Posted: Jun 21, 2019 11:08 pm
by jamest
Svartalf wrote:Actually, they intend the libra to be more stable than the bitcoin, but I just wonder how they'll get that effect.

Because its value will be pegged mainly to fiat currencies. Stablecoins already exist within the crypto world, such as Tether (USDT), which is pegged to the US dollar, meaning that 1 Tether = 1 US dollar (always). A similar situation will exist with Libra though from what I understand its value will be pegged to 'a basket' of prominent currencies and other such securities/monies (aimed at maintaining stability due to any fluctuations in the values of the currencies involved). In effect, the aim will be to maintain the initial basket price.

What this means is that the Libra, just like Tether, will not be an asset you can invest in with the hope of making any money. Indeed, given that the value of fiat depreciates over time due to inflation, the longer you have it the poorer you'll become.