Facebook has announced in the month of June about launching its cryptocurrency named Libra. Facebook’s target of launching its own cryptocurrency entitled as “simple global currency and financial infrastructure that empowers billions of people.” Unlike other cryptocurrencies, Libra will be regulated by the government. Also, Facebook’s Libra has much difference with the world’s biggest cryptocurrency Bitcoin.
The CEO of the Bitcoin investment service Abra, Bill Barhydt also talked about the Libra and Bitcoin topic. He claims that one of Facebook’s staff has told him that they wanted to utilize Bitcoin as a virtual currency to control its payment services. They didn’t have any choice other than launching its own cryptocurrency because Bitcoin is unable to scale.
He said all this last week on 24th August, on the podcast of “What Bitcoin Did”. This was hosted by Peter McCormack and Barhydt stated his claims are all on the talks of the people who are directly connected with Facebook’s Libra project. He said that has had all of many conversations with the team of Facebook, who are developing the Libra project, and they told him about it that firstly they don’t want to create a virtual currency, but only payment service to fulfil their user’s needs.
“Ideally – from my discussions – they actually would have preferred to use Bitcoin. I think there’s a huge belief in the system. But if you want to build a remittance system and you want to build a cross-border commerce system and you have 1.2 billion users today, what would happen to Bitcoin? Fees would skyrocket. Doing anything with Bitcoin transactional was effectively untenable.”
He said that the social network giant has done everything even they also tried scaling solution for Bitcoin, the Lightning Network. But it didn’t work obviously.
“These are smart people. They’ve looked at Lighting, they’ve looked at Bitcoin, they’ve thought this through. And they came to the conclusion that Bitcoin is not optimized to be a payment network, Bitcoin is optimized to be digital cash right now.”
He added that Facebook was strong-willed about building a payment service scalable for remittance on its stages like WhatsApp, Messenger, and Instagram. However, CEO of Twitter, Jack Dorsey said Bitcoin will become the native currency of the internet and not an alternative of commercial money. While Barhydt also confirmed that Libra may presently be much more than a private database, he also added Facebook is determined to build something like “scalable Bitcoin”.