Cryptocurrency Libra will be emerging from an organization that is completely tied to questions that bother on identity. This is why it is astonishing to people that this coin coming from Facebook might be confused about its identity.
As it stands, Facebook has branded its coin as a stable global cryptocurrency. However, the term “Cryptocurrency” has been successfully replicated by the media across the globe.
Nonetheless, Libra has been stated not to be a virtual currency. There are some areas we will be looking at to determine that libra is actually not a Cryptocurrency
Why Is Libra Not A Cryptocurrency?
Although the definition of virtual currencies may differ, however, one major characteristic of virtual currencies is its resistance to anything that has to do with censorship.
This is why they need to be decentralized (like Bitcoin) in a bid to prevent any group or entity from deciding on who actually gets the opportunity to transact. As it stands, cryptocurrency Libra does not fulfill such a criterion.
Although, its foundation has stated that it has plans on moving towards a much more decentralized system in time, whether it does so or not is solely in its hands.
Moreover, the value of this Libra coin is not built through its underlying technology, the crypto market, math, or anyhow you decide to understand Bitcoin and all other cryptocurrencies.
Basically, Libra coin has been stated to be a virtual representation of a basket of securities and all other fiat currencies. Note that, the one thing libra coin has in common with virtual currencies is the fact that they move on a specific Blockchain
So, What Is Libra?
The question you may have in mind might have to do with what exactly Libra is if it is not a Cryptocurrency. Well, on its surface, it can be termed to be a stable coin.
A stable coin is a token that is capable of maintaining a stable value through its peg to the actual world assets like a commodity or fiat currencies.
For now, the crypto sector is being washed with so many stable coin project building resolutions for both settlements and payments.
Nevertheless, Libra coin has managed to act differently from its stable coin partners, in the sense that, judging from its whitepaper, Libra will be supported by a basket of short-term government securities as well as bank deposits.
With its use of the word securities, it gives Libra a different standing. This is because, assets that are supported by securities are in themselves, according to the definition, security.
Others have suggested that Libra is more of an ETF than a fiat-supported stable coin. Bear in mind that, monetary innovation did not begin when Blockchain technology got its new lease of life via linker networks and even decentralized consensus.
With all of its faults as well as features, libra currently represents a highly significant step forward in this process as a while.
To Wrap It Up
Cryptocurrency Libra has some stated aim of extending its monetary inclusion and even decreasing payment friction is among those that have fully consumed the minds of entrepreneurs for decades to come.
Nonetheless, when it comes to diverse technologies, few inventions end up being utilized for their actual initial intent, and as it stands, Libra has shown that it is unlikely that it will act differently.
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