Joe Kernen from CNBC answered this question succinctly and stated that “fiat currency is currency for governments, Libra is currency for corporations and only bitcoin is currency for the people themselves”.
Joseph Lubin, a co-founder of Ethereum and Consensys echoed the sentiment by stating Libra is akin to “a centralized wolf in a decentralized sheep’s clothing” in an interview with Quartz.
The main point is that of trust.
That is what we’ll dive into today before moving into different features of both currencies.
Do You Trust Bitcoin or the association backed by Facebook?
Both bitcoin and Facebook are organizations.
Bitcoin is decentralized while Facebook and the association connected to it is centralized.
The institution of bitcoin started off in an open source manner and was driven forward in a collaborative way.
Bitcoin is still driven in a decentralized manner with different parties contributing to it (miners, nodes, wallet creators, organizations such as Lightning Labs creating new avenues for progress, support from institutions such as MIT, Square Cash, and other parties) to move it forward.
Libra is on a permissioned closed blockchain, driven by Facebook, an organization with a leader who once stated that people who trust him with their data are “dumb f**ks”.
Libra is also driven by an entity that has significant issues with data and respecting privacy.
While there are worries that Facebook and Libra mine for data and invade privacy, bitcoin has always been pseudonymous and is mined for value and trust.
Bitcoin is valuable because it operates in an open, public, neutral, border-less and decentralized fashion.
The bitcoin economy is comprised of the many different transactions which take place on a daily basis.
Individuals can send value in a secure manner through the web on an alternate payment system.
Recipients don’t have to wait for days to receive their bitcoin, it is instant (for the most part).
Bitcoin is backed by the mining efforts, speculation and the need for an untethered internet currency.
Libra is conducted with a host of organizations that range from Paypal to Mastercard and others. It is essentially a consortium of centralized parties who are domiciled within the United States. Furthermore, while the entity uniting these organizations are based in Switzerland, we expect that Libra cannot be censorship resistant.
Rules and regulations would have to be followed to the letter in regard to money transmitter licenses and other necessities to be an entity that facilitates the flow of money.
Facebook and company must be aware of the senders and recipients and should be subject to a variety of laws and regulations.
Libra is backed by a basket of fiat currencies and government debt.
Libra competes with Ripple, Stellar, and even fiat currencies as individuals all over the world should able to hold Libra as a way to preserve a portion of their value.
The Libra system could serve as an improved Paypal but should not be a threat to bitcoin.
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