Since the announcement of Libra in June, the whole crypto world has gone into a frenzy. Regulatory backlash towards Libra has been more severe than Bitcoin ever received. While Libra and bitcoin don’t seem to have much in common, both the cryptos have been labeled as competitors in a field where bitcoin was considered undefeatable. So can the crypto which started the crypto and blockchain revolution beat Facebook’s Libra in a one to one battle.
One of the biggest differences between these two forms of cryptocurrency is the controlling body. Libra is going to be governed by a Swiss-based group composed of several members. On the other hand, Bitcoin has no owner or controlling body. Another major difference is present in the separate environments of each crypto. Libra will be operated within a much more controlled environment. Its records will be stored on a separate set of trusted computers managed by Libra members. Bitcoin’s records can be considered an open field, with anyone being able to link up a computer and verify transactions.
Now that we’ve got some of the major differences down, the matter of debate is – which should you choose? Of course, this is keeping in mind that Libra is going to be launched in 2020, so that’s a major factor for anyone attempting to make a transaction as soon as possible.
Besides this obvious factor, it should be taken into notice that Libra’s data will not be available for public scrutiny. While Bitcoin has a public distributed ledger which anyone can view, Libra does not have this functionality. The effect of this varies from user to user.
One of the biggest points is transparency. Libra is owned by a company, it has a controlling body, and one as powerful as Facebook. Facebook will be well within their rights to restrict your usage of Libra based on any post you make on their platform. Bitcoin can’t be withheld from you in the same manner.
A point in the hands of Libra is its investments and deposit insurance. Being a government-backed project, Libra users will not be subject to the multiple fluctuations in the value of their crypto, something Bitcoin users should know all about.
One of the final points to cover is Libra’s asset issues. While the value of the currency will be stable, a rather large issue will arise should users start to cash out their assets. Libra’s bank system can be considered self-fulfilling, but should a large number of users start to withdraw, Libra would have to sell their assets, causing the remaining assets to fall in price and value. This would lead to an insufficient ability to pay the original investors, creating a vicious cycle that only help from a government could help.
Depending on your usage, either currency could be your choice. For more private users, Bitcoin is the recommended crypto. Libra will operate more akin to a bank, and transactions will most likely be traceable.
All in all, we’ll just have to see how good Libra will be in practice. For it to overcome Bitcoin would be a huge achievement, but this would also require many contributions from the investors backing it. Users seeking a more stable currency will be drawn to Libra, but Bitcoin will always have some users who value privacy rather than stability.