Facebook Libra vs bitcoin: What is the difference? What can you do with Facebook coin?
The launch of Facebook’s Libra has been eagerly anticipated by the cryptocurrency industry for months. Industry insiders have been touting Libra’s ability to achieve mainstream adoption, which bitcoin has attempted to do for a decade. But there are notable differences between bitcoin and Libra and it stems from how they will both be used.
Although bitcoin has attempted to evolve into a platform for making transactions, BTC has been regarded as more of an investment and store-of-value, a little like gold.
Libra, contrastly, is a medium-of-exchange allowing users to make transactions and send money.
Libra is coming to market with a lot of powerful players behind it, other than Facebook.
These include Mastercard, Uber, and Visa, which should help Libra achieve mass adoption.
Michael Graham, analyst at Canaccord Genuity, said: “There is a good opportunity to get a lot of adoption, whereas bitcoin was a grass roots experiment still in development.
Libra’s low fee transaction should incentivise customers to use the token to send money, analysts believe.
Whereas bitcoin is becoming increasingly expensive and slower in conducting transactions.
Mr Graham added: “Libra is meant to be built from the ground up to be fast and inexpensive to transact with, a huge difference because it still costs a lot to trade bitcoin.
The volatile nature of bitcoin has invited risk takers to trade the cryptocurrency.
Since bitcoin is not owned or governed by any central party and lives on a decentralised network, it is vulnerable to bring price swings.
Alternatively, Libra is supported by currencies like the dollar and euro.
Tom Lee of Fundstrat Global Advisors, said: “Libra is a stable coin, backed by a basket of currencies and debt securities. Bitcoin is a hypervolatile crypto-currency.
And some analysts say this is one reason they like it already over bitcoin.
One said: “Unlike the volatility seen around other cryptocurrency’s in the past, we believe that Libra’s focus on creating a stable, low inflation currency backed by a reserve or real assets is a differentiator.
Further, unlike other stablecoins, Libra will not be pegged to one currency but instead a basket of assets ranging from bank deposits to short-term government securities.”
George McDonaugh, CEO and Co-Founder of blockchain investment firm KR1, believes Libra has the potential to significantly disrupt how we deal with money.
He said: “Facebook is creating its own cryptocurrency something that even those of us necking the crypto cool aid back in the early bitcoin days never in our wildest dreams thought would happen.
“Facebook is essentially trying to create a stable medium of exchange that can be used for making payments across its networks and therefore across borders.
“Think the current functionality of Wechat, Venmo and PayPal but instead of transacting pounds and dollars, users will be transacting in Facebook’s Libra.
“Bitcoin doesn’t need to worry (indeed it’s possible Libra may even help Bitcoin adoption by potentially driving millions of people to seek out what a real cryptocurrency is) whose piece of the pie is Facebook taking?
You’ve guessed it, the banks. To one side of them there’s the open source, borderless bitcoin growing in adoption every day and on the other is Facebook with their 2.3 billion users.
“Banks are being squeezed between two hugely powerful forces and remember Facebook have built a global phenomenon through reinventing what we’ve come to understand as a user experience.
“What they’ve done with interfaces, they’re going to do with money, and in that arena, the banks don’t have a chance.”
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