Facebook’s Libra Gives Bitcoin A Step Up

By Ben Hamill - July 03 2019

Facebook’s Libra Gives Bitcoin A Step Up

The confidence factor appears to be cryptocurrency Bitcoin’s greatest driver of value. Bitcoin investors recently laughed all the way to the bank when Facebook’s announcement of its plans to launch Libra; its own cryptocurrency; inspired new global confidence in cryptocies in general. The value of digital money appears to be very much connected to “what people think” which can at any given time, and dependent on a number of unknowns, either be very good or absolutely disastrous.

Bitcoin offers much in the way of lower costs, quick and hassle-free transactions and secure online payments, but its rollercoaster-like performance does have many a downside. Bitcoin is a firm favourite among online gamblers especially, as well as anyone looking to do covert and anonymous transactions, but the sheer volatility of its very nature is off-putting to many potential investors.

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But Is Libra Even Crypto?

Social media giant Facebook hopes to stabilise its own Libra by tethering it to mainstream currencies like the Euro and the US Dollar. Whilst many would instantly argue that this automatically disqualifies Libra from being a real cryptocurrency, others yet are of the opinion that this may be exactly what is needed to provide more stability in the long run.

Bitcoin has ever since its having first gone live been a firm favourite among online gamblers. But apart from the secure-trade factor, many would argue that the currency doesn’t really hold much more in the way of “real world” value. Whilst many online merchants currently accept Bitcoin as acceptable tender, the majority are of the opinion that accepting any form of crypto is simply too high a risk. In other words, the pros don’t exactly outweigh the possible cons.

To Trust Or Not To Trust

Facebook hopes to do much more with Libra than what has been achieved by Bitcoin. One of the main issues associated with Bitcoin; and oftentimes a huge volatility-driver; is the fact that the inventors of Bitcoin considered it appropriate to limit the number of coins that may be “mined” to a pre-set figure. The limit has been programmed into the very source code of the cryptocurrency and cannot be altered.

There hasn’t been talk of any similar limits with Libra. In fact, Facebook hopes to create a low-cost mainstream global currency. Another positive is the fact that the public knows the identities of Facebook’s directors. Bitcoin’s creator(s) are not.

With that having been said, a measure of trust will have to be present and to date, Facebook hasn’t exactly fit the bill. Only time will tell whether Libra will become a global currency giant or whether it will stumble down the same road to nowhere, as has been the case with Facebook Credits.

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