These are the most important differences between bitcoin and Facebook’s libra
Jul 26, 2019
Facebook has received a lot of attention since they revealed that they will release their own cryptocurrency in 2020 and that it will be called libra.
For those who have been in the crypto sphere for a long time, it became clear that libra is quite different from the world’s biggest cryptocurrency bitcoin. But for those who are less knowledgeable, it may be good to have the concepts explored.
In an article, CNBC highlights three different areas where the two cryptocurrencies differ, and we will go through them here.
Bitcoin’s blockchain in 3D. Image source: IOHK / Trijo News
The technology differs between libra and bitcoin
The first area highlighted is technology. It differs in that libra is a centralized cryptocurrency where transactions must be approved by The Libra Association, a Switzerland-based organization consisting of some 20 of the world’s biggest companies and organizations. Bitcoin, on the other hand, is decentralized and works by a network of computers around the world registering transactions in blocks.
Another area where technology differs is that libra is backed by non-digital currencies such as the dollar and the pound. Bitcoin is not backed by anything and therefore has a more volatile value.
Another area where the two cryptocurrencies differ is what they are actually used for.
While bitcoin’s liquid value has made it a popular tool for both short- and long-term investments, the value of libra will be stable. The reason for this is that Facebook wants libra to be used primarily for payments and to easily send money across national borders.
Image source: Shutterstock / Trijo News
May be regulated differently
The last area is perhaps the trickiest since it is not yet clear how libra will be regulated. What is clear is that Facebook from the beginning has stated that it wants to cooperate with the authorities. This is different from bitcoin in that bitcoin has no governing body and therefore can not cooperate with governments.
One important thing to remember in this context is that politicians around the world have been very critical of both libra and bitcoin.