Bitcoin, other cryptos could be added to Libra’s reserve basket in the future
Facebook’s entry into the cryptocurrency space with the launch of Libra has got a lot of people in the crypto-community curious. However, many, including regulators, have raised concerns about the social media platform’s project. And, while Libra has got a lot of people interested in cryptocurrencies, the media coverage has also contributed to many people mistaking Libra for Bitcoin, and vice versa.
Tuur Demeester, Founding Partner at Adamant Capital, addressed the same in a recent interview and pointed out the differences between the two. Demeester revealed that he admires the fact that several different projects are being rolled out in the ecosystem. However, these projects cannot be categorized as being commensurate. Ultimately, there is a distinction between a decentralized cryptocurrency or blockchain and a centralized one.
Demeester went on to say,
“But I think it’s important to keep that distinction in mind. And that’s maybe where the danger is that the public can be confused to think that Libra is similar to a Bitcoin, even though from many, many perspectives, it’s completely different.”
The primary point of difference between the two is that Bitcoin has a decentralized nature, while Libra has a centralized one, he added.
He further highlighted how Libra is bringing asset-based currencies back into the industry. Even though the current composition of its basket contains a list of fiat currencies, Demeester believes that over time, Bitcoin or other cryptocurrencies would make it to the list too.
With several centralized blockchains and cryptocurrencies entering the market, the community is speculating about the survival of a decentralized network like Bitcoin in an ever-growing competitive market. Demeester strongly believes that Bitcoin would survive the competition as he considers its network to be the most secure one. He added,
“I just don’t see any competition coming anywhere close to the Bitcoin value proposition. I still think it’s the most undervalued liquid asset in the world.”
He also pointed out how tiny Bitcoin’s market cap is, when compared to other pools of liquidity in the world. However, if the king coin hits $50,000 or $100,000 or even $1 trillion, “that’s where you get into geopolitically different waters,” he said. Bitcoin might then be perceived as a threat, Demeester added.