Academic of the state University of Australia John VAZ told what will compete with the first cryptocurrency, and what is its main problem
Bitcoin will face stiff competition from the Facebook Libra payment system if it is launched, economist and academic at the state University of Australia John VAZ told Cointelegraph. According to him, the first cryptocurrency has several critical problems that will not allow it to become a common means of payment.
The first of these is scalability, says VAZ. Bitcoin is not suitable for processing a large number of transfers, while Facebook took this aspect into account, the economist explained. The network of the main digital coin is able to perform an average of 4-7 transactions per second. The same indicator for the Visa payment system is 24 thousand transactions per second.
Another problem VAZ called the speculative component of the first cryptocurrency. He added that it is too early to bury the Facebook project. It is not dead, but it is stuck in a" regulatory nightmare, " the economist said.
He also noted that Libra will have a serious advantage over any cryptocurrency from the very start. The future payment system already has a customer base — Facebook users, VAZ explained. In addition, the social network has many partners who can easily integrate into the new system, the academician suggested.
In his view, the spread of the Facebook cryptocurrency will begin not with developed countries, but with developing countries, such as many States in East Asia and Africa. In them, due to the underdevelopment of the banking system, there is the greatest need for such financial services, VAZ is sure.
In February, Vice-President of the European Commission Valdis Dombrovskis said that it is impossible to determine the legal status of the Facebook Libra cryptocurrency. The Agency needs additional details, and getting them is difficult because the project is still under development, Dombrovskis explained.