`So, Facebook released the white paper this week for its most anticipated cryptocurrency-The Libra and as expected, it disappointed. The Libra will not in any way be able to stand Bitcoin and other true cryptocurrencies
Let me explain……
You see, there are five basic fundamental characteristics of Bitcoin and other true cryptocurrencies, these are:
- They are decentralized
- They are borderless
- They are open source
- They are permission-less
- They are censorship resistant
Any true cryptocurrency should have these mentioned characteristics
All true cryptocurrencies are decentralized. This means they are not controlled by any single individual, groups of individuals, government(s), institution(s), corporation(s), etc.
For example, a Bitcoin company/corporation does not exist. Bitcoin is simply an internet protocol that is maintained by miners that are spread across the world. This makes it so that Bitcoin does not have a single point of failure that can be attacked and has no single point of control. Contrast this to the newly released Libra. Fully controlled by Facebook via Libra.org and it is stated that the coin will move towards decentralization in the next 5 years (what a joke). The nodes i.e the miners of this “cryptocurrency” must pay Libra.org $10 million. All these are simply characteristics of centralization with the controlling body dictating how individuals participate in its network.
They are Borderless
Bitcoin is borderless. Anyone from any part of the world can participate in the network as either a miner or a user of the network or both. Bitcoin and all true cryptocurrencies are not bound by geographic restrictions
They are permission-less
This is a very important and unique characteristic of all true cryptocurrencies. They are permission-less. This simply means that anyone of any color, background, religion, ethnicity, etc. can get involved with the network. You do not need any permission to begin to use Bitcoin. There is no central authority that will demand KYC (Know Your Costumer) before you can use the network. This feature of Bitcoin and other true cryptocurrencies is what in my opinion will free humanity from the shackles of the banking cartels and oligarchs. Presently, over 2 billion individuals the world over have no access to financial services. While the Libra will leverage on Facebook’s over 2 billion users to kickstart the Libra’s network. It is also true that as a centralized entity, they reserve the right to restrict any persons or groups of persons from using their network.
They are open source
Bitcoin is open source. All true cryptos are open source. The source code from which the coin was developed is not proprietary and it is available on the internet to be improved upon or forked (i.e used to develop other cryptocurrencies) as anyone deem fit.
A true cryptocurrency cant go bankrupt as members of the community that hold the coin, believe in the project and have the technical know-how can actually help improve the code
Censorship resistant/ non-confiscateable
Bitcoin is censorship resistant and Bitcoin cant be confiscated! Remember when you wanted to open your bank account? Remember the number of forms you had to fill and the volume of your private information you had to provide? If for example, the bank decided that based on certain information you provided you were not eligible to have an account with them. Do you know that there is practically nothing you could do to seek redress? If after the account was opened, the bank suddenly decided they needed their customers to recapitalize their accounts to a particular minimum or you made a transaction the bank was not comfortable with. The bank actually reserves the right to censor your account, cut you off their grid and you have no strong avenue to seek redress. That is a glimpse of the powers the centralized banking system wields.
Bitcoin, a breath of fresh air
The above characteristics of Bitcoin are in direct contrast to the centralized banking cartel (yes, they are a cartel!)/establishment. They hold sway over the banking system, they control the flow of money across borders. They stand as the gateway one must go through in order to access the banking infrastructure ( the power they hold to deny anyone access to these infrastructures at will). Most importantly, they are in charge of the currency supply!
These powers they wield to deny you access to their infrastructure, censor your transactions, charge you exorbitant fees, etc. is what Bitcoin takes away from the banking cartel. Unfortunately, these powers is exactly what Facebook’s Libra is trying to reassert.
A tale of two radically opposed fundamental
While Bitcoin is based on mathematical encryption that cannot be altered. Its maximum supply is fixed at 21 million. In simple terms, it means it is hard money and deflationary-meaning its supply can’t be increased. This implies that it is a very scarce asset and thus will increase in value over time. The Libra, however, is backed by…. wait for it….. a basket of fiat currencies viz USD,EUR, GBP, YEN. Currencies that are printed at will, whose supply is consistently inflated. Currencies that are controlled by government and Bankster and which ultimately will go to zero.
Bitcoin’s opportunity in Libra
The advent of Facebook’s Libra will usher in hundreds of millions who are already on Facebook’s network into the cryptocurrency space. In fact, Facebook just legitimized cryptocurrencies. For the vast majority of people, it will be their first introduction into the world of cryptos. As they learn about the space, they will begin to understand the differences between Libra and other true cryptocurrencies, then they will gravitate towards the true cryptocurrencies in order to preserve and increase their wealth.
The incursion of Facebook into the cryptocurrency space is the dawn of a new era. It is the beginning of the end of government controlled and issued currency. It is my very strong opinion that money has taken on a new identity- it is now a commodity that must compete for adoption in the market place. Libra will succeed (at least in the initial stage) as a medium of exchange because Facebook already has a huge network to make this happen. The problem Libra will have will start when the fiat currencies that underlie it begin to fall (believe me they will) this will cause its gradual demise (this last sentence, my friends is a story for another day).
The future of all this value i.e stocks, money, bonds, real estate, etc is the decentralized blockchain. The wealth that will be created over the next coming decade for those who get in now will be immense. if you would like to know how to begin investing in the cryptocurrency space, click here.