The Facebook-led Project Libra Head, Marcus, Calls Bitcoin A Digital Gold, But Not A Currency
New statements have emerged from David Marcus, head of Facebook’s cryptocurrency project Libra on the definition of bitcoin.
During an interview with the New York Times, Marcus stated that he believes bitcoin to be a form of “digital gold.”
“I don’t think of Bitcoin as a currency. It’s actually not a great medium of exchange because of its volatility, I see it as digital gold.”
Marcus’s reasoning behind classifying bitcoin as digital gold is due to the coin’s inbuilt scarcity and deflationary nature. Assets that are scarce in nature tend to be valued higher than those that are abundantly available, as per supply and demand.
However, bitcoin presently has a weakness in its wild price swings caused by volatility. The price swings then makes it a difficult instrument to use for remitting payments between others as the rate can change from hour to hour.
Marcus was also quick to point out the difference between Libra and bitcoin, noting that they serve different purposes. Libra is a proposed stablecoin that will be pegged to a basket of fiat currencies.
“People don’t use a unit like digital currency of bitcoin to pay for things just because it’s so volatile,”
“It serves a completely different purpose.”
If and when the Libra project goes live, the basket of fiat currencies intends to stabilize the coin on a 1:1 ratio, meaning that it could be used with greater certainty in conducting transactions due to the significantly lower volatility.