Facebook’s Libra is the biggest topic in the cryptocurrency ecosystem at the moment. After Tuesday’s announcement which confirmed that a consortium of top technological companies have partnered with Facebook towards the project, many debates and assertions have begun to spring up.
Libra is drawing so much attention mainly because of the size of its major backer, Facebook, whose population of users accounts for almost a quarter of the entire world population. Government and regulatory agencies have expressed concerns over the issues that may arise in the financial sector with the impending Libra crypto.
Will Libra Replace Bitcoin? Bitcoin vs Libra
Up till this point, Bitcoin remains the big brother of the cryptocurrency environment, and has been the focus of the above mentioned stakeholders (governments and regulatory agencies). This position, at least by insinuation, appears to be threatened by the yet to be launched Libra. Within the cryptocurrency world, debates are already up measuring Libra against Bitcoin, checking out their similarities and differences.
Even the co-founder of the Libra project, David Marcus, has weighed in on the developing argument, trying to debunk ideas pitting both coins against each other.
“Many want to pit Libra vs Bitcoin. In my mind these two are not in the same category. BTC is a decorrelated (investment) asset. Libra is designed to be a stable medium-of-exchange. I have been and remain a fan of BTC, but for very different purposes.”
Bitcoin and Libra vary in certain ways. Rather than being perceived as adversaries that will compete for dominance in the same ecosystem, they may eventually become contemporaries that will join forces to pursue a common goal in establishing a new order in the money industry.
What Is The Difference Between Bitcoin and Libra?
While Bitcoin is not backed by any particular entity, existing on its own with an unlimited potential for growth, Facebook’s Libra as proposed will be backed by existing entities like the Euro and US Dollar. This differentiates their functionalities in various ways.
Bitcoin can be used as a store of value and an investment vehicle which a user can hold onto for anticipated profit. Libra on the other hand is a Stablecoin that will be used to facilitate payments. Holding onto it will not make any difference other than an anticipated more effective method of value exchange in comparison to fiat.
The goal of Libra is to introduce financial inclusiveness to the unbanked people of the world. The anticipated user base, which stems from Facebook’s popularity, gives it an edge in this area. This is why banks and regulators are worried about Facebook turning into a shadow bank.
Bitcoin is a peer-to-peer system of transaction that is based on an open source, transparent public ledger. Its goal is to introduce a decentralized financial solution to the people of the world.
Several other similarities and differences exist between Bitcoin and the proposed Libra, common among them though is their usability as flexible tools for transaction. This is boosted by the kind of technology offered by tap, which makes all kinds of cryptocurrencies easily applicable in the mainstream.
The tap prepaid Mastercard is an adoption tool that enables cryptocurrency holders to spend their funds easily without stress. The card is applicable across international communities and can be used anywhere Mastercard is accepted. Merchants and retailers do not need to pay any special attention to tap cards since they are processed like any other regular card in the mainstream.