Bitcoin’s white paper describes the virtual currency as a peer-to-peer payment system, allowing people to exchange money without going through a bank.
It’s commonly used today as a form of investment, with the term “HODL” being a common slang phrase in the industry to describe buying and staying invested in the cryptocurrency for the long term. It’s frequently been referred to as “digital gold.”
Libra’s primary purpose is to be used in cross-border payments and money transfers. The currency is tied to a basket of government-backed currencies and other assets, to avoid the volatile swings often seen in cryptocurrencies like bitcoin and ether.
Referred to by many in the industry as a “stablecoin,” Libra is aimed at maintaining a stable value. David Marcus, the Facebook executive leading the blockchain initiative, has previously said it will work “more like a traditional currency” than a cryptocurrency.
“Bitcoin and Facebook’s Libra both represent stages in the evolution of currency but in starkly different ways,” Charles Hayter, co-founder and CEO of digital currency comparison platform CryptoCompare, told CNBC.