Bitcoin vs. Libra: What should you invest in ?
You’d have to be living off-grid to not have heard: Facebook is launching, along with around thirty other strategic partners, a new digital currency called LIBRA. Or at least, that is the plan. Libra should officially be out in 2020.
As you have outlined, these are two completely different animals to try and draw any sort of comparison between.
Aside from many of the obvious and more transparent differences between Libra and Bitcoin - that they have different underlying technology, different usage (with Bitcoin primarily seen and used as a payment system for transactions peer-to-peer with Libra’s alleged purpose intended as a money transfer system and for payments across borders or in the words of David Marcus of Facebook, during a pretty turbulent cross examination at a recent Senate Banking Committee, hearing it will work “more like a traditional currency), Bitcoin is relatively ‘ungoverned’ and volatile whilst Libra is to be governed by supply and demand and more centralised by its ties to fiat currencies – many of these factors, depending which side of the financial fence you sit on, are simultaneously seen as the strengths of one ‘currency’ whilst being weaknesses of the other.
There are, of course, many other aspects and issues that need to be fully addressed before anyone could sensibly answer the question as to whether you should choose to invest in Bitcoin over Libra or vice versa or indeed either.
It would have been hard to ignore Facebook announcing Libra’s imminent arrival into the financial arena, as it was swept forward on a no doubt well-orchestrated wave of frenzied positive speculation in certain sections of the media. Others in the more reserved seats viewed the announcement with some bemusement considering that a gate crasher analogy might seem more appropriate.
A few good starting questions to ask yourself might be, whether you trust the members of the Libra Association to remain in line with MZ’s vision for Libra – whatever that is - as Libra develops? Or, if they gain a majority, will they revolt and/or choose to steer in a different direction? Can you contend with the ‘mood swings’ of Bitcoin miners? How do you feel about the potential for Libra’s ‘parent’ to manipulate or misuse your personal data (again!) for targeted advertising or worse?
Recent surveys carried out reveal that doubts still remain with many over Facebook’s management of their personal data with a much larger percentage having reservations about trusting Facebook with their money.
That my friends, is the core of the argument, or decision making process, for me and many others – trust!
With no track record Libra has an uphill struggle to convince me, and believe you me the FB marketing boys are burning the midnight oil working overtime on that one to convince slightly more sceptical ‘adversarial’ obstacles and bodies in their path than me.
With Bitcoin we have a much clearer history to base any investment on from the last 10 years but then there’s the horror, as Colonel Kurtz might say, of the volatility to contend with 