Will Facebook’s Crypto Boost Bitcoin
On Tuesday, June 18, 2019, Facebook laid out plans for its very own cryptocurrency, called “Libra“. Many believe this can completely legitimatize cryptocurrencies as a whole. Obviously, the most well known crypto, and the one with the largest stake is Bitcoin. After its meteoric rise and eventual slide, it has had a huge resurgence in 2019. As of June 20, 2019, it sits at over $9,400, an almost 38% increase from one year ago.
What is Bitcoin?
Without going into all the technical details (you can read about that here), Bitcoin is a type of cryptocurrency, or digital money. What sets it apart from fiat, or paper currency, is that it is decentralized. This means, it’s not backed by the banks, but instead is maintained by coders. A digital ledger is kept, which anyone can view, of all transactions.
Like gold, there is a limited supply of Bitcoin that can be “mined.” Once the miners and their computers unlock it all, that’s it. This is the main reason investors have turned to Bitcoin. If it gets adopted globally and by more and more merchants, the sky’s the limit. The risk is still great, since no one knows how cryptos will play out in the next 3-5+ years.
As with stocks, you can buy, hold and sell Bitcoin. Moreover, as it becomes more widely accepted, you can use it to purchase goods as well. As volatile as cryptos are right now, it’s better treated as an investment and not as an actual currency. You don’t want to spend your Bitcoin, only to see it gain 50% in a couple of months. On the flip side, you may not want to accept it as currency as it could lose the same amount.
What is Libra?
Libra’s mission is to be a simple, global currency and financial infrastructure that empowers billions of people
That’s according to Facebook’s David Marcus, head of the Libra project. It’s not just a “Facebook cryptocurrency” either – MasterCard, Visa, Uber, PayPal and Spotify are among the founders of the Libra Association. While not a traditional crypto, since it will not be completely decentralized, it should make other cryptos, like Bitcoin, more mainstream. The blockchain technology behind it is similar to current cryptos.
Like Bitcoin, Libra will use a wallet system so you can send and receive the currency. It’s expected that many retailers will adopt the currency and accept payments as well. It remains to be seen if banks will be on board with this new “stablecurrency.” Any way you look at it, it seems to be pushing cryptocurrencies to the forefront.
Will Facebook’s Crypto Boost Bitcoin?
We won’t have an answer for that until Libra launches, however the upward trend has continued. There has been a 4% gain in the preceding 24 hours of this writing (12:00, June 20). When a global giant like Facebook decides to do something, people will take notice. Obviously, that’s not always a good thing, but in this case, it seems to be.
Libra still has an uphill battle and might not happen at all. However, what it has done already is shone a light on the expanding world of digital currency. Remember when Amazon used to sell just books? If you’re under 30, you might not remember. One day, you might tell your grandchildren about how you used to use paper money to purchase things. Facebook, along with its partners, may just turn that into reality. Bitcoin, and other cryptos, may be the first to benefit.
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