It appears Facebook executives weren’t all that confident in their new Libra currency to begin with. According to Bill Barhydt, CEO of bitcoin investment platform Abra, the company originally wanted to implement code that would have made bitcoin its global cryptocurrency of choice, but that scalability issues forced them to start from scratch and start their own cryptocurrency.
Barhydt: Bitcoin Was the Prime Form of Crypto
At ten years old, bitcoin is the oldest form of virtual money. To this day, it is the largest cryptocurrency by market cap and enjoys the most users. It has also experienced the most bullish behavior in 2019, trading for about $10,480 at press time. This is $5,000 more than where it stood in early April of this year, and about $7,000 more than where it was during late 2018.
Originally, the idea was that bitcoin could potentially power the new Facebook payment platform(s). Unfortunately, bitcoin’s inability to scale made this very difficult for Facebook executives to implement it, meaning they had to hire developers and coding experts to create an entirely new digital asset – in this case, Libra.
For the most part, Libra has been subjected to mixed reviews. Many members of the U.S. Congress expressed skepticism that the company would implement the appropriate security measures when it came to keeping people’s financial data safe and sound. The company had already proven itself untrustworthy in 2018 when founder Mark Zuckerberg was grilled by Senate members for allegedly selling private data to third parties for advertising purposes, so the idea that such a venture would now weave its way into the financial industry was a little scary.
In a recent interview, Barhydt said that he had spoken with many people at Facebook, who often claimed that it wasn’t their original intention to create an entirely new cryptocurrency, but rather a payment system that “satisfied their users’ needs.” He says:
Ideally – from my discussion – 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 that was transactional was effectively untenable.
Lightning Not an Answer?
For the most part, leaders at Facebook tried to consider all items, including the Lightning Network, but that in the end, bitcoin was simply out of the question:
These are smart people. They’ve looked at Lightning, they’ve looked at bitcoin, they’ve thought this through, and they realized that bitcoin is not optimized to be a payment network. Bitcoin is optimized to be digital cash right now.
Bitcoin seems to be the currency of choice amongst internet entrepreneurs, with Twitter CEO Jack Dorsey previously claiming it will be the only form of currency in ten years.