The Libra Ecosystem is a blockchain-based payment system for the e-commerce industry. It aims to provide e-commerce businesses with a convenient, secure and transparent way of accepting payments from their global customers using cryptocurrencies.
One of the problems that the Libra Ecosystem is trying to solve is the lack of transparency in traditional payment systems.
What is the Libra Payment System?
The Libra Ecosystem employs the cryptocurrency-based payment system on the Ethereum blockchain. As we all know, blockchain transactions are highly secure and end-to-end encrypted.
Transactions on a blockchain are first verified by anonymous nodes and then stored in an encrypted, decentralized, immutable ledger for safekeeping.
Transactions, including payments, on the blockchain are publicly accessible, which means it’s easy to verify a cryptocurrency transaction in case of a dispute.
Unlike traditional payments that are governed by centralized authorities like banks that have complete control over payment processing, crypto transactions are free from middlemen and totally controlled by the end-users.
Transactions in the Libra Ecosystem are governed by digital Smart Contracts.
What is a Smart Contract?
A smart contract is a digital application that contains the agreement terms between a buyer and seller written in programming code. In simple words, it’s a digital contract between the buyer and seller, designed to be executed automatically upon the fulfillment of the underlying conditions.
An e-commerce platform that chooses to use the Libra Ecosystem will get to implement smart contracts for all their payments. Once the payment is made by the buyer and confirmed by the system, the product/service will be automatically released to them.
The best benefit, of course, is that no middlemen are required to confirm or process such transactions. This creates transparency, improves security and reduces the cost of transactions.
Traditional Payments Vs Libra Ecosystem
Still wondering how is the Libra Ecosystem better than traditional payments? Here’s how.
Traditional payments like bank transfers, net banking, cards, etc. require a middleman like a bank to process every transaction or payment. So, when a user makes a payment on an e-commerce site using his card or net banking, he has to share his personal details as well as the order information with the middleman, i.e. the bank or the card company.
Basically, the bank and credit card companies have all your data, including what you are buying and where from. They can use this data for marketing and all other purposes. This effectively puts your privacy and security at risk.
Also, transactions using traditional payment methods are not transparent or secure. They are controlled by centralized authorities like banks that are prone to hacking, errors and other issues. Also, the bank can decide to reveal or not reveal transaction information on its own accord.
Cryptocurrency transactions on the Libra Ecosystem are private, secure and completely transparent. There is no middleman who will see or access your transaction details. Even the user information is encrypted and in the code form, so no one can see the actual details. All the transactions on the blockchain are encrypted and highly secure.
Also, the Libra Ecosystem allows e-commerce companies to accept payments in multiple payment modes from their global customer, using digital currencies like ETH.