or the possibility, to change the way people use money. Also, it can affect other currencies, and it can hurt a lot payment services that exist today. But, with Facebook's bad reputation, and the government’s desire to regulate the currency, maybe this coin will never work. Only time will tell, we will see.
What do you think about LibraCoin? Would you use a digital cryptocurrency? Would you be willing, or ready to make payments through your phone? Well, maybe you already do. But, do you trust facebook? Or are you worried that facebook will share your data again? Do you trust that the companies in the foundation will correctly, and honestly regulate the currency?
These are all questions every person must consider, or think about, before using a digital cryptocurrency for payments.
Alright guys, thank you for listening. I hope you guys learned some new phrases and vocabulary, and maybe a little bit about a topic that you didn’t know about. LibraCoin is supposed to come out in 2020, so I will definitely revisit this topic. Alright, until next time.