LIBRA AND BITCOIN: HOW THEY ARE DIFFERENT?
On June 18th, after the official whitepaper of releasing Libra, Facebook faced controversy surrounding data security regulations, anti illegally using data or fraud and other relatives. Libra is supposed to be a trial of digital currency system and it, obviously, is compared to dominant cryptocurrencies such as Bitcoin. However, experts consider whether Libra is actually a cryptocurrency or not.
Despite of launching whitepaper and called itself cryptocurrency, there are significant differences between Libra and Bitcoin. And this article will elaborate critical characteristics to distinguish Libra from Bitcoin.
One of integral difference of Libra and Bitcoin is technology backed, meaning they are built on different blockchains.
Regarding Bitcoin, transactions on blockchain (ledger) are pseudonymous. It is literally a database maintained by a computing network, in which transactions are secured almost without risk of forgeability. Bitcoin is truly decentralization which can be interfered and maintained by anyone having adopted hardware and Internet accessibility.
Libra, also, is based on a decentralized ledger called blockchain, but permissioned – at least at present. Hence, this authorizes an inclusive organization with power to run the validator nodes as well as add transactions into blockchain. And it is Libra Association which based in Geneva, Swiss, including Visa and Uber. To become a member of association, each entity must invest an initial privilege of $10 million.
“Libra creates a centralized ecosystem managed by a not-for-election association whose members have already bought suffrage” Said Ido Sadeh Man – Founder and Chairman of Saga Foundation.
“Cryptocurrency is featured by independence, distinguishing from trustable intermediary. We, therefore, believe that Libra is definitely not a cryptocurrency because of reliance on a third party stocking and managing monetary support fund” – Director of Policy Research Department of Coin Center, Peter Van Valkenburgh wrote in a recent blog article.
Distinctive usage functions
Although Bitcoin was introduced as a peer-to-peer payment system, allowing transaction could be implemented without bank interference, nowadays it is utilized as a form of investment and is considered as “digital gold”.