Facebook’s cryptocurrency Libra has caught popular imagination with its hyped features that promise greater potential for mainstream adoption in terms of buying things, sending money and the pull of lower transaction fees.

The cryptocurrency news updates on Libra also suggest that it will be launched in 2020 and people can make payments via WhatsApp and Facebook's apps.

Libra can also be bought at local exchange points and can be spent using interoperable third-party wallet apps or Facebook’s own Calibra wallet.

Libra’s major differences with Bitcoin

Now questions are up in what sense and scale Libra will differ from the long-existing bitcoin.

In the White Paper on Libra, Facebook explains that Libra Blockchain as a decentralized, “programmable database supporting a low-volatility cryptocurrency with the ability to serve as an efficient medium of exchange for billions of people around the world.”

According to Spencer Bogart of Blockchain Capital, Libra is more of a medium-of-exchange that can be used for sending money and is fit for all house transactions.

On the other hand, Bitcoin is like an investment. That is why Michael Moro of Genesis Capital calls bitcoin as “digital gold.”

Another factor working in Libra’s favor is the huge backing it enjoys from big players such as Mastercard, Uber, Visa and Booking Holdings.

This will help Libra in mass adoption unlike bitcoin that is still a grassroots experiment and is in the development phase, explained Michael Graham, an analyst at Canaccord Genuity.

For prospective users of Libra, one more attraction of Libra will be its cost advantage in terms of the low transaction fee that will motivate customers to use the token to send money. But Bitcoin is more expensive and is slow in conducting transactions.

Libra’s stability Vs volatility of bitcoin

Bitcoin’s high volatility had repelled risk takers to trade the cryptocurrency. This is because Bitcoin is not owned or governed by any central authority just like the Fed Reserve in the U.S. and operates at the decentralized network and is subject to severe price swings.

In the case of Libra, that issue does not arise as the Facebook cryptocurrency will be supported by top currencies including the dollar and euro.

“Libra is a stable coin, backed by a basket of currencies and debt securities. Bitcoin is a hyper-volatile crypto-currency,” commented Tom Lee of Fundstrat Global Advisors.

Facebook Cryptocurrency
Facebook cryptocurrency is underway, and it'll let users transfer money using its messaging platform WhatsApp. Carl Court/Staff/Getty Images

“Unlike the volatility around other crypto currency’s in the past, Libra’s focus is on creating a stable, low inflation currency backed by a reserve or real assets is a differentiator," noted Suntrust analysts.

The best part is that unlike other stable coins, Libra is not pegged to any single currency. Rather, it will be tied to a basket of assets ranging from bank deposits to short-term government securities.

US lawmaker urges Facebook to pause Libra project

Meanwhile, a U.S. Congresswoman urged Facebook to put on hold the Libra project until Congress vets it.

The chairwoman of the House Financial Services Committee Maxine Waters said considering Facebook’s troubled past, it must agree to a moratorium on any further movement on developing a crypto-currency until Congress and regulators study it and take action.

Waters noted that Facebook history of handling user-data adds to her concerns and urged Facebook's executives to testify before her committee.

Facebook reacted that it would welcome any questions by policymakers.