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    Behind Libra, Facebook's new digital currency

    ​Why not use Bitcoin?
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    ​Why not use Bitcoin?

    Although Bitcoin has gotten a lot of attention, it isn't widely used. For one thing, its value fluctuates wildly, meaning that $100 in bitcoins today might be worth $300 a month from now - or $2.50. Only a handful of merchants accept bitcoins as payments.

    Facebook is hoping to keep the libra's value stable by tying it closely to established currencies. Unlike most other cryptocurrencies, the Libra will be backed by real-world bank deposits and government securities in a number of leading currencies.

    Facebook is also recruiting partners ahead of time. Lyft, Uber and Spotify already have joined the Libra group. They will likely accept libras when the system launches. They'll also help fund, build and govern the system. That'll make Libra less of a free-for-all than Bitcoin. Facebook says Libra will embrace regulation, but it isn't providing many details on how.

    With most cryptocurrencies, including Bitcoin, anyone can lend computing power to verify transactions and to prevent anyone spending the same digital coin twice. With Libra, the verifications will initially be managed by its founding companies, such as Facebook and PayPal. Facebook believes the closed approach will mean better security.

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    The Economic Times
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