Libra vs. Bitcoin

Libra vs. Bitcoin

Libra Vs Bitcoin

With the arrival of Libra, a digital asset of the social media giant “Facebook”, the news has left the folks with some headache who barely are aware of Bitcoin yet.

Let’s dive deep into knowing the potential of Libra and how it is different from Bitcoin. But firstly, let’s get to know the basics.

Libra and Bitcoin

A bitcoin is a cryptocurrency, as sort of electronic cash.

The advantage is that it cuts down the middle man and the process is solely limited to involved parties; it’s a decentralized digital currency.

It doesn’t involve any central bank or any administrator and similarly, certain laws and currencies don’t affect bitcoin; which is a crypto-currency.

Libra, on the other hand, is a cryptocurrency which will be used to transfer money between users through its messaging platform. The system, however, adopts a similar functionality as of Blockchain with some modifications by the developers (Facebook).

The tech is supported by portable computers so it dramatically cuts out the middle man, too; there’s no central authority.

According to Facebook, the purpose which lies behind the development is to empower billions of people who are unable to go through the complex banking system or don’t have access to a bank account, especially women.
Facebook believes that it is a faster, cheaper and secure way as well as a dependable alternative to common ways of making transactions over the internet.

The upcoming digital currency is expected to roll in the first half of 2020 and is being assisted by 27 other companies such as Spotify, Uber, MasterCard and etc.

Libra and Bitcoin

The difference

Although both fall under the shadow of cryptocurrency, they don’t seem to be functioning the same when applied to wider markets.

Facebook wants to make Libra a global coin, giving it a pillar of US Dollar or British Pound in order to suppress “wild swings” of regular cryptocurrencies such as Bitcoin and Ethereum.

Primarily, the virtual currency will only be available to messaging platforms (such as WhatsApp and Facebook) but other firms are expected to accept the virtual currency as a form of payment soon after its launch.

Facebook is also expected to introduce the physical cash points for its customers to manage their Libra coins, which is something its archrivals never introduced.

1) Volatile Value:

The one major difference is that bitcoin was introduced so people could manage transactions without the involvement of banks or corporates.

Libra, on the other hand, is pegged to foreign currencies, therefore, it’s coin value is subjected to sudden and frequent changes – more volatile.

Its dependence on other currencies gives a setback to the concept of Bitcoin; which doesn’t depend on any foreign currency, similarly it goes over all the limitations and laws of a state.

2) Centralization

The most noteworthy difference between Bitcoin and Libra is decentralization. No single firm or entity controls Bitcoin.

Compared to that, Facebook and the Libra Association will be having a vast control over the Libra assets and its practice.

3) Inflation

Bitcoin has promised that there will be only 21 million bitcoins to ever exist. This prevents inflation.

On the other hand, the Libra Association will be the supervisor of the flow of Libra asset supplies. The user must depend on the association and its action.

4) The difference in the Blockchains:

Libra also encourage the mining process, but not without proper follow-ups or permission.

In contrast to Libra, Bitcoin doesn’t demand any permission or requirement to kick start the mining process.

The difference in the Blockchains

Will I be able to buy Libra coins?       

Facebook users will be able to convert real-world currency for Libra coins, just like exchanging money for foreign currency.

As Libra is pegged to foreign currency, it doesn’t offer the same level of investment opportunities compared to that of regular cryptocurrencies (Bitcoin or Etherium)

Will I be able to store Libra Coins?

Facebook will not be introducing any physical currency, but people still need a way to store it somewhere.

To counter the problem, the Company has introduced a virtual wallet known as Calibra.

Calibra will be able to store the currency as well as send/receive Libra currencies across the accounts.

Elements of Calibra will be integrated into the widely used messengers such as WhatsApp and Facebook, to further streamline the payment process.


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