Recently, Facebook launched its own cryptocurrency named Libra. This digital currency was a topic of hot discussion among the enthusiasts and promoters of trading from a long time. Libra has always been under the scrutiny of the governments of various countries. But some term Libra as the key to mass Crypto adoption. After numerous backlash, Libra is finally launched and is frequently been compared to the decentralized Bitcoin.
Even before Libra’s launch, people were comparing Libra with Bitcoin. Bitcoin is the very first crypto introduced and is the most famous one in the market. Traders are struggling to decide between these two virtual currencies. So, here we have combined some basic features of virtual currencies that will help you in comparing how Libra and Bitcoin are different from each other. But before starting with that, let us understand what both Bitcoin and Libra stand for.
As per Bitcoin’s whitepaper, it is “A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.”
And Libra’s Association has defined its ideation as, “The goal of the Libra Blockchain is to serve as a solid foundation for financial services, including a new global currency, which could meet the daily financial needs of billions of people.”
The very first thing that makes these two cryptocurrencies different is Decentralization.
Bitcoin is decentralized and open in nature. It is not controlled by any regulatory or controlling body. Users can download the open-source code for free and run their own node and send money to anyone.
Whereas, Libra is largely controlled by Facebook and Libra Association. The body controls the asset and also its usage. It has several central nodes which can anytime be shut down by the centralized authority. Libra is being considered as a cryptocurrency with fiat currency’s characteristics.
Users of Bitcoin are free to hard-fork the code if they have a better use case and can create their own coin. Crypto-community and developers of Bitcoin decide what happens to this digital asset.
Libra does not have this kind of model as it is supported by Uber, Mastercard, Booking Holdings, etc. In this, users who buy nodes, that is worth $10 million each, are the ones who can decide what happens with this currency.
Bitcoin’s value does not depend on any single entity and is not affected by the changing prices of fiat currencies.
The value of Libra is dependent on government control, inflation and effects of real currencies. It is attached to fiat currencies and other assets.
Bitcoin is deflationary as its circulation is limited. At present, there are around 17 million Bitcoins in the market and it cannot go more than 21 million in existence. This excludes the chances of inflation.
Libra, as stated above is controlled by the Libra Association. This means that the association will control Libra’s supply and users have to depend on the association’s actions.
Users of Bitcoin can send money to anyone they want without asking for permission. When using Bitcoin, your geographical location doesn’t matter for its use and transactions.
Libra, on the other hand, is banned North Korea, Iran and some other countries listed on the sanctions list along with some individuals. The governments are cautious of it and are trying to oppose the whole idea behind Libra.
Bitcoin is safe and secure from any kind of hacking. The network on which this digital asset is running is the most secure one. But, it is your responsibility too of ensuring that your private keys on hardware wallet are safe.
But Libra has centralized nodes which are not protected against personal ID hacks, DDoS attacks, etc.
Bitcoin runs on a permissionless blockchain. So, miners can start mining at their own will.
Whereas, Libra is running on a permissioned blockchain. So, miners need to first ask for permission and only after approval they can start mining.
Bitcoin does not involve any third party for any activity. When buying Bitcoin, you don’t need to trust and depend on a third party for money and other such information.
In the case of Libra, Facebook and some other companies will be intermediaries. They will be responsible for building a safe and secure ledger of transactions. Facebook will look into the money that users will pay in exchange for Libra.
We all know that Bitcoin is the first and the most popular Crypto in the market. But Libra has also become infamous and gained attention from governments, regulatory bodies, investors and industry leaders. Although both are termed as digital currencies, the core concept and idea behind both differ on a no. of factors. In due time, we will be able to understand the use case of Libra as well and can better analyse which currency is here to stay for the longer haul yet.