Libra Vs. Bitcoin
By Hussam Hamdan on ALTCOIN MAGAZINE
Mom (San Francisco): Hey Sam, where are you?
Sam: Eiffel Tower
Mom: Send me a photo by Whatsapp or Facebook
Sam: Done!
That happens in 2019, but after 2020, what will happen?
Sam: Hey Mom, send me 5 Libra to pay my coffee, I am in Paris and I don’t have money!
Mom: done, enjoy your coffee!
In less than 1 second the money has been transferred from San Francisco to Paris which needs some days in Western Union, PayPal and at least 10 minutes in Bitcoin!
Tuesday, June 18, Facebook announced its new digital coin Libra. Libra is created by Facebook but controlled by Libra Association which contains 28 companies so far, including Visa, MasterCard, Uber, PayPal, eBay, …etc.
Calibra is the new messenger, it’s not about connecting people, it is about connecting people’s wallets; so the coins will be sent and received as easy and fast as sending and receiving an image on Whatsapp, Facebook or Insta.
The project seems prominent, it is very interesting to have a cross-border coin so that you can get your money in your phone and treat them as your images and videos, it is a revolution in the payment system! Isn’t it?
But does that matter? Libra is “Bitcoin-like” digital currency, no new concept or idea or technology behind it, it will use blockchain technology! So why we should care? Bitcoin is there!
Let’s take some different points between Libra and Bitcoin, and then you decide if you have to care:
1. Banking Unbanked People
Facebook announced that its objective is to bank unbanked people, there are about 0.5 billion adults who have Internet Access but not bank accounts, so Facebook will get them banked by Calibra as it has already got them connected by Facebook. But at some point, these people need to buy Libra to put it in their Calibra wallet and this should be physical so a local party will intervene to do that and who knows how much people will pay as fees!
The same thing for Bitcoin, at some point, if you don’t have a bank account you need to buy it from another person who has already Bitcoin and there are some websites for finding people who buy Bitcoin! The difference is that with Libra it is safer as you know the identity of the local party! But they also know you and ask you for identity verification!
2. Non-volatile Coin
Libra is supposed to be backed by a basket of assets so the price of Libra will not be so volatile as Bitcoin, because Bitcoin is not backed it is just produced by miners which pay for electricity and mining hardware. Libra is created, not mined, but its value is given by backed assets.
3. Centralisation
Libra is centralized, the 28 companies will validate all transactions on the network and any problem will be handled between them! Bitcoin is decentralized and no association controls the network (it seems to be more centralised right now)!
4. Cross Border Coin
Bitcoin is a cross-border coin, Libra is cross-border coin; But Libra couldn’t be used in Iran, in Venezuela, later on in China, Turkey, Russia …etc, because of USA sanctions, Bitcoin could be used anywhere anytime, so the meaning of cross-border with Libra is controlled by policymakers!
Facebook announced that Libra needs to be regulated by governments and policymakers and they are working on that. This will bring investors and funds to invest in Libra but it is like a prominent project to facilitate the money transfer but it doesn’t have Bitcoin vision! and Bitcoin is also looking forward to being regulated !
So Libra is a prominent project! Competitors will come soon if any regulation could be done! Google, Apple, Microsoft, Netflix, Banks are not in Libra association, and they will not stay outside this market!
If Libra get success, the cryptocurrency market will flourish vastly!
