Libra is supposed to become the big competitor of another cryptocurrency: The wll known Bitcoin. But Facebooks new and own crypto coin has many differences compared to the world’s most famous cryptocurrency.
Next year, in 2020, Facebook wants to cause turmoil in the crypto sector by implementing their own coin into the social network. Almost over night billions of people will be provided with a brand new crypto coin called “Libra” and will be part of the new financial world. Buff! National banks and politicians are still doubtful and don’t know what to do with this brand new idea. Some of which fear the end of our traditional fiat money system, when the money supply can’t be controlled by central banks and politicians anymore. Instead, some important and large companies will have to control the fluctuations and amount of libras circulating in the system.
Bitcoin vs Libra: spot the difference!
Although some might think libra will become the bitcoin of facebook, there’s some big differences between those two cryptos:
- Centralisation: Bitcoin is a completely decentralized coin. Nobody owns a “Bitcoin Central Bank” that controls the money supply. Due to the technical structure of the BTC there won’t be more than 21 million BTC worldwide. Libra on the other hand will be controlled by Facebook and a large network of important firms, such as visa, mastercard, netflix and many more. They will issue a certain amount of libras and can thus control the money supply.
- Value: Libra will be a so called stable coin that will be attached to a basket of other important currencies such as USD and EUR. This is to prevent speculation and trading, libra is ought to become a cryptocurrency that is used for transnational payment, quick and cheap, not for gambling. Price fluctuation of Bitcoin is completely independent and not regulated.
- Deflation: As there’s a maximum of 21 million BTC worldwide one day the coin suffers under a permanent deflation. Of course this is good for traders and investors but not for people who want to buy a pizza or a coke. With Libra deflation and inflation can be controlled by the large companies that own libra. If there’s signs of deflation, they will just issue more coins in order to keep the market under control and bring the price back to normal.
- Blockchain: Libra works with a kind of Blockchain but it is slightly different compared to the BTC Blockchain. With Libra it is possible for the emittents to give just a certain group of people access to the coin. Bitcoin however is made for everyone and can hardly be controlled by governments, politicians and/or intelligence services.
What is your favorite coin?
As you can see from the facts above, there’s plenty of advantages and disadvantages with both of the coins. Which one is your preferred one or do you want to buy both? Let us know what you think about libra and btc in the comment section below!