With the release of social media giant Facebook’s digital asset, an innovation for the digital age, there has been compared to popular cryptocurrencies like bitcoin. However, many experts question whether Libra can even be called a cryptocurrency. This leads to the discussion, Libra Coin vs Bitcoin.
Other than the fact that they both come with a white paper and referred to as cryptocurrencies, Libra Coin and Bitcoin are actually very different. Here’s a rundown of the key differences between the two.
Different Types of Blockchains | Libra Coin vs Bitcoin
One of the biggest differences lies in the underlying technology behind both currencies.
Libra also uses a form of blockchain, or distributed ledger technology.
Where Miners must seek approval before starting to mine. In contrast, Bitcoin’s blockchain is permissionless, so miners can simply begin mining at their discretion.
That’s where the Libra Association, a Switzerland-based consortium of companies including Visa and Uber, comes in. Each of the nonprofit organization’s members have invested a minimum of $10 million into the project.
Bitcoin differs significantly from Facebook’s new asset in many ways. Perhaps the most notable difference lies in Bitcoin’s decentralization. No single entity controls Bitcoin. In contrast, Facebook and the Libra Association have a large amount of control over the Libra asset and its usage. The setup of Libra’s Association also appears to give sizeable entities (or chosen entities) power over what might become a top global asset – the Libra. Bitcoin does not give control to such businesses in the same fashion.
A Question of Value
Facebook’s digital asset is tied to national currencies and other assets. This means Libra’s value depends on the inflation and effects of the underlying currencies, as well as on governmental control. Bitcoin’s value is not dependent on any one government as with fiat currencies (such as the US dollar or the Australian dollar).