Know your Coin: Just how different is Bitcoin from the Facebook Libra?

Mary Brendah by Mary Brendah - 04:29 AM Jul 06, 2019
know-your-coin-just-how-different-is-bitcoin-from-the-facebook-libra

 

It’s been a couple of weeks now since Facebook announced the launch of its cryptocurrency. This announcement set the world in frenzy. All of a sudden, a crypto tone was set and everyone is talking cryptocurrencies. The global coin brought about renewed enthusiasm in cryptocurrency. Although the bitcoin was in a healthy bull run, this news in a way boosted its initial value. Bitcoin and Libra might share some similarities, but they’re entirely different concepts in the world of blockchain.

So, how does Bitcoin differ from Facebook Libra? Is one better than the other? This isn’t a call for investment but it’s good to know the differences. In this article well find out the big differences between the two.

Buying power


When Facebook releases Libra, perhaps in 2020, it will be a virtual currency that can be used for purchases and payments on WhatsApp, Facebook, and other Facebook properties. Other interested businesses will port the Libra payment gateway or even integrate Libra’s wallet, Calibra. Most probably members of the Libra association will come on board any time.

Bitcoin, however, can be used by anybody, in any part of the world, independent of any organization.  As long as you have bitcoin in your wallet, you can send it to any other wallet with impunity.

The Libra association will regulate how Libra is used. This means you will not use Libra for illegal activities such as money laundry, tax violation or buying drugs. Noteworthy, Bitcoin is under no regulation and can be used to commit all sorts of  extortions.

Value


The value of Bitcoin is not dependent on any government. Doesn’t operate the same way fiat currencies operate. Its value is entirely dependent on the holders.

Unlike Bitcoin, the value of Libra is entirely tied on the local fiat currency and other stable financial assets. Libra’s value won’t be too volatile. Additionally, note that the value of the Libra is tied to a fund reserve contributed by a group of members; each contributing $10 million.

Centralization


The Bitcoin network is decentralized. There is no a single entity which controls it. Investors have the say when it comes to the value of bitcoin. The have the power to determine which improvements are to be made on the system. They are all incentivized to make the tokens on the platform as valuable as possible.

As for the Libra, it’s a more centralized system. Mainly because the Libra Association will be at the core of business. It will have large control over its usage and assets. Unlike bitcoin, the users here don’t have control over Libra. Its control will rely on a body of partners such as non-profits, MasterCard, PayPal, Uber etc. which make up the Libra association. Facebook has made it clear that they’ll all get a vote in matters pertaining to Libra’s progress. It plans to have at least 100 members by the end of 2019.

 

Money supply


Bitcoin is deflationary. This is because only 21 million will ever exist. This will help curb inflation.

On the other hand, the Libra association will control the production of Libra. It is also subject to the laws of demand and supply.

The bottom line is that you could use both coins for the same purpose. Yet they both differ in many ways. Know your coin.

About The Author
Mary Brendah

Mary BrendahMy first love is music – then goes writing. I don’t write fiction, I analyze bulls and bears in markets. I call it my jungle, the digital jungle of crypto and chains.

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