The new and yet to be launched cryptocurrency form Facebook called libra is not intended to either kill nor compete with bitcoin, the social media platform has confirmed.
Libra and bitcoin can exist side by side with differing use cases, said David Marcus, the person who is heading the crypto attempts of Facebook, and added that he himself is a big follower and fan of BTC.
The aim of creation of libra is to provide and offer a stable payment system, he explained through a tweet on the issue on Saturday. According to him, bitcoin is viewed to be more of a store of value or a non-correlated asset – which is similar ot the concept of bitcoin being the ‘digital gold’.
“Many want to pit Libra vs. Bitcoin. In my mind these two are not in the same category. BTC is a decorrelated (investment) asset. Libra is designed to be a stable medium-of-exchange. I have been, and remain a fan of BTC, but for very different purposes,” he tweeted.
Drawing a difference between libra and bitcoin, Marcus, who had earlier played the role of a president at PayPal, said that the design of libra is such that it would be able to be stand up a better system for engaging in digital cash and payments while the more prominent role and characteristic of bitcoin is that of a vehicle for making investments in the longer term.
According to a report by CNN, virtually none of the users of bitcoin use it as a means for payments and financial transactions. Merchant transactions were involved in only 1.3 per cent of all bitcoin related transactions in 2019 so far and most of the people owning bitcoin are holding them for the long term.
However, some analysts feel that the power of bitcoin to muscle its place in the payments space in the future is being underestimated by Marcus. Those analysts believe that over time, there would be a gradual reduction in the volatility in bitcoin which would make it a more viable vehicle for peer-to-peer transfer and payment of money.
Facebook cryptocurrency was called a “very high-quality form of digital money” by Marcus while explaining the libra in a television interview. “This is really designed from the ground up to be a great medium of exchange and very high-quality form of digital money that you can use for everyday payments, cross border payments, micro transactions,” he said.
Whatever the situations, the statements made by Marcus are significant. None of the marketing materials that were released by Facebook during the entire Libra rollout had any mentioned of bitcoin. Following that however, these comments made by Marcus now have placed libra alongside the largest cryptocurrency of the world – bitcoin.
(Adapted from CNN.com)