How Bitcoin is Different to Facebook’s Libra
The launch of Facebook’s Libra cryptocurrency is on the horizon and with each passing day that horizon draws nearer. As launch approaches, many people including crypto insiders are still scratching their heads about the new crypto and how it functions. If you think it is styled like Bitcoin, you couldn’t be more wrong. Libra is a very different beast to Bitcoin, and we showcase 4 of its biggest differences.
Libra is Centralised
Whereas Bitcoin is well known for being decentralised (without a central headquarters and without central governance), Libra will be operated and managed by Facebook. This means that Bitcoin has all the flexibility of adjusting its business model to the world around it while Libra operates in accordance with the powers that be at Facebook.
In simplest terms, if Libra needs to do something, but that something is viewed as detrimental to Facebook, it might not be able to do it. An example of this might be regulation compliance and financial safeguards like ring-fencing and passing banking solvency tests.
Bitcoin on the other hand is free to adapt without worrying about appeasing a parent company.
Bitcoin has always relied on its own intrinsic value in order to survive and outside of the blockchain there is very little in the way of funding to build the profile of the cryptocurrency. This is one of the biggest challenges that Bitcoin faces and is listed on the Bitcoin website as a priority.
Facebook’s Libra on the other hand has all the financial backing as well as mass-marketing that is inherent with the Facebook social media platform. While Libra faces some critical challenges, it should be able to gain a lot of attention, quickly. If it doesn’t, something has gone catastrophically wrong with Facebook’s marketing department.
Both are Open Source – But Executed Differently
Both Libra and Bitcoin have publicly shared the code for developers to work on and enhance the cryptocurrency. In this respect both are open source cryptos and allow developers that are independent of the project to contribute to building a stronger cryptocurrency.
The difference is that unlike Bitcoin, any changes will ultimately be governed by Facebook and even though a developer may contribute something excellent to Libra, this avenue may not be pursued if Facebook themselves veto it.
We all know that Bitcoin is worth a lot of money. Each coin regularly trades comfortably over $6000 even when it is going through challenges or volatility. Bitcoin is fundamentally a high value crypto.
Libra represents a big unknown and could also be equally as valuable. It could also be that Facebook aggressively attacks the market like Ripple and Libra is relatively low value compared to other cryptos.
The truth is, at the moment, despite Facebook releasing information about Libra, how it will play out in the crypto market is a huge unknown. One thing we do know is that it will be very different to Bitcoin.