They may look alike, but they are not the same. Bitcoin and Pound have different technology, different uses and are subject to different regulatory frameworks.
Τhis plans for the circulation of his own cryptocurrency, his Pound, recently announced Facebook, causing mixed reactions.
As this is a new "experiment" in the monetary systems of the digital age, inevitably, the comparison of Libra with the most widespread, to date, cryptocurrency, the Bitcoin. At the same time, Facebook is being called upon, in the midst of reactions, to certify that Libra is neither illegal nor dangerous for users, and there are many market participants who raise doubts about whether Libra can ever become a real one. cryptocurrency.
In an attempt to shed light on the world of cryptocurrencies and invoke the positions of many experts, the CNBC points out that despite the fact that Bitcoin and Libra are declared as cryptocurrencies, the differences between them are obvious.
Different technology
One of the biggest differences between Bitcoin and Libra lies in the technology that supports each of them.
As far as Bitcoin is concerned, transactions are done anonymously through a blockchain platform. There must be a database, which is supported by an entire network of computers and which completely secures and shields all transactions.
Libra, for its part, also uses a blockchain platform, which, unlike Bitcoin, requires authorization, at least until now, to use it. This means that transactions can only be made by a group of trusted members.
"Libra will be based on a central structure, which will be managed by an unelected 'union', in which only strong and well-known bodies will participate," he explains.Ido Sadeh Man, founder of the Saga Foundation, a company active in the cryptocurrency market.
This is a completely different network from its Bitcoin counterpart, to which anyone can access.
"Cryptocurrencies are characterized by a lack of credibility. This is not a common secret ", he comments Peter Van Valkenburgh, research director at the think-tank Coin Center. "We believe that Libra is not a cryptocurrency, because it requires a license to use it," he added.
Different cases of use
The basic use of Bitcoin is, as a virtual currency, to allow its users to make any monetary change, without having to go to the bank.
For many, in fact, Bitcoin is a real investment, while cryptocurrency is also known as "digital gold".
The main goal of Libra is to be used in cross-border payments and money transfers. The Libra will be directly linked to a number of conventional / government currencies, in order to avoid the "violent" turmoil that, from time to time, Bitcoin experiences.
There are many who have started to label Libra as 'stablecoin', with the aim of always keeping its value stable.
"Bitcoin and Libra represent different stages in the evolution of currencies. "The way is clearly different," he explains Charles Hayter, co-founder and CEO of the CryptoCompare platform. "Bitcoin does not need a license, it is completely decentralized and vulnerable to deflationary pressures and market volatility. "Libra requires a license, it has a central structure, while it is governed by the principles of supply and demand", he notes.
"As far as Bitcoin is concerned, the offer is fixed. "It can not respond to market demand," said Sadeh Man of the Saga Foundation.
Different regulatory framework
The major question that has arisen for Libra is: To what regulatory framework is it subject?
In stark contrast to Bitcoin, which does not require the assistance of financial intermediaries, the Libra model is based solely on the affiliates of the Libra Association.
"A system without intermediaries is a system without risk and therefore a system that does not need a specific regulatory framework," says Valkenburgh.
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