Cryptocurrencies have become progressively more popular and with Bitcoin being one of the most commonly used platforms, will Facebook’s Libra currency become its biggest rival?
Facebook announced its own cryptocurrency back in mid 2019 and with a range of improvements and benefits, it is set to become just as successful as its leading competitor, Bitcoin.
Established in 2008, Bitcoin uses a public ledger format on Blockchain to anonymously record transactions. It is maintained by numerous computers, securely filing personal and financial data. Because of its public accessibility, individuals who are in hold of top-quality hardware and internet access, can retrieve and maintain transactions on any platform. Bitcoin is referred to as “digital gold” as users are able to exchange and transfer money without requiring a bank. This easy access is extremely beneficial and is one of the reasons why Bitcoin is so successful.
However, it does have its drawbacks. When dealing with important, financial information, it is crucial to provide a trusted network for users. Due to its free-for-all conveniences, Bitcoin lacks the great level of security that other cryptocurrencies provide. The maximum number of bitcoins that one can accumulate is 21 million. This fixed supply limits growing markets and, despite its current success, can be seen as a downfall in the future if other competitors have more flexibility, much like Facebook’s Libra.
First established in 2019, Facebook had plans to provide users with security, trust and advanced developments with its own currency, Libra. As well as Bitcoin, Libra expected to use Blockchain to contain its assets but with a permissioned ledger instead. This would instantly provide users with more safety due to its reliable management system. It was designed to be used for cross-border money payments and transfers through partnered networks including WhatsApp and Facebook itself. Referred as the “stable coin”, Libra would allow adjustments to products which match a range of other assets.
This in turn, would help to maintain a stable price through demand changes, creating a range of flexibility to the success of the cryptocurrency. Facebook hoped to create an enormous impact on global economy. However, towards the end of 2019, Facebook received incredible backlash to its plans due to its history with customer privacy scandals. Facebook has now adjusted its Libra system to make digital payments easier for clients across the world, much like PayPal. Instead of competing against leading currencies like the U.S dollar or the Euro, Facebook has now decided to work alongside these and hope to create a more trusted platform for its users.
As the digital world evolves, so does online currency and its impact on businesses and the global marketing industry. Libra and Bitcoin both represent vast stages in the evolution of currency but as Libra is set for release this year, will it take the lead or will Bitcoin continue its rise?