Libra, Facebook’s planned digital currency, can easily be confused with Bitcoin yet the two are worlds apart.
Facebook announced in June that it plans to issue Libra coin — a digital currency backed by high-profile tech companies including Visa, Mastercard, PayPal and Uber. The move has been opposed by regulators who see Libra coin as a big risk to global financial stability.
Compared to popular cryptocurrencies like Bitcoin, Libra stands out as something totally different — from the way it will be regulated and used to the technology that backs it.
Listen to GHOGH with Jamarlin Martin | Episode 52: Bärí Williams
Part 2. Jamarlin talks to tech attorney and diversity strategist Bärí Williams about the growing gap in big tech regulations between the U.S. and E.U., and why Democrats have been slow in bangin’ against Silicon Valley greed compared to Wall Street greed in 2008. They also discuss reparations and artificial intelligence being weaponized against Black people.
For Bitcoin, transactions are recorded anonymously on a public ledger known as the blockchain, which is essentially a database maintained by a network of computers where information is stored securely.
While Libra will also be based on blockchain or distributed ledger technology, its transactions can only be added to it by trusted parties. Those parties are regulated by the Libra Association, a Switzerland-based consortium of companies that includes Visa and Uber.
Libra is described as “stablecoin” because it aims at having a stable value that is tied to a basket of government-backed currencies and other assets. This helps it avoid volatile swings common with cryptocurrencies such as Bitcoin. Basically, Libra is a digital fiat currency.
Bitcoin is entirely unregulated and not managed or tied to any central bank or organization. The developers and the crypto-community are the ones who decide what happens to the bitcoins.
The striking difference between the two digital currencies is how and where one can use them. Libra, when officially released, will be used for transactions on Facebook, Whatsapp, and other Facebook properties.
On the other hand, bitcoin can be used anywhere. It is not tied to any platform organization and can be used without going through a bank. It is commonly used as a form of investment but can also be used for paying a ransom or making purchases on the dark web.
