Bitcoin vs Libra, what is the difference between Libra and Bitcoin?

Difference between Bitcoin vs Libra
Difference between Bitcoin vs Libra
Digital currencies in the world will enter a new phase after Facebook introduces Libra. Although the plan released this year (2020).

Libra has been attracting attention and expected to threaten other types of cryptocurrencies, including Bitcoin which is the pioneer of cryptocurrencies.

Many experts see Facebook's move to launch Libra as a validation of the rise of digital currencies.

If you think Libra and Bitcoin are the same because they called digital currencies, rethink.

There are some fundamental differences between Libra and Bitcoin. One that needs to understand is the concept of Libra and Bitcoin, each of which is like traditional money and gold.

Experts mention the concept of Libra as a traditional currency that digitized. Libra has the same value as the rupiah, US dollars, yen, euros and other currencies in the world.

Meanwhile, Bitcoin is a digital concept that digitized. People have to do mining to get it, it can also with transactions similar to buying and selling gold.

Besides these main differences, there are other points, namely:

  • Libra has an asset guarantor, while Bitcoin does not

Libra has a guarantor of high-value assets, such as gold and US Treasury. In addition, there are associations that overseer in Geneva, Switzerland.

We consider Bitcoin risk because it is not clear the guarantor or the underlying and full of speculation elements. In addition, the limited amount also makes it easy to fluctuate prices.

Despite having a guarantor of assets, but Libra is not necessarily potentially more secure than Bitcoin and other virtual currencies. We still need time for us to study Libra because the status is not clear.

In fact, the planned publication of Libra also invited anxiety on the European Continent. I fear that the virtual Libra will replace the currency set by the government, and there is also fear that there is a personal interest behind the Libra project.

Libra also feared if it used for money laundering or financing terrorist activities or other illegal activities. Therefore, there must be restrictions from Libra later.

  • Availability

As you well know, Bitcoin is only available 21 million bitcoin. Bitcoin will run out if all assets have been mined, there are no updates or additions. This concept is likened to gold, which is a limited amount of resources.

Reportedly the number of bitcoins is only 20 percent. This makes Bitcoin defensive because of the limited amount of money in circulation. Bitcoin does not depend on anyone's government, certain institutions, or even fiat currency, such as the US dollar.

Unlike Libra, this currency has the nature of inflation and delation like a traditional currency. Libra has a Libra Association that will regulate the supply of assets circulating in the community.

According to the plan, Libra will not peg to one currency but as a basket of assets ranging from bank deposits to government securities. All Libra users must depend on the Libra Association policy.

  • Centralization

A significant difference in Libra is to embrace the concept of centralization which regulated by Facebook and a non-profit organization Libra Association. This concept is like the currency regulated by the Bank of the country.

Facebook and the Libra Association have control of Libra assets and their use. When Libra launched in 2020, Facebook will get out of hand and the Libra Association will have full control. Although, we must be sure, is Facebook willing to release Libra? Or, there will still be interference in the future.

The Libra Association has members of 28 large companies, such as PayPal, eBay, Spotify, Visa, Mastercard, Uber, and Lyft. All members of the association will have the same vote in Libra.

How about Bitcoin? This digital currency adheres to the concept of decentralization. Bitcoin not owned or regulated by any party, therefore it causes vulnerability to price changes. In contrast to Libra, Bitcoin really avoids companies, like Mastercard, which hates the Bitcoin system.

  • Ease of transaction

Libra has the convenience of transactions compared to Bitcoin. Libra, will be positioned as a medium of exchange, where users can send money and any transaction, shopping, paying for food and transportation.

This ability is present because of the support of members of the Libra Association, which is a service provider company ranging from credit cards, food, transportation, to digital payments.

Meanwhile, Bitcoin is difficult. Until now, very rare shops that accept transaction methods using Bitcoin. This difficulty makes Bitcoin considered more than an investment.

  • Security

Libra is guaranteed security by Facebook and the Libra Association. Facebook said it would implement technology to prevent money laundering and fraud.

The company also claims to have direct support to help users who lose access to their accounts and, if users lose money due to fraud, Facebook has offered a refund.

Libra will be built on the open-source code that allows developers and the research community to monitor it for design or security flaws. Facebook will implement a bug bounty program to provide security experts incentives to show vulnerabilities on the platform.

Meanwhile, Bitcoin does not have what is on Libra. Bitcoin relies on blockchain technology for protection. Bitcoin also has a vulnerability in its digital wallet service created by third parties, which means anyone can make it.

  • How to get

The way to get these two digital currencies is also a little different. Although Facebook has not provided clear information about transactions from Libra, it could be a way to get Libra through an exchange of tokens with traditional currencies. A member of the Libra Association will issue the token.

Libra has a digital wallet application made specifically, called 'Calibra'. This application can manage Libra assets and transactions.

Meanwhile, Bitcoin can get through mining and trading transactions provided by third parties. There are no special applications made for Bitcoin or those created by them.

So basically this libra has many advantages, but behind the advantages, there are also the shortcomings of this libra.

Even the emergence of libra as opposed by several parties. And most recently, when this article was written, Facebook Libra almost certainly backed off from the June 2020 schedule because of facing regulatory challenges from Switzerland.

Reported by Reuters, Ueli Maurer one of the seven members of the Swiss Federal Council commented, "I don't think Libra can provide an opportunity in its current form, because the central bank will not accept the cryptocurrency that supports their currency. The Libra project in its present form has now failed." Libra did not immediately respond to this statement.

Libra Release is Delayed. The initial plan for the Libra project to release in the second half of 2020 is likely to delay since developments from Switzerland emerged.

Officials holding the project, including David Marcus from Facebook, say that regulatory barriers could make Libra releases delayed beyond the June 2020 planned deadline.

Keep in mind, Libra's cryptocurrency conceptualized in such a way that reserve assets can support it such as bank deposits and government bonds, to foster public confidence and avoid price volatility that can disrupt other cryptocurrencies.

In addition, Facebook crypto will be regulated and issued by the Geneva-based Libra Association. This raises serious concerns among regulators and politicians.

They worry about privacy issues to the potential of Libra to influence monetary policy and change financial conditions globally.

So far, the Libra project from Facebook that has not officially released has encountered many challenges, pros, and cons.

The Chinese side openly supports the development of the Blockchain like Libra, while the US and Europe are more careful in responding to it.

Some financial officials in the US and Europe expressly reject the existence of Libra and rarely want to accept Stablecoin as an alternative currency for fiat currencies.

So, will Libra released soon in 2020 or back again to the coming year?

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