Since the Bitcoin bubble in 2017 where the value of Bitcoin hit £15,679.38, there has been an influx of new cryptocurrencies all hoping to be the next big success and each with its own unique spin on the new industry.
Similarly, anyone vaguely familiar with the success of Bitcoin is always wondering what is the next big thing and what to invest in. In general, it is a lottery.
As of 19 August 2018 there were over 1600 and growing most of these are destined to paid with trading prices at a fraction of a penny and a market caps well under £100k.
Libra is perhaps the one with the biggest backing with Facebook as the primary company behind it. It differs from Bitcoin significantly, the decentralised anonymous nature of Bitcoin is what made it so appealing to many people.
So how does Libra differ from Bitcoin?
As mentioned, Bitcoin is decentralised with no owner or controlling body, Libra, on the other hand, will be governed by a Swiss foundation comprised of several members that are well-established brands, including Uber and Visa. Paypal was part of it, but they pulled out. The Libra Association currently consists of 28 founding members, and it expects to increase this to 100. With such large companies behind it many sites such as Libra Profit System have popped up with the aim of helping you trade with Libra for profit.
The trend term blockchain that everyone throws around nowadays is the backbone of Bitcoin, but not so with Libra. The Blockchain is essentially a public ledger of all transactions but recorded anonymously, it allows Bitcoin to operate in a manner that is virtually impossible to tamper with.
Instead, the book-keeping of Libra transactions is bestowed upon a set of trusted computing nodes controlled by the members of the Libra Foundation.
This method of using permissioned ledgers to keep track of transactions has made some people claim that Libra is not a true cryptocurrency.
This ledger is a stumbling block from Libra as it has been revealed there is a lack of privacy protections in place and that people are putting there transactional data in the hands of a company such as Facebook. Intimate knowledge of people’s purchases, wealth and shopping behaviour has incredible value for advertising and resale to other companies.
Bitcoin is also deflationary. There will only ever be 21 million bitcoin in existence. This prevents inflation. In contrast, the Libra Association, as stated above, will be in control of the Libra asset’s supply. In a way, this means that users must rely on the Libra Association and its actions.
Bitcoin has suffered from a very volatile nature, following the peak of £15,679.38 in December 2017 it crashed down to £5k by February 2018. It has improved since, with many highs and lows and this year it has risen 46% by £2,254.76 currently trading at £7,180.76.
Libra, on the other hand should be more consistent, with people in the industry classing it as a stablecoin. The currency is tied to a basket of government-backed currencies and other assets, to avoid the volatile swings often seen in cryptocurrencies.