There’s been a lot of hype surrounding Zuckerberg’s new cryptocurrency, Libra. Many people have tried to compare it with Bitcoin. But are there really any “crypto wars” going on? And, if so, in Libra vs Bitcoin, who is the winner?
So Libra is supposed to convey thoughts of balance and stability. You hear that from the name. But how can it be open and closed at the same time? This was once brought up by Blockstream’s Chief Strategy Officer, Samson Mow.
“Libra can’t be everything for everyone,’ he said.
He also stated that he felt like Mark Zuckerberg doesn’t have a clear idea of what he’s building. All of this coming at the heels of the senate banking committee hearings regarding Libra.
Libra vs Bitcoin – What are the Differences?
The general public understands Bitcoin fairly well. Most see it as an investment store-of-value, but people do use it for international online transactions for things such as taking action on their favorite teams at top sportsbooks and a lot of other things. But what are the fundamental differences?
The idea behind Libra is that it is a medium of exchange. A means to an end where people can house monetary transactions. Bitcoin is still looked at more like a volatile investment. Another major difference is that Bitcoin is completely decentralized and subject to huge swings in value. In contrast, Libra is backed by the dollar and Euro, and debt securities. In other words, they are marketing Libra as a ‘stable coin.’
The third biggest difference is backing. Bitcoin has always been a grassroots deal, kind of like an ongoing experiment. Although popular, it has struggled to reach the mainstream. Facebook is pushing Libra while probably still being the most mainstream social media site on the planet. Entities like MasterCard and Uber back it, and Visa. The idea behind it is more akin to Ripple: fast, easy, and cheap transactions.
Can Libra Take Down Bitcoin
The short answer is no. One of the things that drives investors to Bitcoin is volatility. Millions of people are still going to buy and sell Bitcoin and play their hand at timing the market. If anything takes down Bitcoin (in the short term), it will be legislation. And don’t think that this would mean that a coin like Libra would win, because Libra, despite all of the adoption, is not safe from world governments either. Imagine if Libra was really successful. It would create liquidity problems because there would be an influx of similar ‘exchange tools’.
Another reason I don’t see Libra winning the Libra vs Bitcoin fight any time soon is the technology they are using. At a glance, it doesn’t seem to even be on par with Bitcoin – at least not yet. And it’s not ready to for global currency exchanges on a large scale. That said, the technology will improve with time. But as it evolves, who controls that? The ever so trustworthy Mark Zuckerberg? A conglomerate of vested businesses which probably don’t have the public’s best interest at heart? They say it is open source and that they will relinquish control over both the network process and the codebase, but this doesn’t make sense. The association stated that “wallets will enforce the sanctions that are led by our national security apparatus and treasury.”
How can they keep this promise if components in the codebase were alterable by dev-teams?
Essentially, there are a lot of bugs that Libra has to work out before it becomes a powerhouse in the crypto world. And even if it does take up a huge share of the crypto markets, it won’t necessarily be the catalyst that ‘breaks’ Bitcoin.
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