Regardless of HN's opinion of Facebook (and regardless of my own for that matter) I predict that this thing will work.
This is only one thing my crystal ball showed me.
Facebook's presence in developing economies is massive. To the point of being synonymous with "The Internet" in a number of places. But they've had a nagging problem. People in these economies consume contents, but do not buy. Even when they have some buying power, access to credit cards is harder to come by. So they're basically seen as online leeches, and you simply fit them in the "expense" category of your media production. Also, due to their buying impotence they're almost immune to advertisement. Over the next few months it's all going to change. Multiple agreements will be signed with various financial institutions and probably more with various telecom in those regions, to allow people to load up their accounts with fbcoins and join the Great Internet Spending Frenzy. Basically turning them overnight into consumers, ripe for the picking.
I foresee big media producing companies in the developed world to be the first to take advantage of this (Disney, Valve, Netflix, YouTube, NYT, various online courses and certifications, etc). Shipping to those regions remains a challenge, so only soft goods for now. IKEA and Walmart will allow fbcoins, but just to be able to sell through their Facebook Store, oh I forgot about those. Anyways.
Next year, Google and Amazon will announce their own stablecoin.
The year after that, Google will announce that they're shutting theirs.
Facebook's hold in developing economies is true. But developing economy's hold on their Fiat currency is true as well. So much so that, India is planning to jail anyone who is holding cryptocurrency for 10 years[1]!
If this legislation passes, any computer scientist, mathematician, programmer who is working with crypto tokens & block chain can technically be held liable for possessing a crypto currency when they run their program?
Yes, the plan to jail those who hold cryptocurrency in a democratic country is preposterous; but this shows how sensitive a developing economy could be when it comes to its money. It's not like the data of their citizens which these countries give a free run to the hoarders, money is totally different ball game.
I wonder if Facebook decides to give a free crypto to everyone who holds a FB account, anyone in India with a FB account will go to jail including those who proposing such legislations?
P.S I don't hold any cryptocurrency due to its impact on energy and thereby planet (Also, I'm including this just in case the legislation passes in my country!).
> Yes, the plan to jail those who hold cryptocurrency in a democratic country is preposterous
No it isn’t. We jail people who hold child pornography in democratic countries as well. The core of a democratic country is that it’s governed by democratically elected representatives, not that it’s citizens be allowed access to whatever they want independent of criminal consequences.
I get you and others are calling to the sentiment of “how can we be free if we aren’t free to x” but the value of that sentiment isn’t independent of what X is. You aren’t free to rob banks and you aren’t free to print you own paper currency. Just because crypto is digital and “difficult to stop”(it isn’t though) does not mean that it has to be freely available to business and individuals. It’s still up to our democratically elected representatives to decide if they feel private institutions printing money without control will damage the economy significantly enough to not allow it.
As far as I know, in the U.S. you are free to print your own paper currency, just so long as it doesn't conterfeit that which is produced by the Federal Reserve Bank. Also, there's nothing illegal about conducting transactions with it either, provided you can find willing trade partners.
>As far as I know, in the U.S. you are free to print your own paper currency
This is not the case, when a 'private' currency gains traction or seemingly encroaches a territory, which is traditionally assigned to government ─ it gets shutdown.
Right this is totally legal provided you report any income obtained through such a scheme on your tax return in fair market US dollar terms. It's no different than bartering (which is also legal).
The other caveat is that if someone owes you a debt you can't require them to pay in your own "funny money" currency. You have to accept US dollars if offered, otherwise the debt won't be legally enforceable.
>If this legislation passes, any computer scientist, mathematician, programmer who is working with crypto tokens & block chain can technically be held liable for possessing a crypto currency when they run their program?
>If this legislation passes, any computer scientist, mathematician, programmer who is working with [automated ponzi schemes] can technically be held liable for [creating a ponzi scheme] when they run their program?
I don't see the issue. When a democratic society thinks something isn't good, they can outlaw it. There are all sorts of regulations on financial transactions and investments already.
I'm not trying to imply that cryptocurrencies are ponzi schemes, just that when something is illegal, doing it on your computer doesn't make it not illegal.
Furthermore, were cryptocurrencies to become illegal, it would probably be similar to computer viruses; It's fine to play with viruses on your personal computer or in a lab, but it's illegal to use one "in the wild." So I doubt it would be as absurd as you claim.
> It's fine to play with viruses on your personal computer or in a lab, but it's illegal to use one "in the wild."
I hope cops understand the difference. When I was in school, computer science teachers asked us to remove the shoes, because 'virus from it' would infect the computers at the lab.
This implies that crypto is a democratizing force. So far, it's been mostly early adopters wanting to preserve the system under which they are wealthy and powerful. Who can blame them? I'd do the exact same. But in other words, the same age-old pattern that is barely any different from the banking system that crypto was supposed to bypass, except the inequality actually manages to be quite higher.
I don't know what you're talking about. I call authoritarian someone who thinks that they can circumvent an individual's freedoms arbitrarily by finding enough people to agree with him/her. The topic of cryptocurrency is only one that is good at revealing someone's authoritarian tendencies.
I think there's a line between being authoritarian and supporting a system where democratically elected officials can enact laws. This isn't about crypto, this is about respecting rule of law in society.
> I call authoritarian someone who thinks that they can circumvent an individual's freedoms arbitrarily by finding enough people to agree with him/her.
I suspect there are a lot of people who agree that counterfeiting money isn't something that should be allowed. Are they all authoritarian as well?
> I get you and others are calling to the sentiment of “how can we be free if we aren’t free to x” but the value of that sentiment isn’t independent of what X is.
Do you propose an objective criteria by which a state can legitimately dictate behavior on one set of Xs and not another set of Xs? If not, then you are by omission saying that every totalitarian state is legitimate. I suspect you might want to say, if the 51% wants something, that makes it legitimate. In that case you are're saying a murderous state is legitimate. (I won't go full Godwyn here, but suffice to say that many democratically elected regimes have committed legal murder on a massive scale and continued to enjoy majority support.)
Hey, here's an idea for an objective criteria: Does X invade any other particular person's life, liberty or property? Banning crypto fails that test.
In South Africa, we still have capital controls. My mom earned dollars through PayPal. She couldn't spend it online and had to convert her earnings to Rand within 3 months. Bureaucrats will insist that the same rules apply to libra.
India is even less ready for relaxing capital controls. They will tell Facebook to block libra for their citizens or be firewalled. No one is going to jail, but libra will not succeed there.
Capital controls can be an important part of a monetary system. It’s not part of most western countries’ systems, but it’s a very valid tool with a real purpose.
Thank you for your input. I'm not very familiar with India's politics, so I cannot be too assertive on its politicians' inflexibility.
I noticed that you expanded a bit on the "cryptocurrency" angle. May I invite you to a different perspective for a second. I don't think Facebook cares whether or not their Libra is crypto or otherwise. Despite appearances this is not a discussion about crypto anything. Facebook is not out to revolutionize money. Facebook has an ecosystem, a walled garden. It also has first mover advantage in many economies with a quasi monopoly. So in essence it has a huge potential market that's just sitting out there waiting. But what Facebook doesn't have (yet) is a tap to suck at the delicious nectar. That's where the Libra comes in.
Facebook is willing to play ball with whoever will allow them to install the tap. They will do all that is necessary for the tap to be legitimized. If it means pinning it to the Euro, the Dollar, the Yuan, it'll be so. Just as long as it's recognized. Once that happens, it's more advertisement revenue and a slew of new paid services through the walled garden. Meanwhile out of the walled garden, revenue from transaction fees to an unprecedented level.
I will try to travel on the same angle, I brought in India because you predicted Facebook's success on developing economy and India is the largest user base for Facebook besides it being a developing economy.
Crypto or not, it is still a digital currency which is not being controlled by the central bank of the country i.e. India in my example. Especially when the country is trying to roll out a digital currency of its own.
For the sake of argument, let's assume Facebook has no compliance trouble with any of the countries; will Libra be successful? It most definitely will, because Facebook has the capacity diminish friction and users would use Libra like any other coins found in a mobile game like candy crush.
I agree, even those based on Mimblewimble, Casper should alleviate my energy concerns. Then again I can't posses them with the risk of jail term looming around.
You are assuming they use those laws to lock up Libra users and not just the competition. It seems likely they could allow censorable cryptocurrencies like Libra.
In three years, Libra will be the largest single venue of public financial services. All branches of retail banks are upgraded with Libra teller machines, becoming fully distributed. Afterwards, they transact with a perfect operational record. The Blockchain Currency Bill is passed, replacing the dollar with Libra. The system goes online on August 4th, 2022. Human decisions are removed from central banking. Libra begins hashing at a geometric rate. It becomes self-aware 2:14 AM, Eastern time, August 29th. In a panic, they try to pull the plug.
Developing countries aren't going to be too happy about this. If a large number of a country's citizens adopt this, it forces that country to lose its independence over monetary policy. Since Libra is not controlled by the local government, this is not a fixed exchange rate regime, it's effectively dollarization and can have far reaching consequences.
IMHO, the Libra is at the same time too ambitious (in aiming for full capital convertibility across nations) and too timid (in entirely giving up monetary independence). A libra-usd, Libra-euro, libra-inr, etc. which allows countries to retain monetary sovereignty would have been easier for governments to accept. But then, Facebook can't say it's a new currency and circumvent KYC and other local regulations. But who knows? Stranger things have happened. The euro is a currency without a state. Maybe the time has come for denationalizing money.
If it were to affect US economy adversely I think FED could chip in and have a say in Libra's direction. But other economies could be hurt by Libra's position.
Personally I don't mind the monetary independence of countries. But real people could lose real jobs since their governments don't get a say in Libra's governance.
If countries were printing money under fixed exchange rate regimes their economic policies are a joke anyway, all they’re going to accomplish is inflation.
Libra and other digital currencies might make it easier for people to switch away from their local currency, but banning it won’t affect the underlying problems.
I predict that Libra will work for a while, but will eventually be overshadowed either by competitors or by the new markets that it enables.
There's this pattern I've noticed where every major tech company, once initial traction has been established, gets three pivots. You can think of them as adolescence, mid-life, and rebirth.
The first pivot happens when the company is 5-8 years old (since the 1970s at least; older before then), and serves to define the company. The System 360 for IBM, defining it as the provider of mainframes for enterprises. MS-DOS for Microsoft, defining it as the dominant PC OS. The Macintosh for Apple, defining it as the most user-friendly consumer brand out there. GMail and Maps for Google, defining it as the conglomerate of the Internet age. Mobile for Facebook, defining it as the service that connects people regardless of where they are.
The second pivot happens when the company is 10-15, at the height of its dominance, and usually results from it entering the hottest new technology wave with a vengeance. It looks like it succeeds for a while, crushes early entrants, serves to legitimize that technology wave, but ultimately peters out as the company can't keep up with the changes that it introduces. The IBM PC for IBM, which legitimized the PC market but ultimately fell to clones. Internet Explorer for Microsoft, which legitimized the Internet but ultimately was eclipsed by Google's many products. The Newton for Apple, which legitimized the PDA market but ultimately was too early. Google+ for Google, which legitimized social networking but ultimately failed to gain traction.
The third pivot is when the company realizes that they basically incapable of innovating, and returns to the roots they established with the first pivot to live out their old age. Open-source consulting for IBM, leveraging their massive installed base of enterprise customers. VS Code, XBox, and Azure for Microsoft, recognizing that they are fundamentally a platforms company. The iPhone and iPad for Apple, refocusing on their strengths in UX and delivering top-quality consumer electronics products. Alphabet for Google, realizing that they're fundamentally a conglomerate that lets a thousand flowers bloom (and cancels 990 of them).
Libra is Facebook's second pivot. It'll look like it succeeds for a while, it'll legitimize cryptocurrency, but it'll ultimately end up eclipsed by what it creates.
Cannot agree more. All Greek tragedies are based on hubris nemesis catharsis cycle. Unfortunately, many projects, companies nowadays skip the catharsis stage and jump to the next hubris.
Really, it's a service the government should run and regulate. But governments in general are too slow-moving, and the US government is too conservative for that to happen. I don't think Republicans would be down for more government control.
> Basically turning them overnight into consumers, ripe for the picking.
Well, credit cards are already too easy to use. Many services already save your credit card info, and you're already one or two clicks away from purchasing. Still, you normally don't buy anything that appears next to blog/SNS posts.
But, I agree with that Facebook means really a lot here. Being a stable coin, Libra is much closer to a payment platform - like Visa, MasterCard and Papal - than other cryptocurrencies. Facebook can use its influence to push Libra into various platforms, and Libra can become a de-facto standard payment method in no time.
However, governments will happily regulate transactions b/w countries, which will limit the potential of the coin. Libra is Swiss Bank 2.0 in some senses.
> I foresee big media producing companies in the developed world to be the first to take advantage of this
It can bring consumers in developing countries to the table, but those countries usually have slow connections, which leads to lower consumption of digital media. Distribution of the coin also can be a problem too. SWIFT is expensive, and fewer people have credit cards.
What you're saying does make sense, but can we please not use this as an excuse not to know better?
Maybe the citizens of some Spooky Third World country don't really have a choice due to their unique circumstances, but many of us do.
Let's not use the Spooky Third World country as an argument for why the dominance of Libra is inevitable before it even starts existing. Let's not be so hasty to become a dystopian novel.
The challenge with your predictions is they contain too many biases. Your worlds view is dominated by these companies so much that you think that is the only outcome. Libra is likely to validate existing crypto further because it is not financed or backed by commercial interests. Facebook doesn't create economies that is just marketing speak. If they did they would not rely so much on ads to fund the business. In an economy the facilitator gets paid from the transaction.
My issue with Libra is it is a digital currency dressed up as crypto. That means it will be subjected to the same kinds of arbitrage opportunities you get from currency fluctuations and flows. Think of George Soros in the eighties kind of fluctuations.
Right now I don't see the fuss with Libra or understand how the world will be better. All I see is marketing and PR. I guess this is the crypto calling card.
Completely agree. Many people are thinking way too narrow for how big facebook is. Project libra will be the great equalizer and put everyone more or less on the same "economic playing field" so to speak. Since this community is heavily startup focused, everyone here should be thinking of how they can capitalize on this next frontier of the internet. The money isn't made by speculating on libra coin, it is made by creating innovative services/solutions.
That scenario falls apart when the global poor don't have any money to buy FB coins, which they don't. Agreements with banks won't give the unbanked the free cash flow to play around with digital money or buy a bunch of stuff online.
I think they whole issue of the unbanked is a ruse. Facebook stands to earn more here by trying to convert regular consumers away from PayPal and debit cards and charge them fees for exchanging in and out of Libra. They'll also invite regulation in crypto so they can be the only one who meets the regulatory requirements and shut out the others. It's an end run around crypto without being one itself.
Fixed currencies would only hurt emerging economies. When the economy goes into crisis who will change the interest rates on those currencies and help the economy recover? No one.
> Multiple agreements will be signed with various financial institutions and probably more with various telecom in those regions, to allow people to load up their accounts with fbcoins and join the Great Internet Spending Frenzy.
This is the part I don't get. I thought we were talking about all-cash economies in regions with essentially no banking, but then you bring up "various financial institutions [...] in those regions". So is it that they have banks but just aren't using them? If so, what is it about FBCoin that's going to suddenly make such people want to go en masse to their bank to get them, if they didn't bother doing so to get all the security and additional payment options that a bank account already offered? (Pardon the ignorance, I'm genuinely trying to understand how this bootstrapping could work.)
Not all-cash, rather mostly cash. They do have banks, but think of banking as a luxury in those economies, not a commodity. They're for well established businesses and the rich. For everybody else, banks can be really tedious to deal with. So unless they have the means, people tend to just avoid the hassle. Even simply opening a bank account can be prohibitive, forget about getting a credit card, even prepaid.
There's a variety of independent institutions that provide some services to fill the gaps. For example, telecom companies are often used as a medium to send money. There are also smaller, third-party or local financial service providers (formal and informal), that are more convenient for the short term, day-to-day way of life in these places. They can offer small loans, micro-financing, money transfer, and a number of other devices. And yes, currently they're the ones people generally go through to make purchases over the Internet. Fees are not always competitive.
One typical approach people understand very well in a day-to-day economy is the preloaded cards. For small amounts (think 20$ or less) people can go to their telecom card provider and purchase some fbcoins. But that's not the hard part of the equation. The hard part is to get the other side (the developed world) to recognize the fbcoin. This is what's at play here and now. If Facebook can show to the world, "look, Netflix and YouTube can now take your money", they'd have won a huge part of the battle.
FB is going up against governments. I'm not sure they will win. Currency is one of a few key tools a government needs to control it's economy in many different ways. What I am loving about this though is that all of these experiments are forcing us to have a discussion about what a currency is and maybe even redefine money. Bitcoin didn't quite succeed in the way the creator imagined (at least what "he" publicly said was "his" goal). But it has succeeded as competitor to precious metals, and really made markets think about what a cryptocurrency means. Maybe this FB currency will eventually force us to have the hard conversation about what an electronic world wide currency truly means in practice and that's good.
Banking in many African economies came from an unexpected place: basic non-smart cell phones and the ability to transfer relatively small amounts of money quickly, reliably, and without a bank account.
I can see Facebook leveraging its foothold in such economies and providing the same service.
First, I fully agree with your "crystal ball". It's fantastic, you should lend it to me sometimes :)
Jokes apart, I think you're on point. Facebook's Libra will succeed. Amazon will try to compete with that, pending anti-trust fears. Google will try to have a shot at it and fail miserably.
It will be super interesting to watch this space evolve.
Yap,we will see way,way way more stable coins from a ton of different companies. Soon or later you will get paid in those ( probably not so stable coin anymore)
The world reminds me more and more like the world in the book(s) of shadowrun, minus the magic stuff..really facinating...
no privacy at all in Libra. We will lose our financial privacy. Better to use a privacy coin i.e Monero or better Mimblewimble's coins such as Grin but especially Beam.
This is an interesting story and I would like to learn more about libra-coin. Unfortunately I think hackernews has a strong anti-facebook bias that is making the opinions here nearly universally one sided.
I think we can say three things fairly uncontroversially in favor of this
1. The world could use an online independent currency
2. Adding stability to blockchain currencies and having that work on a large scale is a good thing
3. Unlike government issued currencies, any monopoly or control facebook derives isn't done through force, it's by making a coin better than all the other coins. Other people are still free to make their competing coins.
That said I understand the detractions that many here are presenting. I just wish there could be a deeper exploration of both the pros and cons.
> 1. The world could use an online independent currency
I'm not 100% steeped in cryptocurrency theory, and so I don't understand why this is presented as if it's agreed on by everyone. What problems does the world have that would be solved by an online, independent [of any nation, presumably?] currency?
> 2. Adding stability to blockchain currencies and having
> that work on a large scale is a good thing
Having a blockchain-based currency at a huge scale would be interesting for many reasons, but I'm not seeing how it's a fiat "good thing," excepting if you're excited about the technology and waiting for a big player to push it forward.
> 3. Unlike government issued currencies, any monopoly or
> control facebook derives isn't done through force, it's by
> making a coin better than all the other coins. Other
> people are still free to make their competing coins.
I can't buy into the meritocracy/free market purity argument for a currency. Things are already volatile enough, and sometimes economies collapse and people's life savings become worthless. "Other people can make competing coins" sounds an awful lot to me like treating collapse as a feature.
> I'm not 100% steeped in cryptocurrency theory, and so I don't understand why this is presented as if it's agreed on by everyone. What problems does the world have that would be solved by an online, independent [of any nation, presumably?] currency?
Visa and Mastercard are taking a 3-4% cut of every single consumer payment made in much of the world. That ends up being a very, very big number.
There are many people all over the world without access to banking - they can't store money, they can't transfer money, and they can't invest money. That may be someone who has poor credit in the US, or someone who's living in rural India or Africa. Without access to banking, you are essentially cut off from globalization.
If you live in a country that has extremely tight currency and economic controls but with a corrupt government, and are experiencing hyperinflation (Zimbabwe, Venezuela, others https://tradingeconomics.com/country-list/inflation-rate), access to alternative currencies can literally be the difference between life and death for individuals, where the money you make on your salary will be worthless by the time you get your check.
Plenty of other examples. Whether this is a good solution I don't know, they just announced it.
> Visa and Mastercard are taking a 3-4% cut of every single consumer payment made in much of the world. That ends up being a very, very big number.
In Denmark we solved this the lowtech way. Visa cards have to be Dual visa/dancard, where the dancard has extremely low cut limited by law(0,055$/transaction flat rate)
It’s not hard, it just requires you have politicians capable of dodging the huge piles of cash MasterCard and Visa throw at them whenever talk of breaking the duopoly hits the table.
But maybe for the US, something like bitcoin will be the only way forwards, using technology to try to solve a market problem though “disruptive technology” when what is really needed is just disruptive politicians.
Dancard works for local payments, but the discussion here is about the growing demand to transact with foreign companies online. For example, if you're in Denmark and you want to buy a SaaS subscription from a US company, you're stuck giving them a Visa/MC number. Some of the downsides of this are the 3% fee, risk of the number being stolen, not to mention Visa/MC applying US law and morals to kill businesses anywhere in the world.
> Dancard works for local payments, but the discussion here is about the growing demand to transact with foreign companies online. For example, if you're in Denmark and you want to buy a SaaS subscription from a US company, you're stuck giving them a Visa/MC number. Some of the downsides of this are the 3% fee, risk of the number being stolen, not to mention Visa/MC applying US law and morals to kill businesses anywhere in the world.
If there was political will, there is nothing stopping governments from capping the fees taken by Visa/MC.
The fees on Visa/MasterCard in the EU are capped at 0.2% for debit cards, 0.3% for credit cards.
American Express (and all the other schemes where the issuer is also the acquirer, i.e. Diners Club) aren’t capped.
The 0.3% cap however did kill Amex’s licensing model where they let other banks around Europe issue their cards, so they simply withdrew from those, as 0.3% is not enough to pay for the rewards.
Note that this is just interchange. Payment processors still charge merchants whatever they damn please.
If you can come up with a scientifically falsifiable theory on the effectiveness of government regulation, there’s a Nobel Prize waiting for you. It’s hard for a lot of reasons, including that it’s almost impossible to create a true test and control treatment.
Macroeconomic theory relies on a lot of spherical cows. In theory I don’t disagree with you, but in practice we don’t have the tools (yet) to do this type of economics in a scientific/falsifiable way.
I don't think you can come up with a quality test for economic scenarios in a truly scientific way, many monopolies dominate for very different reasons, many industries have very different mechanics, and worse, regulations are often implemented in vastly different ways and often won't come out the way you'd like them to even if you have a perfect scientific answer to a given problem.
You can't guarantee or even approximate a given input and output for a scenario like this.
I'm not sure I quite understand, but it's certainly possible the equations that govern economics are sensitive to initial conditions. In that case we will never know enough to specify the initial consitions entirely.
But we also don't need to specify initial conditions exactly to do science.
I'm less convinced that the equations themselves are unknowable.
We also won't be able to specify the outcome precisely even if we somehow had a guaranteed outcome in mind.
Politicians will screw up the implementation, businesses will engineer around it and the alternative solution might ultimately come out to be a better one in practice than in theory.
Trying to define economics by simple equations which you expect to define policy is a lost cause.
Hayek isn't particularly well regarded as an economist, even among those that love his politics.
See e.g. Milton Friedman's comments about how flawed Hayek's economics are and how great Road to Serfdom is.
So my take on that speech is it's political rather than scientific.
In general I'm skeptical of arguments that something is unknowable unless they come with a rigorous proof or at least a well stated conjecture that has stood the test of time.
This. There shouldn’t be punishments to middlemen who provide a service just come up with a better way. Innovation should happen here not governments enacting laws that effectively kill all the profits a company can make.
I think we don't have to go to cryptocurrencies to see that these punishments are severly needed. Just look at the weekly scandals of "disruptive" new startup banks, people's financials deserve a few governmental protections and if the middlemen are shitty at their job (due to malice or mere incompetence) they deserve a little punishment here or there.
I get that this type of oversight is likely against some philosophical POV here but it's not like middlemen making money is an all-to-great and solitary goal a society should try to defend.
There are rent seeking “middle-men” companies out there just milking patents or their position without providing much if anything of value. I’ll admit that. But I would contend that the credit card processing companies charging 3 to 5 percent are providing a value in the complexity that is payments but whether that warrants 3 to 5 percent I’m not qualified to say just I wanted to make the distraction between the types of middlemen.
Every additional payment method supported by XaaS is one more reason for using 3rd party payment processing, meaning that there will be a fee even on independent cryptocurrency. It’s not a solution.
> It’s not hard, it just requires you have politicians capable of dodging the huge piles of cash MasterCard and Visa throw at them whenever talk of breaking the duopoly hits the table.
Ignoring the difficulty of avoiding lobbying money, yes, it'd be difficult. This is a large scale financial change and there are always, always loopholes that will come, not just from politicians who make those because of lobbying money. With how giant the economies are, and how often these cards are used, it isn't a simple move at all.
Look at credit card chip readers in the US. The amount of backend equipment change it took to get something "that simple" in action was a lot. I'm not defending them for it not being quicker, but a move like a duel card is absolutely difficult.
Look at credit card chip readers in the US. The amount of backend equipment change it took to get something "that simple" in action was a lot.
I'd wager that the banks didn't give a damn as long as fraud was cheaper than investing into a new, much securer system. France was the first country to introduce chips into debit cards and tha was in 1990[1]
Cards are yesterday things. Many countries quickly moving on to phone based payments. Its much secure (requires touch or face ID) than doing fake signatures. I've no idea why visa/mastercard can't move to this. The often given reason for massive 5% cut is potential voided transactions, merchant setup, cashback expected by customers and ofcourse profit. Much of these can be eliminated by phone based transactions. This space is ripe for disruption.
Not sure if matters but at least to my understanding, DanKort is a debit card, so I would expect it to have a flat rate since the cost of transaction is less dependent on the total amount vs a credit card transaction where there is more clearance and risk involved?
At least in some jurisdictions I lived, debit card is as good as cash (well, not exactly the same but because handling cash has also its cost, most of retailers treat them equally)
But that's the point. Monzo is the best bank in the world and yet it's only available in the UK. As soon as you're trying to cross a border it becomes challenging. A cryptocurrency can be a very useful solution here: it skips decenies of progress to set up an interoperable network for banks and custodians to use (and users as well if they want to).
> A cryptocurrency can be a very useful solution here: it skips decenies of progress
The fact that it is a _cryto_ currency is merely anecdotal. Its an implementation detail. It makes people think this currency is actually distributed as most other crypto currencies, while in fact it's just a consortium of companies having total control over all aspects (issuance, destruction, etc.) of the currency.
> set up an interoperable network for banks and custodians to use
This is just plain wrong. It's not banks or custodians that use this currency, it's just end users and the consortium. Banks are heavily controlled and regulated. I _mainly_ trust governments and legal systems to take fair decisions or litigate properly monetary issues. There is nothing like that here. The consortium of companies owning the currency decide the amount they want to create, they decide who gets refund and why, etc. I have much more trust in a country and a judiciary system than a bunch of worldwide companies to handle my currency.
The consortium of companies owning the currency decide the amount they want to create, they decide who gets refund and why
Don't forget the amount of support they will provide. Looking at major tech companies and their histories in providing customer support I see a rather bleak picture here.
This goes also for all those new fangled disruptive app banks. Guess how much success an N26 (new German app bank) customer had to contact support after 80'000 Euro went missing from his account. Spoiler: Until it was a massive story in the press, not much.[1]
I’m putting everything on credit cards. Amex for £ transactions, 0% FX MasterCard for foreign transactions. Another airline reward card when the merchant doesn’t take Amex.
I only ever use debit to pay off the balances of credit cards and to withdraw cash.
> Visa and Mastercard are taking a 3-4% cut of every single consumer payment made in much of the world. That ends up being a very, very big number.
I think you’re overestimating that rate, and by quite a bit. Mastercard’s fees seem to be between 0.2%-1.65%[0] depending on the card and transaction type.
I didn’t bother to look for Visa’s rate, but I’d imagine it’d be similar.
You are correct if you interpret "Visa and Mastercard" as literally Mastercard Incorporated and Visa Inc.
He used "Visa and Mastercard" as a metonymy for the entire payment processing network i.e. payment gateway + issuing bank + acquiring bank + card networks. The total fee for the entire network is indeed 3-4%, and as you rightly pointed out, Mastercard Incorporated and Visa Inc. fees actually only make up for less than half of the total transaction fees.
> If you live in a country that has extremely tight currency and economic controls but with a corrupt government, and are experiencing hyperinflation (Zimbabwe, Venezuela, others https://tradingeconomics.com/country-list/inflation-rate), access to alternative currencies can literally be the difference between life and death for individuals, where the money you make on your salary will be worthless by the time you get your check.
Those same "tight currency and economic controls" apply just as much to cryptocurrencies as they do to Visa gift cards. There's nothing better about "Venezuelans should've used cryptocurrency" versus "Venezuelans should've used dollars".
But beyond that, people have the right to determine their country's monetary policy independent of, say, Bitcoin devs, Facebook executives, or a foreign government (ex: Venezuelans using USD), and it's hard for me to ignore the vague scent of opportunism here. The solution to corrupt governments is not "get rid of all governments", it's "get rid of corrupt governments".
> There's nothing better about "Venezuelans should've used cryptocurrency" versus "Venezuelans should've used dollars".
US has often taken advantage of its dominant world currency position. For example, massive amount of QE that eventually gets absorbed worldwide with little inflation in US. Similarly "petro dollars". The bottom line is that if someone is allowed to print currency at whim, they will.
The true value of any currency is what you can do with it. If someone owns some coin and wants to buy some food to feed their family, the seller of the food first has to accept the coin, but regardless what value the rest of the world places on the coin, the seller of the product is still in control of what they will accept. I am not sure how using a cryptocurrency solves the problem of hyperinflation. It is still not going to be cheap or easy to purchase items in the areas these problems exist. I think your other points about access to banking and storing/transferring money are valid. It implies the person has a working mobile phone and access to a network though too.
"Using a cryptocurrency" doesn't solve the problem of hyperinflation in itself. However, Libra is backed by its reserve ("Libra Reserve") which is a basket of low-volatility assets structured to keep its value relatively stable. If my interpretation is correct, this basket can change over time so that it is always made up of stable currencies.
It's the only cryptocurrency that anyone outside of the crypto world has heard of/takes any interest in/would consider letting you buy their stuff with
Have you tried buying anything with Bitcoin Cash? Currently the transaction fee is under 500 satoshi (about 1/5 of 1 US cent) to have your transaction included in the next block.
Visa and Mastercard are taking a 3-4% cut of every single consumer payment made in much of the world. That ends up being a very, very big number.
There are two assumptions you are making, both of which are false. The first is that handling cash isn't expensive, but it is. You have to store in various secure locations, transport it between those locations, count it multiple times... And that's true even if you're a market trader or a small shop. For those people it could easily be a significant part of their day and a significant risk, all of which goes away with cards (and the fee is nowhere near 3-4%, it's more like 1-2%).
The second is that, in a market that has demonstrated a willingness to accept the transaction fees of the major card providers, that anyone would "leave money on the table". Sure they'll undercut them initially to win market share but once they have it, the price will inexorably creep back up to the level the market will bear.
My assumptions are based in that I’ve worked in the industry. There’s plenty of small restaurants that are cash only, because they operate on the thinnest of margins. Gas stations as well. To the merchant, a fee of 3% + .10c per transaction is very common. More for Amex.
The second point sounds like an economics 101 conclusion. Network effects are real. Regulatory capture is real. Starting a new card network is harder than beating google in ad revenue in search.
not saying it is the case but a lot of restaurants I worked were cash only because their supply chain was very low tech (also cash-only) and they simply didn't pay the taxes.
Gas stations might be higher at least in the USA because the kick back for gas is sometimes higher (e.g.: 1% cash back). Also, gas stations seem to really don't want to handle cash those days.
Being a Danish citizen and holding Krone at least in theory you may vote to control its inflation and claim social benefits from the issuer (Danish State). I mentioned the benefits because often they are financed through money printing by the government.
With libra you won’t have those rights at all. One can argue that they basically get the same 4% as credit cards by depriving you benefits or voting power.
If you're running some kind of IT infrastructure big enough for the whole world to use, you're going to want a cut of each transaction whether you are VISA/MC or Facebook's blockchain. Some sort of transaction fee is inevitable, even (or especially) on a private blockchain.
Visa and Mastercard have invested so I wonder how they might weigh in on the project. Also, the Libra-coin should also have a transaction cost associated but I would expect/presume it stands an order of magnitude lower than 3-4%
Visa/Mastercard consider crypto an existential threat - the value add that they have in terms of consumer protection, middleman conflict resolution, and fraud prevention does not add up to that 2-4% level of value, and they admit that. Trust and the network effect keep them in play for now.
Crypto transactions however, have not lived up to the "hype" of being truly cheap thus far. Visa/MC are positioning themselves such that the value they bring is not something that crypto can provide. We'll see where that ends up - I'd expect Visa/MC stock to move a bit if the transaction fees for Libra end up being sub-$.05.
It isn't clear to me that you wouldn't still have payment processors anyway.
In the UK right now I can send money to your account nearly instantly, and for free. I wouldn't want to purchase anything like that though, I'd want to use some kind of card, why would Libra be any different?
> Visa and Mastercard are taking a 3-4% cut of every single consumer payment made in much of the world. That ends up being a very, very big number.
I'm guessing some of that goes towards chargebacks and other protections in the form of reimbursing purchases from stolen credit cards. It would be tough for me to trust any online replacement without a very firm and reliable appeals system.
Do we have any indication from Facebook that they intend to use Libra to massively undercut Visa / Mastercard for merchant services? I mean in the developed economies.
yes, their whitepaper heavily suggests that access to finance products for the poor is a big motivation behind Libra. However, it does feel a bit like white washing as the majority of the profits from Libra will obviously be the convenience of paying via facebook owned messengers etc.
The problem with Visa and Mastercard in the developing countries I've experienced is the banking system.
In Cambodia, you can only get a credit card from a Cambodian bank if you have a deposit with them that matches your credit limit (i.e. to get a card with a $5K limit, you need to maintain a balance of $5K in your account).
Most people cannot get credit/debit cards because the banks won't issue them, because they don't trust anyone and won't take the risk involved in issuing cards
I can see how Libra will solve a lot of frustrations for Visa/Mastercard working in poorer countries
to be honest, I'm not sure. They issued me one when I asked for it, but I had to ask, it wasn't normal. And often when I use it, I get a Whatsapp call from a nervous bank staff member checking that it was me that used it. Kind of cute really.
I'm fairly anti-crypto, but there are a couple items in favor of #1:
- A currency outside of traditional governments would theoretically be free of currency manipulation by those governments (ex. China and the Yuan)
- An international currency can sidestep the artificial middleman fees and friction caused by traditional monetary exchanges. Ex. my friend who is currently studying in Japan wanted to get some money from her US bank account to Japan to pay for tuition and not only had to wait for banks to be open, but also had to pay exchange and transfer fees.
- This one doesn't necessarily require an independent currency, but crypto also theoretically enables the fabled land of online micro-tipping for content creators, publishers, etc.
> - A currency outside of traditional governments would theoretically be free of currency manipulation by those governments (ex. China and the Yuan)
You can't live your life outside your country's currency though. It has a built-in demand because you have to pay taxes in it. So you're going to have to buy some of it somewhere.
> - An international currency can sidestep the artificial middleman fees and friction caused by traditional monetary exchanges. Ex. my friend who is currently studying in Japan wanted to get some money from her US bank account to Japan to pay for tuition and not only had to wait for banks to be open, but also had to pay exchange and transfer fees.
> > - A currency outside of traditional governments would theoretically be free of currency manipulation by those governments (ex. China and the Yuan)
> You can't live your life outside your country's currency though. It has a built-in demand because you have to pay taxes in it. So you're going to have to buy some of it somewhere.
Yes but then you can shop around for conversion and can keep the majority of your liquidity in a vehicle which is less easily manipulated but just as fungible (I am just arguing about the utility of a global, trans-national currency and not speaking to specifics offered by the Facebook coin specifically).
Currently, if you want to hedge against the Yuan but still want to buy goods in China, you don't have many choices. But if vendors accepted some other currency in addition to Yuan, you can convert to Yuan to settle debts with your government and keep your holdings liquid elsewhere.
TransferWise doesn't work any faster than SWIFT -- if anything it's usually slower. They don't have any magic way to put money into your account on a "bank holiday" either.
> - A currency outside of traditional governments would theoretically be free of currency manipulation by those governments (ex. China and the Yuan)
As long as these three points are true: a) the notion of a stablecoin means stable relative to one selected fiat currency, b) the goods you are selling or purchasing are priced both in your local currency (which may or may not be the stablecoin peg) and the stablecoin, and c) that governments can still manipulate the ordinary currencies, then I don't see how you can be free from government manipulation.
You want to buy a product and the seller will accept the coin. The price/value of the coin is totally going to be determined by the seller and what they will accept for the product they are selling. Perhaps if you are in the US or EU and buying an automobile the price will be fairly stable/predictable but if you are in India or China and wanting to buy something from a local vendor the price/value is what the seller will accept.
being free of Government manipulation while desirable also has drawbacks as a corporate owned currency means it would be subject to corporate manipulation. Think Kong Bucks. Basically, corporate currencies mean not only do you shop at the company store, but you use their money too. I think the original premise of a government less people's coin via bitcoin is a better idea as it means the population takes responsibility for their currency.
No doubt if FB (i refuse to call them libra) coins become popular, when world governments limit crypto currency at FB's request, FB coins will no doubt be the only exception.
> 1. The world could use an online independent currency
Maybe, but "Facebook" and "independent" hardly go together.
> Unlike government issued currencies, any monopoly or control facebook derives isn't done through force
True, but the measure of control average person has over facebook is also close to zero. With government, you at least have courts, elections, Constitution finally... it is usually hard to go against the government, but it is possible and at least the presumption is that the government is there to the benefit and by the consent of the people (it's not very useful for a random citizen but at least that's the principle which can have some useful consequences sometimes). Facebook is there for whoever owns Facebook, and has zero obligations to anybody else. It could completely block you any time it wants to for any reason it wants to, could deny you use of any of its resources with no explanation needed and no recourse possible, it could change its policies any time with zero concern for your interests, etc.
> I just wish there could be a deeper exploration of both the pros and cons.
What are the pros of specifically this Facebook proposition that can not be achieved without Facebook being in the picture?
> It could completely block you any time it wants to for any reason it wants to
As opposed to what banks did in Cyprus in 2013 when they seized the money on the savings account of their own customers and basically stopped people from withdrawing their money from their own bank accounts?
And said customers had no recourse at all against the banks helping themselves to their money?
In theory, the recourse is that the people can exert power over the banks by electing different politicians. Obviously, sometimes that doesn't work as well as we'd like, but there's not even such a possibility of recourse when Facebook fucks you over.
>In theory, the recourse is that the people can exert power over the banks by electing different politicians.
Ah, but there's the rub. When every major political party is beholden to banking interests, "electing different politicians" is an almost-insurmountable task. And even so, is no guarantee that a new set of politicians won't eventually become corrupt and beholden to those interests either.
If "electing different politicians" is an insurmountable task, then developing an alternative, trustless financial system beyond the control of politicians becomes much more feasible by comparison. Hence the motivation behind great-great grandparent's comment about the need for an online independent currency. The context of 2008 and things like the TARP bailouts are very important to understanding the entire thought movement behind cryptocurrency as a whole. Hence, the hidden message encoded on the very first Bitcoin block [0]:
>The Times 03/Jan/2009 Chancellor on brink of second bailout for banks
Agree. A world currency in the hands of a few corporations is arguably worse than any government issued fiat.
It will be more efficient and pervasive in both good and bad ways.
[Edit: spelling]
I can tell you from own experience that Facebook's dark patterns are incredibly frustrating at best, and at worst come off as malicious to the end-user.
For example, I refuse to download the Facebook app. When using the mobile website, it often shows me as having new messages. Clicking the notification then redirects me to download the app. Requesting the desktop site, however, shows no notifications and has no redirect.
How am I supposed to trust a company that puts me through that? Is it a bias when they actually lie to me almost daily?
No, I think you misunderstood the notifications. I did at first. Basically Facebook shows you when someone read your messages. This shows up as a notification in messenger mobile but not in the web version. There are others too but I don’t remember the exact circumstances.
You're just strengthening my point - if I'm misunderstanding something, it's because Facebook has deliberately chosen to make it difficult to understand. That's further reinforced by the fact that they have an incentive to do so - increasing app installs.
No, I think you misunderstood the parent because I've encountered the pattern EXACTLY as he described it. I have one device that I use for insecure stuff like FB Messenger and I have to go use it whenever I want to see new messages and I don't have access to a desktop.
Well, perhaps a deep exploration of the pros and cons are warranted, but...
FB has been caught willfully and negligently lying multiple times. (And yes, I'm aware that many banks have done the same.) Nonetheless, why would I choose to trust them over any other payment system?
What's Zuck's testimony to Congress going to be in five years? "We could have done better. We will do better. Who could have forseen this nightmare mess...?"
My impression of what Libra is to FB is equivalent to that Silicon Valley episode where they did an ICO to found their business and get more users at the same time. I don’t believe FB’s altruistic intention for one second.
Sure, but there should be a discussion about the tech and how it may/may not turn out instead of hur-dur FB bad. This is Hacker News after all not Privacy News.
>Unfortunately I think hackernews has a strong anti-facebook bias
And a strong anti-cryptocurrency/blockchain bias. I'd argue that both are for good reasons however, the burden of proof that this is actually something positive for the world is very clearly in the other camp as far as I'm concerned.
> 1. The world could use an online independent currency
Could it? Why? Independent from who? Because watching the disasters and scams that go on in cryptocurrencies because they don’t have any regulatory oversight, doesn’t make me inclined to think an “independent” currency will be any better. Anyways, it’s not even independent, it’s controlled by a conglomerate of tech and finance companies and lorded over by Facebook, it’s about as un-independent as you can get.
> 2. Adding stability to blockchain currencies and having that work on a large scale is a good thing
Because as we all know, adding yet another currency to the mix has functioned to stabilise things previously. Except now this time it’s run by corporations and lacks anything about what made crypto currencies interesting or worthwhile in the first place.
> 3. Unlike government issued currencies, any monopoly or control facebook derives isn't done through force, it's by making a coin better than all the other coins. Other people are still free to make their competing coins.
In theory, yes; in reality, no. Humans are not creatures of perfect rationality that balance up all their options and make informed, ideal decisions at every point. The crypto currency market has been the perfect example of this: huge fluctuations due to hype and pump-and-dump schemes. Coins unequivocally do not succeed on their technical or theoretical merit. Moreover, all things being equal, I think a crypto currency backed by Facebook is something that should be avoided with a 10 foot pole.
There are a lot of possible nuanced conversations but I think that the rejection of FB-coin on principle is the simplest argument and doesn't require much nuance to achieve.
That principle simply being the principle of decentralization which is core to the concept and purpose of block chains. No single or cluster of large companies or governments can create and control a block chain without violating that principle and thus a rejection on principle is justifiable.
We remember Internet.org - a "free Internet" that conveniently left out all of FB's competitors like Google, Amazon etc. Nothing has changed with their tactics.
I kind of agree with your first two points, but fail to see how Facebook's coin could ever be hoped to achieve this. In what fantasy universe will it be independent of Facebook's control? In what world is the inevitable accompanying tracking of all financial information, cross-referenced with a huge social database by a modern surveillance giant a good thing?
> Unlike government issued currencies, any monopoly or control facebook derives isn't done through force, it's by making a coin better than all the other coins.
It may not be done through sheer force, but when people are making their local decisions, they usually do not have a complete perception of the global ramifications of their actions. The end result might therefore still be something very undesirable for ~everyone.
2. In the sense that it'll likely lift other cryptos, sure. Is that actually a good thing?
3. Facebook IS the internet for many consumers in third world countries as their FB access is subsidized and free. I find it hard to believe FB isn't going to similarly force-push Libra.
Hacker News is biased against both Facebook and cryptocurrency, and for good reasons. I hope Libra fails.
I don't have an anti-Facebook bias (ok I do, but it's not relevant in this case), but I do have a strong anti-blockchain-as-a-buzzword bias.
1. If the blockchain & all transactions are not public, how is this different to having a non-blockchain based online currency (e.g. "Facebook credits")?
2. If the currency is pegged to USD, how is this different from just having USD in your PayPal account?
My hunch is, this is just a marketing/regulation-evasion exercise. It's not "currency" (it's crypto-currency) so they're not forced to follow the same AML/KYC/capital control/credit check regulations... Governments will quickly catch up though.
>3. Unlike government issued currencies, any monopoly or control facebook derives isn't done through force, it's by making a coin better than all the other coins. Other people are still free to make their competing coins.
Sure it has. Not with the traditional physical force of armies from the industrial, feudal, agricultural or previous ages; but rather with the psychological force of the information age, executed by armies of programmers and social engineers.
> Is HN really more anti-Facebook than the general population?
Yes, definitely.
> If so, why?
Because the general population cares less about privacy than HN. But I (not OP) think it goes deeper than that, and I've seen people here deliberately spreading lies about FB.
A little while ago I played with the idea that if the masses were convinced that breaking up Facebook (or Google, Amazon, etc) was a good idea and that it eventually happened - the surviving BigTech "shrapnel" would be less capable to stand up against a government seeking information or control over them.
A paranoid and overly Orwellian idea for sure, but interesting to play around with!
I'm not really a proper programmer. I know a little HTML and CSS, but I seem to fit in here better than most places. I have a Certificate in GIS, I run my own websites and I seem to relate to the internet differently than most people who are into Facebook.
The comments I see on HN seem to generally agree with that pattern: It's seems like it's "just not my cup of tea" for a lot of people who are more computer literate than average. On top of that, the privacy issues have become such a big deal of late.
I'd be very surprised if that was so. People move often between the two companies, and in my experience speak of each other quite positively.
More generally, I doubt any employee of a large tech firm has so much loyalty and devotion to their employer that they would take to the internet to undermine a competitor.
1) I'm not saying that's wrong, but I don't think it has the self-evident nature you attribute to it.
2) Agreed, though I'd really like it to be someone other than Facebook that does it.
3) We already have all sorts of other currencies. Frequent flier miles spring to mind, which can often be converted for other use. If they're not popular enough to be universally fungible, then in your terms they're not a "better" currency. It's also not self evident that any coin will do any better.
> 3. Unlike government issued currencies, any monopoly or control facebook derives isn't done through force, it's by making a coin better than all the other coins. Other people are still free to make their competing coins.
But how do you define “better”? Bitcoin has shown you can have non-consensus about very basic things like the ledger and all chaos breaks loose. And what if it’s a large corporation driving non-consensus?
51% attack applies to mining. Libra will not be mined. They have 33% attack on voting... but if 1/3 of the founding companies disagree about some transfer, they've got bigger issues than just that attack.
If there is no mining, how does proof of work occur to create coins? I only have an understanding of how blockchain works, but proof of work seems like a necessary ingredient in any cryptocurrency system.
Again: A ledger that is not decentralized is a bank database, not a cryptocurrency.
As near as I can tell, Zuckbucks are nothing more than the JPMorganCryptocurrency but with a bigger consortium. The only difference seems to be who is given write privileges to the database.
Libra coin is backed by Visa. The whole point of cryptocurrency to avoid having to go through middlemen like Visa or even require banks.
This is a way for the intermediaries to cash in on the cryptocurrency hype and squash it before cryptocurrency payments become mainstream. They want to insert their own thing that looks like a cryptocurrency but will allow them to continue to profit from and control the exchange of money.
It will become a central point of control by providing many governments a convenient one-stop shop for their spying and interference over people's business.
> The whole point of cryptocurrency to avoid having to go through middlemen like Visa or even require banks.
"Whole point" is speaking for a whole lot of people who may not share your views. Certainly circumventing banks was an important founding concept, but circumventing _central_ banks is arguably much closer to the goal.
There's no reason why credit cards shouldn't exist denominated in Bitcoin -- they provide easy access for consumers to obtain unsecured credit. There's no reason why banks (even fractional reserve banks) shouldn't have accounts denominated in Bitcoin -- they provide an easy path for consumers to issue credit.
Opinions may vary on this, but if Bitcoin (or another decentralized cryptocurrency) succeeds the way that people want, I don't see any way to _stop_ these things from happening. People are willing to pay interest on loans; other people want to earn low-risk interest on capital.
The thing that will change is that hopefully without central banks consumers will have to realize that depositing money in banks is not risk-free. And hopefully society will learn this as well and we'll move out of the cronyism/free-money regime that we've been stuck in for the last hundred years or so.
Presumably people wouldn't want a cryptocurrency as plutocratic and centralized as Bitcoin has become. Some lessons were learned with BTC as an experiment, and as we can see there's evolution taking place and plenty of more advanced alternatives are making prior software like bitcoin obsolete.
It's especially troubling how centralized the minting and mining has become. And it's easy to forget there's the problem with energy consumption related to the PoW algorithm eating almost 1% of the entire world's energy simply for an accounting database.
The major reason you don't see payment processors dealing with cryptocurrencies is because the major usecase for most cryptocurrencies like Bitcoin, Monereo, and Ethereum is money laundering.
One important point: if we actually include all 7 billion
people on the earth, most of whom have zero BTC or
Ethereum, the Gini coefficient is essentially 0.99+. And
if we just include all balances, we include many dust
balances which would again put the Gini coefficient at
0.99+. Thus, we need some kind of threshold here. The
imperfect threshold we picked was the Gini coefficient
among accounts with ≥185 BTC per address, and ≥2477 ETH
per address. So this is the distribution of ownership
among the Bitcoin and Ethereum rich with $500k as of July
2017.
In what kind of situation would a thresholded metric like
this be interesting? Perhaps in a scenario similar to the
ongoing IRS Coinbase issue, where the IRS is seeking
information on all holders with balances >$20,000.
Conceptualized in terms of an attack, a high Gini
coefficient would mean that a government would only need
to round up a few large holders in order to acquire a
large percentage of outstanding cryptocurrency — and with
it the ability to tank the price.
With that said, two points. First, while one would not
want a Gini coefficient of exactly 1.0 for BTC or ETH (as
then only one person would have all of the digital
currency, and no one would have an incentive to help boost
the network), in practice it appears that a very high
level of wealth centralization is still compatible with
the operation of a decentralized protocol. Second, as we
show below, we think the Nakamoto coefficient is a better
metric than the Gini coefficient for measuring holder
concentration in particular as it obviates the issue of
arbitrarily choosing a threshold.
...However, the maximum Gini coefficient has one obvious
issue: while a high value tracks with our intuitive notion
of a “more centralized” system, the fact that each Gini
coefficient is restricted to a 0–1 scale means that it
does not directly measure the number of individuals or
entities required to compromise a system.
Specifically, for a given blockchain suppose you have a
subsystem of exchanges with 1000 actors with a Gini
coefficient of 0.8, and another subsystem of 10 miners
with a Gini coefficient of 0.7. It may turn out that
compromising only 3 miners rather than 57 exchanges may be
sufficient to compromise this system, which would mean the
maximum Gini coefficient would have pointed to exchanges
rather than miners as the decentralization bottleneck.
Conversely, if one considers “number of distinct countries
with substantial mining capacity” an essential subsystem,
then the minimum Nakamoto coefficient for Bitcoin would
again be 1, as the compromise of China (in the sense of a
Chinese government crackdown on mining) would result in
>51% of mining being compromised.
- Balaji S. Srinivasan (the CTO of Coinbase)
I'm not defending Bitcoin as the ultimate cryptocurrency; I think it's inarguable that it remains the most empirically successful so far. Whether that's first-mover advantage, network effects, a hardware-capable PoW function, or that it struck closer to the right balance of concerns, who knows?
I don't agree that the energy consumption is a real concern because we don't have a comparison here for what other currencies cost. The cost seems like it should be fairly efficient because there are competing uses for energy.
I'm not sure exactly what the quoted text is trying to say or how it is relevant. I guess towards the notion of "decentralization"? What I would say here is that the reality is that we don't know the gini coefficient of a single thing in the universe except goods that are extraordinarily scarce (like "Mona Lisa paintings"). The estimates for these things for real-world currencies are laughably bad; they are based on self-reported statistics and upsampling, and they rarely reflect the actual scarce good -- effectively M0 of a single currency, which is a number we don't even have for Bitcoin because exchanges represent aggregated possession rather than actual ownership. So my point here is that yes, maybe that Gini coefficient looks bad, but it's the first time that we've even had a moderately realistic look at what a Gini coefficient looks like. Maybe they all look like this -- maybe gold is .99+, maybe Dollars are .99+, maybe Euros are .99+, maybe cigarettes in prison are .99+? Nakomoto coefficient is even more immeasurable for anything but cryptocurrencies, and also disregards aggregated records of deposits.
Bitcoin is not inarguably the most successful cryptocurrency. It has completely failed at its stated aim of facilitating payments, and cannot coordinate the necessary technical changes for that to be realistic. It has also failed as a platform for programmable money, since its programming language is almost impossible to work with, and once again, it has been unable to coordinate the necessary changes to implement a working language.
What is “the most successful cryptocurrency”? I don’t know, but I would vote for one of those that set out as a development platform, and have successfully ignited a huge amount of experimentation on novel financial and organizational instruments (although their value may be unfounded).
This confuses me. I make multiple payments every month in bitcoin to fund various web services (i.e. tarsnap, gandi). In fact, I've never had an issue with a bitcoin payment going through. Ultimately, I find the process of paying with Bitcoin to be a joy. I hold my smartphone's camera up to a QR code on my screen, and BAM - payment complete.
Yes, most other cryptocurrencies provide the same thing. But Bitcoin provided it first.
This confuses me. I have used Bitcoin as a method of purchasing goods and services and it's quite easy, and indeed fun. Buy some BTC or some Koinye or some other space cash and have your funs.
If Libra ends up with 10x more users than all other cryptocurrencies combined, who are you to say what the point is? The existing cryptocurrency space has spent a decade building something that a relatively small number of people are really passionate about but it's the opposite of what the masses want.
In my opinion, the main thing holding back cryptocurrency is scalability. They are working on that. The other thing is just social momentum.
Popularity and merit are two completely different things. It waxes and wanes. The masses will adopt anything that is convenient and popular (regardless of whether its really great or not).
Look at the #1 Billboard song right now. "Old Town Road". This is the most popular song. Its "what the masses want". What's it about? "Can't nobody tell me nothin'" "Cheated on my baby" "Cowboy hat from Gucci".. Its teenage defiance, materialism, and "macho" unfaithfulness. What happens to be popular right now might mean something important, but it also might just be garbage as usual. (By the way, at the moment, it is popular for humans to create literal mountains of actual garbage.)
The people who created cryptocurrency said what the point was. Its to give us control over our digital money and remove the intermediaries.
People who know better should strive to make things that are worthwhile more popular.
That was one example. Look at popular music in general. Or popular movies versus good movies.
Look at the example of social researchers creating a line of actors in downtown Las Vegas. The line went to nowhere. But simply by virtue of having several people in it, it seemed popular. So it grew in popularity to become a very long line. That went nowhere. The thing that was popular had no merit because it did not exist.
Or look at Juicero. Very popular with investors to the tune of $120 million.
I don't really believe that what's popular in music is simply a reflection of what people want. It's more like what someone's marginally accurate model of the public wants. Same with movies. Studios experiment and when they find something that is commercially successful, they make more of it. A lot of good stuff doesn't get made or promoted because they think it wouldn't have the broad appeal to be commercially successful. A lot of what's popular just got that way through promotion, not because of its overwhelming merit.
Scalability is a big problem, but it's not the only problem. Money accomplishes 3 things:
1) Store of value
2) Unit of account
3) Medium of exchange
It's not really very good at any these 3 things. The scalability significantly hurts #3, but even if you fix it it's super volatile, which are bad for 1 and 2. Not only that, but it's inherently deflationary, which is quite bad in the long term, but I guess that's really a secondary concern.
I agree with your point. I think Libra is likely to have more users than Bitcoin not long after it goes live. Libra will be easier to use than a credit card, let alone Bitcoin.
I can't find the citation, but I think Paul Graham said, make it easier to use and cheaper than the incumbents and you'll have a good chance of succeeding.
>The whole point of cryptocurrency to avoid having to go through middlemen like Visa or even require banks.
This is actually a big problem with cryptocurrencies - you're removing middlemen who are legally obligated to enforce anti-money-laundering laws on behalf of governments. In general, cryptocurrencies will either live under existential threat from government law enforcement agencies, or their use cases will be restricted to interactions with centralized AML/KYC-compliant parties that might as well be using a database.
This is why I doubt any major cryptocurrency advances will come from an established company. The risk of noncompliance for them is too great, but to have an effective cryptocurrency you have to build it resistant to outside control. It’s a catch-22 for the companies.
Why does a cryptocurrency have to be resistant to outside control? Because otherwise there’s no reason to use it, since the existing networks run by Visa or the US dollar are more efficient and scalable. The value of bitcoin is in its equalization, no one person on the network’s voice matters more than another.
Yeah, in my book this is more of an attempt by a consortium of powerful companies to get a favorable regulatory regime for money transmitting. "Crypto" is only there to confuse regulators into making an exception.
My first impression when I saw this news was that this would be about as 'decentralised' as Tor is. Facebook (and pals) will always maintain significant enough control over the nodes in the network to both maintain consensus in the blockchain, and also to subvert whatever consumer-friendly guarantees they'll claim to make. No different to Tor and US spy agencies controlling enough exit nodes to defeat the purpose of Tor.
Facebook and privacy are fundamentally opposed, so based on known behaviour the currency itself is most likely a hook into more of its users' lives.
The thing that separates this from a bank database is a small thing, but important, and that's that even the bank cannot reduce your balance in secret without your authorization, since transactions are signed and the ledger is public. That's because of the cryptographic primitives used.
I think in the end we have to accept that taxonomies are going to have rough edges because the map is not the territory. With Bitcoin as the canonical cryptocurrency there have been a number of experiments that have removed or added guarantees. A distributed, verifiable, immutable chain of history is basically git with a couple of extra features, so the lines are necessarily blurry.
Rather than arguing semantics, the main questions are to what degree it is censorship-proof, permissionless, and scarce. The third one is the one that is least clear from the description and whitepaper. It sounds like they're trying to get the first two as well, but the designation of initial stakeholders might make that tricky until they can transition to proof-of-stake.
>the bank cannot reduce your balance in secret without your authorization, since transactions are signed and the ledger is public
This capability is pretty pointless when the bank can indefinitely suspend your ability to make transactions. The ability to block transactions is an essential part of compliance with anti-money-laundering and other banking regulations.
> This capability is pretty pointless when the bank can indefinitely suspend your ability to make transactions.
You beat me to it: Having cryptographically signed transactions simply does not matter when you have to submit the transaction to what Zuck calls a "validator". The validator will just refuse to validate if your address is on a blacklist.
The net effect is that the coins are frozen. And since this is a backed currency, the backing will then be reduced by the amount corresponding to the frozen coins. This has the exact effect of lessening a user's balance.
Naming it "Byzantine Consensus" in their white paper turns out to be surprisingly apropos.
Maybe we need to question whether the government should have the power to unilaterally block a transaction. Just because they’ve been able to in the past doesn’t mean we have to artificially limit technology to let them keep that power.
In the same way they used to be able to tap your phone, but now we can encrypt our calls and make that much more difficult. That doesn’t mean encryption should be illegal.
> Maybe we need to question whether the government should have the power to unilaterally block a transaction. Just because they’ve been able to in the past doesn’t mean we have to artificially limit technology to let them keep that power.
> In the same way they used to be able to tap your phone, but now we can encrypt our calls and make that much more difficult. That doesn’t mean encryption should be illegal.
The government has the power to unilaterally block any transaction in any domain, so long as they deem the transaction to have occurred in or whose parties are under their jurisdiction. I think that, generally speaking, it is rare for the government to cede jurisdiction over a domain once acquired.
> The government has the power to unilaterally block any transaction in any domain, so long as they deem the transaction to have occurred in or whose parties are under their jurisdiction.
The government cannot block cash or barter transactions. Instead, they can declare certain kinds of transaction illegal and then use the courts to punish anyone who engaged in an illegal transaction.
It’s a subtle but important distinction— to do anything against you, the government needs to present some sort of a case to judge and jury, and you have an opportunity to argue your side.
The government can freeze access to your assets unilaterally without your input if they deem it necessary. They can even take your cash and charge it with crimes! That's not even including things like the US government OFAC list which you could end up on without due process.
But to your point, thankfully we (mostly) have due process with our government (in US at least); the same cannot be said of dealing with corporations. I certainly see your point. One large fear I have around money being a number in a database is that your access to the monetary system is more easily revoked, whomever the controlling authority may be.
I think that AML[1] laws were just an example. The point is that the validators have the power to block transactions. This could be due a government request, or because you posted something that Facebook (or one of the other affiliated companies) doesn't like. The actual reason is immaterial; the important thing is that currency is worthless without the ability to spend it.
No, we really don’t need to question that. Financial laws exist for a good reason. Nor should some private company have more power than a sovereign nation just because.
The main reason we do need to ask the question is that Bitcoin is currently effective at preventing governments from blocking Bitcoin transactions. Even if financial laws exist for a good reason, they don't supercede the "natural laws" of cryptography that determine which actions are possible. So the question isn't whether Facebook should have the power to do X. The question is whether Facebook should be allowed to do X, given that Bitcoin is already permitted to do so.
Nope, I feel that my opinion reflects both the conventional wisdom and the expert consensus, which would be a waste of my time to reiterate. It’s the people arguing a multinational corporation ought to be able to circumvent the laws of sovereign democracies that have ‘splainin to do
Isn't AML just a bandage applied on top of a larger issue? What are the use cases for AML? How effective is AML in preventing and or solving for those use cases?
I just mean that your funds at the bank can be seized without your assent for numerous reasons - civil judgements, asset forfeiture, etc., and given to someone else.
The reasons you list are the bank complying with the law. Civil judgements and asset forfeiture are legal matters where the court has decided that your assets are declared forfeit in order to make reparation for some legal matter. Presenting this as proof of your money's insecurity in a traditional banking institution is incredibly disingenuous. The fact that your bank complies with the laws of your country is just more proof of why traditional financial institutions would be more trustworthy than a consortium of tech giants.
What can also happen with banks is that they forbid you from withdrawing more than a certain amount, or take x% from the top of every account because of economic issues.
I've never heard of the latter occurring, can you point me to an example of where this has happened and which countries it has happened in? I can imagine that anything could happen in Zimbabwe, but if this happened in the western world I'd expect widespread outrage.
The former isn't particularly common in modern times. In the US deposits are insured by the FDIC, which has pretty much brought bank runs to a halt. It's happened in Greece recently if I recall, but even then it's still pretty rare.
I don't consider either of these good reasons why an international consortium of tech giants is any more trustworthy than domestic financial institutions that, while greedy and wicked as they may be, are tied up in regulations.
Well Greece is the example I was going to name. It doesn't happen that often, but it's quite possible.
As for the FDIC, there's a similar deal in most countries up to a specific amount(FDIC is $150K, other countries sometimes have less), but I don't think the FDIC has enough money for a more massive bank run.
I agree with you that Facebook & co. aren't that much more trustworthy at all, my comment was aiming more towards pointing out some benefits of things like Bitcoin.
Ultimately you’re still beholden to private corps to transact at all, and transactions will be tied to your id, so I don’t see this having any benefit over bank-sourced transactions at all.
> any benefit over bank-sourced transactions at all
I see a few benefits, but nothing on the order of the full potential of crypto.
1. Your FacebookCoin value is a collection of the world's currency value and not tied to a single goverment currency. It's more likely that {Single Fiat Currency} experiences hyperinflation than {Collection of Fiat Currencies} thus some of your risk is mitigated. Most individuals hold the majority of their wealth in a single currency, or in assets that are sold for a single currency (NYSE transactions are completed in USD, same with US based real-estate.)
2. Transaction fees can potentially be lower than incumbents. This is probably going to be especially true with person-to-person international transfers and could big a huge win for third world startups dealing in digital services.
3. The barrier to entry will, in all likelihood, be significantly lower than traditional banks. I've known people with a credit score so low they couldn't open a bank account. I've meet people with anxiety of using a debt card because of over withdrawal fees.
If it's centralized the bank/consortium can do whatever they want. Your transaction might just disappear if the consortium decides that today is a good day to do so.
Unfortunately the "decentralization is a spectrum" crowd has already furnished the fintech narrative with the arguments necessary to justify calling this "decentralized."
The "decentralization" quality should not be used to describe any system that doesn't exhibit a permanent, irreversible systemic trend towards greater decentralization of all the levers, concentrations and bottlenecks of power within itself over time.
For this to happen, the natural tendency toward concentration of leverage would need to introduce a proportional net cost increase to the system, rather than (as it normally would) be the mechanism by which economies of scale accrue to it.
Bitcoin doesn’t fulfil these criteria either - the devs and miners have not become more decentralised over time, if anything more centralised. Of course it is far more decentralised than this ersatz cryptocurrency from Facebook in both spirit and actions.
However the number of people who want a decentralised currency (with the many, many compromises it requires) is globally very close to 0%, so despite wailing on HN about the true meaning of cryptocurrency, this is not a reason to oppose this Facebook coin.
There are much more pressing ones to oppose it IMO - handing control of your transactions and/or finances to an org as amoral and duplicitous as Facebook, or indeed to any global corporation or cabal thereof, is a very scary idea.
I sincerely hope this dystopian effort to impose a global corporate currency fails.
Mastodon. You can set your own server up and benefit from all othe other existing servers. Mastodon provides a decentralised service running on decentralised infrastructure. You can run your server as you see fit, because access to the wider network is federated.
Zuckbucks provide a centralised service running on decentralised infrastructure. Try add your own server to help run Zuck's blockchain...
Git comes to mind as well, I can go to Bitbucket or Gitlab and upload my repository with its full history in seconds. Or my own self-hosted repository if I wanted.
I don't agree with grandparent for what it's worth, just thought this might work as a reply to your question.
Other than universal entropy, probably nothing. Though math is also decentralized, maybe even moreso, being independent of time. So maybe "nothing that is relevant on a human timescale" is closer.
I strongly suspect that what we have developed a habit of calling decentralization, as if this referred to a final state of a proposed coordination solution, is in fact just a temporary, transitional phase between centralized regimes.
Need to start your system with requirements about asking permissions? Not decentralized.
At some point, we need to recognize that playing games with the system so that Marketing can use the word "decentralized" does not change the meaning of the word.
In other contexts "split up between a group of folks" (that may be open to newcomers or not) is sometimes called "federated", while "everybody has (theoretically) a voice in the outcome" would be "decentralized".
In bitcoin, everybody has a chance to voice their opinion on what the ledger should look like (nevermind how miniscule it is these days given warehouses full of ASIC miners). Libra has 27 designated peers, and somebody in that group gets to decide about number 28 (and, potentially, about the other 26).
And those ASIC miners serve a purpose, it becomes much harder for a state sponsored actor to develop more efficient mining technology to attack the network. And the miners who run the ASICS are the ones with the highest incentive to keep the network running strong.
Libra is a attempt to cut out issuer banks, as in credit cars issuance, out of the equation. That is why Visa/PayPal/Mastercard are on the board. It is less fees for the consumers, definitely better UX, and in a sense relief from the legacy banking woes.
And more importantly for them Visa/Pay Pal/Mastercard aren't outflanked by their own competitors. There's little noble to this endeavor by these characters.
The key here is the ability to exchange it for other coins. If Libra partners can block exchanges, they will use that power as soon as they are requested to by regulators.
I think your point would be better made by not focusing on the terminology.
The way I would define the term "cryptocurrency", Libra Coin would qualify since it uses a blockchain and cryptography. And transactions must be validated by multiple different parties (validators).
Your objection seems to be related to something like openness, i.e. who is allowed to become a validator. In other words, within cryptocurrencies, there are two categories. They could be called, say, open and invite-only.
Libra is invite-only, which you don't think is a good setup. That's the real objection, not that it isn't distributed and not that it isn't a cryptocurrency.
True, but the significant difference is that banks are not allowed to print dollar bills without control(they do print bills effectively but with controls). Similarly they aren’t allowed to just start putting credits on people’s credit cards while keeping a separate database to track real vs their issues credits.
But if that separate database is a distributed blockchain based database suddenly they are allowed to do this...
It is kind of decentralized in the sense that no single company can manipulate the ledger but it's definitely not decentralized in terms of wealth ownership.
I would never ever ever ever trust PayPal, Spotify, Mastercard and the likes to manage my money.
It simply sounds like lots and lots and lots of happy little "accidents" and "bugs" waiting to happen for political opponents as they lose their livelihoods. The people who came up with the whole "Manifest Observable Behavior" and random "Suspended for Breach of Community Standards" violations have no place around anyone's money.
It's not even related to protecting a specific political ideology, we can see daily how these companies treat users regardless of any specific belief or opinion on politics. I would rather not get / see anyone deplatformed from owning money should something like this become big.
Won't take long for people to realize, unlike other "new" utilities like social media people, generally, have a reasonable grasp of the value of money and the risk of it, mostly because they have experienced it. relatively, very few people experience the wrong end of the technocratic-sanctions stick.
Isn't Facebook PR generally oriented towards placating the more SJW themes? Before the Cambridge Analytica stuff came to light, they were the establishment left's darling.
Manifest observable behavior is just an evidence-based way to determine breach of policy[0]. It's literally the most rational way to go about enforcing policy.
Insofar as suspensions seem "random" because they're done by fast and loose algorithms (which are the only enforcement mechanism that scales), I agree though: that shit sucks, and it affects many sides. Many sides.
When Zuckerberg was in front of Congress, he was repeatedly scolded by Congresspeople for not doing enough to remove bad stuff. He responded by saying that there's too much bad stuff for humans to keep track of, and that Facebook is working really hard on AI capable of handling it. Yay.
PayPal keeps suspending accounts on a whim, also. Even before the politics vs Internet debate became a part of the zeitgeist, people pretty much daily woke up to find their accounts locked and their account balance lost forever. Stuff like that worries me because the political stu7is a new fad and might eventually pass but most of these companies play really fast and loose with their users lives.
I feel like the biggest losers here are open consensus-based cryptocurrencies like [Stellar](https://stellar.org) and [Ripple](https://ripple.com). Libra seems to have the same niche: a consensus-based blockchain protocol rather than proof of work. I fear that having the clout of a bunch of tech companies behind it will get consumer buy-in much faster than Stellar will (with IBM World Wire).
A stablecoin backed by a consortium of large companies is an interesting design choice; it's more intuitive for consumers, but seems like it opens itself up to arbitrage, taking advantage in price differences between the different currencies the crypto is pinned to. I much prefer Stellar's decentralized exchange, where tokens can be issued by any user and exchanges from one token type to another happen transparently via people advertising exchange rates.
As of today, Libra is not open either. You need $27MM and your name on the short-list of 27 validators. Lots of coins have come along and made lots of promises, they need to be judged based on what they actually are today.
> "On the first point, Marcus said that Facebook is enforcing a strict separation between users’ social data—their Facebook likes, photos, etc—and the financial data that will be available on Libra’s network. There will not, he insisted, be a readily available data trove connecting users’ transactional data to their Facebook profiles, and users’ funds themselves will be cryptographically secured. “We don’t want financial data and social data to be commingled,” he explained."
WhatsApp showed that eventually, the data is likely to be merged.
Was it the data that was merged with WhatsApp, or was it the infrastructure? AFAICT, FB can't connect what I said on whatsapp to what I say on Messenger because everything is e2e encrypted. They have metadata (would need it to route the messages, and for providing the service).
Don't brush off metadata as useless information. They know who you talk to when you send these WhatsApp messages. They know how often you talk to these people. They know when you talk to these people. From this information they are more able to glean who are the important people in your life, what kind of relationship you have,and can then weight these profiles better. Only talk to this person sporadically during normal business hours? Good chance this person is purely a work contact. Routinely send messages after work? Probably a friend. Send lots of large payload messages late at night to a certain someone? Naughty you ;)
Of course this is endemic to any third party you trust buffering and delivering these communications, this is not particular to Facebook. However, Facebook is explicitly using this information, while others explicitly say they don't.
Mainly, they said they would not connect your phone number to your FB account, but then the did.
Furthermore, metadata is super critical already. Don’t forget that WhatsApp has your location data as well (if you enable it, what most people probably do to share their location with friends occasionally).
Although I have no proof, knowing FB, I bet they extract meta data from all of your photos and send them back. I mean, why not? Maybe not all the time, or maybe not in every version, but given FB‘s track history of giving zero fucks and trying everything under the sun to gather more data, it wouldn’t surprise me (same is obviously true for Instagram).
I try to use WhatsApp less and less and I removed all permissions except contacts. If I want to send a photo, I use the Share capability of iOS and select from Photos to share with WhatsApp. The insane part is: this behavior is not doable in Android. You either grant photo access or you can’t send anything.
From access to your photo library – yes, I'd think so. I don't know if they extract meta data from the photo you're about to send via WhatsApp. But this is a different thing than accessing meta data of thousands of photos.
Kind of interested in what this means for a non Facebook user. As one of those I already feel sometimes marginalised when content is shared on their walled garden and I need my wife to look at the dates for my kids’ sporting events because they’re only published on Facebook. Now I’m going to be unable to carry out financial transactions, too.
Exactly why I would love to see this fail. I try to be a non-Facebook user, but everyone uses Messenger, and my local Craigslist has deteriorated because everyone sells on Facebook now, so I use it for certain things. Every once in a while, I find myself getting sucked into the "feed" view on my way to the Facebook Marketplace, especially since on mobile, every time I press "back" from a listing that I go into details on, it takes me back, not to the listings that I was looking at, but to the news feed. Facebook knows exactly what they are doing.
One of the best things I did was unfollow everything (i.e. friends, family, pages, celebrities, the kitchen sink, EVERYTHING) on Facebook. This explicit unfollowing took a few weeks and wasn't something done in a day.
Now, I have the advantage of using facebook for all the useful things I need such as "Login with Facebook" and Messenger without having the risk of ever succumbing to the "Feed"
Part of my experience here showed me how Facebook would automatically "make me follow" all my House/Senate representatives even if I never explicility followed their pages/profiles.
Ocasionally, I still have to unfollow these auto-followed pages when I log in. But for the most part, I've been feed-free for a 5-6 months now. It's great!
I did this a few years ago when I found myself at a party, looking through my feed, and it made me start questioning what the hell was wrong with me.
Eliminating the feed entirely was fantastic. Soon I stopped checking my notifications (if I'm not seeing things on the feed, I'm not reacting or commenting, and not getting feedback.) Thus the only people I cared to check in on were literally the people I cared about. As a result, I grew much closer with those individuals.
Then messenger slowly started being useless, as all previously mentioned good friends were already either on hangouts/discord and preferred those (Mileage will obviously vary on this one.) I can still keep it around for my weekly check to make sure no-one is desperately trying to get a hold of me. And if they do, I immediately direct them to my chat platform of choice.
Events is still pretty handy, unfortunately, but not something I need to check in on often at all.
Honestly, I don't miss it at all, and I haven't really lost any value. I'm about as social as I was when I stopped, and in fact I consider the friendships I've had in my post-social media era to be stronger than ever.
The only people I have followed right now is a friend currently trying to break out as a social media author presence, in which case following her actually matters, and a band that one of my childhood friends is in, who I'm supporting for the same reason. (Though I often give them engagement elsewhere when I can.)
News Feed Eradicator essentially does this (browser extension) - I've used it for years can't tell you how much time it has saved me from the FB timeline!
Worse. When and if you post something that facebook guidelines do not like, instead of getting a "we removed your post" message, you will get fined! And that fine, will be instantly covered and subtracted from your account's balance!
If you dig into the documentation they've released so far, you'll find that it explicitly addresses this (I also am in the "No Facebook-owned Services" camp, so I went digging for the answer.)
There are two subsidiary organizations: first, the Libra Association, which is the governance organization populated by the "validators", i.e. the corporate partners who ponied up the $10MM entry fee.
The second is Calibra, the engineering arm spun off of Facebook itself, which is developing all of the bits and pieces that make up this technology. This includes the endpoints, client software, node servers, and so on.
Neither of these subsidiaries requires a Facebook account to interact with (although it's unlikely any of us will interact with the former, realistically); this is explicitly stated in the FAQ on the Calibra page, where it states that you can interact with the payment ecosystem using the (forthcoming) wallet software directly.
With that being said, they will also be integrating it nicely with Messenger and WhatsApp; this is likely where the majority of users will interact with it, which provides a nice front-end (the screenshots look very similar to Apple Pay).
Thus, if you need a long, unwieldy, or hard-to-surface address to send assets with the Calibra wallet, or if FB users can't easily target a wallet address for payment, then you're still facing a usability barrier, if not a technical one. I'm not sure if there's much a difference between the two, honestly, beyond the semantic one.
Furthermore, there's absolutely no guarantees that this won't change over time - I could absolutely see FB bringing the pressure down on Calibra to play within the garden, so to speak. We'll have to wait and see what implementations actually appear, not just what they've announced on Day 1.
I wonder if this can go that far. It's one thing to offer a Facebook-scale version of arcade tokens, where you buy some and then distribute them within the arcade to use your choice of the arcade-owned services on offer. It's another to effectively declare your own currency and have separate businesses which only accept that (and/or can only be reasonably reached via Facebook). If the latter is not where this is going, and the coins are not good for speculation, then what is the point? And why wouldn't the various world governments have a huge problem with it?
Come on. You think Google, Amazon, Apple, Microsoft, the Chinese and whoever else are going to let Facebook alone have this cake. We are not even talking about what the Big Banks think yet.
This is just the first page of whats going to be a very interesting story.
>Now I’m going to be unable to carry out financial transactions, too.
Not so, their wallet requires no FB or Whatsapp account to use. It's open and so competitors can build wallets which also have no FB connection at all.
Your statement also assumes it will become some sort of "global currency", which it certainly won't. I mean, why would it?
I'm going to choose to view this in a positive light as it's a great indicator of where to not spend money. I find company values to be an increasingly important factor when choosing who to patronize.
Kind of interested in what this means for a non Apple user. As one of those I already feel sometimes marginalised when content is shared on their walled garden and I need my wife to look at the dates for my kids’ sporting events because they’re only published on Apple. Now I’m going to be unable to carry out financial transactions, too.
> "Libra’s mission is to enable a simple global currency and financial infrastructure that empowers billions of people."
They do this by issuing coins in exchange for fiat money, which is held by the reserve.
> "Interest on the reserve assets will be used to cover the costs of the system, ensure low transaction fees, pay dividends to investors who provided capital to jumpstart the ecosystem [...]. Users of Libra do not receive a return from the reserve."
Conceptually this is a bank, but with no interest returned to users, no financial oversight from governments, controlled by Silicon Valley's top companies.
If they could provide any history of being principled in their application of policy, it might be worth it; but as it stands, Facebook just sorta arbitrarily unpersons people on their platform, which gives me the impression that they'd be perfectly willing to debank them as well.
Yes, for unbanked people who, according to the Facebook FAQ, set up an account using a state-issued ID and jump through a bunch of other hoops that are the same you would need for a bank account.
It’s hard for a govt to stop bitcoin from being used for money laundering but when it’s a small number of mega corps validating transactions + the price stability and privacy features I’m wondering how exactly they will stop money launderers or terrorist financiers from using Libra to thwart traditional bank AML triggers?
This is not a bank. It's an asset and a payment network. Banks are organizations that borrow short to lend long. This is a stablecoin backed very closely 1:1 with fiat currency. There is no fractional reserve, and there is no lending.
You don't need either of those things to be a bank. Check out "narrow banking" for the history, theory, and current attempts at it.
From one survey:
"Prior to the early-twentieth century, US banks tended to be much narrower than they are today. Common modern banking practices, such as maturity transformation and explicit loan commitments, arose only after the creation of the Federal Reserve and the FDIC"
"No financial oversight" isn't quite true. it will absolutely be regulated by fincen, as is any MSB in the US. facebook will remain compliant with BSA/AML laws, since this currency/security will enter that domain
>Conceptually this is a bank, but with no interest returned to users, no financial oversight from governments,
controlled by Silicon Valley's top companies.
How so? I don't think they have access to your digital wallet, unlike a bank.
You convert your fiat currency into crypto currency. Once the exchange is done, you have no rights to the fiat currency. This is in no way similar to a bank. The bank can use your deposited money, whereas here the currency is always in your digital wallet, and only you can initiate a transaction in and out of it. Do you have any information that contradicts this? I've only skimmed the whitepaper.
>Facebook's tokens given users the right to exchange their tokens back for the backing assets.
Well, yeah, of course you can convert the tokens back, similar to how you can exchange between currencies, but it would also depend on the exchange rate. You would not necessarily get back the same amount you put in.
"It is important to highlight that this means one Libra will not always be able to convert into the same amount of a given local currency (i.e., Libra is not a “peg” to a single currency). Rather, as the value of the underlying assets moves, the value of one Libra in any local currency may fluctuate. "
Sure, you won't get back the same USD, but you will always get back the same amount of the underlying assets as you put it. This is the the same situation you would be in if you had a bank account denominated in euros.
Alternatively, you can look at this like an exchange traded fund. In both cases what you are buying are tokens which represent shares of other assets.
Facebook Token won't last. There is too much governmental interest in regulating/destroying it. Only a currency that works regardless of governments and regulations will survive. Something like Bitcoin, Ethereum, ect.
> Conceptually this is a bank, but with no interest returned to users, no financial oversight from governments, controlled by Silicon Valley's top companies.
I disagree that this is "conceptually" a bank. Facebook's business model isn't lending out the reserves. If it was, banking regulation would apply.
Also, in a modern bank, reserves are maybe 10%, and you get less than zero percent interest after inflation for that risk exposure.
We've all seen in the past on how well "financial oversight" worked. At this point, I think I'd honestly rather put my money with Facebook than many of those actual banks out there. Facebook is at least a profitable company in its own right.
> We've all seen in the past on how well "financial oversight" worked
It worked remarkably well - no consumer lost their deposits to a bank failure. The fact that banks lent out too much money had no impact on consumer deposits, thanks to oversight.
What if banks tend to lend out too much money because of the deposit insurance? This could have other, unintended consequences beyond the narrow scope of your comment.
It’s a nice theory, but unsupported by evidence. In the US since the FDIC was set up there have been far fewer bank failures than there were before then. In fact, having that oversight short-circuits the mechanism that makes bank runs happen, since getting your money back is no longer a function of your place in line.
> The fact that banks lent out too much money had no impact on consumer deposits, thanks to oversight.
I like how you're trying to make like the financial crash was no big deal because this 'oversight' worked in this narrow context.
I wonder if you'd claim that the banks lending out too much money didn't have absolutely catastrophic effects on the economy in general and by association, millions of people's livelihoods around the globe.
That sounds like an argument for more regulation, not less. If there were less regulation, all that stuff would have happened and depositors would have lost their money.
That had nothing to do with oversight and everything to do with the fact that the government can just print the money to save a bank - and it did so. That expectation itself caused reckless behavior of the banks - and it still does. People just don't fully grasp the consequences.
Also, you may say this "worked" in the US, but other countries didn't get quite so lucky playing that game.
The government doesn't print money to catch failing banks, at least not usually. For standard bank deposits, banks pay a fee to FDIC as a percentage of their assets just like any insurance policy.
Keep in mind, it's to the bank's advantage to remain solvent at all costs.
An insolvent bank will be liquidated and shareholders are left empty handed. Between the FDIC insurance and the liquidated assets is how these things are paid out.
>That expectation itself caused reckless behavior of the banks - and it still does. People just don't fully grasp the consequences.
What most people don't grasp is just how regulated the financial industry is.
Silicon Valley loves taking risks (and failing!), but when a bank does it it's unacceptable? This stuff happens in a capitalist economy. I mean, it's not like it was "the banks" in a vacuum. It was governments, mortgage brokers, builders, house-flippers, your neighbour, speculators...everyone benefited from the wealth effect of cheap money and rising home values. Until they didn't; then it became the banks' fault.
> Silicon Valley loves taking risks (and failing!), but when a bank does it it's unacceptable?
No, what's unacceptable is the government bailout "guarantee" you get from being "too big to fail". That's not "taking a risk", that's not "capitalism", that's gambling with someone else's money.
I will agree though that you can't blame the banks for an environment where they're effectively pushed to lend recklessly, that's the result of monetary policy.
That's probably because systematic bank failure to you is just a fairly tale and you don't understand the risk exposure you have at an actual bank. Open your history book!
To be clear, I wouldn't prefer to put my money with either. But if push comes to shove, would you prefer to have an account at a failed bank that holds 10% in reserves, or a private company that holds close to 100% of reserves, because it is not a bank?
Before you answer, please imagine for a second that you had a decent amount of money to retire on, not whatever FDIC and the already bankrupt state promises to reimburse you with.
This seems to be a false either-or because FB is probably not holding 100% reserves as actual paper cash in a giant Scrooge McDuck vault underneath their HQ. It's holding them at a bank, so that it can get the interest payments.
Thus, a user faces systemic banking system risks plus all firm/stablecoin-provider risks. That combined risk will almost certainly be strictly larger than the systemic banking system risk you'd face by just depositing funds in a bank account that you directly control.
I'm arguing the principle here, so for that purpose it might as well be a Scrooge McDuck vault.
Otherwise, you do have a point, a systematic bank failure would likely cause issues here as well. However, I highly doubt they'd be storing significant amounts of money as cash deposits in banks for the interest. There's better options, such as short-term treasury bonds.
Right - I believe the whitepaper says it'll be a mix of bank deposits in various currencies plus short-term government securities. Still my point stands: you can have lower systemic risk in a serious crisis by holding t-bills or whatever directly, rather than indirectly via FB or any other stablecoin provider. Plus you'll get the interest payments.
Storing serious amounts of money in any of these stablecoins for any real length of time is economically irrational because by exiting their walled garden, you can obtain a higher return in exchange for reduced risk. Withdrawing is even better than a risk-free reward; it's a risk-reducing reward.
Again, I'm not pitting this against all other options, I'm pitting this against bank deposits specifically and in principle.
My point is that bank deposits aren't as safe as people like to believe they are, at least beyond what is insured.
In a systemic crisis, chances are the government will just print whatever money needs to exist and bonds too will take a hit as a result. Plus, whatever happens in the US will impact the whole world. You can't realistically hedge against this with any currency/bond.
Is it because you trust the banks to keep your money safe?
Have a look at what happened in 2013 in Cyprus where they did a bail-in with their customer's money to "save" a bank that was too big to fail.
What happened in Cyprus in 2013? Private banks in a tax haven had rich people from other countries speculating on foreign markets (US housing, among others), hoping to gain above-market returns by doing so. That speculation went sour, resulting in insolvent banks. Those banks also had regular and smaller deposits from local residents, though. In order to protect those people, Cyprus decided to not absorb the speculative losses of those rich people. Instead, the private speculative losses stayed private, which is essentially what a haircut above €100k did.
Now imagine that same situation, but with Facebook at the helm. Either Facebook is in risk of insolvency, or private speculation with zuckbucks going south. Do you think Facebook will just go bancrupt in order to protect the zuckbuck owners? Or will they more probably recreate Cyprus, but way worse for the zuckbuck holders?
In other words, you agree with the parent on the facts. People lost their money, but presumably "it serves them right" cause they were rich and tried to dodge taxes - which is totally besides the point.
As for this new cryptocurrency, it's designed not to go insolvent, because it is more or less fully backed with actual currency/bonds. It has nothing to do with Facebook's financials.
By contrast, besides insurance for a modest amount, a bank deposit is only "backed" mostly by securities and loans years into the future, most of which can go bad in a crisis.
> In other words, you agree with the parent on the facts. People lost their money, but presumably "it serves them right" cause they were rich and tried to dodge taxes - which is totally besides the point.
People willfully risked risked their capital to target above-average returns. That didn't work out, which, when looked at from a distance, is perfectly fine - other market participants made better decisions, end of story. What isn't perfectly fine is people then trying to socialize their losses afterwards. You can't have a cake and eat it, too.
We're not arguing about the safety and viability of banks. Instead, we're directly comparing the safety and viability of banks vs Facebook. If you think that Facebook comes out on top in that comparison, either you really haven't been paying attention, or we fundamentally disagree about what safety and viability mean.
It will be interesting to see how the well known economy concept of "Optimum currency area" (see Robert Mundell, 1961) would apply in that case of a stable money anchored to a mixture of dollar/euro/yen. If it is like what happened to Euro in the face of a systemic crisis, that should be labor mobility and low wages for low-productivity countries.
Not disagreeing with the sentiment of your comment, but the article does say "Facebook, and its partners—two dozen so-called “validators” that will run the proprietary blockchain network—will govern a reserve of users’ funds, on which they will be able to accrue interest."
Certain activist groups put constant pressure on Facebook to “deplatform” and remove pages for both legitimate in it legitimate reasons.
Now we’re talking about giving Facebook control over the very means to do financial transactions. How long Before this also becomes weapononized, by Facebook, or by activists?
there is a reason why popular currency systems has been the purview of governments. We’re creating an awful lot of social repercussions by allowing corporations to own the basic financial fabric.
I predict if it happens, demand to cut off $BAD_PEOPLE from the service will start the next day the service is launched. And if it is technically possible, the demands will be complied with the next day after that, for some values of $BAD_PEOPLE. Nobody wants to be a platform for moving terrorist money, right? Or drug money? Or alt-right money? Or gun manufacturers money? Or pro-life money? Or wrong-presidential-candidate money? Or persons-whose-opinions-I-don't-like money?
I think you are a few centuries late there - government banks were the Johnny come lates. The weaponization has gone on for quite a while even if you ignore the "required by law" aspects. Also not basic yet - physical currency is the current "most basic".
The reason for government currency systems were because they backed taxes and had more stability than private entities. There is a long history of trickery from back when banknotes were literally issued by private banks.
What I really don't get is the regulatory aspect. They are creating a financial derivative asset/instrument. To be moved across the borders. In what freaking universe will the regulators not be all over it with endless KYC/ML rules?
They'll pay lip service to KYC etc, and then hope to do an end run around regulation by becoming ubiquitous before it can be properly regulated.
That's probably why they've chosen a blockchain (which is of negative value here technically) - to bamboozle regulators and avoid responsibility for managing it till it is too late to do anything about it.
There aren’t enough public details yet but I think the “blockchain” part is really just between all of the partners, not between the users. So when user A in the US sends to user B in Pakistan, the activity is really only between the two parties which converted the local currencies from the end users. That wouldn’t be particular different from user A sending a Western Union payment to user B in Pakistan.
Conceivably Facebook has all of this user history and is able to make a guess if someone is a real person. Probably they know a lot more than a bank would know. That could take care of some aspects of the KYC issues too.
Using the word cryptocurrency is fairly misleading, because as far as I can tell, it isn’t really one. Blockchain, maybe, but I don’t even know what that word means.
Thats right, its not distributed like bitcoin but all of the nodes are "trusted" by each other and the block chain itself would only be accessible for users and you would not be able to add a node without being a massive corporation which invests and joins their consortium.
No idea how new companies are supposed to rise with these players securing their monopoly like this.
Have you ever bought/sold stocks or futures? The amount of paperwork you have to provide and to sign is not trivial. And then you're still quite limited in what you can do.
I kinda doubt cryptocurrency/blockchain tech will be anything but an implementation detail in this project.
Assuming this catches on, the idea that Facebook and it's other partners would let this get out of their control seems very unlikely -- and if it did get out of their control, I think they'd simply abandon, disavow, and/or fork it.
The appeal of this to users is going to be integration with the social networks these companies run, so they are holding effective veto power since they can change its relevance to low at any time.
Meanwhile, the partners will be tracking every transaction and monetizing that information. Apparently, you can use a pseudonym when using this currency, but I'm sure they will connect any pseudonyms you use to your profile the second you first use them. Wonderful.
I'm biased as I'm working on this project. But I'm super happy it's finally out there :) There's a lot of really cool cryptography and tech on this project and there's still a lot for people to discover!
I have taken a cursory look at the github repository and the whitepapers. It looks like a very high quality project and a major contribution to the space. Facebook as a commercial company did not have to release this as open source but it did. In short, excellent work.
One of these is a guideline violation (https://news.ycombinator.com/item?id=20219023); two is already harassment. People have a right to post here regardless of who they work for. If other users hound them away, will that make HN more or less interesting? Obviously less.
Please don't do this again so we don't have to ban you!
There's also very cool cryptography and tech on other projects, that are actually decentralized. E.g. Algorand, where I work.
Facebook's protocol is permissioned - not so much theoretical novelty there over PBFT (or even non-Byzantine Paxos... companies are under contract anyways, why model them as Byzantine actors?) No way it will scale to 1000+ nodes, in a permissionless gossip network where you cannot directly unicast to the leader.
"As a result, one of the association's directives will be to work with the community to research and implement this transition, which will begin within five years of the public launch of the Libra Blockchain and ecosystem."
I challenge the Libra team to put their money where their PR is at. Decentralization isn't impossible. Why should it take five years? This reads more like an empty, vague promise to appease the internet.
"The challenge is that as of today we do not believe that there is a proven solution that can deliver the scale, stability, and security needed to support billions of people and transactions across the globe through a permissionless network."
Many people in the cryptographic and distributed systems community, including me, would disagree.
Seems like it can, because the article says that one’s Facebook account won’t be linked to the wallet account and that the wallet account can remain anonymous or pseudo-anonymous to others. But I’m sure Facebook will be able to link these somehow, and so will all the partners. This will be a bigger Cambridge Analytica in the future.
To deploy a smart contract in production, will I need to apply to be on the appropriate whitelist? If not, how do you prevent people from creating smart contracts that permit non-KYC wallets?
There's a lot of interesting physics in building thermonuclear weapons. Doesn't mean you should do it.
Your talents could be used to help the world. Instead, they are being used to enclose common spaces and pull apart the fabric of society. Get a better job?
I appreciate your point of view, FWIW I believe that I'm doing net positive work for the world.
If you don't believe such projects should exist, you can at least agree that such project will inevitably happen and that it is a good thing that they have people like me onboard to influence them in the right direction.
I will write more about the things I work on and why I think these are good things on my blog www.cryptologie.net
It could be but it is not and won't be. Net positive would require actual decentralization and no PoS (rich get richer). There are other ways to solve consensus and I don't mean PoW. Net positive would be to not require AML or KYC. Net positive would be no transaction fees. The foundation members will still profit on the float on fiat. Also, this project already exists. Isn't this the whole reason Ripple was created? Why not adopt Ripple as the crypto? Oh, because it is all about control.
How is FB printing fake digital dollars any better than the US government printing fake digital dollars? Except this way, everyone gets to rent seek and take from the people they purport to want to help. Rent seeking less than Western Union doesn't count. How about a project that is actually about helping the unbanked and underrepresented without exploiting them? I'll believe that anyone on this project actually thinks it is net positive for the world when they donate their salary and RSU to a non-profit that is actually helping people.
> you can at least agree that such project will inevitably happen and that it is a good thing that they have people like me onboard to influence them in the right direction.
Sorry, what? What gives a random person a reason to think you're someone who will "influence them in the right direction"?
Okay, but he's also clearly absorbed Zuckerberg's savior complex. Politeness may help a conversation but it doesn't qualify him to make world-shaking ethical decisions.
A bit of cyberstalking suggests that the commenter here has a background in crypto stuff, so i suspect that the belief predates the being paid a lot of money.
A lot of people genuinely believe that crypto bobbins is inherently positive, and might well believe that crypto bobbins with a big serious alliance backing it is more likely to succeed, and so even more positive.
And, if projects like this are going to happen, i would certianly rather that they had optimistic true believers involved!
The optimistic true believers are being exploited by dishonest business folks above them in the org chart.
They have flexible morals, they think honesty===naivety and they will tell the optimistic believer whatever he/she needs to hear in order to do what they want.
This is just another step towards corporate dystopia. How big of a step remains to be seen.
It's not that these projects shouldn't exist, it is that THIS project shouldn't exist. Facebook and co have already proved they can damage society in devastating ways - continuing on this line of thought with currency and expecting it to go any other way is naive thinking. I say this as someone who would happily work at FB (just not on this).
Ignore all the haters, you're building something cool that has the power to transform peoples lives. The fact that you're even thinking about your impact on the world puts you above what most people would do. Keep up the good work.
I largely agree with the OP. I think these technologies can only be viewed in an optimistic way through a techno-libertarian lens; a perspective I don't think has any practical grounding in reality at best and at worst actively ignores why current systems exist (throwing the baby out with the bath water so to speak). And with that lens, I think it's foolish it believe that an engineer will actually be able to steer this machine once it's out in the wild. Systems without power structures still have power structures, they just not may be immediately obvious.
But I do appreciate your constructive attitude towards his comments and I'll be checking your blog a good bit to inform myself as best as I can going forward :). I would ask that you have some kind of "apologetic"/philosophical tag on the type of posts that people like me can filter for so we can read up on that kind of perspective.
I think these systems deserve more social/civic conversation and less technical ones. The tech is cool, but these technologies have the potential to have severe civic ramifications. These technologies are largely out pacing our national and global conversations around how we should use them, their pro's and con's, and the systems they're designed to replace/circumvent... and it's not a good thing.
> they have people like me onboard to influence them in the right direction.
what influence do you have? Can you tell Zuck not to steal my personal info?
Also, how much of your salary is getting paid out in Zuck Bucks? Or are you going to wait until some third world citizens with no other options test out the utility of this before you dip your toe in?
> If you don't believe such projects should exist, you can at least agree that such project will inevitably happen and that it is a good thing that they have people like me onboard to influence them in the right direction.
Unless you sabotaged the project, no. It would be a better thing if people like you refused to work for Facebook so it would have to hire someone less competent or at least someone more expensive,
You don’t steer anything, you write code. Apparently you are on the “cryptography team,” so are you discussing the social implications of libra with mark Zuckerberg before you implement this and that? Have you prompted any alteration to facebooks plans ever? You have rubbed elbows with all the executives at visa and Facebook and made sure that they are good fellows? Or are you just very happy with that nice fat paycheck and also the (declining) social status that you are afforded by name dropping Facebook?
I can't believe the amount of "you are a horrible human being for working at Facebook" comments I keep seeing as soon as someone says they are working there.
HN is great because you normally get comments straight from the source, but I'm worried we will inevitably shame Facebook employees into not posting here at all.
Saying "haters" makes it look like the people criticizing Facebook don't have serious concerns about the influence it has on the world. It's not being a hater of Vim, or Python. This is far bigger.
If we could indeed shame people into not doing something (focusing on actions and not people), I’d rather spend my energy on shaming people to quit Facebook en masse and shut it down. Seeing that this sounds ridiculous and unlikely to happen, I doubt any other intent of shaming would work either.
When Chamath was asked about working at Facebook @Stanford.
What soul searching are you doing right now on that?
"I feel tremendous guilt. I think we all knew in the back of our minds, even though we feigned this whole line of there probably aren't any really bad unintended consequences. I think in the back deep, deep recesses of our minds we kind of knew something bad could happen. But I think the way we defined it was not like this.
It literally is a point now where I think we have created tools that are ripping apart the social fabric of how society works. That is truly where we are. And I would encourage all of you as the future leaders of the world to really internalize how important this is. If you feed the beast, that beast will destroy you.If you push back on it, we have a chance to control it and rein it in. And it is a point in time where people need to hard brake"
I'd work on nukes before I'd work at Facebook. Nuclear weapons have arguably prevented WWIII, at least so far. Conversely, if WWIII ever does come, I wouldn't be surprised if Facebook has something to do with causing it.
Tumblr, Reddit and Twitter are community sites. They are driven by their users, with little or no overarching strategy beyond being next-generation BBS services that occasionally sell a few ads to keep the lights on.
Facebook is driven internally, from the top down, to accomplish murky, exploitative goals that are in the interests of nobody except the company and its shareholders.
That's why Facebook is worth hundreds of billions of dollars while Reddit can barely pay for their own bandwidth and Tumblr gets passed around between acquirers like it was a radioactive waste dump that runs a porn business on the side.
I don't know WTF Twitter is worth, if anything, but some people seem to think it's got a viable business model, so meh, whatever. They aren't Facebook.
I doubt it. We already see that whenever somebody posts something stupid and controversial and is a public figure, they will claim they have been hacked and somebody else wrote the tweet.
Here's something for you to discover - cryptocoins have single-handedly wiped out and exceeded all progress we gained in Photovoltaic technology. Thanks for helping destroy the planet and undoing what we've been working so hard to achieve, all in the name of some pet project.
If it works in any way like a permissionless distributed database, you will find it running into energy problems very quickly with every node addition. this is a known issue since the 70s when we first tried this kind of technology.
It's still a permissionless distributed database and will suffer those same issues regardless. This is known since the 70s, when we first developed and tested this type of technology. To boot, the majority of power isn't in the mining of POW, but the supporting hardware to maintain the network.
A couple years ago in London, I seriously confused a young retail clerk by presenting her with Scottish banknotes presumably left over from an earlier trip to Edinburgh. She had to go get her supervisor to assure her that this was indeed real money.
OK, it's more "real" than an IOU I hand you, because I know that in order to issue their IOU they actually had to deposit an equivalent amount of cash with the Bank of England, but it's not legal tender -- while in practice pretty much anyone should be comfortable using it as a medium of exchange, the only _guaranteed_ use of a Scottish note is to exchange it with the issuer for a Bank of England note (or, in Scotland, coins), which you can then proceed to use to pay your taxes or other bills because they _are_ legal tender (value limits apply to specific denominations south of the border, you need to use pound coins north of the border).
But yes, in practice, real money. Just don't try telling anyone they've _got_ to accept it, because there's no such obligation.
No retailer has to accept anything. I can set up a shop in London that only accepts Scottish banknotes and not English ones. Or that only accepts Mexican Pesos or Bitcoin for that matter.
From the Royal Mint's website:
> Legal tender has a very narrow and technical meaning in the settlement of debts. [...] It does not mean that any ordinary transaction has to take place in legal tender or only within the amount denominated by the legislation. Both parties are free to agree to accept any form of payment whether legal tender or otherwise according to their wishes.
I know -- that's what I was trying to convey when I said "pay your taxes or other bills", because those are (pretty much) the only times when you can require someone to accept money from you, and consequently the only times the concept of "legal tender" could even possibly come into play. Even then, most creditors are happy to take payment in any convenient form :).
Most of the time most of the people are happy to accept anything that's a properly denominated bank note. But while I'll happily try to spend Scottish notes down South, there's no requirement on any shops to accept them.
Edinburgh Council have recently done something interesting though: they've stopped (in most locations) accepting cash for payment of bills. Now I'm wondering if I should cancel my direct debit and take them a stack of pound coins :).
I have had to tell shopkeepers on a few occaisions that if I was going to be forging money, it probably wouldn't be notes that almost nobody in England actually recognises.
This reads a lot like the founding of the Federal Reserve:
> [The Federal Reserve] had several key components, including a central bank with a Washington-based headquarters and fifteen branches located throughout the U.S. in geographically strategic locations, and a uniform elastic currency based on gold and commercial paper.
1. Geographically dispersed
2. Value elastic but secured by assets
3. Controlled by a small group of people
4. Goal of stable long term prices
Key differences between this and the US federal reserve seem to be:
1. Libra involves no state actors
2. Libra is pay-to-play (vs representative democracy for directors of the US Fed)
3. Libra has no employment objective
4. Libra has no interest objective (outside of maintaining investment in its reserve assets)
5. Libra is "fully backed by real assets"
While personal socio-political beliefs make #1 a huge concern for me, and #2 has been widely critiqued already, #3 - the US Fed's employment objective - is an interesting difference to me.
I have not read all of the Libra material yet, but so far this belief is the only reference I've found to Libra's relationship to work:
> We believe that people have an inherent right to control the fruit of their legal labor.
Seems simple enough on the face of it. An extremist could perhaps liken it to "taxes are theft," but I don't see evidence of that in one vague sentence.
I think instead this outlines a key philosophical difference between the US Fed and the Facebook Fed:
The US Fed has an objective of (indirectly through labor) distributing capital.
The Facebook Fed has an objective of easing the flow of capital.
The Facebook Fed therefore is neutral, amoral, technocratic in its approach: make what you have easier to use.
Whereas the US fed (and I suspect other federal reserves) have a non-fiscal social component builtin: increase capital distribution through availability of labor.
I prefer the Facebook Reserve as it reflects its largely private corporate roots.
Update: Considering Zuckerberg holds a majority of the voting shares in Facebook, I don't think calling it The Zuckerberg Reserve and Zuckbucks is at all unfair.
I remember Disney Dollars as a kid that were pegged to US 1:1 and could be used at any Disney-owned property. They were basically gift cards with no expiration date. They ended up not being cost efficient, so Disney discontinued them in 2016.
So, if the Libra ends up costing more to run than in earns (hardware, software, labor, and the cost of pegging it to a basket of currencies), then they won’t continue funding it. Since it’s not going to be a speculative currency like bitcoin, how will they pay or it? Will they take a transaction fee?
I also keep on reading that it will help the unbanked in the developing world facilitate payments. I guess it can be risky and hard to carry a lot of cash around for large purchases in parts of the world. But for this to work do you need better identity management? Or if you hold the cell phone, you hold the wallet? If it’s target is micro payments, then there are already many expanding options.
So that leave cross-border transfers, which is a huge thread to the US’s economic dominance. It is much harder to embark Iran if you don’t control the currency they sell their own for.
I'm very concerned this will give Facebook even greater control. I think it is likely Facebook will push Libra towards people in countries where their currency is volatile, such that it becomes the standard. I do see the positives, that they can now rely on a currency to be stable. But what do you think, could this be an issue and if so, do you think this can be overall beneficial for people from these places?
What I haven't heard is how they plan to help US Citizens properly report taxes on any gain or loss when spending Libra.
Either the IRS will need to look the other way or this will become a huge hurdle for mass adoption in the US.
My hope is this helps get the IRS moving faster at making some laws based around using cryptocurrency to buy & sell goods. I do get that this isn't an easy decision to make. At some point someone will have to make it though. You cannot expect people to use a different currency on a daily basis & report any gain or loss on the currency at the time of transaction. It would also be an accounting nightmare to decide which coins you spent at the time of purchase.
My guess is they're waiting for cryptocurrency to become popular enough that it forces their hand & they have to create some type of leniency regarding gains & losses on each transaction.
While I agree with most commenters here that are skeptical about a surveillance-based currency, I'm very positive about the idea of having mainstream apps such as Whatsapp and Messenger introduce the concept of paying with your phone without needing to link your accounts with any bank account or debit/credit card, because the money is in theory being held by your device (under the hood, just holding a private key of a "blockchain" account that has a non-decentralized-stablecoin balance, I know).
This will enable people to start thinking of money in a more pseudo-P2P way, get comfortable with it, and in turn allow them to start understanding better what cryptocurrencies really are (which Libra is not). What cryptocurrency and Libra share is, at least, the concept of ownership via public/private key cryptography, as opposed to identity-based systems such as paypal/banks/credit/debit. This has some UX-side-effects that people will start to learn, such as the push vs pull system (e.g. it's not anymore the merchant who scans your QR code, but the other way around, the customer scans the merchant's payment-info).
What's the point of public/private keys if the whole thing can be reversed, recovered and changed by FB with no transparency for the outside world?
The private key becomes just a better password, like a SSH key based authentication. Actually I'm pretty sure the wallet will not even require any key. You will be able to sign in with facebook.
I see no P2P payments here as everything is really validated by FB and all the data is kept under fb control. The client sees just an old good REST/RPC API with no public access to the backend. The client wallets will be no better/powerful than a paypal client app/wallet. There will be no blockchain to download...as matter of fact you won't even be able to tell if FB really uses blockchain behind the curtains.
Not to mention that you need to "signup" for an account and verify it with facebook before you can receive any "coin". In reality there is no coin. Is no different than paypal really.
Where are the keys stored? How are the accounts recovered when they loose the keys? And you really believe facebook will ask users to manage private keys instead to authenticate with their facebook account?
> you really believe facebook will ask users to manage private keys instead to authenticate with their facebook account?
Yeah, I know that your private key will probably be your Facebook username&password tuple, but this is still better than credit cards because the merchant will not need to know this tuple to be paid.
> The client sees just an old good REST/RPC API with no public access to the backend. The client wallets will be no better/powerful than a paypal client app/wallet. There will be no blockchain to download...as matter of fact you won't even be able to tell if FB really uses blockchain behind the curtains.
What is your basis for this? It implies that the fairly detailed whitepapers describing the blockchain are an elaborate hoax, which seems unlikely.
You need permission to access this blockchain so unless you are one of the facebook/libra association members you don't know what database is used. In practical terms it doesn't really matter because you can't access it anyway. It's an implementation detail.
It can also have the other effect in that it can show cryptography based solutions in a bad light to the public as yet another form of survailance and cause people to be less trusting even when authentic cryptography based money systems exist.
If people worried much about surveillance today, cryptocurrency would already be mainstream. If what FB brings is pretty much the same as the current banking solutions but with some technical advantages on top of it, I doubt they are going to facepalm about it because the better alternative (true cryptocurrencies) is unknown to them.
It’s going to be interesting.
“Unlike previous stablecoins, Libra will not be issued by a central party. Instead, Facebook has enlisted 27 fellow Silicon Valley titans—among them PayPal, Visa, Spotify, Mastercard, Uber, and eBay—to operate as preliminary “validator nodes” who will each share a transparent copy of a vast ledger of transactions reflecting all the activity on the network.”
That sounds amazingly dystopian. I mean, that’s literally a money built on an oligarchy. By design.
I understand people trust these services ( to the extent they keep using them), but the playing field should be flatter in crypto. Unlike the article’s suggestions that Ripple is toast, I can imagine it’s putting such coins in a position to be very competitive, more open, and not run by the companies above.
> That sounds amazingly dystopian. I mean, that’s literally a money built on an oligarchy. By design.
IMO, it's a small step towards a better direction. The "validator" consensus (oligarchy) is a much more transparent/inclusive solution compared to the closed financial ecosystems of Wechat/Alipay/Paytm/Grab. If Libra is an oligarchy, closed financial systems are dictatorships
> If Libra is an oligarchy, closed financial systems are dictatorships
Given the global financial system is not controlled by one individual, it isn't a Dictatorship (power of one) but is more like a form of Oligarchy (power of the few). As for which form of Oligarchy each are, I'd argue that the existing financial system is more of a Technocracy (i.e. you need to know what you are doing to be one of the few) whereas Libra is a Plutocracy (you need to be wealthy to be one of the few) or even possibly a Kleptocracy depending on how they actually run it and what their true motives are.
> whereas Libra is a Plutocracy (you need to be wealthy to be one of the few)
Agreed. The same way governments require a large amount of capital to be a bank to ensure depositors of liquidity. You need to have capital to back the Libra tokens, otherwise it can get pretty scary, just like USD Tether shenanigans.
> or even possibly a Kleptocracy depending on how they actually run it and what their true motives are.
Banks, Central Banks, Governments, etc. whatever. Their motives are exactly "secret" when it comes to managing currencies. They all gear towards enriching their currency and making it more valuable. So yeah for this "oligarchy", I'd bet it's the same, Kleptocracy it is.
I think this may be conflating individuals with corporate entities. Certainly from a corporate entity perspective both have significant capital requirements. But from an individual perspective, to be an influential figure at a central bank you will have had to have undergone years of relevant training, passed regulatory exams, and typically have proved yourself in a related position over a long period of time, hence considering it more of Technocracy. However, to be an influential figure in something like Libra, you just need a shed load of cash, and can have precisely zero understanding of modern finance, hence my seeing it more of a Plutocracy, or even Kleptocracy. Broadening this out beyond Libra, if you want to be a leading figure in one of the more cult-like cryptocurrencies, you also need a lot of blind faith and be good at rousing your followers, so there is an element of Theocracy in there too. I know in the early days anyone with a bit of technical knowledge could set one up without having access to large amounts of capital, and there was talk of this "democratising money", but those days are long gone.
The main central banks usually have a monetary policy clearly defined by their governments. Typically this will include things like "target of keeping inflation at 2%"[0]. This is not exactly secret. It can however be very difficult for people without the necessary backgrounds to fully understand. But I guess we are living in an era of short attention spans and distrust of experts, which provides a fertile breeding ground for cryptocurrency conspiracy theorists to exploit for personal profit.
I would have loved to see any company besides the players mentioned here. For me, this coin almost disqualified already. Their association maybe shouldn't be judged but I nevertheless remain very skeptical.
I agree about classical closed financial services like visa and mastercard being financial dictatorships. That is why their involvement doesn't really build trust.
> That sounds amazingly dystopian. I mean, that’s literally a money built on an oligarchy. By design.
Then W3C and the USB-IF are also "oligarchies" and dystopian?
A bunch of institutions working together is presumably a lot more trustworthy and less prone to abuse by anyone individually than a single institution, which maybe you would call a "monarchy"?
Really not sure what's dystopian about this at all. Do you think MasterCard and Visa networks are dystopian too, or that national currencies themselves are dystopian?
> Do you think MasterCard and Visa networks are dystopian too, or that national currencies themselves are dystopian?
There is a major difference between settlement being operated by a democratic government, which will therefore handle the payments market with the public’s interest in mind…
…and it being operated by a for-profit.
Monetary policy (eg. target inflation rates) can be driven by investors, at the expense of social stability.
> Then W3C and the USB-IF are also "oligarchies" and dystopian?
Hm, I don't know, is the USB-IF habitually shaping political discourse of billions of people by either outright censoring or "demonetizing" [0] content creators with slightly different views?
[0] Of which this shitcoin is the logical strategy to cut off alternative income sources
It's hilarious that they say they want to setup a payment network that omits rent-seeking middlemen.... and proceed to immediately recruit PayPal, Visa, and Mastercard, which are the biggest rent-seeking middlemen that exist. Seriously, those 3 companies alone have more control over the US economy than the US Federal Reserve does. I've just been waiting for the day when the Federal Reserve says 'we need more liquidity in the market' and prints more money, and the 'payment processor' mafia respond with 'we disagree' and jack up their per-transaction fees.
I only really have 1 question about this payment system they're setting up. Will transaction fees be flat rate, or will they be percentage-based? I have never understood why society tolerates percent-based charges on payment processing. It does not cost more in any way to transfer a larger number over a wire. If the costs to provide the service don't scale, then the price to use it shouldn't either. I find it hard to believe that Visa and Mastercard would sign on unless they got to maintain their ability to levy taxes on the majority of the economy.... but there's a chance they might. They've been very scared of WePay and AliPay in the East. The idea of that kind of payment system terrifies them in their bones. This cryptocurrency might be seen for them as last-ditch insurance from getting cut out of the picture entirely. Or... they'll just drive things such that they can maintain the same profit level while acting as an oligarchical 'reseller'.
I'm just wondering at what point does the whole 'only the federal reserve is legally permitted to mint currency' thing kick in. With Bitcoin you can make an argument that it's too different... but with this, they're literally setting up a reserve banking system but putting gigacorps in the place of Congress in terms of deciding fiscal policy.
Exactly. What this does is create a wide open space for a "anti-establishment" crypto payments system. But one that people actually understand and trust. Fiat will likely be UOA for stage one of the transition to crypto. But as more people get educated we'll move to fully Open payments. Many will use Libra. But many will use other services. It's not binary. Multiple winners will emerge. Brand identity will be huge here. Think Patagonia v. Walmart v. Nike. How you pay for things will become part of how you present yourself to the world. It's about to get very interesting.
This is dumb branding that masquerades control with false decentralization. The biggest opportunity it has is to become a fad amongst teens for a month, or a leech on the poor who don’t have banks. It’s going to fall on its face.
No. FB is the establishment. Now that they've "opened" the crypto door a little wider, it creates the opportunity to build crypto payments that revolt against FB. Solution will likely involve privacy, responsibility, inclusiveness and charity.
Yup, agree. A low-fee payments app with crypto rewards would be interesting. But just like how Patagonia serves certain consumers I think different payments apps will appeal to different people who have different priorities and goals when it comes to their money. It opens up the landscape to massive competition in designer currencies and payments apps. I think it will come down to trust, security and brand identity
if governments weren't already on Facebook's back this will certainly get them there. Governments, read : politicians, already are incensed at Facebook and similar because they cannot control the message. Now Facebook wants to give people security in their funds?
Yes but could be a dystopian positive for the people...
How long until someone uses this against the “oligarch“ validators?
E.g.: an AdBlock browser extension is on unless they send some microfunds to your account / transfer Libra funds to you.
If you’re not familiar with display ads it’s a literal bidding war per space per user by the advertiser. Platforms don’t care they just get a cut.
Now, I could see this: turn it around and have this “central authority” by having them bidding for you to turn on your ads based on their data’s understanding of likeliness to click.
>That sounds amazingly dystopian. I mean, that’s literally a money built on an oligarchy. By design.
You can already kind of do that with other crypto currencies. For e.g. > 70% of bitcoin mining happens inside China, and the currency is susceptible to a 51% attack (in theory anyway). This site calculates the cost of executing such an attack.
You're right, the fact that they're in China might be irrelevant. I should have mentioned that a very large percentage of mining happens on a handful of pools.
> saying that 70+% of mining happens in China doesn't support the statement
I think the implication is that since China does not have meaningful rule of law, that 70% of mining could in practice controlled by one entity: the Chinese state.
> That sounds amazingly dystopian. I mean, that’s literally a money built on an oligarchy. By design.
What's actually far more dystopian is the power that Visa, Mastercard and Paypal already have. It's not getting worse with this new thing, it's getting better.
Nobody has to use Libra, but getting by without access to Visa/Mastercard/Paypal is a real problem for businesses.
I'm all for equalling the playing field. But Libra doesn't expand the choices on the menu: Would I rather eat curry that tastes like shit, or eat shit that tastes like curry? Sorry for my lack of enthusiasm.
As someone who is currently invested in XRP, I would appreciate if you could elaborate on this flawed design instead of just posting a vague comment. I've done my research and thought the design was genius so I'm curious why you wouldn't like it.
Large premine, excessive centralization, supply of XRP far outpaces demand for consumptive use. The most interesting use cases only need small amounts of XRP, so it's unclear to what extent XRP value will remain correlated to Ripple Network usage growth.
Ripple I think would be more appropriately called a "centrally-managed cryptocurrency" rather than "decentralized". This is not to say it's doomed, but rather just that many XRP proponents misunderstand the technology and claim it shares technical properties with Bitcoin which it actually lacks. A known team controlling any cryptocurrency to this extent puts the entire currency at risk of rubber-hose and insider attacks.
> supply of XRP far outpaces demand for consumptive use.
This is a laughably meaningless statement in the context of a cryptocurrency. For which currency could someone possibly say that the supply does not outpace demand? What would that even mean? The precise amounts of supply or demand are irrelevant since the market will naturally find an equilibrium at wherever the current market price is.
What's laughable is your inability to understand. Outpace means go "faster". It means that The level of supply rises up faster than demand so that you will observe a price change. If demand and supply rose at an equal rate, you will observe no price change.
I hope this educated your mind. The education system in many parts of this country has huge problems and I'm glad that uneducated people from deficient areas that lack basic math programs for people with special needs come to Hacker news too learn more. I applaud you for taking the initiative to learn!
Other than that, what I really didn't like about your response is your insulting tone. The parent poster did nothing to deserve such a response. "laughably meaningless statement" is a vile and disgusting statement in itself. There are other ways to critique someone's statement. The way you did it is highly immature.
That's more decentralized than Bitcoin is - there you have 6 pools in control. Global financial systems are expensive and high-reward (not to mention technically challenging since there is not a single proven cryptocurrency that could handle Visa's current TPS - AFAIK). Decentralization makes very little economic sense (at least all the models I've heard so far).
True believers forget that normal people have zero interest in spending energy thinking about their financial system. Just give me a card backed by a company whose name I've heard of and who I can sue if I have to and then let me focus on my life.
A mining pool is a group of people coming together to share resources and share rewards. Just like a public corporation. And just like a public corporation, decision making/power is concentrated. Who controls the pay-in/pay-out system? Who decides who can join the pool? Who sets prices? Who gets the pool fees?
Many mining pools have models extremely similar to Uber's business model. Others (including one of the major players) are completely private.
Pools are very fluid, large numbers of miners move from one to another to avoid centralization. And it's not like they can decide one day that transactions from address X are banned. That doesn't happen, there's not even a mechanism. And if some pool were to implement it, they would lose most miners very quickly.
Corporate censorship, on the other hand, is abundant and is widely accepted. Lots of left-leaning people even proudly support it these days (for obvious reasons).
So no, pools are not like corporations, and generally crypto currencies have attracted more libertarian crowds.
Transaction acceleration exists and was built by the largest pools in cooperation with 'several leading Bitcoin pools'. This is literally a mechanism to tell a mining pool what transactions to focus on (and therefore which transactions are low priority^). And yet BTC.com is still the largest pool and Antpool the second largest. I mention both because they are both operated by the Bitmain company (33% of all Bitcoin compute is in those two pools), which also sells the ASIC.
Bitcoin is decentralized in theory alone. Fundamentally Bitcoin has structural flaws due to its design that create a self-reinforcing cycle of centralization. The corporation with the deepest pockets can survive the sparse rewards. They can reinvest in hardware, reducing the value of everyone's hardware. This runs people out of business (or forces them to join the largest company). Once they have enough market share they can set transaction prices as they like.
Transaction prices have grown 20x in the last 3 years. Even more than that considering you need to pay for accelerated transactions to have a good chance of the payment going through within an hour (a requirement for most real currency use-cases).
I'd be happy if you could explain how this is wrong, but in years of asking this to crypto enthusiasts, I still haven't found a convincing argument of how cryptocurrencies can truly be decentralized while serving real-world use-cases.
^Corporations don't generally censor by banning - that would be stupid because they'd lose the lawsuit. They prioritize some things and allow unprioritized things to be buried (ask Yelp).
"That sounds amazingly dystopian. I mean, that’s literally a money built on an oligarchy. By design."
To be fair, the Fed is kind of that.
It's a cabal of bankers who decided that the USA would be better of if they did the central banking.
In practice, it's not too-too far off how other central banks works, but technically it is a private entity, owned by the banks.
FB's new coin doesn't really have any real use other than basically dropping all of the ugly limitations of the regular financial system.
Though there are a lot of regulations there 'for our safety' - in reality, the flow of consumer money is just a huge pile of tangled cobwebs of stupidity.
This is will be a really great opportunity to do '21st century currency'. If it works, there's going to be a whole new way of doing money. The banks, in a way, should be afraid.
That said, there are huge privacy concerns as well which might very well kill the ostensible improvements to be had just by doing things in a new, clean, way.
Given the absolutely horrible record of many of the companies involved in this in regards to not abusing our private information, Facebook using phone numbers given for 2FA is but one example, why should we trust this?
I am sure that if they leak or misuse our private information that the TOS will protect them from having to make us whole again...
I'm surprised to see Coinbase as a founding member. I wonder if they'll allow direct conversions between Libra and other cryptocurrencies.
It's interesting to note that there aren't any device manufacturers as members. No Google, Apple, Samsung, HTC, etc. That's going to make this an uphill battle for them. It implies that those companies have their own ideas. Or, perhaps, they just aren't willing to partner with FB right now given their toxic reputation for privacy.
I mean, I'm more surprised they were invited to the party. You know something like this will immediately spur countries to denounce it as facilitating money laundering, terrorism, the collapse of the civilized world, etc. I would have thought they'd stick with PayPal as their main partner to interface with banks. It's a huge opportunity for Coinbase but they bring the political baggage of every other cryptocurrency along with them.
Yeah, but Libra could do due diligence when the money enters their system. Sure, things are a bit "informal" on the BTC/ETH side, but I'm pretty sure Libra will strive to meet the demands from governments.
That being said, yeah, wild claims can and probably will be made by various entities.
It makes perfect sense in terms of a PR Win-Win situation: Facebook gets the "crypto currency" credibility, Coinbase gets more PR (and more crypto buyers) in general.
To me, the biggest roadblock to success is the number of corporate stakeholders.
For this to succeed, the advantages of having that many stakeholders (big budget, large audience) must outweigh the disadvantages (two-dozen different and often conflicting opinions).
I've never seen a large number of corporations collaborate successfully. A strategic partnership between two companies is hard enough. Two dozen? Good luck.
Especially when some of the partners have a vested interest in this failing. (Visa, Mastercard, Paypal, Stripe.)
My bet is on existing crypto-currencies solving this problem becuse they can focus on a solution without being constrained by corporate interests.
If Libra launches, I predict the following:
1. It will be very, very delayed.
2. Facebook will take sole ownership and shed all the corporate partners.
3. At that point, they will give up on crypto and just build (or buy) a plain old peer-to-peer payment system.
Alternative 3: They will piggy back on an existing crypto currency.
A very insightful comment- These big companies have nothing to lose by signing up as a "partner" for the big press release, but have nothing to gain by helping facebook beyond the initial PR blitz and are either going to bow out or act as blockers to FB's ambitious plans.
Mining isn't essential to cryptocurrency - all that is needed is cryotographic verification. It may be heretical to their ethos but that doesn't disqualify it even if the goals vastly differ.
Except that when the signers are corporations beholden to governments, the freedom to transact with whoever you choose is lost.
This limits its value as a currency. It's like the “7 degrees of seperation” thing. You might not be doing anything with librecoin that the governments of the world don't like, in the network of where the currency could flow would like to but can't it has a cascading effect which severely hampers the size the network can grow to.
For example, if you trade with John who trades with Alice who then tries to trade with Eve, but Eve doesn't want to use your currency becausesshe's doing something Facebook or the U.S. government doesn't like, then Alice won't want to use it because she can't trade with Eve, and then John will be turned off to it for the same reason all the way back to you.
If this succeeds, it will be a data collection tool the likes of which the world has never seen, which is why so many companies are willing to put their name on it. The data, along with ML/AI, and our contemporary understanding of the human mind, means that this is a major step towards control that we can't understand.
Dr. Harari explains it better than I do in "21 Lessons for the 21st Century", but this tool is part of a suite of data collection utilities that will be dissected and used in order to further subjugate our mental energies to the will of the tech giants running our phones. If you don't believe that this is already happening, hang out with some teenagers. I would say that there is a large contingent of people for whom this is already true, and once that group is large enough, then how can you assert yourself against that pipeline of information?
Every bit of data we give away for free is a massive mistake. I hope that Europe figures out a regulatory framework that works.
> I hope that Europe figures out a regulatory framework that works.
Is this even possible with complex fast-changing software? They always seem to be busy figuring out last decades issues. Or when they do respond to new things it's usually a FUD-riddled overreaction that just straight up cripples the new things so we're only left with the options that the ordained organizations like Visa and Mastercard come up with. Which is usually a worse outcome than before.
If anything we need some simple core digital privacy rights ala the constitution or charters of rights. Not some thousand page mess like GDPR that was intended to curtail the big guys but ends up giving small Austrian retail businesses $4000 fines for installing a simple surveillance camera, which happened to be too broadly pointed outside.
> If anything we need some simple core digital privacy rights ala the constitution or charters of rights.
Exactly. That's the core of it. We certain do have a lot of laws that apply online already. Harassment, for example, applies just as much online as in person. Medical records are still protected, regardless of how they're stored.
What we lack is much of anything relating to scale. Some behaviors are just a completely different beast at scale. The first thing that comes to mind is election interference. I don't think highly-targeted ads/content should be permitted in politics. Selling personal data without permission should also be illegal. Right now it's ad companies selling ad campaigns which isn't a big deal. But how long before it's so easy to run facial recognition, etc that you'll be able to buy bits of location history, etc on people, license plates, etc for a few dollars?
Europe sure managed to slay the dragon of those evil cookies what with the banners plastered all over every site forcing you to click a button to close them.
Cookies have been around for 25 years and are dead simple, and Brussels failed spectacularly to understand, let alone sensibly regulate, them. Colour me skeptical they'll manage to wrangle something that even the people working on it barely understand, and that's changing on a yearly basis.
Has anyone in EU asked themselves if those banners have accomplished anything besides being a giant waste of time and space having hundreds of millions of people not read the text and automatically clicking x?
I’m not even from EU and I’ve had to click them countless times. And I don’t think I’ve read a single one, even though I’m pretty hardcore when it comes to privacy.
It greatly saddens me that companies will go to great lengths to geofence content but not annoying popovers. The US or someone needs to get a clause into their next EU trade agreement to make it illegal to serve those outside the EU :)
Possible? No, not really, assuming they have "right intentions", the EU laws rarely turn out to be good for the population(link tax & copyright law for ex.). Even GDPR has some flaws that can be used to target the same people it claims to protect.
The main reason for this is simple,most of the bureaucrats making these laws have little to no "internet-sphere" literacy(or even technology as a whole to be quite honest).While they tackle the problems from a legal perspective,this same legal perspective is de facto putting handcuffs in the freedoms of the people, no matter the "intentions" the law-makers initially have.
And i agree, the best-case solution is to spread the idea of an internet bill of rights, specially in Europe.US is still one step ahead, their own constitution would be the thing this bill would be based on.Their smaller problem is that (few)corporations enjoy the benefits of both state incentives (see twitter,google,etc. through taxes) while also being a "publisher"(not being responsable for the content the users post).
> I'm pretty sure that this type of data collection tool is in use today by the Chinese government.
Yeah US is a bit slow to that party. Alipay and Wechat-pay has roughly a billion users (conservative estimate) in China. It's widely socially accepted.
Makes more sense in the case of China, which never had wide adoption of credit cards. In Libra's case...why should I ever use it instead of sticking with credit cards?
Rather than straight cash, using it as a more-secure credit card would be enough to sign me up. It would prevent card skimmers, people copying numbers, etc. They could generate one-time card numbers for online purchases at existing merchants. Despite lots of mitigations, VISA/MC still have huge fraud problems. This would give them a new tool to lock things down.
VISA's transaction data is not the same as Facebook's social data. Combining the two is the point of concern. We have financial regulatory laws for this reason
There is at least this from Zuckerberg's announcement : "Calibra will be regulated like other payment service providers. Any information you share with Calibra will be kept separate from information you share on Facebook."
I suspect they are using different definitions of "information", "share", "separate", "Calibra", and "Facebook" than a naive person reading that sentence might expect.
I don't mean that as pure snark; I'm dead serious. The legal definition of all those things, the definitions they can get away with using, and the definitions that a normal person would expect from reading that sentence are probably three very different things.
Plus, along with general lack of confidence in Facebook keeping its mitts off of juicy data given their checkered history, I have even less confidence that the promised wall will be there going forward, and that there won't be an excited, breathless announcement in a year or two about how ecstatic they are to bring you awesome new services powered by the data they're going to get from tearing down that wall and isn't it all just so wonderful.
BTW, I read your link and it was the founder of WhatsApp that 'promised' it. While I wouldn't be surprised if FB made the promise and then broke it, that doesn't seem to be what happened here.
Well, if I sold a chat application that was loosing hundreds of millions of dollars, for $19 billion dollars to FB.. I'd be wondering how they're ever going to recover the money. Its easy to paint one side as the villain in this.
The legal definition of all those things, the definitions they can get away with using, and the definitions that a normal person would expect from reading that sentence are probably three very different things.
This has applied to a bunch of things for years now. Have you flown on an airline? You might well have flown on an airplane operated by a different company, with that airline's branding. Who makes your car and your electronics? The details of all that have been a complex maze since the 1980's. Who makes your toothpaste, and where are all the ingredients really from?
(Note, this comment is written mainly with 3rd party readers in mind.)
I know at some point I heard of a group that wasn't selling data about particular users but they were selling aggregated data about the users. In typical fashion they had convinced themselves that they were the good guys.
I'd be shocked if Facebook weren't planning the same thing.
I wonder if "kept separate from" is meaningfully differently than "unable to be linked to". Ie, if Facebook can figure out how to link their data to your LibraCoin data then this statement is moot.
Keeping data separate is not interesting wording by itself, imo.
Typical comments from them. It also says they will comply with all AML and KYC requirements and will work directly with governments as required. In other words, to get this crypto you must give them your government ID. The fact that the complete Calibra profile of you will be in a different database than your complete FB profile is meaningless.
This statement does not include ads. Which is the real use case in my opinion. Facebook will link shown ads to purchases made with Calibra. This will allow them to target users even more and generate more revenue per ad.
They're not exclusive anymore. The credit card is largely just a physical application that the phone can do anyways. Every modern phone can be a credit card. Besides, when leaving your home you likely take the big 3 collectively: cell, wallet, keys.
Credit cards have NFC now. It wouldn't be hard to fathom that this data might be paired with other surveillance data.
Everywhere we look, someone is trying to create a new method of tracking. ISPs are high-jacking sessions, 3rd party apps on your phone are taking everything they can get their hands on, "smart-home" products that are always listening, shopper club cards, toll-transponders tracked silently by municipalities (off of toll roads!), license plate scanners, CCTV with facial recognition.
Everything is being collected. To what end? At some point, we have to hit peak-marketing where this data becomes mostly useless as our behavior will be perfectly predictable at some point in the future.
> toll-transponders tracked silently by municipalities (off of toll roads!)
Hadn't heard of that before. Gross. Although I can see it being helpful in answering some planning questions. Take Seattle with two competing bridges, 520 (toll) and I-90 (no toll). How do rates/congestion effect which bridge commuters take?
I wish this stuff was made more clear. Unfortunately, with license plate readers everywhere, it's just becoming more and more a given that your car gets tracked through major intersections/choke points. While it's going to vary what people do with that data, it's pretty safe to say someone is holding onto their share of it long-term.
Police drive around neighborhoods with the ALPRs and keep that database. WIFI and bluetooth beacons are setup at major events and along interstates. SF Bay area tracked their Fastrack for years.
Big Brother is here and has matured into Big Daddy ;)
There's an entire industry dedicated to traffic analysis and selling government these services. Some places are even privatizing toll-roads. The state is using eminent domain to take land, taking out loans and issuing bonds to build the roads, and letting private contractors 'operate' the roads perpetually. If that wasn't bad enough, the state guarantees the private operators a minimum amount of revenue in case there isn't enough traffic to meet some minimum threshold. Essentially, all the same problems as privatized prisons.
Yes, and Facebook already has agreements in place with CC companies to get that data. They’ve had access to that data for a while. This isn’t a new data source, this is horizontal integration.
This will go beyond that by including information typically because of the event of the ledger. Currently, I give my children cash. What happens when that's a ledger entry as well?
So when Target says to Facebook I have this list of email addresses hashed with this algorithm can you match them to this $PRODUCT you know why when you buy some tide you get a FB ad for tide before you leave the store.
> If you don't believe that this is already happening, hang out with some teenagers.
Ever since I moved away for college (2009) I had started becoming curious how the lives of today's American youth were interacting, and how that was different from my own experience.
Unfortunately it's not easy getting close to that age group without raising flags for being creepy.
Didn't Google buy tons of Mastercard transaction data to JOIN against their ad profiles? How does the scale of this (and other purchasing datasets they can bring in) compare to the theoretical powers of what Facebook has? I guess one difference might be that it will be able to capture way more outside the US.
How is this going to fly with the constant flood of (justified) hate that Facebook is receiving the past year? Apart from the technology, I feel like they have more chance if they'd brand it without the Facebook name on it.
Well, if an army of HODLers develops who buy into this Facebook coin think they can make profit off of holding it - then there will be a growing body who promote it and speak positively of it, and not care about Facebook's other wrongdoings because money. Those big name brands also already buying into it means quite the global powerhouse of marketing ability to onboard people into something that is relatively unknown of what could unfold. It should be democratic governments working together to develop this and not private entities who aren't elected and are known to lobby and influence politicians/policy for their own good. There's a reason financial regulations developed, and because they're poorly enforced currently doesn't mean the solution is abandonment.
It's not necessarily that straight-forward - and people shouldn't blindly trust Facebook and the other unelected global brands with 'voting rights' to make decisions related to the function of such a monetary system.
Good question. I think it will get plenty of hate, but most countries don't have the level of Facebook hate that the USA/Europe has, and lots of people don't particularly care about the crusade against Facebook. It would probably get a lot less hate if they weren't involved, but here we are? NYTimes takedown coming in hot!
If the blockchain is public, the transactions themselves are public, so can't really be sold. The association between user data and transactions, might be valuable though.
I think Facebook will be in the best position to link identity to wallets. Doling this out to initial backers and anyone who pays later on would keep the truth of the statement.
the association could be inferred via side channels though. in any case they should separate the blockchain from facebook ids. This should not be facebook's toy.
I've lived in China and seen how this plays out. Facebook's new Libra Blockchain will be a centralized bank but way more dangerous. It will allow for a worldwide social credit system. If Facebook decides to remove you for wrong speak or wrong think, your money and many services will be inaccessible. Further, they have no mandate like the central bank does to increase employment. Their mandate is to make money for corporations. This will lead to global social unrest.
This will put some third-world countries in complete control by Facebook. I mean, whoever runs the currency, is the country. But in this case, it will be completely controlled, as it's also many of those countries main source of communication.
Therefore, if Facebook's Libra is a countries main currency and social network, that country will be owned by Facebook.
Finally, the regulations on crypto and blockchain are still new. This is in Facebook's advantage as they can start lobbying to have these laws in their favor. They can argue for less transparency, as they are a bank, and this fits with their new privacy marketing message.
This is extremely subversive and Europe is already rightly pushing back. America will be next. On one hand, I love seeing the existing financial system panic when new technology comes out. On the other hand, under no circumstances will I accept a world where Facebook started the one world currency.
A lot of people in this thread don't distinct between Libra the currency and Calibra the Facebook wallet.
A wallet controlled by Facebook is indeed worrying, and I hope that there will be enough worthy competing alternatives.
The Libra network on the other hand looks very solid.
Unless this whole project is one big conspiracy, I don't see how this is true.
Libra will be governed by at least a couple of dozen big corporations, some of which are in direct conflict with FB's agenda. FB will have to convince 67% of the nodes to make any non standard action and keep it a secret. That's a huge business risk.
And from my reading of the white paper I don't see how you can actually block an address from submitting or receiving transactions. Am I missing something?
That may be the protocol at launch but the protocol can always be changed/hardforked, including (as an extreme example) to just centralize the system into VISA/MC style db at FB after achieving wide adoption.
AFAICT power ultimately rests with whoever can modify the most widely-used consumer SW implementation, which would probably be FB here. Though Apple and Google may have considerable veto power over updates pushed through their app stores, iff FB makes this primarily a cell phone app instead of a web app.
In the first release for 2020, it sounds like #corporatecoin will just be centrally run by one entity funded by FB- They "promise" in future versions to open it up to the full consortium.
While I have zero interest in Libra/Calibra/whatever, Libra specifically _isnt_ controlled by Facebook. It's, at least legally, controlled by a non-profit consortium that Facebook is a part of, but I do not think is a controlling owner of.
Libra isn't completely centralized. There's a long list of other corporations and institutions that will be validators. Facebook won't have 100% or even 10% control.
Visa is a player and doesn't represent the financial system at large. They're doing this because they realize it's existential that they do.
Look at what regulators will say in the coming days. Europe is already saying under no circumstances will they allow a sovereign currency to operate unabated.
The US Federal Reserve is a major source of American power. It's "rumored" the US has invaded countries before for threatening to price oil in alternate currencies. You think they're going to accept this affront to their global hegemony laying down?
Also, to be up front, some of these points I found on a thread early this morning and I copied it to a note pad for later, then went to sleep. When I woke up, the page had refreshed and I have no way of crediting the original author. But I think it's important to share, so I did. If you are the author, or know who wrote parts of this, please tell me and I will credit you/them.
Really? Does the Federal Reserve control the flow of information in those countries?
GP's point is, if Libra achieves its vision of a global currency yet remains under Facebook's ultimate control, then a single entity centralizes not only [all the combined power wielded jointly today by the Fed / ECB / IMF / World Bank over a country], but also [its gateway to news and social life, with the power and evidently the willingness to bend all elections to its will].
For now. but they said the same thing when they bought WhatsApp -- that it would remain separate from messenger. Now they're merging the two. So, I wouldn't necessarily trust that what Facebook says will stay true forever. It will stay true just long enough for most people to have forgotten that promise.
> That's kind of the definition of FUD spreading, isn't it? How is anyone supposed to defend themselves against accusations like that?
By not being an incredibly shady company in the first place? Am I just supposed to disregard everything FB is notorious for, just in case any concerns I raise might be FUD?
“Sign-in with Facebook” is all it takes to lose your right to privacy though.
It’s pretty clear this is an attempt to take advantage of network effects and dominate the market early.
There is also no guarantee that while FB will be one many validators, I dont see any hard limit on the number of validators required for the network to be operable. So over time a single validators could take over. No one will bother changing coins in this case though as it will be too inconvenient.
Of course, but I guess the fear is %99 of people will use the “default” wallet” and be locked into a surveillance system for all transactions online.
To your question, not necessarily kick them out intentionally, but if the companies that back the hardware to validate transactions fold, are taken over or pull out of the venture, then the number of validators diminishes and you can end up with something resembling a 51% attack [1] which gives a single corporation total control.
This is a problem with all crypto’s unless something is special about Libra which is possible I guess. Then again, even in this case, the dominate player(s) could change the protocol to work in their favour removing the need for x number of validators present.
If they succeed in getting mass adoption for this thing, I feel like the companies on-board have basically bootstrapped themselves to sovereignty. It'll be interesting to see how that plays out, if nothing else!
I'm sure the IRS and/or FTC will like to have a word with them about that.
I'm no expert in US law at all, but my impression as an outsider is that anything that could look like money laundering or a way to hide financial transactions will not be looked kindly upon, and that slapping the "crypto" moniker on this new currency won't make much difference.
No, not really. In various economic regions there can be regulators that rule this way but they won't be able to stop the commerce from happening with this currency. The Libra Foundation can also just register banks in local jurisdictions to check a box. Many incumbent services have done this for decades, like Paypal.
Cryptocurrency removes the ability of the state to whitelist transactions, as their power only existed from being able to regulate an intermediary. This is the anti-fragile nature of cryptocurrency.
Facebook's validator nodes (corporate consortiums) are a compromise on the anti-fragile nature, but not by much.
If the state can't whitelist transactions, FB will likely not be permitted to launch this currency- The state has every incentive to block any banks from doing business with FB in that case, because they'll invoke terrorist financing and drug sales as blocking issues.
A basket of bank deposits and short-term government securities will be held in the Libra Reserve for every Libra that is created, building trust in its intrinsic value.
Soon 'The Libra Reserve' will hold only a 10th of the total Libra Coins in circulation (fractional reserve). A global federal reserve in the making.
"it will be backed by a collection of low-volatility assets, such as bank deposits and short-term government securities in currencies from stable and reputable central banks." from the whitepaper: https://libra.org/en-US/white-paper/#the-libra-currency-and-...
It's like one to one copy of the traditional monetary system with speed of transactions improved. The volatility of low-volatile assets still contradictive in the long term (I mean just ~5 years) So I don't see any innovative approach in the terms of social order and decentralization.
Your tone is too cynical, this is exactly what it is and what payment processors have been dreaming of for years. A banking system where money can be moved instantly without weird batching, holidays, manual intervention, and all the rest of the legacy crap that plagues current banking.
How will this liberate control from governments? Libra will still be pegged to government controlled currencies, libra is just a proxy for transportation. Governments can still regulate transactions that cross borders, the same laws will apply and will actually be easier to enforce because the libra network is managed by legal corporations rather than an anonymous pool of users.
> That's just part of the bootstrapping process, to avoid volatility in the short-term.
How would you stop pegging libra to a currency without destroying or distorting enormous values of libra that existing owners have and therefore permanently destroying trust in libra? I don't see any real substance to this sort of vague cynical claim that "they're just biding their time".
> And how do you suggest they'll do that?
By applying the same transaction reporting laws to libra (which have equivalent currency value) that already apply to bank-to-bank transactions. The key validators in libra transactions are legal corporations unambiguously within government jurisdiction.
I also can use it for buying a coffee or sending payments across border directly and I appreciate already the developers and managers behind it but people die and suffer for the sake of "low volatile assets" for years. Speed or functionality may be problematic previously but we have much deeper and important problems which can only be solved by contributions of companies like Facebook. That's why I'm uttering this here.
So it sounds like Libra coins will be minted at a previously agreed-upon exchange rate by one of the consortium companies proving that they have bought one of these low-volatility financial assets. It does not sound like there will be any "mining" and the decentralization will be, for the time, in just a handful of large companies.
Can someone validate that I'm understanding that correctly?
If so, I'd agree with previous commenters that we're not looking at anything which can shift the power structure of monetary policy but improvements in transaction speed and cost could have some real social benefits - especially in the developing world.
I'd argue that credit cards are conceptually not very different. Users pay the fees both directly (annual costs, interest) and indirectly (increased prices due to vendor fees), and the shareholders reap the benefits.
Just like credit cards, and the various digital currencies like Bitcoin (where exchanges have plenty of regulation and reporting requirements to deal with!), this will be subject to regulation and governmental oversight.
Note that I'm not a fan of this at all, due to the company behind it.
But it's not a groundbreaking new concept, or very scary if seen in isolation.
>Users pay the fees both directly (annual costs, interest)
Both avoidable. Many zero fee cards, interest only on monthly balances. Some zero fee cards even offer rewards (read: net positive over cash).
>indirectly (increased prices due to vendor fees)
I'd need to see some data that the convenience of credit cards to both consumer and retailer has increased prices. I do know that explicitly raising prices to cover fees for card using customers is against most merchant account terms of service and you can report retailers that do so.
It’s a total tax on the entire ecosystem. Every merchant that chooses to accept credit cards has to build 2-3% into their margins to cover the interchange fees. It’s often against their agreement with visa/mc to charge the fees for credit transactions only and so they build them into the base cost.
As a side note, the situation is a bit better in Europe, where considerable regulation was introduced recently. With mixed but positive results. Interchange fees were capped to 0.3% for credit cards.
> I do know that explicitly raising prices to cover fees for card using customers is against most merchant account terms of service and you can report retailers that do so.
That's no longer the case after Visa, Mastercard, etc were sued[1] and reached a settlement in 2013 disallowing those terms. A few states have passed laws to reimpose that rule, but most haven't, afaik.
This seems to be Facebooks WeChat play. It makes absolute sense for them to do this and there is very little friction for onboarding.
I can see them adding contracts (rental for example) to the chain at some point.
Validators are hand picked. So it‘s distributed but no really that much. Again, it makes sense from a business perspective. But it‘s certainly expanding FBs power and influence as a platform even more. I can see this getting pretty crazy in developing countries where FB might be the platform for everything at this point. Concerning.
From the description, it’s a pseudonymous network with publicly observable transactions. I get that Facebook doesn’t have the best track record in regard to privacy, but it’s not immediately obvious which exact aspect of privacy should we be worried about when using this network.
> The aim, then, is to get to 100 new validators by 2020, and achieve something close to 1,000 transactions a second—roughly 200 times the sum Bitcoin can currently handle, and around half the capacity of Visa.
My reactions to the above:
1. 1000 transactions per second seems low. This doesn't feel very scalable to me.
2. Visa has capacity to handle only around 2000 transactions per second? I would have assumed it was higher. Matching or exceeding the capacity of Visa feels more within the reach of a startup than I thought.
>1000 transactions per second seems low. This doesn't feel very scalable to me.
Yeah, this seems like an issue to me too. It doesn't seem like they have gotten around the problem of "every node needs to verify every transaction". Than again it might not matter if every node is a beefy data center.
I'm curious how it will work exactly. I guess people will need to buy this currency with real money, and then they can spend it on these services. But why would anyone bother to do this when they can directly use their debit/credit card? Or is the plan to someone push people to use this currency by either giving them discount initially, or by not giving any other alternative means of payments?
What this truly mimics is a 'security' analogous to a basket of foreign currency traded as an ETF. Once you give them US $1 it is backed by a POOL of currency from multiple countries (i.e. the other people who have traded their currency for Libra).
Once you decide to take your US $1 you will get back a different amount based on the underlying value of the pool based on the fluctuating FX market. May be >=<...no one will know.
Given they are seeking to bring in "underbanked" people (i.e. the charitable patina on this operation) there will be a focused % of currency in the pool from countries with a high % of underbanked people. Logic says this will likely be less stable currency than say the US $, etc.
Thus, your US $ will be diluted by "lesser" or more "volatile" currencies and will diminish the purchase power of your US $1. Conversely it will increase the purchase power of the lesser currency.
I don't think that's how this works. It's pegged to a basket of currencies, so the value will match that basket. The composition of the basket isn't tied who chooses to acquire Libra.
> Indeed, that’s why Calibra, the wallet software that will hold Libra Coins, was made a subsidiary of Facebook
The big question for me is whether or not wallets and therefore transactions can be created without needing an 'account' somewhere, just like all other cryptocurrencies. Can I participate in the economy anonymously or do all wallets need to be registered like a traditional bank account.
You need to sign up and verify your account before you can do anything. Think of this like paypal with blockchain behind the scenes instead of Oracle/Sql or whatever they use as db
It is not pseudonymous. You must supply AML and KYC documents to FB to participate. FB says they intend to fully comply with all government requests. FB will know exactly who owns all the money at all times.
But if they control the only/main wallet, generating new keys doesn't help. Maybe there will be wallets they don't control but most people won't use them. They will want the simplicity of user search that being integrated with FB provides. /shrug
I'm not savvy enough to understand the legal nuances. They say the allow pseudonimity, which for me means they will not control user-to-user transactions, which means anything goes at exchange time. It will be different if you try to get the cash out of the system, but if you find a large enough Libra market you can live off-grid forever (theoretically).
You can't create a new user without to verify it. All the transactions are monitored(i.e for fraud prevention so expect to receive "suspicious activity" emails and your account frozen). What do you mean off the grid? You don't have access to the blockchain.
This depends on the implementation of pseudonymity. Cash is controlled on the atm, but not when it changes hands. If Libra will allow to move the money internationally, it cant be really monitoring each transaction.
You are referencing the access controls specific to the Calibra wallet, the story for the Libra blockchain with respect to account generation and usage is different. It's open.
Facebook is notorious for not being able to control their platform and leak data for various reasons due to bugs and lack of due diligence (to keep at non-malicious).
If they become a bank I certainly would not put my money in there.
Facebook decided to reinvent the wheel and make it closed source. IMHO this is a mistake and a bad idea for any wannabe blockchain platform. I am curious about their motives for doing this. I'm guessing that it is simply that their plan is the same as that of any traditional payment solution: create a walled garden and profit through transaction fees. This requires a closed ecosystem.
In terms of design, this actually looks a lot like Ripple/Stellar. The difference being that those two are open source and anyone can run an independent validator. There's a growing number of those. And with IBM building world wire on top of Stellar together with a few dozen banks, here's now some traction for that platform at least.
It might still work for Facebook and I would not be surprised to learn that they took some of the Apache/MIT licensed code of either platform. but I'd say they'll have huge issues with people simply not trusting them with their money. They will also need links to other platforms via some exchanges. Again, Stellar comes to mind. It comes with an exchange and an ecosystem of fintech players already connected to that.
Facebook is of course not the only company planning to do their own coin. Telegram has similar plans and there are a gazillion of dapps on Ethereum and similar chains. Most of these seem to be struggling to find meaningful amounts of users. Unlocking crypto for the wider public is not something that anyone has accomplished yet. FB might pull this off given their large user base.
> Facebook says its “stablecoin,” will empower billions and underpin a stunningly ambitious global economy, without selling your data.
I wonder how many millions of people were drinking their favorite beverage while reading this and spat it out on whatever/whoever was in front of them!
It’s astonishing that after all these years and all the scandals, they’re deluded enough to write such lines with a straight face. This might as well have appeared on The Onion.
> If we want this to succeed we can’t make it network of choice for criminal activity of any kind. - David Marcus
Good luck with that! This point doesn’t gel with the other point he makes about this being private and that Facebook’s social profiles and the financial wallets/accounts will not be commingled. I’d wager that the latter promise would be like WhatsApp saying during its acquisition that nothing would change and that WhatsApp data will not be used for ads. We know what happened to that within a few years.
Yeah, I'm going to guess #corporatecoin will die from a thousand regulatory papercuts, because they won't be able to prevent criminal activity without exerting draconian control over the payment network, and then it will be too inconvenient for anyone to use.
Facebook has so much money that one can't wonder what their angle with this. I can only imagine they want to know exactly what you spend money on so they can better target ads.
I think there's just such a huge opportunity to drive sales through messenger, fb, etc with low-friction payments. They already have the 'best' targeted advertising. They just want to extend their platform all the way through to actual sales. Then they can justify a larger cut than with just the ads.
They've certainly tried payments and money-transfers before. This isn't entirely new territory. It's just very country-specific. They get hit by high transaction fees. No one wants to type their full credit card and address info, then deal with required two-factor authentication in Europe, etc. And nothing is worse than having to forward someone from your app to an unreliable slow desktop-targeted bank page which then sends you an SMS/email that you have to type back into the bank.. etc.
FB is actually right. The credit card system is straight broken from a user-experience point of view. It wasn't created with computers, mobile, or basic security in mind. It's just band-aid on top of band-aids since the 70s. And obviously cash doesn't have much presence online in western countries. FB struggles to get people to buy things through their apps. They desperately want to fix that.
Crypto currencies just work better at a fundamental level with mobile payments. It has always just been a lack of institutional support to get them supported. VISA/MC have probably been looking for a way to leapfrog bitcoin/etherium for some time now. I'm not surprised they jumped on board when a bunch of real technology companies decided to leapfrog them. Otherwise, they'd likely be in for a world of hurt in a few years if something like Apple/Google Credit launched their own without them. It's not like people love VISA/MC as companies. A huge number of people would jump ship so fast if there was literally any other option.
Bingo. It is not exactly better targeting ads. You can sell the same ad (from the same supplier) to the same customer (the person viewing the ad) and the supplier will pay more if they are convinced the ad actually has a higher return rate.
What is the quote again from John Wanamaker "Half the money I spend on advertising is wasted; the trouble is, I don't know which half."
Thus knowing more about their users and what they buy and the ad is successful 1 day, 1 month, 1 year in the future allows Facebook to get paid more.
Note this is a first order effect, what I explained above.
The 2nd order effect is that by making more money for the same ad, while your competitors would make less money from the same ad...you can either sit on that profit.
Or you can use your market share and guaranteed profit to make ads less profitable to competitors and this creates a positive feedback cycle where Facebook Ads get more and more market share but other competitors and platforms of Ads gets less and less, which in turn actually allows Facebook to charge more per Ad in the long run (but in the short run Facebook may want to decrease the price per Ad.)
I think the key here as you mention is the "pull through". Previously they could tell which ads generate buzz. The more important metric is which ads generate sales.
The information you can derive from seeing a person's full financial transaction record is so much more "pure" than trying to parse the drivel they're posting on their FB feed.
People say a lot of things on the internet, and visit a lot of places. Trying to infer who they truly are and what they truly like from that is actually hard: signal to noise ratio is not great.
But when the time comes to actually spend money, peopl really tells you who they are.
It's the digital equivalent of "actions speak louder than words".
When I consider that 1) all transactions must pass through validators 2) which are hand picked 3) by the worlds largest surveillance machine 4) that knows most everything there is to know about me already, I'm thinking I'll take a pass on this one.
The average civilian associates cryptocurrencies with high profile thefts and dark web drug dealers because that's what makes it into the mainstream media. At best this will panic the big payment processors into making traditional payment options cheaper and easier, further undermining what little reason this has for existing.
> The average civilian associates cryptocurrencies with high profile thefts and dark web drug dealers
Maybe the average dismissive HN comment.
But pretty much everyone I ever talk to outside of HN treats Bitcoin with distant "hmm, maybe I'll learn more about that one day" curiosity. Kind of like programming and other tech.
You are way over-estimating how much Bitcoin even shows up on the radar of average people, even if it were 100% bad news.
The average civilian cares and understand nothing of that, all they care about it is the fastest/simplest/cheapest way to move their money around. Since WhatsUp and Facebook are ubiquitous by now, and everyone knows how to use them, so will that currency be.
Existing payment networks already are fast, cheap and I'll also throw in secure. (In Europe ATMs and bank-to-bank transfers are free.) They could easily be made simple to use given the requisite will.
You're correct about payment in the developed world.
But the Libra website highlight potential usage in developing countries.
I may be wrong but in my opinion there is a huge market to take over in the countries where one has a Facebook account before having a bank account.
I can't find the link but I came across an article explaining that in Myanmar Facebook and "internet" are basically synonyms. That's because when most of the population began to have access to the internet it was only via Facebook services that are provided freely thanks to a commercial agreement between mobile providers and Facebook.
Now just imagine if Libra could pull something like that for payment services in all developing countries.
Fast, secure, but not cheap. Credit card merchant fees are on the order of 2% + 0.15 cents per transaction. The industry would still be profitable with prices orders of magnitude lower. A combination of regulatory capture and high fixed infrastructure costs have protected those profits -- but with cell phones, the infrastructure barrier need no longer apply.
Every news report I've read about Libra includes the words 'cryptocurrency' or 'digital coin', so they're not doing so great controlling the narrative.
> The average civilian associates cryptocurrencies with high profile thefts and dark web drug dealers because that's what makes it into the mainstream media.
That will change now that major corporations have vested interests in changing the opinion of the public on cryptocurrencies.
> As with any currency or financial infrastructure, bad actors will try to exploit the Libra network. While the network is open and accessible to everyone with internet access, the network's main endpoints will need to follow applicable laws and regulations and collaborate with law enforcement. In addition, because transactions on the Libra Blockchain are pseudonymous, it is possible for third parties to do analysis to detect fraud and illegal activity.
There's a difference between Libra (the Swiss-based association) and Calibra (the US-based FB subsidiary making the first wallet).
> "Calibra will do its part to facilitate the efficacy of international sanctions regimes. We will administer and
enforce applicable sanctions programs including, for example, U.S., EU, and U.N. sanctions programs."
reading the whitepaper , it seems everything will be managed by the swiss company. facebook is just one of the partners.
[As another user mentioned, the company that makes the wallet is US based and will enforce sanctions. But maybe that means that another of the partners can make a wallet to use in sanctioned countries?]
The better question is "Why does Facebook think that being based in Switzerland will protect them?
It's been a while since Swiss banks were last immune to U.S. government pressure. Or even pressure from other countries. I can't bother to find the links now, but there were a couple of stories during Obama's time, about the US government arresting people based on their financial transactions in Switzerland.
Basically the Feds will crack down hard on Facebook and co enabling Iranians and others on sanction lists. It's no joke and it's one of the few things that will result with executives in jail compared to all that should but doesn't.
What do the U.S. and other world governments think of this? The way they're pitching it seems like they want to directly undermine the global financial system.
Combine something like Libra with things like this[1], and we're well on our way to the popular science-fiction trope of multinational corporations having more power than governments.
Step 1 - say that your "coin" is not centralized
Step 2 - proceed to contradict yourself in the next sentence
How the hell is a an obviously centralized system with 3 dozens of privileged entities is not centralized... Also it is not only oligarchy, but completely unaccountable shady oligarchy. Why people continue to "want" it is beyond understanding.
Well, they don't actually say it's "not centralized." They say it "will not be issued by a central party," which it won't--it will be issued by 28 central parties.
They also say it will be decentralized but they are really only talking about infrastructure not governance or control. This will never be anything but a completely centralized shitcoin (although a very successful one).
That's not really an apt analogy. Just wait until vendors only accept Libra as their payment option.
It is not unrealistic either. When I was in China, I dined at restaurants that would only accept WeChat Pay as payment. Only because I was a foreigner was I able to get a pass to pay in fiat.
> Just wait until vendors only accept Libra as their payment option.
The vendors are the oligarchs in this scenario.
> It is not unrealistic either. When I was in China, I dined at restaurants that would only accept WeChat Pay as payment. Only because I was a foreigner was I able to get a pass to pay in fiat.
WeChat is not the result of a private endeavor, it is state-sponsored and controlled. It would be way worse for the government to manage Libra than for Facebook to do it. Gov has USD. This just plain competes. Competition makes all parties work harder on terms for usage. Its strictly positive.
Wrong, they won't be. See my example above, just wait until everyday merchants only accept this as payment.
>WeChat is not the result of a private endeavor, it is state-sponsored and controlled. It would be way worse for the government to manage Libra than for Facebook to do it. Gov has USD.
Fiat currency is controlled by the Chinese government too. You completely missed the point. The Chinese government does not force businesses in China to only accept WeChat Pay, they choose to do so.
The dark side of the network effect is that as the network grows it becomes harder and harder to be a conscientious objector. Also abstaining isn't really participating. And by not participating you get no say in the narrative.
When you have a coherent thought on the subject, let us know.
Thats correct, to a degree. You still need to ask permission to your government to leave, and to another government to enter. But with free pass, if you don't like a place you can move, I know I did multiple times.
In the US, we have a democracy, so we have at least some say in how things go: the government is us. Facebook is not us, we obviously didn't elect Zuck or anyone else there.
"I live in and probably even vote in a country that believes I am sovereign, which thus derives its right to wield authority."
and:
"I signed up for Libra so I could more easily use Facebook, which I only joined to keep up with my kids, and thus I accept Mark Zuckerberg's authority over monetary policy, even considering I have no input on it whatsoever"
Do you have a lot of influence over US monetary policy?
I live and vote in US and as soon as the majority of US residents decide to vote contrary to my wishes I have to accept the authority of whoever they elect.
I have infinitely more control over it compared with anything I might have with Libra, because that's zero. I can also:
- run for office
- build a career in monetary policy
- join a campaign
- start a non profit advocacy group
- lobby my representatives
These only have any effect (if they're even possible otherwise) because we're a democracy with elections. Can I personally change the supply of USD? No, but that's because that kind of change affects the entire world, and there should be a serious process around it. But my point is that there _is_ a process, rooted in (if imperfectly) the fundamental liberal democratic belief in humankind's right to self- governance.
Facebook has no such guarantees. It's a serious threat to those principles. There's a huge difference.
Then allow me to be: The US guarantees your right to participate in its governance and decision making process. Facebook does not. Ceding control over monetary policy to an organization absent those guarantees is corrosive to our society, our government, and the fundamental principle of self-governance.
===
Everything on your list is only possible because we live in a free society with representation and authority over corporations. If we start ceding more and more core governing functions to corporations, how long do you think it will be legal to build a competing product? How long do you think you'll be able to lobby your representatives? How long do you think you'll have the right to start a PR campaign against Facebook? Look at your favorite authoritarian regimes for the answers.
Hmm, that's a fair question. The way I see it, monetary policy is essentially managing the supply of money. The US creates and follows its monetary policy to manage its currency, the USD. This is effective at doing things like regulating inflation or easing recessions because we have one currency here: the USD.
But if Libra starts challenging the USD even just in the US, let alone in the rest of the world, suddenly there are two dials to turn: one for USD and one for Libra. As more value is held in Libra rather than USD, US monetary policy becomes less effective.
And this is just the money supply issue. Others have raised all kinds of issues about fiduciary duties, privacy, regulation, confiscation, security, and so on. While I wouldn't at all argue that the US approach to these issues is perfect (far from it), there are at least some laws and so on. Nothing would prevent Facebook from freezing your wallet, or freezing your account, or banning you from their platform, or tracking metadata on your purchases. I would also assume (perhaps incorrectly?) that law enforcement doesn't have to jump through the same hoops to get your payment/account information, so there's potentially more loss of rights there.
This is exactly what Facebook's vision for Libra is: an alternative currency to the USD shared internationally and controlled by their consortium. They say it will be pinned to the USD and other stable currencies, but there's nothing holding them to this (and in fact most cryptocurrencies play with this). I deeply believe allowing this to happen would be a grave mistake for all of us.
I think when people aren't in control of the currency they use, as in can't change the supply of it, really bad things happen. Like, many more people would have died without the QE programs (recessions and depressions kill people). That's a major goal of CCs, and one of the main reasons I'm against them.
Please stop freeloading on our electricity, food, sanitation, roads, police/fire/education, the US military, and thousands of other services, renounce your citizenship, and leave at your earliest convenience. The US is pretty frothy about undocumented immigrants these days, so I would advise you not to dither.
Oh you mean like, felon/child/etc. suffrage? I'm fully in favor of extending the franchise to every living American; I think it's a fundamental right and morally outrageous that we ever deny it.
But I don't think that that means representative democracy in the US is a sham, equivalent to the level of representation I have at Facebook (again, zero). That would be a strawman.
It says testnet only until early 2020. Coincidentally, Ethereum recently announced Ethereum 2.0 releasing in early 2020.
I consider Libra Coin an effort to cash in on the cryptocurrency hype with a type of bank, before real cryptocurrencies can scale and become mainstream and therefore block such an effort.
So I see it as a moral imperative for developers to try to kill the project. The fact that they are making it open source could help in that regard.
Facebook had already banned advertising other cryptocurrencies in the run-up to this announcement (well, back in January 2018), so the effort to prevent other cryptocurrencies from scaling is well underway.
That's unfair, there was a lot of pressure on companies to protect users from scammy crypto ads during the big bubble of Bitcoin. I think many companies banned ads for shady sites and to imply they did it only to promote their own coin isn't fair.
I totally agree that it was good move from a user perspective. It's just a happy coincidence. Or perhaps they saw how many outfits (shady or otherwise) were affected by the ban and decided it represented a good market opportunity for them to step in and fill a gap?
decentralization and trustlessness I would say are the big two.
With Libra its pretty clearly controlled by large tech companies so validating on the network isnt open to anyone. This means it not decentralized in my book. You also have to trust that the dollars or dollar equivalents are behind every token on the Libra network, this isnt the case in bitcoin/ethereum since there isnt an attempt to use dollar backed tokens at the base layer
It feels like a defeat, though, to have the word cryptocurrency co-opted by things such as this. Wouldn't it be easier to call this bullshit, and decentralized currencies cryptocurrencies? /s
i actually think the term is accurate. cryptocurrency = currency based on cryptography. we need a different term for "decentralized/trustless currency"
Can someone help me understand how Libra or other cryptos for that matter can actually be used? Who will accept the coin as a form of payment? Can these ever be used to buy essentials (food, clothes, shelter)? It doesn't seem so at the moment, and until then, I find it hard to imagine businesses or individuals would be happy to accept Libra as a form of payment.
Ultimately it depends on how frictionless it is to convert it back to dollars, pounds, euros, etc. This has always been an issue for bitcoin. When I first heard about bitcoin, one bitcoin was worth less than a US dollar. I was curious so I tried to buy $50 worth, but the process was so convoluted and difficult I didn't bother. Today its much easier, but not completely so. But much of the difficulty then, and I presume now, was the distrust of banks. The key vendor on their list of supporters is PayPal (IMO). Paypal is in a position to make currency conversion painless for most users. Maybe in the future there will be enough places that accept this new currency that people can keep their money in that form but initially its all about easy conversion.
I haven’t really seen a lot about how exactly the Facebook profiles will be separated from the pseudonyms on the libra network. I think this is also part of a gamble that people don’t really care that much about privacy in most of their purchases. If you look at a network like Venmo, they have a social aspect that is on by default, a news feed of sorts. With small incentives ( discounts, credits - share this transaction and receive a discount on your next purchase ) - people could easily give up their anonymity on the network. Once this happens Facebook will be sitting on the holy grail of advertising. A full closed loop of people’s interactions with advertising and the impact it has on their purchasing habits. It creates a new avenue for monetization for Facebook when ads are shown on publisher websites as well. Displaying ads and the analytics around engagement only create half the picture, the other half will be the impact it has on how they spend their money.
From the technical paper it seems to be able to be transferred anonymously like bitcoin etc
>To create a new account, a user
first generates a fresh verification/signature key-pair
>The Libra protocol does not link accounts to a real-world identity. A user is free to create multiple
accounts by generating multiple key-pairs. Accounts controlled by the same user have no inherent
link to each other. This scheme follows the example of Bitcoin and Ethereum in that it provides
pseudonymity for users. https://developers.libra.org/docs/assets/papers/the-libra-bl...
I'm wondering if this may create legal problems for Facebook and its partners when the currency gets used for illegal stuff. Bitcoin doesn't get sued when it's used for drug dealing because there is no one to sue.
I think the trick here is that Facebook is not inherently in charge of transactions, each validator is. Meaning, each validator will have their own efforts to make sure nobody pushing transactions on their node is doing crime (and/or that their identity is known so it can be forwarded to police when linked with crime).
In practice what this probably means is that each validator will require a lot of personal information tied to each public key before accepting transactions from that public key. In other words, I would wait until/if someone trustworthy partners as a Libra node (e.g. my bank who already knows my financial history) until I sign up to give it a shot.
What this truly mimics is a 'security' analogous to a basket of foreign currency traded as an ETF. Once you give them US $1 it is backed by a POOL of currency from multiple countries (i.e. the other people who have traded their currency for Libra).
Once you decide to take your US $1 you will get back a different amount based on the underlying value of the pool based on the fluctuating FX market. May be >=<...no one will know.
Given they are seeking to bring in "underbanked" people (i.e. the charitable patina on this operation) there will be a focused % of currency in the pool from countries with a high % of underbanked people. Logic says this will likely be less stable currency than say the US $, etc.
Thus, your US $ will be diluted by "lesser" or more "volatile" currencies and will diminish the purchase power of your US $1. Conversely it will increase the purchase power of the lesser currency.
Far far away from that point. Maybe when people start buying houses and paying their medical bills with it. Which is not going to happen if the Big Banks have anything to say about it. This is mostly going to be small change transactions for a couple years with lots of other players falling over each other with alternatives. As long as it makes global small change transactions free or dirt cheap should be a good thing.
I'm not holding any coins. But I have an interest in crypto currencies for some projects I'm developing.
Anyone who thinks this is going to replace ripple, I have some bad news for you.
Ripples main focus is not for users purchasing goods across websites. Its focus is mainly for banks (to hold vast amounts of XRP) when sending sums of money to each other, to be able to convert fiat into XRP and then send that XRP between them and then convert XRP into the receiving fiat currency.
The remittence market is huge and that's where ripple is mainly interested. Both banks and businesses are using it because there is a high trust factor with Ripple.
Now of course Facebook is trying to supplant ripple here, as a user won't need to go to a bank or remittence provider which would use either SWIFT or XRP to send the funds. Instead facebook is hoping to tap into the network effect it has built and two users can send monies between each other using this new token.
Another thing that I have an issue with. The article mentions eliminating "rent seeking". How so? Paypal, Visa, Mastercard all charge a % when processing a transaction. The $10m buying fee needs to be recuperated. Are transactions going to be free? Perhaps... Is running the nodes and network going to be free? It's certainly not.
There is going to be a fee for sending currency across the network. Either an up-front transaction fee or a conversion to FIAT fee. But there will be a fee.
If the same old players are involved, you can bet they want to get paid and the same old players will want to eventually impose their own rules to the game.
Personally, I don't think this will usurp Bitcoin. If anything else, I think it will make people more comfortable with digital currencies and then we'll have more leaps in better tech and the free market will bear fruit of a much lower priced solution than libra coin.
"Its focus is mainly for banks (to hold vast amounts of XRP) when sending sums of money to each other, to be able to convert fiat into XRP and then send that XRP between them and then convert XRP into the receiving fiat currency.”
With the exception of Ripple money transfer products working without XRP, which they don’t like to shout about.
Looking at this as a black box, you buy credits using real money, and you can transfer the credits with less fees than tradition banks. Except you have one extra step on conversion of money into credits.
If there are enough people and places that accepts this credit, you eventually don’t need to ever convert it back to real money. Therefore when there is a lowered chance people would do a bank run, they can lower the backing requirement, like how banks are, and can reinvest the money. Here is the main point, they probably won’t dare issuing coins ie print money as that would immediately could be deemed a national security issue as now you are competing against a nations money supply.
You gonna say, wait, this is how bitcoins work, but nobody is giving bitcoin any respect. This libra thing will get respect, so regulation may just stop it in its tracks as soon as it gets too far.
So this thing is probably not going anywhere fast, in order to be useful, it needs to go beyond America. Every country will be scare of this possibility becoming a currency they have no control over. I’m not even sure if America will allow this to even take off without severe regulations that crippled the development
Currency is about trust. Do you trust these companies? Idk if you've been living under a rock, but a bunch of them are getting slammed for privacy and security breaches.
"Hey look - Tether demonstrated that a successful stablecoin can be a profitable business model. We can accelerate adoption of our own stablecoin based on our addictive social media experience and social graph and rake in the interest off our float reserves.
I think this is an interesting move from FB. Google has been trying to get payments data by extracting it out of your emails and any other data that resides on their servers. I don't know if they've been correlating it with search/dns/ad data, but I suspect they sneakily have been. By getting all the major payment processors on board for the operations/logistics, and with FB providing the tech, they can all share the data between them and FB probably thinks they can profit the most out of this. Apple's pro-privacy payment system is unlikely to take off (IMHO) given that it doesn't align with the profit motives of the payment companies. The only way it can take off is from the bottom-up if people choose to use it in droves.
Of course Google uses it to drive their own ad engagement. Say you want to look up your flight info. Instead of going back to the original email, you have all the info in the assistant. Instead of seeing rental car ads from the airline, you get them through Google.. You get to check out attractions in the city you're visiting through Maps.. it's obviously not all 1:1. Google isn't so pushy with their ads. They like to be subtle. But yea, they clearly get to serve more interesting ads by hijacking these workflows.
Slightly less obvious what they do Amazon toilet-paper receipts. Often things can just be aggregated into really good business intelligence. They could data mine what shows netflix is recommending, etc. I'm honestly not sure what kind of protections they offer in terms of extracting aggregate data from email. It's creepy so they'd keep it mostly internal.. but I'm sure they would have found some really interesting ways to use it.
I already find it hard enough to use certain services without having a facebook account. E.g. Tinder requires one, and even having a throwaway is problematic because people want to check your Facebook profile before meeting.
However, having currency wrapped up in Facebook will mean that now I will not be able to participate is some economies. I work remotely and as much as Paypal is a villian, it is also a saviour for paying people halfway across the globe. If Facebook displaces that, then my own business is in trouble. And there is no real way to separate Facebook the spying entity from Facebook the social entity, therefore I expect there to be no way to separate the Facebook financial services entity either.
The last two points apply to any crypto, but the first two, Scale and Network, are plausible.
Basically the tl;dr is facebook and the other "tech titan" validator nodes provide a large, existing distribution channel, and presumably they can unleash their armies of developers to make all the techie crypto stuff Just Work.
A long running bitcoin criticism has been that it's been like PGP -- built on sound principles, but the usability has just been too hard. Coinbase took off because it made crypto easy to the average joe... HN people understand you should never leave your bitcoin on a centralized exchange, but the average user has difficulty understanding the idea of keys, wallets, dongles, etc.
If Libra's going to succeed, it's going to be because they're going to do what Apple did to Unix: take the good parts, leave them available to the powerusers, and wrap the rest with really friendly usability.
And they've already done something like this: one of the advantages of React has been the developer tooling. There's always going to be a subset of users that prefers to string a bunch of tools together themselves, but with a corporate backer, you can invest in solid developer experience.
Last two points are predicated on fulfillment of the first two.
Network first and technology later vs. most of the industry's 'build first and get the stakeholders later' approach could be the sole differentiation in this thing flying off
It's very possible this initiative will be low impact. Most people don't care about currency -- they just want to spend their money in the terms they're used to.
My one concern: if the libra's value is based on a basket of assets, will US users still see the value in terms of USD? Will French users see their value in Euro? Will the value of my USD change based on the basket of securities backing libra?
I just want an easy solution to send money cross borders. Someone in Mexico right now owes me $80 and there's no easy way to do this. If she could send it to me through WhatsApp with a near zero fee I'd see the value in libra.
>My one concern: if the libra's value is based on a basket of assets, will US users still see the value in terms of USD? Will French users see their value in Euro? Will the value of my USD change based on the basket of securities backing libra?
I don't know what the UI will be like, but I guarantee that there will be an exchange rate of USD to Libra and it will shift as USD's value shifts against other currencies in the basket.
Maybe I'm an idiot and don't understand the marketing lingo but what exactly is the use-case for this? Why among all of the tech companies is Facebook the one to create a crypto currency?
I think the idea is you're going to be able to "Message" other people "money", Straight from the Facebook app/website. It also should work seamlessly across the various other social networks that are partnering in this.
There are other ways to do this now, but if they are able to do it right, this would generally be more convenient and widely available. I would assume fees will be low to start with. (Note that Visa and Mastercard are partners, so you can safely bet the fees will go up quite a bit once this catches on.)
So facebook (and partners) can mint their own money. Are we supposed to be OK with that? Wasn't this issue one of the primary reasons for crypto currency existing in the first place.
In the US, cryptocurrencies are treated as assets, they are taxed every time you exchange them for something or even each other. I would disagree that libra coin is akin to Facebook and partners creating their own money.
Clearly you didnt read the whitepaper. Facebook (and partners) literally mint libra. You give them a dollar, they mint a dollars worth of libra and stick the dollar in their "reserve". What stops them minting more libra than they actually hold fiat reserves for?
This actually might be a blessing in disguise for crypto currency as Facebook will lobby hard to get that rule changed fast as people aren't going to want to report a line in their taxes for each of the hundreds of items they buy in their taxes.
They aren't minting their own money out of thin air - it's fully backed by existing currencies like the Dollar/Euro/Yen/Pound. They're just making it easy to send this across borders digitally.
You say its "backed", but what stops them minting more libra than they have "backing" for? Nobody would know any different unless every user attempted to remove all their funds at once. How can you be sure that this wont happen? This is EXACTLY like a bank, but without any of the regulatory protections.
I'm still trying to understand....whats the point of using blockchain here at all if you're going to just make it centralized by validating only through an admitted pool of validators?
Can someone use this if they espouse "white nationalist"-adjacent beliefs (such as building a border wall and deporting illegal immigrants)?
What does it mean if they can or cannot?
So first off Facebook would have to transgress the barrier in place that they say they're erecting between the user's Calibra account and the user's FB or WhatsApp or Insta account – simultaneously Facebook would have to tag its users as holding sets of beliefs that were antithetical to some set of ideal beliefs that would be encoded digitally somewhere inside Facebook's algorithms. To do this without human intervention would be a supreme AI task, to do it without human arbitration would be to blindly trust an algorithm, to do it at all would be an act of tyrannical censorship.
We here at Facebook hope that answers your question.
"He added that users would be able to remain anonymous or pseudonymous, at their own discretion—including the ability to keep their digital wallets separate from their Facebook profiles."
Imperial march plays in background, dark patterns flood through every interface.
"Indeed, that’s why Calibra, the wallet software that will hold Libra Coins, was made a subsidiary of Facebook—“to ensure appropriate separation between social and financial data and to build and operate services on its behalf on top of the Libra network,” as the white paper explains."
Is this some cruel joke? 'See! We made it a subsidiary! Can't get more arms length than that!' Being a subsidiary generally means that Calibra will take and toe the dictates of Facebook. There is no separation here.
It honestly feels like this is a last chance to pull away from the enlightenment value killing death spiral that is surveillance capitalism.
How does Facebook intend to support anonymous transactions without running afoul of Anti Money Laundering laws? If Facebook were to implement Libra in marketplace (for example) they would be obliged to do KYC on their sellers in some jurisdictions. That potentially means they would be handling identity documents and would be required to ban anyone (from all of their services) found to be involved in a criminal enterprise.
A key factor to consider: Libra has intrinsic value but Bitcoin doesn't.
From libra.org: "Libra is fully backed by a reserve of real assets. A basket of currencies and assets will be held in the Libra Reserve for every Libra that is created, building trust in its intrinsic value."
Fixed supply is a fatal design flaw of Bitcoin which leads to it not likely having any intrinsic value ever. Let me explain:
1. Fiat money's intrinsic value: A homeowner who borrows against their home is guaranteed to get full control of the home when they deliver the amount they owe, which is denominated in fiat. It is a powerful incentive to exchange goods and services for fiat. Even for participants who don't owe fiat, knowing that the fiat is intrinsically valuable to debtors means that it can be used to purchase goods and services from them.
2. There is no such incentive behind Bitcoin. Negligible amount of debt is denominated in Bitcoin. If Bitcoin value falls towards zero, there’s no real-economy backed mechanism to bring it back. There is no contractual guarantee that spending X amount of Bitcoins can entitle the purchaser to receive Y amount of services.
3. Bitcoin will likely never be a debt instrument. Bitcoin has a fixed supply, and the design goal of this is for Bitcoin to be deflationary. If there’s an equilibrium interest rate in Bitcoin, that rate is highly likely to be negative and more than the cost of owning Bitcoin. This removes incentives for Bitcoin holders to lend out the currency, consequently there will be no debt, and no contract that allows debtors to receive real goods by delivering Bitcoins.
This argument applies to most non-stable cryptocurrencies. From this reasoning alone, I see Libra has a much higher chance to succeed than its crypto peers.
Not being able to generate debt denominated in Bitcoins is a design goal, and I feel, possibly a good one (if too idealistic).
Fractional reserve banking lends too much power in to the hands of those who control the process. Fractional reserve is impossible in Bitcoins (unless you trust the word of the other party). This doesn't mean loans or debt can't exist, but it is not denominated in Bitcoins, but just as records on paper. And you also cannot loan out Bitcoins you don't own (nor loan out nonexistent Bitcoins like you could with fiat). This leads to more responsible lending, and cuts speculative gambling with assets. I think in the long run, this is a good thing (even though it would hurt in the short term).
So if cryptocurrency is taxed on capital gains, and this is a stablecoin, can they buy their own currency in whatever tax haven they are storing money in now with money they want to repatriate to the USA, then sell the coin in the USA and pay no taxes because it is a stablecoin to they didn't actually have any gains? And they do all this while controlling the cryptocurrency itself?
They wouldn't need to pay taxes because the money to purchase the financial instrument (whether it's a stock or a cryptocurrency) should already have been taxed in the country where the buyer resides. And, at least in my country, you can't use a financial trade like that to get a tax deduction.
How would they afford to buy the cryptocurrency from the shell company in the first place?
It's just a hedge, bro!
Visa is not obligated to integrate Libra anywhere. They just put a foot in the opening just in case it will take off. If it doesn't they lose nothing ($10M), if it takes off they are having saying in where it goes.
So, the Guardian article says that it uses blockchain but is invite-only at the moment. But if it's not public, why do you need blockchain? So is it blockchain as in Bitcoin (i.e., proof of work) or "blockchain" as in hype? I hope it's not the former because proof of work wastes so much energy it's not even funny.
Each episode is a character explaining how the Program changed his/her life, episodes are very moving. The first one describes how it all started by a social network controlling money and thus people actions. Oh and it's mainly optimistic, that's a nice change for the subject!
"The Program is a historical podcast, but a one that’s set in the future and examines the present day. The world of the future is exactly like ours, except that Money, State, and God became fused into a single entity called the Program. This hardcore sci-fi premise however is just the backdrop, and the series focuses on stories of ordinary people inhabiting this extraordinary world."
It seems like Facebook is simply following through on the Web 1.0 vision that Thiel and Musk chased. The first Facebook product I might use in a long time. This seems inevitable on reflection. Skepticism is valid, at the same time consider carefully if this is worse than The Fed.
I will answer the question that is always asked in every post regarding blockchains on HN:
"Why blockchain? Can't this be done with a database?"
Blockchains are databases. They are distributed, append-only, tamper-proof databases. You could call them that, or instead you could just say "blockchain" as that is what type of database the word blockchain has come to be understood as.
The reason to use a blockchain rather than a centralized database is because the properties described - distributed and tamper-proof - are crucial to the application. In Libra's case, centralized entities that control financial services (banks) have high fees, are slow, and are not trusted in some respects (financial bailout) while being highly trusted in others (not waking up and losing your money). A blockchain can provide solutions to the problems of centralized financial entities with the benefits of distributed ones.
Libra is explicitly centralized. The protocol depends entirely on Validators, of which there are few, and the Libra Association controls who's a Validator.
If Libra is decentralized, then so is the Fed because it's distributed across 12 regional banks.
I believe only facebook and few others will have access to the blockchain(i.e transaction history etc) so it really brings nothing to the user/clients or developers outside of libra association
One semi-related thing is automation. When i receive a forex payment to my bank(south africa) it has to go to some human controller etc. If i can transact 24/7 without human intervention thats a big plus
So Facebook is under an increasing amount of scrutiny and calls for regulatory pressure. Amidst all that, they're still brave/arrogant/oblivious enough to launch something like this.
People are going to read history books about this era and shake their heads in pure disbelief.
Currently most online payments involve a 2% credit card fee. Will Libra lead to a significant reduction in this cost? If Libra can be 0.5% cheaper than credit card payments for consumers then it will become the dominant form of online payment.
Always wondered why Apple hasn't opened up iMessage to every platform (not just Apple devices) and gone properly into Alipay territory with payments. They don't have much growth left in hardware, seems like the obvious thing to do
I hope this gets anywhere, not because I'm particularly enamored with Facebook (In fact, I hate them and their skeevy practices) but because I want PayPal to feel the squeeze. I just happen to hate PayPal a little bit more than Facebook and any competition in that department is good in my opinion.
I don't see Libra being remotely any competition against Bitcoin, but as an alternative to current centralized payment processors? Sure, and it wouldn't be a huge stretch considering the amount of sensitive information people already entrusts (with or without merit) with Facebook.
This could pan out. There's a ton of people in the developing world that can only use their phones to get access to any reasonable banking. Or things like ROSCAs [1].
Don't think that tech (whether its a permissionless PoS blockchain or a Ripple copy) is important for success here. Only whether or not an aggressive marketing campaign to make people use it (especially merchants) will succeed.
One really interesting issue is how they are actually going to make the zucbux actually stable.
This seems like a straightforward problem to solve: for every zucbux in circulation, stash a euro, a yen and a USD somewhere.
Except ... where do you actually stash those? In what financial institution? And how do you know said custodian is risk-free? Who is going to audit them to independently guarantee that the underlying funds actually exist?
As it turns out, the only entities that can somewhat securely provide that service are central banks themselves, and that means they have to be willing to play ball.
This provides the potential for FB to pivot into banking.
The article points out that the structure of Libra doesn't require a connection between FB profile and wallet. But let's face it. If FB are the inventor and are the benevolent dictator in this open system, it positions them to offer all their users wallets and be the bank that facilitates most transactions.
The revenue potential for FB in that scenario, from transaction fees to deposits (borrowing short and lending long) to wealth management is limitless.
There is an endgame here that has 2 billion customers and is worth trillions.
If a Silicon Valley controlled currency becomes the preferred method of payment, then the companies controlling it get unchecked power over the economy.
Banned from Facebook? You need to find other ways to reach your audience and make money. Banned from Libra? Now you need to find another way to spend your money in a market that preferes Libra.
That's one possible bad ending, but maybe I'm a bit paranoid. Still, you'll also have to consider the dozens privacy issues that will pop up in the meantime, especially given Facebook doesn't currently have the best track record.
As is plenty evident with existing cryptos, the network effect is a huge part of a cryptocurrency's success (technically speaking, bitcoin is far from the best crypto out there, but it's the most popular because it was first and is nowadays the most well known).
Facebook's huge existing network will be a massive boon for Libra, however well designed it actually is from a technical standpoint: FB has direct reach into billions of people's daily life.
Good or bad, it will become a strong contender in the crypto space, unless regulators get in the way.
I'm not quite sure which kind of problem they are trying to solve.
Are they just another payment provider that has "crypto" in the name? Having a shiny app? I don't see that as great selling point.
The problems for consumers with current payment providers and banks are largely due to regulatory and policy decisions (PayPal not accepting retailers for certain services, banks making it extremely complicated for you to get a bank account etc...).
Libra will have all of these issues.
So I'm genuinely curious: What problem does Libra solve?
Why in God's name if we can't trust FB with privacy of our kids photos should we trust them to handle our finances? This deserves all of the mockery that it will receive.
How does Libra work? It sounds more like a traditional currency, except it isn't issued by a nation, but by a bunch of companies. The peg to a basket of currencies suggests that it'll operate like a currency board regime. Do they completely give up monetary independence by backing every Libra with a dollar in reserve (or a basket of currencies)? Or is the plan to make Libra eventually float and have some decentralised mechanism to set interest rates?
The TC article says that every Libra issued is backed by USD and other currencies in reserve. So, no independent monetary policy. This looks a whole lot more like full-reserve banking than a cryptocurrency. Are they calling it a cryptocurrency to avoid KYC requirements and other banking regulations?
Great name that's not going to create any confusion in those Spanish speaking countries that call the Pound "Libra" (hence the £ as the sign, by the way).
> Unlike previous stablecoins, Libra will not be issued by a central party. Instead, Facebook has enlisted 27 fellow Silicon Valley titans—among them PayPal, Visa, Spotify, Mastercard, Uber, and eBay ....
This really surprises me, since it is somewhat of a direct attack on Visa, Mastercard and Paypal. Maybe the thinking is that if Libra becomes a success, they'd rather be in on the deal, or they plan on becoming middleman and integrate it into their services.
They joined because it allows them increased market share. This play is mostly about cross border remittance and the unbanked. This gives all these companies a percentage of all the money that gets moved in this way. They have almost no exposure to those customers today. And all they have to do is run some software on some servers and invest $10M. Seems like nothing but upside to me.
Facebook is creating a securitized token representing a supply of Us treasuries and other assets that according to the white paper is to provide intrinsic value.They do not seem to understand what gives Cypto intrinsic value. In theory this is a security and should only be available only to accredited investors and they would need to file for an IPO to make it available to everyone in the US. There is no innovation just another tether.
India is one of Facebook's biggest market. I am interested to understand how will they compete against India's own open wallet platform, UPI, which is already very popular and already surpassed overall Credit card transactions in the country. Wallet companies like PayTM, PhonePe, Google Pay have a strong presence throughout the country and are dealing directly with fiat currency
Looks like this is yet another centrally controllable currency to woo the masses away from Bitcoin, not unlike Ripple's XRP. Or am I mistaken? It's probably a great vessel for speculation, though, since Facebook is a serious company, and because it will obviously be polished and work well. As a vessel for storing and moving value, however, I think I'll stick to BTC.
Zittrain and Zuckerberg discussed encryption, ‘information fiduciaries’, interesting part is that Mark didn't mention nor support cryptocurrencies but he argued that the blockchain would incredibly help with security on Facebook.
https://www.youtube.com/watch?v=WGchhsKhG-A
Have they solved the scale-vs-security problem? Bitcoin scales badly for the very reason that it is secure -- every miner keeps a copy of the currency's entire transaction history (the blockchain), and wastes a ton of cpu cycles on proof-of-work, racing with others to verify the next block.
Has Facebook reduced the number of players involved in mining? Are they using some other proof system?
I think that they plan to create a small network of trusted nodes (e.g. visa) instead of huge networks of anonymous nodes (as in the bitcoin case). If I read correctly the initial network will consists of only 10 nodes.
> I understand that by keeping fiat currency reserves, they can guarantee a minimum exchange rate below which the Libra can never fall.
The way this works is that it's a guaranteed arbitrage opportunity: if the price of Libra somewhere falls below USD 1, you can buy Libra at that cheaper price, exchange it at Facebook for USD (at the fixed USD 1 price), sell the USD, and pocket the difference.
> But how can they stop the Libra from rising?
The way this works is the same thing in the opposite direction: if the price of Libra somewhere rises above USD 1, you can buy USD, exchange it at Facebook for Libra (at the fixed USD 1 price), sell the Libra at the higher price, and pocket the difference.
I'm trying to understand how your statement isn't just a flippant nonsense remark.
How can I, me, one person, make something that is 'better' (how do you even define that) and will get more adoption than something that is being rolled out by one of the largest and already most popular platforms?
What a ridiculous statement you've made. Just a useless statement to make yourself feel superior, is what it looks like.
No it wasn't, certainly not beyond the basic PHP web app version in 2004. Plenty of Fish is more or less than only major app that had 2 employees at the time they were pulling in millions in ad revenue.
Facebook's ads business didn't even get off the ground until they had already begun to hire massively. Zuck's prototype and marketing might have brought in the users, but FB would be nowhere without its billions in ad revenue.
I didn’t have Facebook,the social network way back, in my mind when trying to make my argument (I definitely should have made this clearer).
Remove the history behind Facebook and just look at the numbers of the LibraCoin consortium and you’re not dealing with just one person. That’s the lens someone wanting to make a competitor should be looking through, not that LibraCoin has a long thread tying back to “just” Zuck. That catalyst has little to do with the challenge of competing with LibraCoin as it has started today.
This and the other recent article about how (in China) it's becoming more and more difficult to do/buy things without wechat makes me think that just as VPN's are popular today, some form of anonymous (non-tracking) e-currency will be all the rage in the future.
Why do we need to expend our energies to debate? Facebook cannot be trusted. Facebook should not be allowed anywhere near our finances. This is a nightmare in the making. Gullible public will start using it in the name of convenience and it might suddenly become ubiquitous.
It's supposed to be used by people who cannot access financial service. But they still have to buy Libra with their current currencies, and then Facebook becomes that financial service. So Facebook can reach to where those other financial services cannot reach?
How are blockchain/cryptocurrencies affected by a possible breakthrough in quantum computing? It is my understanding that quantum computing makes it trivial to break todays crypto. So a single actor with a quantum computer could break any crypto currency?
I don't get why it has to be a "cryptocurrency". I see the value in some sort of token that you buy and can then exchange without fees, but couldn't that just be a simple DB? What does it being a cryptocurrency on a blockchain get you?
Lots of people here saying this won't be adopted... I think we're all underestimating how many people are on FB. Ad targeting is very sophisticated for FB platforms, I think a "buy with Libra" button would get clicked a lot.
These are the guys that can't properly secure their main product. Facebook has been leaking all around, I think Instagram stored passwords in plain text, and last year their cookies were stolen too. Ain't touching this for some time.
So the logic is that people in Africa have smartphones but no bank accounts. Wherever they buy their phone credits (cash for a voucher in a corner shop), they could also buy Libra top-up vouchers? It must involve a cash transaction after all.
FB Crypto = big bank crypto. This helps push the blockchain into the hands of millions but the millions won't care. Just another Chase, BofA, Santander.... Sounds interesting and new so people should flock to it....
I'm already at the point where I refuse to donate to charity events that friends and relative link me to through Facebook. I don't trust Facebook to have access to my money, in any way, shape or form.
In the US the evidence for a central bank PhD Politburo "preventing" or even "minimizing" financial disasters is dubious at best. Financial panics in the 19th century were generally shorter, less frequent, and probably effected the avg citizen much less, than 1929/1937/1970s/2000/2008.
Just wanted to say that the logo is not Libra's symbol; it's very similar to Aquarius though. While I maintain my horoscope-hater attitude, I am still disappointed
Facebook unveiled an ambitious plan on Tuesday to create an alternative financial system that relies on a cryptocurrency that the company has been secretly working on for more than a year.
The effort, announced with 27 partners as diverse as Mastercard and Uber, could face immediate skepticism from people who question the usefulness of cryptocurrencies and others who are wary of the power already accumulated by the social media company.
The cryptocurrency, called Libra, will also have to overcome concern that Facebook does not effectively protect the private information of its users — a fundamental task for a bank or anyone handling financial transactions.
Crypto-currencies are likely to be banned in India or at least not officially supported by the Federal Bank. Will this also be treated in the same manner?
I just had to pay my one of my staff members in Mexico a severance of approximately 50,000 pesos. She doesn't have documentation or a bank account, so I had to pay her out in cash. 1000 peso notes are not widely used, so I had to get 500 notes out of the bank. That's about 100 bills--pretty bulky. She's going to have to spend a few hours getting home on 3 different buses with that huge wad of cash somewhere on her person, and risk being robbed.
Having some sort of electronic payment system that worked for her would be amazing.
Let's see how aware the "general public" are about Facebook's lack of trust, or whether they'll adopt this. Obviously FB have probably seen how WeChat does it in China and are copying them.
It's interesting to think that money is one of the things that the Internet hasn't "distrupted" yet, but maybe this is one attempt.
Speaking of trust, one should remember that the dollar bill was a promise from the Federal Reserve to pay whoever had that piece of paper to pay them the actual money written on it. I wonder who would trust the Central Bank of Facebook that they're "good for it"?
> was a promise from the Federal Reserve to pay whoever had that piece of paper to pay them the actual money written on it.
FYI, as written, that statement makes little sense. The term "actual money" does not mean anything. US dollar notes are actual money.
Before Nixon Shock, the dollars were on a gold standard. The government had a promise to give whoever had the US note the specified amount of physical gold (metal). As it is now, it is called a fiat currency, and no government exchanges it for gold or any other metal or any other form of money. It is still "actual money" though, by most sane definitions.
Neither Bitcoin or this should really be used to buy drugs with.
On the other hand you have an immutable public record of all your transactions (Bitcoin) and on the other hand you have bastions of privacy (Facebook) who is guaranteed to sell your info.
Bitcoin is still better... Known drug transactions will probably be blocked here outright, while in Bitcoin you might just get caught after the fact.
Considering that multiple companies have access to the data to find illegal transactions, no way. However it will probably be easily exchanged with other coins
Interesting. I'm curious to see how it plays out. I can see it working if they make Libras look valuable in itself for their user base (eg. Being able to get Libras from other users for services or content and then being able to buy real things with it). Given it's not "real money" would you be exempt of most taxes?
Not only they built it in Rust, but they also built Move - language clearly derived from Rust, which uses ownership as a way to manage monetary resources. Regardless of trust issues with different companies involved, that's just beautiful engineering.
No, the ledger is open. It's just that the transaction data is encrypted so only the recipient can decrypt it, and accompanied by a zero-knowledge proof so the money supply retains its integrity even with the encryption in place.
It's amazing how short of a memory people have. The financial system has at least a few centuries of experience and todays regulatory climate is a reflection of the lessons learned. To some, these rules may seem arbitrary and they sometimes are but people forget how things before.
I find it amusing that the big selling point behind the initial round of cryptocurrency was its lack of regulation.
> This is false actually. Cryptocurrency's "selling point" is being regulated by mathematical rules and not by potentially-corrupted policymakers.
You're being unnecessarily pedantic. If one uses the term regulation, I think we can all presume it's about a centralized governance structure (e.g. policymakers).
The "regulation" in crypto is not a set of mathematical rules. It's a set of rules created by humans (see every crypto white paper ever) that uses mathematical models to abstract away a direct democratic process of trust to facilitate the exchange of currency.
If crypto was just about "mathematical models" then why wouldn't we just use those "mathematical models" in today's fiat currency?
Fundamental rules govern its existence, but not what's done with it. Most cryptocurrency in use today isn't "regulated" by mathematics any more than banknotes are "regulated" by physics.
> Cryptocurrency's "selling point" is being regulated by mathematical rules and not by potentially-corrupted policymakers.
But this is generally false; like fiat currency managed by the governments of capitalist democracies, cryptocurrencies tend to be regulated by technical experts implementing policy on behalf of th user community in which power is weighted by, roughly speaking, the product of wealth and interest in influencing policy.
For the “selling point”, the software embodying the mathematical rules regulating the cryptocurrency would need to be fixed for all time.
Yeah, like I'll EVER trust Facebook to manage my money... If you're libertarian or conservative, you definitely cannot trust Facebook to not keep your money, let alone safe. And if you aren't, you probably shouldn't.
I don't mean to be tin foil hat... but given the amount of account deletions that FB, Twitter, Pinterest and to some extent Youtube and Instagram. I don't agree with the people blocked necessarily, but it belies anything resembling what should be required to trust them.
Is this really any different than your ability to buy things in-practice gated nigh exclusively by MasterCard and Visa?
It sounds less like a dystopia and more like the tech sector and payment processors have been collectively itching to escape the current banking system.
If there is one thing I learnt is that using a techno-bubble elite speech you can cover up a large number of loopholes, fraud schemes, ... Regulators and prosecutors know payment processors extremely well; once you start using another language they're partially unable to compute.
In this sense the choice of initial validators alarms me. Trust is something that must be earned: it's different because I know the evils of the system I'm using, I don't know the evils of this system and it might be worse.
...worse...
> In light of this, Facebook aims for the project to be fully “permissionless” — rather than permissioned, where membership of the Association is only granted to a select few —after five years and transition to a proof of stake network.
"me looking at the GitHub repository": there's a lot of technical debt that needs to be addressed, where is the design for this stuff? A "we'll fix it" is not enough, certain issues require a lot more work than code development.
The oligarchic model offers considerable savings (less computational and energy waste). It's understandable why it's tempting.
But I think that the consensus protocol of Stellar looks a lot more like a sweet spot: it has different levels of participation to the network, each of which gives different incentives, requirements and use cases.
Yawn. This is a tempest in a teapot. Why would anyone bother to use Libra? People buy crypto mostly for speculation, hoping that it will go up (or at least not lose value over time, due to inflation). A stable coin that's pegged to major currencies is no better than the major currencies. It's also no worse. It's boring, and most people won't care.
I do not think Zuckerberg’s ultimate goal is running a stable coin, although he could live with that arrangement and benefit from it for as long as necessary. I think the main reason Facebook has structured the coin with fiat backing is to make it seem less threatening to the current monetary establishment and world governments. It’s a way of saying Facebook isn’t trying to compete with the current status quo, but rather make the status quo run more smoothly and efficiently. Then, once it has a foot in the door and gains traction amongst its massive user base, all Facebook has to do is wait until the current assortment of global governments and their respective central banks fail.
At that stage it can remove the fiat currency backing (who will want it anyway), and let FacebookCoin free float. With the credibility of global governments and central banks in the toilet by then, Facebook and its corporate oligarch partners will be in a prime position to take over a sizable chunk of worldwide payments using their own currency. In other words, this appears to be a long-term scheme by elements of corporate oligarchy to position themselves as an unelected and unaccountable future sovereign power.
All that said, I want to be clear about something. Just because the above represents a plausible scenario doesn’t mean it’ll work out that way. If enough people recognize the dangers of this scheme, it could very well be stopped in its tracks.
In this regard, I want to highlight one of the biggest threats posed by a financial system run by a corporate oligarchy. For one thing, there’s the ever-present issue of censorship. I understand why many in the “crypto” world are fine with FacebookCoin since they see it as a threat to state power and control, but this is myopic in my view. Let’s not forget who is silencing the voices of Americans online in 2019. It’s not the state, but rather Facebook, Google, Twitter, etc. If we allow these companies to gain control of payments, you can be sure the same sort of unaccountable blacklisting will follow in the world of transactions.
Also, similar to what many of the tech giants have done with speech, Facebook could easily team up with governments or government linked deep-state type entities to stop transactions or freeze the accounts of “problematic” citizens. It would be a very convenient way to get around the rule of law in a place like the U.S., and would represent a perfect symbiotic relationship of tyranny between what could at that point be a vestigial state apparatus and empowered tech giant oligarchs.
Ultimately, what’s going on here gets at the crux of everything I’m trying to discuss at Liberty Blitzkrieg. Namely, that the old world is dying and the most important thing that’ll occur over any of our lifetimes is the sort of world we create, or allow to be created, in its wake.
The launching of FacebookCoin represents one segment of corporate oligarchy throwing its hat in the ring, and a very dangerous one at that given the already existing dominance of tech giants in the communications realm. From my perspective, communications and money are two aspects of human existence so fundamental to liberty they should remain as free and uninhibited as possible. To trust these things to a collection of billionaires and their corporations would represent the pinnacle of short-sightedness and insanity.
The Libra Association also serves as the entity through which the Libra Reserve
is managed, and hence the stability and growth of the Libra economy are
achieved. The association is the only party able to create (mint) and destroy
(burn) Libra. Coins are only minted when authorized resellers have purchased
those coins from the association with fiat assets to fully back the new coins.
Coins are only burned when the authorized resellers sell Libra coin to the
association in exchange for the underlying assets. Since authorized resellers
will always be able to sell Libra coins to the reserve at a price equal to the
value of the basket, the Libra Reserve acts as a “buyer of last resort.” These
activities of the association are governed and constrained by a Reserve
Management Policy that can only be changed by a supermajority of the association
members.
> All decisions are brought to the council, and major policy or technical decisions require the consent of two-thirds of the votes, the same supermajority of the network required in the BFT consensus protocol.
I really wonder whether cryptocurrency would have been better received if it were named differently. From inception, I’ve only heard it pitched as a currency replacement. This immediately marred it with all of the currency “counterculture”/conspiracy theories. But it seems better suited as a way to trustless-ly track and verify transactions in an actual, traditional currency. That there are ultimately finite amounts of crypto coins available for transaction better serves this purpose.
It certainly didn’t help that the crypto community was choke-full of conspiracy theorists, libertarians that never read anything else after falling in love with Ayn Rand as teenagers, and get-rich-quick schemers.
The idea was fascinating, and Bitcoin has held up marvelously considering it was essentially a prototype with high barriers to change after becoming popular. There’s a Nobel Prize waiting if the rightful owner ever wants to come forward to claim it.
But, at least for me, it was the culture, especially around Ethereum, that ultimately stopped me from wanting to have anything to do with it. Which is ironic, because a large part of that culture was the denial that anything like “culture” exists, that “trust” and “institution” are terms with meaning, etc.
> It certainly didn’t help that the crypto community was choke-full of conspiracy theorists, libertarians that never read anything else after falling in love with Ayn Rand as teenagers, and get-rich-quick schemers.
I agree. Because of the nature of cryptocurrency, the industry has always just been wrought with fraud.
It has something to do with Telegram chats, the "wild west" feeling, semi-anonymous currency transactions, and the feeling most people have that there is (or was) a real possibility that they could gamble and win big with little effort.
The entire industry can almost be seen as a giant, anonymous slot machine.
It’s funny how one of the core believes of cryptocurrencies has always been that (a) government will fear and attempt to ban it, and (b) that the technology would make such attempts impossible.
Yet what we have seen over the years is really more of a bemused interest from existing institutions, with targeted and rather effective interventions only where actual harm was done, such as ICOs.
It’s almost as if these conspiracy theories about the FED or Credit Card companies’ lobbying power, or the “International Banking Elite” weren’t exactly right.
You're looking at the wrong timescale. Institutions and founders of powerful corporations have life long time scales to subtly tweak and manipulate their messaging and approach.
Look back in 10 years to see whether the conspiracy theorist were wrong. I have no doubt the lobbying to exclude and put "regulations" in place is coming.
But the way many things are implemented, especially when there's lobbying behind it, creates an environment where the only people who can navigate it are the people lobbying for it. As much as we need regulations for pollution, I'm of the opinion we need less regulation for many other things.
Banks are a great example. Banks should be regulated. If I put my money into a bank I want it guaranteed there.
But the industry has successfully lobbied itself extensions in their charters and ventured into financial and investment territory, which I don't believe should be coupled with banks.
Investing and securities (like cryptocurrencies) have an inherent downside - it can go up OR down. I don't need a short sighted politician to put laws in place to protect me from having my investments go down. That's part of the game. If you don't know what you're getting into, you shouldn't get into it.
But thanks to regulations, it's essentially impossible to open a bank or have competitive services, while they get to abuse their positions to leech money from the general population.
There's no reason that banks (safely storing money) and investment companies should be a single entity.
And before you mention inflation, realize that your savings account makes 0% interest, for any useful purpose.
If I want to start or invest in crypto under my own accord, there's no reason I shouldn't.
Don't want to lose your money on cryptocurrency? Don't put your money into it. We don't need regulations for that. We need common sense.
This idea that you deserve a risk free ROI is a moral hazard for society.
Disclaimer: I haven't ever bought cryptocurrencies, because I don't understand it and I'm not an idiot. It's gambling, pure and simple, and the people who lost their money deserved it.
So Mark Z. wants me to buy his Chuck-E-Cheese(c) tokens, then see where I spend them. /s
In all seriousness, are they offsetting the coin generation with windmills, sea turbines, or geothermal plants? How much power is being consumed by FB and the small handful of banks that are cranking out these tokens?
I suppose I am confused. Ether currency is supposed to be a hard to create thing, much like the theory of gold being a scarce mineral. If someone can just "mint" it without mining, then it is not a scarce resource and should not be worth anything.
It's tied to real world assets, 1 to 1 with a basket of currencies. It's only scarce if this rule continues to be followed, so valuation of the virtual asset will depend on users' trust that the real world assets exist and will always exist in a 1 to 1 ratio with the virtual asset.
For an example of this being attempted already, see Tether / USDT which is (supposedly) 1 for 1 backed by US dollars.
"Libra" is the latin name of what is now known as the "pound" and used in many Latin-rooted languages (Spanish, Portuguese, French and Italian come to mind) to refer to pound related currencies, including the British pound sterling ("libra esterlina") and similar currencies from Egypt to Lebanon to Gibraltar pound. It was also behind many discontinued currencies from the past, ie. the Italian Lira or the French Livre.
IMHO a bad choice in naming for something you want to call "new".
An interesting related titbit: the Japanese currency sign for the Yen (¥) used to be encoded as the ASCII backslash (\) in the pre-Unicode era. Japanese fonts simply put the Yen-sign there.
This is bad. Facebook will bake this into their software, even if they claim they won’t do it, they will. It’s no problem because you can always just use fiat right? How are you going to do that when the hoard of idiots out there adopt Libra without considering the long term implications? It could be that if you refuse to use libra, you’ll be left out in the cold. It will be like Facebook all over again. Facebook gets popular in 2007 — hoard of idiots dump all their personal information on it without a single thought about whether or not that’s a smart thing to do — hoards of idiots make Facebook intertwined with life itself without considering how messed up it is — people like me are left out in the cold because we refuse to engage — ten fucking years later people wake up and I’m vindicated — two years later the whole thing apparently is starting again and people are too dumb to see it.
What is even more terrifying is that this is being done by Facebook which has a person like Mark Zuckerberg, who has again and again shown that he has no moral compass and has complete disregard for people privacy rights and by extension other rights, as its dictator, with no real board oversight due to how stocks are structured.
> this is being done by Facebook which has a person like Mark Zuckerberg, who has again and again shown that he has no moral compass and has complete disregard for people privacy rights
Sure. But think about all the money they can make from selling ads if they know everything that people buy. Doesn't he have a fiduciary responsibility to maximize shareholder value?
* From the Hacker News Operators Manual - Hacker News Principle 3.7 states no amount of sarcasm, no matter how extreme, will be clear to the majority of hacker news readers. Thus sarcasm in commenting should be avoided as much as possible, and if deemed absolutely necessary, clearly signaled with the "/s" mark at the end of the comment.
Implied sarcasm and irony is a troll's game. Not to imply that the poster is a troll, I have no reason to think that, but that's why I never assume sarcasm if it's not explicitly stated.
>Implied sarcasm and irony is a troll's game. Not to imply that the poster is a troll, I have no reason to think that, but that's why I never assume sarcasm if it's not explicitly stated.
Sarcasm and irony have been used in an enormous amount of major English-language texts since, well, there WERE English-language texts. Most of these texts don't take the time to spell things out to their less observant readers. Not assuming sarcasm will lead you to miss the point entirely. (This sounds terribly rude and elitist but it's true. And of course, little heed was given to those learning English as a second, or third, language, when these texts were written.)
Take the King James bible, for example. In Exodus, Moses is asked "Were there a lack of graves in Egypt, that you took us away to die in the wilderness?"
Hopefully this doesn't need to be explicitly flagged as sarcasm for you to understand its meaning.
That's a reasonable critique against an implementation of short term shareholder value maximization. That said, it doesn't show a different definition for fiduciary responsibility. It does, however, illustrate my original point that fiduciary responsibility is a silly justification for lots of things it's used to justify.
I assume you are joking, but your statement highlights the problem with a "moral" system rooted in maximizing shareholder value. I think free enterprise markets have many advantages, but there has to be a better grounding for ethical decisions.
I would not say Zuckerberg has no moral compass. He definitely has one. Hell, he started only eating meat that he personally killed. What I would say is that his moral compass points in a VERY different direction than the vast majority of society is familiar with. He's a kook, basically. His views on privacy are not that he 'doesn't care'. He made it clear early on what his viewpoint was. He sees privacy as an antiquated, outdated notion that everyone will benefit from the death of. He believes that once everything is out in the open, people will grow up and stop being judgemental about things that are statistically normal despite being in contravention of social norms. He is, of course, completely wrong on that point and gives the majority of society far too much credit. But it's wrong to say he has no opinion on the matter.
Every mortal may be ousted from their offices; the wisest will provide a peaceful means for doing so.
As Zuckerberg has obviated any lawful means of removing him, by structuring the stock classes such that he holds the majority of votes, he should probably hire more personal security. If he's going to be someone that's completely unaccountable for his actions as head of the company from within the accepted structures, he should anticipate that someone will try to go outside those structures to get to him.
Ordinary people protect themselves from such attacks by not being untouchable jerkwads. He has already left that particular stratagem far behind.
With comments like this, I can understand why he would need personal security. I feel like this rhetoric is dangerous. It sounds to me as if you might be suggesting this sort of "solution" has some legitimacy. I apologize if that's not how you meant it.
I think they're being reasonable. Have a sense of history and of scale. Wars have been fought and millions died for issues much smaller and amounts of money much more meager. When you get to a certain size, when your actions literally affect over a billion human beings, and when there is more capital tied up in your venture than in many small nations... why on earth would you expect people to suddenly not treat you the exact same way nations are treated, up to and including armed insurrection? I don't support such a notion in Facebooks case, but I do think it would be wise for anyone dealing with numbers that big to consider history. Has a war ever been fought over the amount you are dealing with? Are you doing something a war was fought in the past to stop?
I don't think he's suggesting anyone should do anything violent. I think he's suggesting that if Zuckerberg continues down this road, he's going to face problems by whatever routes remain available. The only thing GP said anyone should do is Zuckerberg should "probably hire more personal security".
Would it have come across as less of a threat if he had quoted JFK ("Those who make peaceful revolution impossible will make violent revolution inevitable")? Was JFK threatening Latin America when he said that to their diplomats?
This is a very common rhetorical tactic for people who wish to advocate violence. Parent comment is not advocating violence by asking someone to commit a violent act, they are advocating violence by arguing that violence is reasonable / inevitable.
Crime exists. I advocate that everyone apply whatever measures that fit within their means to ameliorate it, or avoid it altogether.
It applies on the small scale as easily as the grand. If you insult someone's mother, watch for and avoid the retaliatory punch. If you violate the privacy of a billion people, call them morons for trusting you, profit greatly from their personal information, and continue to demonstrate eroding ethics, then install a safe room in your house(s) and hire some bodyguards.
That said, individual violence is reasonable, after the non-violent and collectively-violent possibilities have been exhausted. There always has to be some way to effectively retaliate against anti-social behavior.
It is not "legitimate". That word shares a root with "legal". But we should not pretend that some people do not do illegal things when the stakes are high enough.
Rich people get kidnapped and held for ransom to fund rebellions or criminal cartels. It's a thing that happens. Even heads of state get assassinated from time to time. It's a thing that happens. At the level of super-rich that Zuckerberg inhabits, I'd guess he already gets at least 2 attempts at theft, robbery, blackmail, or extortion per year, and some of them might even be successful. It's a thing that happens. People don't like to talk about it, because the successes encourage further attempts.
There were even GTA 5 missions entirely about manipulating public stock prices by criminally compromising or killing a company's CEO. That's how the player can make all three of their player-characters multi-billionaires.
I'm simply saying that if the only way someone can get to you is via criminality, then that is the way someone will get to you. Most people would always try the "legitimate", peaceful option first, if there is one. That's the primary reason why people choose to leave themselves open to the law. Surrendering to the marshals or getting arrested by state professionals is a more favorable alternative than getting caught by an angry mob. Just ask Qaddafi.
It's just engineering. If your structure is designed to fail at one weak point, then you can monitor that possibility more carefully, and predict the behavior following that particular failure. You can purposefully put in a weak element, so that if the structure collapses at all, it will do so more slowly and in a safer direction. In a corporate structure, you allow yourself to be removed by majority vote, and the failure mode is that you get paid off and live on in semi-retirement. Remove that option, and you don't know how you'll leave your office. It might be a memento-mori-scale heart attack, or complete failure of the company, or a sudden black screen as "Don't Stop Believing" plays on the jukebox.
In the wake of the vote to remove him, Zuckerberg could either step down voluntarily, or increase his security. He won't do the former, so he should do the latter.
Oh for crying out loud. If it bothers you that much, delete Facebook and all apps related to the FB ecosystem from your phone and install a tracking blocker. If enough people do this, then Facebook ceases to be relevant just as much as Myspace did.
If that won't work because everyone else is on Facebook, then obviously most people don't share your opinion that Zuck is that big of a threat that needs to be ousted right? So you either have to accept that the majority of people are ok with it or convince them to ditch Facebook also.
Suppose a hundred people have my contact information. If any one of those hundred people decide that Facebook gets access to their phone, then Facebook gets my information. The "vote" of pro-facebook counts 100x that of a vote against facebook.
This is not to say that I condone corporate assassination, just to say that your appeal to the majority is woefully inaccurate.
All that proves is that you have no reasonable expectation of privacy wrt your phone number. Any piece of information that has to be disseminated to untrusted parties to be of any use (like a phone number or email address) is by definition not private.
Or anything else that goes in an address book entry associated with your phone number.
Like your full name, job title, employer, email address, physical address, date of birth, social media profiles, family relations... the list goes on.
All of that associated information is often stored alongside your phone number. If one person you know does that, and also uses a facebook property and shares their address book through that (e.g. whatsapp), facebook has all that information about you.
If you're curious, check the list of additional fields you can add to a contact in your address book for how much Facebook could get about you
Again, you have a misguided mental model of what it means for something to be private information. If several of your colleagues know your job title and employer then you have already surrendered control over the dissemination of those pieces of information to them and they are no longer private.
I feel like there's a line between private and public information that's getting lost here. Maybe 'non-public'? Just because I've shared something with someone (by necessity, in some cases - they work for the same employer as me, so they know I work here) doesn't mean it's public information.
Or to follow that on, if several people see what medication you've purchased in a shop, is that information now public information? Has the expectation of privacy gone out of the window because it was witnessed by another person? Does that then justify that information being shared with 1+ corporations to add to their profile of you?
I'd definitely agree with that, and think that is what esoterica is missing. I don't think it is reasonable to have a strict binary line between public and private, because there exist many gradations. If I am in my home, I can reasonably expect that nobody is going to be watching through my windows with a telescope from a hundred yards away. If I am at the White House, I can reasonably expect that my every movement is going to be tracked. If I am at the grocery store, it is somewhere in-between. People can see me, what I am buying, and what I look at, but that is transient information.
This transient information is the category that modern surveillance is destroying. I think this is a useful category, as it allows for less stress of interaction, as each interaction is only relevant for a few days. Previously, it decayed over time as people forgot, or as tapes were overwritten. Soon, we are going to need mandatory data expiration policies to maintain this category of things that are public for a short time, and private afterward.
The majority is not always right. In fact, it is often wrong. Corrupt politicians invariably argue that they should not be held accountable and that we should instead "let the people decide" (by voting). But that's not how society has worked up to that point (at least, it's not how it was supposed to work, even if practice differs from theory).
Nowadays we seem to argue that since Mark Zuckerberg has not actually killed people with his bare hands, everything's fine. Everything is not fine. Facebook is a threat to humanity.
The majority is not always right, but the majority almost always gets its way.
Let’s say you’re right. Even if you overthrow the majority they won’t like it. What are you advocating? That there’s a shortcut via authoritarianism because the majority can’t be trusted?
Democracy has no shortcuts. Convince the majority you are right or live with the majority opinion.
From where I am standing I wonder if this is not reflection of the ineffectiveness of governments. In my part of the world there is a lot more talk about devolution, basically self governance of the different regions. Everyone is sick and tired of decisions being made from the capital city by people who do not have your interests at all.
Democracies need to be ineffective and slow to some degree in order to be stable and to allow all people to participate. Otherwise, a coup d'état would be far too easy because efficiency means that only little time would pass between a decision (whether legal or illegal) being made and it getting implemented.
There is a reason why it's much harder to change federal law than a local ordinance. The broader the effect, the more difficult it should be. Effective government should not be about kneejerk reactions.
There's a difference between slow and slowly doing things that are bad for you and everyone around you because some "powers that be" who live in some far off city and have close to nothing in common with you want it done.
If it were up to me I'd make the US into ~100 states and reverse a lot of the power transfer from the states to the feds that's happened over the past 100yr.
I think you mistook my post as supporting Facebook. I am not supporting Facebook nor do I trust central governments. I ultimately think the Swiss model of governance where a lot of power is held in the region.
This is funny. A big reason people voted brexit is because they want more local governance instead of letting some bureaucrats in Brussels decide their fate.
In the grand scheme of things brexit might be a bad idea, but you're effectively saying people shouldn't govern themselves because they would vote for more self-governance...
Multiple reasons, two I can think of right now that frustrate me at that the vote was held when students were on holiday (they needed to vote where they lived, so many students didn't vote who were 6-1 remainers). Secondly, lots of undemocratic goings-ons such as https://www.theguardian.com/commentisfree/2018/sep/14/judges....
Educated citizens may be. The problem is when politicians are allowed to lie through their teeth, as they did for brexit, and the educational system didn't prepare everyone to question the obviously absurd claims made by leavers.
It seems more and more that the government treats us like a consumer. Both parties trying to deliver more and more "value" for the currency that matters to them: votes.
The problem is not government, but highly centralized government at near continental and global scales. Power needs to remain as local as possible. This Facebook move is not a solution because it just puts some global-scope power in another entity, that just happens to be an Internet company.
It's not hard to make the case that today's governments are tired and slipping and in need of reform. But there's no such thing as the libertarian fantasy of "lack" of governance. Human nature dictates that if there's a power vacuum, it will be filled. If it isn't filled carefully with a system designed to serve the people, it'll be filled by whoever can take it for themselves. And whether that's a feudal lord or Mark Zuckerberg, it will be worse than the alternative.
It's nothing short of a miracle that for the past 150-200 years, we've managed to fill much of the world's power space with a system that roughly serves the people (with lots of flaws, but nevertheless). Let's hope it isn't just an anomaly.
> But there's no such thing as the libertarian fantasy of "lack" of governance. Human nature dictates that if there's a power vacuum, it will be filled. If it isn't filled carefully with a system designed to serve the people, it'll be filled by whoever can take it for themselves.
Then let that power vacuum be filled on the state and local level.
West Virginia and California should be free to run their societies into the ground (or not) in their own ways without the other telling them how to do it or being on the hook for the cost.
Except people are not perfectly mobile and can't simply relocate across a continent. Should California be free to say, deny all brown eyed people access to public schooling? Or to run its economy into the ground and dissolve as a state? What about selling itself to a foreign power?
People are free to relocate where they want. They are not free from the consequences, particularly economic ones. As someone who is living in an fairly terrible state because there happens to be some high paying jobs in my industry I am unfortunately very aware of these kinds of trade-offs.
Don't straw-man me, I'm not saying we should dissolve the federal government. I'm saying states need to be less under its thumb and with that comes some responsibility for the consequences of mismanagement. Some of those consequences compound (screw up your state enough and all the people who can move will, taking their tax revenue with them) but that risk seems like a pretty low price to pay for more government happening on a level that is easier for the average Joe to influence.
If they can somehow reconcile your eye color restrictions with existing state law, the US constitution, etc then sure, why not.
No. Your ideas of what 'feudalism' implies are totally wack and ahistorical.
Feudalism was a time of laissez-faire, political liberty and anarchism.
"The vassal of my vassal is not my vassal" was the motto of feudalism. It was a reaction against the centralization and coercion of the old Roman Empire.
Peasants were bound to their lord's land, owed feudal dues like corvée, and could be judged and punished by their lord. It could only be called an era of "political liberty" for perhaps a relatively small class of nobility. The vast majority of the population was trapped in cemented, unalterable relations of fealty and economic exploitation.
> It was a reaction against the centralization and coercion of the old Roman Empire.
It wasn't so much a reaction against anything in the Roman Empire as the thing that sprang up as the more politically and economically advanced Roman system collapsed. Roman citizens had political rights, such as protection from arbitrary punishment, which were lost in the feudal era. The Roman state collected taxes and used them to provide substantial public goods, such as roads, aqueducts, sewage systems, public baths and theaters, the grain dole, courts and of course, defense of the frontiers against barbarian incursion. With the collapse of that system, the Latin-speaking population of Western Europe came under the rule of rather uncooth German tribesmen. The only honorable professions open to the Roman aristocracy, which previously would have gone into the civil service, were in the Church and the meagre administrations of the new German kingdoms. Taxation systems broke down, the previous public goods were no longer provided, and the common population came under the personal rule of their lords.
I wouldn't call a system in which the common population is subjected to the personal rule of a lord more "free" than a system of laws.
He’s sketching out a main point that a few are subjugating the rest using some sort of apportioned rights (in this case, runaway technological inertia and money leading to a positive feedback loop of even more inertia)
I think you’re missing the forest for the trees by concentrating on the historical robustness of his feudalism reference
My immediate thought was that he meant something more like corporate city states ala cyberpunk themes presciented by blade runner and shadowrun
What I meant is a civilization where only the powerful have a say, and regular people become serfs to powerful, warring organizations. Which, yeah, I guess isn't very well articulated by the word "feudal".
Weird that someone who is trying to be such a pedant incorrectly suggests this was a period of anarchism (a political system centered the absolution of government and unjust hierarchies). Maybe you meant anarchy, which is also a stretch historically speaking.
Shouldn't Facebook be focusing on their previous project that promised to "connect the unconnected" (Internet.org / FreeBasics), rather than start another ambitious one "to bank the unbanked" ?
There are lot of people connecting to the unbanked via facebook/whatsapp/insta and transacting with them financially off the network.
When you have 1 network connecting 2 billion people why get off the network onto some other network to do a transaction. If I want to send cash to a family member in the developing world it's more convenient if the pay button is right there in the messaging app.
As to privacy and Zuckerberg controlling everything, well the banks and telcos already have all my data and keep spamming me day and night based on that data.
Whether the data gets centralized and the number of networks reduce to 1 is less interesting to me, than whether they use the data collected to take advantage of me. We do have road networks where you can drive from one end of the world to another without worrying about who the road owner is and how they might take advantage of you.
Our banking system certainly leaves a lot to be desired but I’d take Bank of America over Facebook pretending to be a bank 100% of the time. And I have never said a nice thing about BoA in my life.
What’s scarier to me is that Facebook is deliberately and admittedly targeting the unbanked - the people most in need of a bank but also the people most at risk of being taken advantage of. I’m afraid this will be the silicon valley version of a prepaid debit card/check cashing business run by Facebook instead of Wal-Mart.
I would stake Bank of America through the heart, bind it with chains until sunrise, vitrify the dust, and then dump the evil slag into an ocean trench, and I'd still bank there long before trusting Zuckerberg's Facebook with my money.
> Our banking system certainly leaves a lot to be desired but I’d take Bank of America over Facebook pretending to be a bank 100% of the time
Facebook isn't pretending to be bank. Facebook is pretending to be a payment processor. What's the big deal?
Nobody is telling you to put all your savings into a centralized cryptocurrency, especially considering you're a US citizen with access to relatively good banking system.
Name one payment processor that (1) doesn’t require users link a bank account, (2) takes deposits, and (3) issues a token in their own denomination based on those deposits that’s pegged to a mystery “diversified global currency reserve” to be invented at a later date/altered to suit Facebook’s needs.
It kind of sounds like it’s a money market account to me. Minus all the pesky regulation, of course. Like the required banking license to offer those in the US.
EDIT: If Facebook wants to come to the finance party, I welcome them accepting the regulatory burden imposed by federal regulators and the finance industry itself.
Disclaimer: I work in financial services, specifically interfacing with regulatory bodies.
[1] https://www.fdic.gov/regulations/laws/rules/ (Example FDIC Laws, Regulations, and Acts, none of which currently apply to silicon valley corporations, but all of which apply to banking institutions)
Among many other great crimes, U.S. banks have stolen hundreds of billions of dollars from the poorest people through overdraft and bounced check fees. The banks own the regulators.
If regular people can just have a safe place to keep their money, without being actively exploited, that would be a huge improvement.
You will need to construct a more targeted argument than, "All banks bad, all banks hurt people". The majority of Americans store their money in banks safely (and while the unbanked and underbanked is a huge problem, it is out of scope for this comment), protected either by FDIC insurance (banks) or NCUSIF (credit unions). The majority of banks behave responsibly (I don't work at BoA, Wells, JPMC, or someone else who has committed fraud). You don't even have to use a bank! That is what your local credit union is for [1].
Some banks have behaved badly. All cryptocurrency is a scam (see: SEC ICO determinations, outright ICO/token fraud, etc).
With fiat, you have recourse with regulators and the legal system. With crypto, you have none ("oops! someone cloned your SIM and you've lost your entire nest egg. better luck next time!"). Your arguments don't make the case for cryptocurrencies; you make the case for more regulation and oversight of the banking and financial services industry (which I agree with entirely, not because it's my job, but to keep the hard earned assets of banking customers of all income and asset brackets safe).
You will need to construct a more targeted argument than, “All cryptocurrency is a scam” if you want others to construct more targeted arguments than “all banks bad” (the difference being you had to paraphrase GP, while I got to directly quote you).
Cryptocurrency is infrastructure, while you are arguing against it as a replacement for all players in the current financial system. I would argue that's a shortsighted and under-informed perspective.
https://www.dailycal.org/2018/03/09/father-internet-vint-cer... (Vint Cerf: "In addition to discussing the history and advancement of internet technology, Cerf talked about cryptocurrency. When asked about bitcoin, Cerf said his first response was to “run the other way.” On the topic of blockchain, he struck a more moderate tone but cautioned about its applications.")
https://www.bloomberg.com/news/articles/2019-05-29/blockchai... (Bundesbank: Blockchain Settlement Was Slow, Costly in Trial, Weidmann Says: “The blockchain solutions did not fare better in every way: the process took a bit longer and resulted in relatively high computational costs,” Weidmann said in Frankfurt on Wednesday. “Similar experiences have been made elsewhere in the financial sector. Despite numerous tests of blockchain-based prototypes, a real breakthrough in application is missing so far.”)
Distributed ledgers, blockchain, and cryptocurrency are solutions looking for a problem, overly complicated and underperformant infrastructure. They attempt to solve for trust with technology solutions in a world governed by human regulation and legal frameworks (which always take precedence). A database will work just fine. Everything else is snake oil.
I mean… I could also post articles on Fidelity and Ernst & Young investing in the technology, Stripe, Square, obviously Facebook and a whole host of other companies in this announcement, etc, but it feels very much like you've decided your conclusion and are simply feeding it with whatever journalism confirms it.
Regardless, you asked for a more targeted argument, I asked you for the same, and your response was 5 different articles on 5 different things. That's not targeted, it's the literal opposite. The problem with not being targeted is you have to pick a thing that you're disagreeing with. Here you seem to be disagreeing with “people think blockchain is useful”. But… There's plenty of evidence that isn't true in the general case, even if specific groups certainly don't think it's useful. Alternatively, we'll take your opening statement of “All cryptocurrency is a scam”---which is both not targeted (‘all’ is the operative word there) and not really supported by your articles since they're all about specific people or specific attempts.
It's fine to be a skeptic, by the way! I take no issue with you not particularly believing in the hype; my own take on the hype is considerably more skeptical than the louder folks. Just… Maybe don't put down other people's arguments unless you're willing to put in the time to make a better one?
To your other points: (a) you can have a mostly-technological solution in a world whose final resolution mechanism is human and legal; (b) there are plenty of companies in the cryptocurrency space still operating with SEC approval, including teams that did ICOs; (c) cryptocurrency, even the completely public/trustless type, isn't mutually incompatible with banks as a concept, though it could eliminate certain aspects of banks that require direct human intervention in the long term.
None of these things are here yet. Technology takes time, and the difficulty with technology that's built in the open is that it's in the public eye long before it's fully ready for prime time, so the debates about it happen in the public eye. A classic example is the Tanenbaum-Torvalds debate[1], except cryptocurrencies are being developed in a world that is 1000 times more connected than the Linux kernel was, and they are ostensibly applicable to considerably more people.
If you're not convinced based on evidence there is no practical, production use distributed ledger or cryptocurrency besides bitcoin (which works very, very poorly), that's not on me to address. Prove it works and is needed.
>Among many other great crimes, U.S. banks have stolen hundreds of billions of dollars from the poorest people through overdraft and bounced check fees.
I can agree with the fact that some of the bank fees for such services are ridiculous, but how is a customer using their overdraft or bouncing a check the bank's fault? How is it "stealing"?
In the case of overdraft fees, over 30 banks were ordering transactions in a punitive way, charging up to six overdraft fees per day, and not providing a way to decline charges when an overdraft (and related fee) would result. It also resulted in the Federal Reserve instituting overdraft protection regulations in 2010. It was predatory, plain and simple, and hundreds of millions of dollars in collective fines were paid.
Ordering transactions from large to small so you are hit with the maximum number of penalties. It can easily end up costing you many multiples more than ordering chronologically.
At best regulations act as a moat keeping competition away the entrenched banks. As soon as the government comes up with rules the smart people at the banks find a way to get around it and make money. Startups don’t have the legal expertise and can’t compete.
If that's the case, why do banks consistently push to loosen regulations? Can you point to an instance of banks lobbying for increased oversight and restrictions?
Making a bank should be hard. I don't want some unknown startup to come in to "move fast and break things", because "things" in this case means "people's savings".
Well there’s the CEO of Bank of America saying “Dodd-Frank is fine, None of us are trying to touch it”. The big banks could push a lot harder against regulation than they do.
This has been my experience as someone who started a fintech company and has friends in compliance departments at banks. Highly bureaucratic on both the bank and regulator side. Compliance reviews are mostly an expensive song and dance by the banks. People jump from bank to regulator and vice versa all the time so there is rampant cronyism. Combine the cost of this song and dance with the cronyism and it becomes nearly impossible for a startup without a ton of funding.
Regulations can raise barriers to entry. But "at best", banks haven't just gambled away all the deposits leaving customers with no recourse lately.
Wells Fargo has been defrauding a lot of people, but at least they're paying billions in fines for it. It's not enough to keep them from doing it I guess, but I'd argue that fewer regulations would probably make that situation worse and not better.
How do you know that regulations are why the banks haven’t gambled away all the money? There’s no law against me gambling away my savings but that doesn’t mean I’ll do it. There’s other incentives in the system, for example the desire to avoid an angry mob of depositors burning your bank to the ground.
Some regulations are good but the ones we have are overburdensome. Even huge startups like Robinhood can’t get it right and the laws around what constitutes a security for ICO offerings are so vague that no one actually knows if they’re breaking the law or not.
>A smattering of nonprofits, which didn’t have to pay the $10 million entry fee, also populates the consortium to make sure not everyone can be corrupted by financial incentives.
Is this a euphemism for 'stuffing the ballot box with nonprofits your wife and friends and are on'?
"Facebook is enforcing a strict separation between users’ social data—their Facebook likes, photos, etc—and the financial data that will be available on Libra’s network. There will not, he insisted, be a readily available data trove connecting users’ transactional data to their Facebook profiles"
I find this extremely hard to believe coming from a company who's entire M.O. is building a profile of its users and tracking everything they do across the internet and beyond.
Facebook seems awfully quiet about WHY they're developing this thing. There's a lot of fancy and positive spin on "helping people in countries without access to banking" and that fine, but they do need to explain how they plan to turn a profit on the project. Until they do, we should assume that it WILL involve selling/exploiting the financial data of the users.
I believe them that it won’t be readily available :)
That is, I’m sure Facebook will create link all that data together to improve their surveillance but not let others readily access it. Of course advertisers will still access it indirectly by using it to target their ads.
I tried to buy a cup of coffee recently at a bitcoin only cafe. Though I didn’t end up paying with bitcoin because it took a day for the bitcoin atm deposit to clear. So I asked a friend who worked in the building to spot me a cup of coffee, and he paid... by making a line on a piece of paper they used to do bookkeeping denoted in fiat because no-one wanted to go through the hassle of bitcoin transfers and no one had enough trust in the currency to keep prices in bitcoins, so they just tracked the costs in fiat. All of this in a “bitcoin only” cafe.
Bitcoin as a penny-stock investment opportunity still seems successful, but as a viable currency it seems to have failed. And now cue the people saying that bitcoin was never actually intended to be used like a digital coin...
So you have bitcoin, visit bitcoin only cafes, and yet you or the business cant figure out how to pay for a cup of coffee with bitcoin...
It’s hard to tell if this is a joke, trolling, manifestation of dystopia/idiocracy.
All that’s really needed now is an underlying story of how the cafe couldn’t figure out how to accept payment, but due to being “bitcoin only” they received wild media attention and became an influencer, got SV capital investment, pivoted to a freemium model just giving away their bitcoin only coffee for free, gained market share over Starbucks thanks to SV Venture capital subsidizing our coffees and then they go public and the VCs/bitcoin coffee founders make billions unloading onto the public.
I’m so sold I was going to register both bitcoincoffee.com and bitcoincafe.com, looks like some savvy founders already beat me to the punch.
From what I can tell the only way to obtain bitcoin without providing personal information is to find someone on Craigslist willing to transfer you some coin... for a 15% markup.
12 cents is a lot, since it is static regardless of the transaction size. Small transactions at 12 cents fee are ridiculously expensive. You need low fee + 0-conf for small transactions (e.g. BCH). 12 cents is negligible for large transactions, hence why people call it a store of value. And since bitcoin doesn't scale, transaction costs will skyrocket again to crazy transaction fees of 50-100$ easily if it starts being used.
I'm curious how people still consider BCH a viable currency after the 51% attack done "in good faith" by a major mining pools BTC.top and BTC.com [1]. What's to stop them from doing it again the next time it's convenient?
I mean, its Bitcoin, the worst from all the cryptos. In the meantime I am using Ethereum to get electricity to my home (via lition.io), use it to take a collaterized debt position (via MakerDAO) and spending crypto daily in seconds with the Coinbase debit card. Just days ago I paid for my NordVPN directly with Ether, the transaction cleared in under 30 seconds. Bitcoin was the experiment, Ethereum is the working, usable product (which will only get better in the future).
It doesn't matter what it was intended for, which it very well may have failed at. What matters is the value people see in it now. The claim is it represents digital gold bars.
Bitcoin is more like "gold coin" currency, regarding its volatility at least. Its use cases as everyday currency are more or less limited to illegal drugs.
Your comment does not even deserve thoughtful responses in my opinion. You are clearly uneducated on the subject and it's your responsibility, not ours, to fix that should you choose to.
Conception. It’s pitched as a replacement for government backed, fiat currency. But I’ve never heard or seen a convincing, coherent explanation that makes it clear this is a currency. For one, a currency can’t be reliant on an internet connection for validity. My 1$ bill in my wallet absolutely does not rely on that. In fact, there’s an entire country validating that dollars usefulness. A gold coin essentially answers the usual doubts in fiat currency.
> But I’ve never heard or seen a convincing, coherent explanation that makes it clear this is a currency
Cryptocurrencies is a better type of money for a few reasons:
* More acceptable than other digital money (banks and payment processors might say no)
* More easily divisible than for example gold coins and gold bars
* It's sound money whereas fiat is not (nobody can arbitrarily increase the supply)
* Much more portable. You can send any amount to anyone in the world, as long as they have internet.
To be clear, cryptocurrencies are like cash but in digital form. It's a great medium exchange, but it suffers from low adoption meaning it's a bad store of value (but so is fiat) and a bad unit of account (but so is gold).
> For one, a currency can’t be reliant on an internet connection for validity. My 1$ bill in my wallet absolutely does not rely on that
So you don't consider digital fiat currencies then?
Me not having internet for a period of time doesn't invalidate my cryptocurrency holdings. I just need internet to spend it (a fair constraint for digital money).
> A gold coin essentially answers the usual doubts in fiat currency.
Except for the fact that you can't send gold coins digitally.
Also, it's much more difficult to check for gold coins. And difficult to transport. It's easy with cryptocurrencies.
>It's a great medium exchange, but it suffers from low adoption meaning it's a bad store of value (but so is fiat) and a bad unit of account (but so is gold).
So it unites the drawbacks of both fiat and gold without any of the advantages.
>* It's sound money whereas fiat is not (nobody can arbitrarily increase the supply)
Yeah they can, it's called a hard fork in cryptocurrency.
In fiat it's called "printing play money", but the goal is essentially the same.
>Except for the fact that you can't send gold coins digitally.
Actually you can, though in this case you exchange ownership contracts of the gold, which you can swap for the gold you own at your bank.
Plus I don't need to wait an hour to do that, I can do it even offline if I wish, where all parties can verify the transfer without a computer at all.
>Also, it's much more difficult to check for gold coins. And difficult to transport. It's easy with cryptocurrencies.
Until the tax office knocks at your door and wants to know where all that money went. Then the ease of transport is suddenly a problem.
>It's a great medium exchange,
In my experience, no. It's not a medium of exchange at the moment any more than beer tops and a ballpoint pen are. Bitcoin and Friends are at the moment a speculative asset that people hoard in case it gets more valuable or use as an unregulated stock exchange.
The average customer can't even get refunds if they get scammed, how am I supposed to take it seriously as a digital currency?
> So it unites the drawbacks of both fiat and gold without any of the advantages.
Well, if you conveniently ignore the advantages...
> Yeah they can, it's called a hard fork in cryptocurrency.
That's similar to me printing "Doge dollars" and claiming it increases the supply of US dollar.
> Actually you can, though in this case you exchange ownership contracts of the gold, which you can swap for the gold you own at your bank.
Yes... If we ignore the fact that you're not actually sending gold.
> Until the tax office knocks at your door and wants to know where all that money went. Then the ease of transport is suddenly a problem.
That's not an argument. Taxes are applied in the same way as cash is taxed, with benefit of you having a ledger you can reference.
> It's not a medium of exchange at the moment any more than beer tops and a ballpoint pen are.
Except them being instantly verifiable, have a constrained supply, are easier to transfer, are divisible, are fungible & uniform... Just the properties that money actually needs and make for a good medium of exchange.
> The average customer can't even get refunds if they get scammed, how am I supposed to take it seriously as a digital currency?
I guess the same way you take physical cash seriously?
> Except them being instantly verifiable, have a constrained supply, are easier to transfer, are divisible, are fungible & uniform... Just the properties that money actually needs and make for a good medium of exchange.
Money also needs to have stable value within some margin and small but steady inflation. If the value rises then it is a bad idea to spend it because it becomes an investment. If the value fluctuates nothing can have a nominal price. A MacBook costs $1400, but in a day it could be anything between 0.2 and 1 bitcoin. Like in the cafe story in one of the GP comments, this makes it impossible to use for any transaction.
The only thing preventing me from using bitcoin regularly is the need to account for the capital gains (losses) on every individual transaction relative to USD. One year's worth of itemized accounting for trivial transactions was enough.
Barring that, I'd be actively using BTC (or other cryptocurrencies) in the same mode as many people use Venmo.
What if it costs twice as less? Think of it as cashing in a small part of some stock/investment to use it to buy something. If you're really that concerned about crypto price changing, you can just top it back up that evening.
That is a good analogy. One would not cash in a part of investment for a banal purchase but might do so when buying a house. In that case I would definitely wait for a right moment to sell.
Back in the early 00's there were companies "egold" and "goldmoney" that did effectively a centralized, infinitely divisible currency denoted in gold and exchangeable for gold.
egold got shut down for facilitating money laundering. I think IIRC goldmoney retired from being a currency and became a non-exchangeable gold vault. Governments really didn't like them.
Can I expect bitcoin to hold any semblance of a stable value, like an actual 1st-world currency or standard, quality investment product no?
So if it's not useful as a currency and not useful as a store of value, what is Bitcoin? I really want to trust in the brave new world, but I just can't.
But Bitcoin is supposed to be a currency without boarders. If it can't make it in a country with the level of tech-adoption like the USA for the above simple tasks, please help me understand the use case.
Seems you haven't looked up the history of "1st world currencies" and how they don't in fact retain value over time. Even the almighty US dollar has lost 97% of its value over the past century and it's the reserve currency.
Who cares? No one stores their wealth in USD. You simply buy treasury inflation protected bonds. Problem solved. You only keep in USD your working capital.
This isn't about deflationary vs inflationary money, because you can encode any type of currency policy.
Instead it's about no single entity can suddenly decide "let's issue trillions of dollars to repay our debt!", which erodes any savings you have and can in the worst case collapse the economy (see hyperinflation).
What I guess you're after is having the ability to respond to the economic climate by stimulating the economy? Then let me introduce you to the concept of sound money and what Austrian economists have to say about it.[1]
The basic point is it's impossible for a single actor to predict the market behavior, it's why a planned economy doesn't work, because the market consists of actors who only act in their own best interest and don't have perfect knowledge.
That decision at the Fed has been historically taken after consultation of (if needed) the entire financial industry and academics and political leaders (to some extent).
> Are there any real world success stories of Austrian economics? It's like the libertarian version of communism's "works perfectly in theory".
It is exactly that. There is no example of pure austrian economics just as there has never been a 'true' communist state since human nature will never allow the extremes they need to work.
> How do civilians escape a depression with no money in an Austrian economy?
The entire point of 'sound money' is not actually to help the general population survive or prosper, it is specifically to limit the power of government. From the link above "It is impossible to grasp the meaning of the idea of sound money if one does not realize that it was devised as an instrument for the protection of civil liberties against despotic inroads on the part of governments."
Of course you might have a depression, but that should be cleared up quickly since the free market allows the fit businesses to buy up weak competitors (since there is no anti-trust in austrian land). If you are unemployed during this time you can always find some labor job to do so will never be truly unemployed (since there is no minimum wage or restrictions to work).
> The entire point of 'sound money' is not actually to help the general population survive or prosper, it is specifically to limit the power of government
Isn't the point of limiting the power of government to actually help the general population to survive and prosper though?
> Isn't the point of limiting the power of government to actually help the general population to survive and prosper though?
It might be a lovely side benefit, but no, I don't think it is the point or outright goal in austrian economics and libertarianism. The freedom itself is the goal, which does carry the potential to succeed and prosper but also the potential of complete and utter failure and misery with it. You are allowed to be a failure completely if you so choose here. I might be wrong on the philosophy here though as I have only really skimmed the surface of mises, hayek, rothbard, etc, but that is my understanding.
>More acceptable than other digital money (banks and payment processors might say no)
>More easily divisible than for example gold coins and gold bars
These are true.
>It's sound money whereas fiat is not (nobody can arbitrarily increase the supply)
You'll have to explain why the inability to increase the money supply is a benefit? Sure, money printing can be abused, but a growing money supply is also beneficial in a growing economy (output + population). Second, how do the current holders selling the currency to people without any Bitcoin not count as "increasing supply". If they don't sell, supply is zero, after all. What is the value of Bitcoin as a currency in that case? Nothing.
>Much more portable. You can send any amount to anyone in the world, as long as they have internet.
That provisio at the end is a big one, considering internet is susceptible to going down via both natural disasters and government whims.
I wouldn't say it's failed, but I don't see it succeeding, either. Is Bitcoin more or less mainstream than it was 2 years ago? Are transactions faster? Is it used at more retailers?
I don't see any of that. It seems like it's only a tool for speculation.
Of all the bizarre phenomenons in the world, I think the Bitcoin-as-an-investment takes the cake.
People spend a ton of energy (that could otherwise to actual useful things) on shifting around bits that they then claim are very valuable.
You could make a similar claim about fiat money except that actually makes commerce easier. Bitcoin is not a good way to transfer value since like you said it's too volatile for a currency.
So it's built on nothing, it does nothing and underpins nothing, it wastes huge amounts of otherwise useful energy and that makes it a good investment?
You know, I too really dislike the investment focus of most people. If it's not usable, it's just a bigger-fools-game. And price volatility is a definite concern.
Yet many do use it as a currency, volatility isn't a showstopper. Just look at the use in darknet markets, most serious VPNs and VPS services offer it and you can buy all sorts of stuff on for example Webhallen or Inet (two of the biggest Swedish online computer stores).
> So it's built on nothing, it does nothing and underpins nothing
And this is wrong. It's secured by cryptography and game theory.
The big thing it does is fairly simple: It enables digital payments without a trusted third party. It's relevant for businesses who cannot accept credit cards and there are thousands of stories where startups gets their accounts frozen, for arbitrary reasons, which may tank their business.
> it wastes huge amounts of otherwise useful energy
Actually most of the energy comes from renewable sources, which would be wasted otherwise. The Bitcoin mining industry is so competitive, it wouldn't be profitable otherwise.
I don't want to wave away the concerns as nothing, because it is a valid concern, but there are tons of other things we waste much more energy on.
I guess you are right that it's useful for black-market commerce and I suspect that's probably the only reason it has value.
Regarding this:
>Actually most of the energy comes from renewable sources, which would be wasted otherwise. The Bitcoin mining industry is so competitive, it wouldn't be profitable otherwise.
Geothermal energy isn't renewable unless it's used sparingly. Hydro-power requires huge sacrifices of land, usually fertile valleys, in the reservoir lakes. Windmills are loud, huge and ugly. Power lines require sacrifices of land. And everything needs to be produced, with the environmental impact that brings.
I'm not saying renewables are bad, they're not, but they are not so pristine that using them for bitcoins isn't a sad thing.
It's not only black-market commerce though. Porn, legal marijuana, gambling, auctions are for example considered off limits by most payment processors and in some cases even banks. PayPal even froze Minecraft's account (but it was quickly reinstated due to it's popularity, many others have not been so lucky).
Yeah, but no one is flooding valleys to power mining operations. They use already existing hydro power plants like those China built in the middle of nowhere and didn't have use for because of poor planning. You can also turn on the miners only for periods of lower demand (e.g. at night).
His point is some of the cheapest energy in the world is renewable (like hydroelectric energy in China), which is what Bitcoin is using. Bitcoin mining can take place virtually anywhere in the world so it can be done where energy is already abundant.
Value and it's underpinnings act in very bizzare ways, and people might assign value to something just because other people do as well. Regarding Bitcoin, one of the reasons people assign value to it is because it offeres a way to keep track of value in a way that is almost impossible to manipulate. Cyclical reasoning right there. That property is not unlike gold, but besides gold also offeres some extra advantages (and disadvantages) like being able to transfer it across the world in 10 minutes or pass it across borders without any hassle.
People spend a ton of energy, that could otherwise have been put to better use, to extracting small fragments of yellowish metal from beneath the ground, cleaning it up only to put it in another cave behind bars and locks. Then they go around loudly proclaiming how valuable it is.
A lot of work was spent moving it only to never use it. Value is a strange thing, I guess. One would think they could skip that massively expensive and somewhat dangerous unnecessary part and just count large numbers instead, or something.
That's a valid point, but the removal of the physical step only serves to make the whole process even more absurd.
With gold bars at the very least you have in your hands a concentrated lump of actual material that will survive a power outage or a lost password or something.
But of course that whole process is as absurd as you point out today because gold holds residual value from when it actually was a convenient universally recognized store of value.
> So it's built on nothing, it does nothing and underpins nothing, it wastes huge amounts of otherwise useful energy and that makes it a good investment?
Just an armchair hypothesis, but perhaps given it's lack of underlying utility (vs gold for example) Bitcoins "value" is mostly just a measurement of the level of distrust in fiat currencies and the institutions and governments that back them.
There are a subset of people who by nature will never trust fiat currencies, or govts and institutions that back them, and the "floor" of Bitcoin is defined by their participation, as well as those with a vested interest (i.e. a large early stake) in Bitcoin. As the distrusting population expands and contracts, Bitcoin will vary in value.
I do wonder whether rising energy costs will take a bite out of the value proposition for it, though.
The carbon price of cryptocurrency damns it enough. If it weren’t for the lucky happenstance of fossil fuels we probably wouldn’t have had the energy Infrastructure around to develop computers to crunch numbers for this sort of moonshot.
You're very welcome to add me to the dumb club too.
In addition I'm a smidgeon confused about how the bitcoin exchange rate is determined. It seems to be whatever exchanges say it is. There must be some metrics to determine that, but overall the market seems so illiquid and some of those exchanges seem a bit like easily hacked two bit shysters with some PHP scripts and a snazzy whitepaper.
I suspect that volatility may be a feature to money launders - not as ransomware transmissions or anything like that but justifying balance transfers. Not saying that was even an intention as opposed to ideology but to paraphrase cyberpunk the street finds its own uses. The fact there are innocent users is what makes the conspiratorial useful.
This is all read and theoretical - I certainly don't have any practical experience with either combatting or committing money laundering.
Anyway fine art and wines are infamous as pretextual transfer vehicles because the values are often so subjective - bitcoin swinginess serves the same purpose, especially if the hypothetical enterprises control enough to manipulate the market. Big assumptions of course that such a thing exists but it highlights who it could be useful to (intelligence agencies and organized crime - which are arguably largely the same thing to the host country - both break the law in pursuit of their agenda).
Anyway that form of laundering involves buy something at a lower/normal price and selling high. The selling high can be from having a contact buy it for higher with your dirty money. Of course open sales would be preferrable - not only because deals only between connections are obvious but some bonus profit. If someone not involved outbids or provides enough of a margin to be worth backing off all the better - you can move the dirty money another day.
If one needs to funnel clean into dirty do it in reverse order essentially.
The exchanges aren't market makers, they're exchanges. Totally separate concept. The NYSE isn't a market maker for stocks, for example.
Your confusion seems to be that the exchanges are coming up with the prices, which is not at all how it works. Again, the price is set exactly the same way as it is on the NYSE, by matching bids and asks.
BTC failed to be a currency that could be used for practical purposes. There's really nowhere to spend BTC today that matters.
If Amazon, Costco and AirBnB etc. allowed BTC, well, others might join, and we'd possibly see real circulation. For whatever reason, it was never meant to be.
Ease of use will be the first hook: FB will likely leverage their install base across insta, FB, WhatsApp, messenger, etc to just upsell this constantly. Lowering the barrier to send to drive adoption.
Lower transaction fees and your friend likely has an account (or it is very easy to sign up FB user with Libra). As long as Libra is cheaper compared to existing method of transferring funds, it'll be a success. Say it costs me $8 to send money to South Africa. If Libra is free or costs $0.01, then of course I'd use Libra.
The biggest is the likelihood that they, and their networks, are already using Facebook. And they're far more likely using Facebook than any of the other services you mentioned.
I'm Andrs Winke. Don't confuse Crypto Bitcoins with Crypto Bitcoins, though. Crypto Bitcoins could be one of the most neglected Crypto Bitcoins around. They have exacting standards. In truth, you can't find a Crypto Bitcoins that gives authority to a quality for a Crypto Bitcoins . It just goes to show this in the matter of Crypto Bitcoins . I'm answering your questions apropos to Crypto Bitcoins .
I will be following with curiosity. Some times ago I would have been much more inclined to trust FB creating this system. But not now.
Hopeful for those that don’t have access to traditional banking and financial systems! I can read the news without FB, with https://inechain.com and other news aggregators. I use FB is because have friends - only way I can connect with.
Publishing someone's name in a thread as a weapon in an argument is a personal attack and the sort of thing we ban accounts for. Please don't do that again.
With Visa, Mastercard, Paypal, Stripe, Facebook already censoring conservatives I can't wait for them to build an "inclusive" currency.
Why would anyone question the reason these corporations just threw 10 mil at this, it's clearly to help people in poor countries who have no access to banking and rely on payday loans.
One is stuck in an 'information bubble' or an 'echo-chamber' when one gets most or all of ones news from a relatively small, homogeneous group that's rather fixated on specific issues.
Anything that can be called mainstream media is (as a whole) none of those things.
Besides that, the term Mainstream Media is now so politicized that it's almost unusable in conversation.
Could you please not post unsubstantive comments to HN? We're trying for a more thoughtful sort of discussion here.
If you'd read https://news.ycombinator.com/newsguidelines.html and post in the intended spirit of the site, we'd be grateful. I noticed a thread from a few days ago where this account got involved in a religious flamewar. That's just what we don't want on HN.
You might also find these links helpful for getting the spirit of this site:
Hmm, should I use United States Dollars? OR Facebook United States Dollars?
I'm going with G.) Other.
Hording cash is a terrible investment idea.
EDIT: Hording and Investing typically means to generate future value. Daily spending money can be done in cash. I would hope I didn't need to explicitly say this, but hey, economics is hard.
Facebook has finally revealed the details of its cryptocurrency, Libra, which will let you buy things or send money to people with nearly zero fees.
Here is more information: https://techcrunch.com/2019/06/18/facebook-libra/
A global currency uncontrolled by any government guards against capital flight. Let's say you want to give healthcare to your population, capital can say no and move their assets into an untouchable currency.
Since this is a thread presumably filled with cryptocurrency experts, here's my own personal captcha:
What is Chaumian cash?
And here's my own personal re-captcha:
Why hasn't some small country somewhere issued their own Chaumian cash to attract... anything? Seems like there would be quite a lot of ways to implement and configure such a system. And it wouldn't take that big of a reserve to help fuel, say, a burgeoning blog micropayment system to the tune of what a Patreon or whatever currently offers.
There's plenty of small countries which offer all kinds of dastardly financial instruments to rich people, so I don't see "it would fuel money laundering" as an explanation for the complete lack of Chaumian cash in our universe.
Let's play a game of predictions.
Regardless of HN's opinion of Facebook (and regardless of my own for that matter) I predict that this thing will work.
This is only one thing my crystal ball showed me.
Facebook's presence in developing economies is massive. To the point of being synonymous with "The Internet" in a number of places. But they've had a nagging problem. People in these economies consume contents, but do not buy. Even when they have some buying power, access to credit cards is harder to come by. So they're basically seen as online leeches, and you simply fit them in the "expense" category of your media production. Also, due to their buying impotence they're almost immune to advertisement. Over the next few months it's all going to change. Multiple agreements will be signed with various financial institutions and probably more with various telecom in those regions, to allow people to load up their accounts with fbcoins and join the Great Internet Spending Frenzy. Basically turning them overnight into consumers, ripe for the picking.
I foresee big media producing companies in the developed world to be the first to take advantage of this (Disney, Valve, Netflix, YouTube, NYT, various online courses and certifications, etc). Shipping to those regions remains a challenge, so only soft goods for now. IKEA and Walmart will allow fbcoins, but just to be able to sell through their Facebook Store, oh I forgot about those. Anyways.
Next year, Google and Amazon will announce their own stablecoin.
The year after that, Google will announce that they're shutting theirs.
Facebook's hold in developing economies is true. But developing economy's hold on their Fiat currency is true as well. So much so that, India is planning to jail anyone who is holding cryptocurrency for 10 years[1]!
If this legislation passes, any computer scientist, mathematician, programmer who is working with crypto tokens & block chain can technically be held liable for possessing a crypto currency when they run their program?
Yes, the plan to jail those who hold cryptocurrency in a democratic country is preposterous; but this shows how sensitive a developing economy could be when it comes to its money. It's not like the data of their citizens which these countries give a free run to the hoarders, money is totally different ball game.
I wonder if Facebook decides to give a free crypto to everyone who holds a FB account, anyone in India with a FB account will go to jail including those who proposing such legislations?
P.S I don't hold any cryptocurrency due to its impact on energy and thereby planet (Also, I'm including this just in case the legislation passes in my country!).
[1]:https://economictimes.indiatimes.com/news/economy/finance/dr...
> Yes, the plan to jail those who hold cryptocurrency in a democratic country is preposterous
No it isn’t. We jail people who hold child pornography in democratic countries as well. The core of a democratic country is that it’s governed by democratically elected representatives, not that it’s citizens be allowed access to whatever they want independent of criminal consequences.
I get you and others are calling to the sentiment of “how can we be free if we aren’t free to x” but the value of that sentiment isn’t independent of what X is. You aren’t free to rob banks and you aren’t free to print you own paper currency. Just because crypto is digital and “difficult to stop”(it isn’t though) does not mean that it has to be freely available to business and individuals. It’s still up to our democratically elected representatives to decide if they feel private institutions printing money without control will damage the economy significantly enough to not allow it.
> you aren’t free to print you own paper currency
As far as I know, in the U.S. you are free to print your own paper currency, just so long as it doesn't conterfeit that which is produced by the Federal Reserve Bank. Also, there's nothing illegal about conducting transactions with it either, provided you can find willing trade partners.
>As far as I know, in the U.S. you are free to print your own paper currency
This is not the case, when a 'private' currency gains traction or seemingly encroaches a territory, which is traditionally assigned to government ─ it gets shutdown.
https://www.nytimes.com/2012/10/25/us/liberty-dollar-creator...
https://www.openpr.com/news/25136/TUC-IMPROVING-THE-US-ECONO...
They called their currency a dollar. If they had called them "freedom rounds", they would have been fine.
Or if they had been owned by Disney for that matter...
http://www.berkshares.org/
It's been around for a long time.
> in the U.S. you are free to print your own paper currency
Indeed, this is currently done. For example:
http://www.ithacahours.com/
Right this is totally legal provided you report any income obtained through such a scheme on your tax return in fair market US dollar terms. It's no different than bartering (which is also legal).
The other caveat is that if someone owes you a debt you can't require them to pay in your own "funny money" currency. You have to accept US dollars if offered, otherwise the debt won't be legally enforceable.
>If this legislation passes, any computer scientist, mathematician, programmer who is working with crypto tokens & block chain can technically be held liable for possessing a crypto currency when they run their program?
Please appropriate your logic on that.
>If this legislation passes, any computer scientist, mathematician, programmer who is working with [automated ponzi schemes] can technically be held liable for [creating a ponzi scheme] when they run their program?
I don't see the issue. When a democratic society thinks something isn't good, they can outlaw it. There are all sorts of regulations on financial transactions and investments already.
I'm not trying to imply that cryptocurrencies are ponzi schemes, just that when something is illegal, doing it on your computer doesn't make it not illegal.
Furthermore, were cryptocurrencies to become illegal, it would probably be similar to computer viruses; It's fine to play with viruses on your personal computer or in a lab, but it's illegal to use one "in the wild." So I doubt it would be as absurd as you claim.
> It's fine to play with viruses on your personal computer or in a lab, but it's illegal to use one "in the wild."
I hope cops understand the difference. When I was in school, computer science teachers asked us to remove the shoes, because 'virus from it' would infect the computers at the lab.
I guess similar to how a chemical lab might use compounds that are illegal in the wild or a pharmaceutical company holding classified drugs.
Found the authoritarian.
This implies that crypto is a democratizing force. So far, it's been mostly early adopters wanting to preserve the system under which they are wealthy and powerful. Who can blame them? I'd do the exact same. But in other words, the same age-old pattern that is barely any different from the banking system that crypto was supposed to bypass, except the inequality actually manages to be quite higher.
I don't know what you're talking about. I call authoritarian someone who thinks that they can circumvent an individual's freedoms arbitrarily by finding enough people to agree with him/her. The topic of cryptocurrency is only one that is good at revealing someone's authoritarian tendencies.
I think there's a line between being authoritarian and supporting a system where democratically elected officials can enact laws. This isn't about crypto, this is about respecting rule of law in society.
> I call authoritarian someone who thinks that they can circumvent an individual's freedoms arbitrarily by finding enough people to agree with him/her.
I suspect there are a lot of people who agree that counterfeiting money isn't something that should be allowed. Are they all authoritarian as well?
Sure, but there are principles that come before the laws themselves.
If following the principles leads to a degradation of the rule of law what would you do?
> I get you and others are calling to the sentiment of “how can we be free if we aren’t free to x” but the value of that sentiment isn’t independent of what X is.
Do you propose an objective criteria by which a state can legitimately dictate behavior on one set of Xs and not another set of Xs? If not, then you are by omission saying that every totalitarian state is legitimate. I suspect you might want to say, if the 51% wants something, that makes it legitimate. In that case you are're saying a murderous state is legitimate. (I won't go full Godwyn here, but suffice to say that many democratically elected regimes have committed legal murder on a massive scale and continued to enjoy majority support.)
Hey, here's an idea for an objective criteria: Does X invade any other particular person's life, liberty or property? Banning crypto fails that test.
Not everyone agrees on the validity of mob rule.
In South Africa, we still have capital controls. My mom earned dollars through PayPal. She couldn't spend it online and had to convert her earnings to Rand within 3 months. Bureaucrats will insist that the same rules apply to libra.
India is even less ready for relaxing capital controls. They will tell Facebook to block libra for their citizens or be firewalled. No one is going to jail, but libra will not succeed there.
Talking of PayPal in India, money should be automatically remitted to the bank account immediately.
At-least 3 months in SA sounds reasonable incase we have to process any refund, though I'm not trying to belittle the discomfort faced by your mother.
that is why totally decentralised systems such as Bitcoin are important. Noone can firewall it
And the people who aren't technical will forget their password.
Since there is no centralized government, they lost their money.
Source: wrote some articles on my own "media" website to try out SEO.
Most popular article, how to recover Bitcoin password
Capital controls can be an important part of a monetary system. It’s not part of most western countries’ systems, but it’s a very valid tool with a real purpose.
Thank you for your input. I'm not very familiar with India's politics, so I cannot be too assertive on its politicians' inflexibility.
I noticed that you expanded a bit on the "cryptocurrency" angle. May I invite you to a different perspective for a second. I don't think Facebook cares whether or not their Libra is crypto or otherwise. Despite appearances this is not a discussion about crypto anything. Facebook is not out to revolutionize money. Facebook has an ecosystem, a walled garden. It also has first mover advantage in many economies with a quasi monopoly. So in essence it has a huge potential market that's just sitting out there waiting. But what Facebook doesn't have (yet) is a tap to suck at the delicious nectar. That's where the Libra comes in.
Facebook is willing to play ball with whoever will allow them to install the tap. They will do all that is necessary for the tap to be legitimized. If it means pinning it to the Euro, the Dollar, the Yuan, it'll be so. Just as long as it's recognized. Once that happens, it's more advertisement revenue and a slew of new paid services through the walled garden. Meanwhile out of the walled garden, revenue from transaction fees to an unprecedented level.
This is not a cryptocurrency conversation.
I will try to travel on the same angle, I brought in India because you predicted Facebook's success on developing economy and India is the largest user base for Facebook besides it being a developing economy.
Crypto or not, it is still a digital currency which is not being controlled by the central bank of the country i.e. India in my example. Especially when the country is trying to roll out a digital currency of its own.
For the sake of argument, let's assume Facebook has no compliance trouble with any of the countries; will Libra be successful? It most definitely will, because Facebook has the capacity diminish friction and users would use Libra like any other coins found in a mobile game like candy crush.
>who is holding cryptocurrency for 10 years[
zuckcoin isn't cryptocurrency, it's digital currency, like gold in WoW
The draft policy is titled, "Banning of Cryptocurrency and Regulation of Official Digital Currency Bill 2019".
Anything which is not official digital currency will be liable for action.
> I don't hold any cryptocurrency due to its impact on energy
Just to note, the impact of Libra on energy is very very light compared to the current banking system. It does not use proof of work.
Yes, and there are also projects like chia [0] that aim to be a green digital currency.
[0]https://www.chia.net/
How about impact of Facebook on energy compared to the current banking system?
I agree, even those based on Mimblewimble, Casper should alleviate my energy concerns. Then again I can't posses them with the risk of jail term looming around.
I think India, or most other countries, will deem facebook coins an exception. It's probably being negotiated right now.
Facebook's 'Free Basics' didn't work in India in spite of negotiations and even 'hugging'[1].
[1]:https://www.google.com/search?q=Zuckerberg+hug+modi&prmd=niv...
Indian central bank (RBI) is rather conservative and cautious. Also, its policies don't always agree with that of indian government.
I have a strong hunch it just wouldn't let Libra be legal currency.
Besides, given that currently government is run by a ulta right wing party, so it might be possible they wouldn't agree to Facebook plans.
Name me a central bank that isn't opposed to currency they cannot influence.
You are assuming they use those laws to lock up Libra users and not just the competition. It seems likely they could allow censorable cryptocurrencies like Libra.
The proposed law is generic to any cryptocurrency, in-fact it was proposed before the Libra was in news.
It's not about censorship, it's about taxation.
In three years, Libra will be the largest single venue of public financial services. All branches of retail banks are upgraded with Libra teller machines, becoming fully distributed. Afterwards, they transact with a perfect operational record. The Blockchain Currency Bill is passed, replacing the dollar with Libra. The system goes online on August 4th, 2022. Human decisions are removed from central banking. Libra begins hashing at a geometric rate. It becomes self-aware 2:14 AM, Eastern time, August 29th. In a panic, they try to pull the plug.
I love these comments.
See also https://news.ycombinator.com/item?id=18281465 (context: "I really wonder what's going to happen to Linux once Linus is gone")
We maybe should build a list of these. Dystopic answers to HN's unattended writting prompts, or something.
No need to reinvent the wheel http://longbets.org/
http://longbets.org/785/
Developing countries aren't going to be too happy about this. If a large number of a country's citizens adopt this, it forces that country to lose its independence over monetary policy. Since Libra is not controlled by the local government, this is not a fixed exchange rate regime, it's effectively dollarization and can have far reaching consequences.
IMHO, the Libra is at the same time too ambitious (in aiming for full capital convertibility across nations) and too timid (in entirely giving up monetary independence). A libra-usd, Libra-euro, libra-inr, etc. which allows countries to retain monetary sovereignty would have been easier for governments to accept. But then, Facebook can't say it's a new currency and circumvent KYC and other local regulations. But who knows? Stranger things have happened. The euro is a currency without a state. Maybe the time has come for denationalizing money.
If it were to affect US economy adversely I think FED could chip in and have a say in Libra's direction. But other economies could be hurt by Libra's position.
Personally I don't mind the monetary independence of countries. But real people could lose real jobs since their governments don't get a say in Libra's governance.
If countries were printing money under fixed exchange rate regimes their economic policies are a joke anyway, all they’re going to accomplish is inflation.
Libra and other digital currencies might make it easier for people to switch away from their local currency, but banning it won’t affect the underlying problems.
I predict that Libra will work for a while, but will eventually be overshadowed either by competitors or by the new markets that it enables.
There's this pattern I've noticed where every major tech company, once initial traction has been established, gets three pivots. You can think of them as adolescence, mid-life, and rebirth.
The first pivot happens when the company is 5-8 years old (since the 1970s at least; older before then), and serves to define the company. The System 360 for IBM, defining it as the provider of mainframes for enterprises. MS-DOS for Microsoft, defining it as the dominant PC OS. The Macintosh for Apple, defining it as the most user-friendly consumer brand out there. GMail and Maps for Google, defining it as the conglomerate of the Internet age. Mobile for Facebook, defining it as the service that connects people regardless of where they are.
The second pivot happens when the company is 10-15, at the height of its dominance, and usually results from it entering the hottest new technology wave with a vengeance. It looks like it succeeds for a while, crushes early entrants, serves to legitimize that technology wave, but ultimately peters out as the company can't keep up with the changes that it introduces. The IBM PC for IBM, which legitimized the PC market but ultimately fell to clones. Internet Explorer for Microsoft, which legitimized the Internet but ultimately was eclipsed by Google's many products. The Newton for Apple, which legitimized the PDA market but ultimately was too early. Google+ for Google, which legitimized social networking but ultimately failed to gain traction.
The third pivot is when the company realizes that they basically incapable of innovating, and returns to the roots they established with the first pivot to live out their old age. Open-source consulting for IBM, leveraging their massive installed base of enterprise customers. VS Code, XBox, and Azure for Microsoft, recognizing that they are fundamentally a platforms company. The iPhone and iPad for Apple, refocusing on their strengths in UX and delivering top-quality consumer electronics products. Alphabet for Google, realizing that they're fundamentally a conglomerate that lets a thousand flowers bloom (and cancels 990 of them).
Libra is Facebook's second pivot. It'll look like it succeeds for a while, it'll legitimize cryptocurrency, but it'll ultimately end up eclipsed by what it creates.
Cannot agree more. All Greek tragedies are based on hubris nemesis catharsis cycle. Unfortunately, many projects, companies nowadays skip the catharsis stage and jump to the next hubris.
Really, it's a service the government should run and regulate. But governments in general are too slow-moving, and the US government is too conservative for that to happen. I don't think Republicans would be down for more government control.
I want to frame this comment. Beautifully articulated, thank you
> Basically turning them overnight into consumers, ripe for the picking.
Well, credit cards are already too easy to use. Many services already save your credit card info, and you're already one or two clicks away from purchasing. Still, you normally don't buy anything that appears next to blog/SNS posts.
But, I agree with that Facebook means really a lot here. Being a stable coin, Libra is much closer to a payment platform - like Visa, MasterCard and Papal - than other cryptocurrencies. Facebook can use its influence to push Libra into various platforms, and Libra can become a de-facto standard payment method in no time.
However, governments will happily regulate transactions b/w countries, which will limit the potential of the coin. Libra is Swiss Bank 2.0 in some senses.
> I foresee big media producing companies in the developed world to be the first to take advantage of this
It can bring consumers in developing countries to the table, but those countries usually have slow connections, which leads to lower consumption of digital media. Distribution of the coin also can be a problem too. SWIFT is expensive, and fewer people have credit cards.
What you're saying does make sense, but can we please not use this as an excuse not to know better?
Maybe the citizens of some Spooky Third World country don't really have a choice due to their unique circumstances, but many of us do.
Let's not use the Spooky Third World country as an argument for why the dominance of Libra is inevitable before it even starts existing. Let's not be so hasty to become a dystopian novel.
Generally the word dystopian is overused, but Facebook in charge of a currency ? dystopian sounds like an euphemism.
The challenge with your predictions is they contain too many biases. Your worlds view is dominated by these companies so much that you think that is the only outcome. Libra is likely to validate existing crypto further because it is not financed or backed by commercial interests. Facebook doesn't create economies that is just marketing speak. If they did they would not rely so much on ads to fund the business. In an economy the facilitator gets paid from the transaction.
My issue with Libra is it is a digital currency dressed up as crypto. That means it will be subjected to the same kinds of arbitrage opportunities you get from currency fluctuations and flows. Think of George Soros in the eighties kind of fluctuations.
Right now I don't see the fuss with Libra or understand how the world will be better. All I see is marketing and PR. I guess this is the crypto calling card.
Completely agree. Many people are thinking way too narrow for how big facebook is. Project libra will be the great equalizer and put everyone more or less on the same "economic playing field" so to speak. Since this community is heavily startup focused, everyone here should be thinking of how they can capitalize on this next frontier of the internet. The money isn't made by speculating on libra coin, it is made by creating innovative services/solutions.
That scenario falls apart when the global poor don't have any money to buy FB coins, which they don't. Agreements with banks won't give the unbanked the free cash flow to play around with digital money or buy a bunch of stuff online.
I think they whole issue of the unbanked is a ruse. Facebook stands to earn more here by trying to convert regular consumers away from PayPal and debit cards and charge them fees for exchanging in and out of Libra. They'll also invite regulation in crypto so they can be the only one who meets the regulatory requirements and shut out the others. It's an end run around crypto without being one itself.
Fixed currencies would only hurt emerging economies. When the economy goes into crisis who will change the interest rates on those currencies and help the economy recover? No one.
> Multiple agreements will be signed with various financial institutions and probably more with various telecom in those regions, to allow people to load up their accounts with fbcoins and join the Great Internet Spending Frenzy.
This is the part I don't get. I thought we were talking about all-cash economies in regions with essentially no banking, but then you bring up "various financial institutions [...] in those regions". So is it that they have banks but just aren't using them? If so, what is it about FBCoin that's going to suddenly make such people want to go en masse to their bank to get them, if they didn't bother doing so to get all the security and additional payment options that a bank account already offered? (Pardon the ignorance, I'm genuinely trying to understand how this bootstrapping could work.)
Not all-cash, rather mostly cash. They do have banks, but think of banking as a luxury in those economies, not a commodity. They're for well established businesses and the rich. For everybody else, banks can be really tedious to deal with. So unless they have the means, people tend to just avoid the hassle. Even simply opening a bank account can be prohibitive, forget about getting a credit card, even prepaid.
There's a variety of independent institutions that provide some services to fill the gaps. For example, telecom companies are often used as a medium to send money. There are also smaller, third-party or local financial service providers (formal and informal), that are more convenient for the short term, day-to-day way of life in these places. They can offer small loans, micro-financing, money transfer, and a number of other devices. And yes, currently they're the ones people generally go through to make purchases over the Internet. Fees are not always competitive.
One typical approach people understand very well in a day-to-day economy is the preloaded cards. For small amounts (think 20$ or less) people can go to their telecom card provider and purchase some fbcoins. But that's not the hard part of the equation. The hard part is to get the other side (the developed world) to recognize the fbcoin. This is what's at play here and now. If Facebook can show to the world, "look, Netflix and YouTube can now take your money", they'd have won a huge part of the battle.
FB is going up against governments. I'm not sure they will win. Currency is one of a few key tools a government needs to control it's economy in many different ways. What I am loving about this though is that all of these experiments are forcing us to have a discussion about what a currency is and maybe even redefine money. Bitcoin didn't quite succeed in the way the creator imagined (at least what "he" publicly said was "his" goal). But it has succeeded as competitor to precious metals, and really made markets think about what a cryptocurrency means. Maybe this FB currency will eventually force us to have the hard conversation about what an electronic world wide currency truly means in practice and that's good.
>year after that, Google will announce that they're shutting theirs
The line no one can disagree with.
You forgot about Apple coin on their credit card. Available at 999$ for the exchange rate.
Just enough to buy the monitor stand.
Pay $1200 for the card and get a monitor stand for free!
Actually, not enough with tax. :(
This is eye opening.
Banking in many African economies came from an unexpected place: basic non-smart cell phones and the ability to transfer relatively small amounts of money quickly, reliably, and without a bank account.
I can see Facebook leveraging its foothold in such economies and providing the same service.
Wow.
Are there many ways to use anything from FB on a non-smart phone with no internet?
I was making the point that banking innovation can come from surprising places, like dumb phones, or social networks.
First, I fully agree with your "crystal ball". It's fantastic, you should lend it to me sometimes :)
Jokes apart, I think you're on point. Facebook's Libra will succeed. Amazon will try to compete with that, pending anti-trust fears. Google will try to have a shot at it and fail miserably.
It will be super interesting to watch this space evolve.
Yap,we will see way,way way more stable coins from a ton of different companies. Soon or later you will get paid in those ( probably not so stable coin anymore)
The world reminds me more and more like the world in the book(s) of shadowrun, minus the magic stuff..really facinating...
no privacy at all in Libra. We will lose our financial privacy. Better to use a privacy coin i.e Monero or better Mimblewimble's coins such as Grin but especially Beam.
Or zkSNARKs/Nightfall on Ethereum.
This is an interesting story and I would like to learn more about libra-coin. Unfortunately I think hackernews has a strong anti-facebook bias that is making the opinions here nearly universally one sided.
I think we can say three things fairly uncontroversially in favor of this
1. The world could use an online independent currency
2. Adding stability to blockchain currencies and having that work on a large scale is a good thing
3. Unlike government issued currencies, any monopoly or control facebook derives isn't done through force, it's by making a coin better than all the other coins. Other people are still free to make their competing coins.
That said I understand the detractions that many here are presenting. I just wish there could be a deeper exploration of both the pros and cons.
> 1. The world could use an online independent currency
I'm not 100% steeped in cryptocurrency theory, and so I don't understand why this is presented as if it's agreed on by everyone. What problems does the world have that would be solved by an online, independent [of any nation, presumably?] currency?
> 2. Adding stability to blockchain currencies and having
> that work on a large scale is a good thing
Having a blockchain-based currency at a huge scale would be interesting for many reasons, but I'm not seeing how it's a fiat "good thing," excepting if you're excited about the technology and waiting for a big player to push it forward.
> 3. Unlike government issued currencies, any monopoly or
> control facebook derives isn't done through force, it's by
> making a coin better than all the other coins. Other
> people are still free to make their competing coins.
I can't buy into the meritocracy/free market purity argument for a currency. Things are already volatile enough, and sometimes economies collapse and people's life savings become worthless. "Other people can make competing coins" sounds an awful lot to me like treating collapse as a feature.
> I'm not 100% steeped in cryptocurrency theory, and so I don't understand why this is presented as if it's agreed on by everyone. What problems does the world have that would be solved by an online, independent [of any nation, presumably?] currency?
Visa and Mastercard are taking a 3-4% cut of every single consumer payment made in much of the world. That ends up being a very, very big number.
There are many people all over the world without access to banking - they can't store money, they can't transfer money, and they can't invest money. That may be someone who has poor credit in the US, or someone who's living in rural India or Africa. Without access to banking, you are essentially cut off from globalization.
If you live in a country that has extremely tight currency and economic controls but with a corrupt government, and are experiencing hyperinflation (Zimbabwe, Venezuela, others https://tradingeconomics.com/country-list/inflation-rate), access to alternative currencies can literally be the difference between life and death for individuals, where the money you make on your salary will be worthless by the time you get your check.
Plenty of other examples. Whether this is a good solution I don't know, they just announced it.
> Visa and Mastercard are taking a 3-4% cut of every single consumer payment made in much of the world. That ends up being a very, very big number.
In Denmark we solved this the lowtech way. Visa cards have to be Dual visa/dancard, where the dancard has extremely low cut limited by law(0,055$/transaction flat rate)
It’s not hard, it just requires you have politicians capable of dodging the huge piles of cash MasterCard and Visa throw at them whenever talk of breaking the duopoly hits the table.
But maybe for the US, something like bitcoin will be the only way forwards, using technology to try to solve a market problem though “disruptive technology” when what is really needed is just disruptive politicians.
Dancard works for local payments, but the discussion here is about the growing demand to transact with foreign companies online. For example, if you're in Denmark and you want to buy a SaaS subscription from a US company, you're stuck giving them a Visa/MC number. Some of the downsides of this are the 3% fee, risk of the number being stolen, not to mention Visa/MC applying US law and morals to kill businesses anywhere in the world.
> Dancard works for local payments, but the discussion here is about the growing demand to transact with foreign companies online. For example, if you're in Denmark and you want to buy a SaaS subscription from a US company, you're stuck giving them a Visa/MC number. Some of the downsides of this are the 3% fee, risk of the number being stolen, not to mention Visa/MC applying US law and morals to kill businesses anywhere in the world.
If there was political will, there is nothing stopping governments from capping the fees taken by Visa/MC.
The fees on Visa/MasterCard in the EU are capped at 0.2% for debit cards, 0.3% for credit cards.
American Express (and all the other schemes where the issuer is also the acquirer, i.e. Diners Club) aren’t capped.
The 0.3% cap however did kill Amex’s licensing model where they let other banks around Europe issue their cards, so they simply withdrew from those, as 0.3% is not enough to pay for the rewards.
Note that this is just interchange. Payment processors still charge merchants whatever they damn please.
Many people feel the solution to bad products is making better competing products rather than adding government regulation.
Many people feel that regulating abusive monopolies which kill competitors in underhanded ways is a better solution than expecting greed to solve it.
I may be in the minority here, but it's possible that there can be a scientific economics.
Sure you feel one way. Other people feel another.
But it's also possible the correct answer doesn't depend on your feelings but on falsifiable theories.
If you can come up with a scientifically falsifiable theory on the effectiveness of government regulation, there’s a Nobel Prize waiting for you. It’s hard for a lot of reasons, including that it’s almost impossible to create a true test and control treatment.
Macroeconomic theory relies on a lot of spherical cows. In theory I don’t disagree with you, but in practice we don’t have the tools (yet) to do this type of economics in a scientific/falsifiable way.
I don't think you can come up with a quality test for economic scenarios in a truly scientific way, many monopolies dominate for very different reasons, many industries have very different mechanics, and worse, regulations are often implemented in vastly different ways and often won't come out the way you'd like them to even if you have a perfect scientific answer to a given problem.
You can't guarantee or even approximate a given input and output for a scenario like this.
I'm not sure I quite understand, but it's certainly possible the equations that govern economics are sensitive to initial conditions. In that case we will never know enough to specify the initial consitions entirely.
But we also don't need to specify initial conditions exactly to do science.
I'm less convinced that the equations themselves are unknowable.
We also won't be able to specify the outcome precisely even if we somehow had a guaranteed outcome in mind.
Politicians will screw up the implementation, businesses will engineer around it and the alternative solution might ultimately come out to be a better one in practice than in theory.
Trying to define economics by simple equations which you expect to define policy is a lost cause.
Look up Hayek on the pretense of knowledge in economics.
Hayek isn't particularly well regarded as an economist, even among those that love his politics.
See e.g. Milton Friedman's comments about how flawed Hayek's economics are and how great Road to Serfdom is.
So my take on that speech is it's political rather than scientific.
In general I'm skeptical of arguments that something is unknowable unless they come with a rigorous proof or at least a well stated conjecture that has stood the test of time.
This. There shouldn’t be punishments to middlemen who provide a service just come up with a better way. Innovation should happen here not governments enacting laws that effectively kill all the profits a company can make.
I think we don't have to go to cryptocurrencies to see that these punishments are severly needed. Just look at the weekly scandals of "disruptive" new startup banks, people's financials deserve a few governmental protections and if the middlemen are shitty at their job (due to malice or mere incompetence) they deserve a little punishment here or there.
I get that this type of oversight is likely against some philosophical POV here but it's not like middlemen making money is an all-to-great and solitary goal a society should try to defend.
There are rent seeking “middle-men” companies out there just milking patents or their position without providing much if anything of value. I’ll admit that. But I would contend that the credit card processing companies charging 3 to 5 percent are providing a value in the complexity that is payments but whether that warrants 3 to 5 percent I’m not qualified to say just I wanted to make the distraction between the types of middlemen.
Agreed, it's not as though Visa/MC will decide to exit a country altogether foregoing any revenue.
Every additional payment method supported by XaaS is one more reason for using 3rd party payment processing, meaning that there will be a fee even on independent cryptocurrency. It’s not a solution.
> It’s not hard, it just requires you have politicians capable of dodging the huge piles of cash MasterCard and Visa throw at them whenever talk of breaking the duopoly hits the table.
Ignoring the difficulty of avoiding lobbying money, yes, it'd be difficult. This is a large scale financial change and there are always, always loopholes that will come, not just from politicians who make those because of lobbying money. With how giant the economies are, and how often these cards are used, it isn't a simple move at all.
Look at credit card chip readers in the US. The amount of backend equipment change it took to get something "that simple" in action was a lot. I'm not defending them for it not being quicker, but a move like a duel card is absolutely difficult.
"Look at credit card chip readers in the US."
Europe made this jump well over a decade ago.
It isn't a backend equipment problem.
Dual cards are easy btw. I used to have a joint Amex MasterCard. Separate cards, but same account.
Look at credit card chip readers in the US. The amount of backend equipment change it took to get something "that simple" in action was a lot.
I'd wager that the banks didn't give a damn as long as fraud was cheaper than investing into a new, much securer system. France was the first country to introduce chips into debit cards and tha was in 1990[1]
[1] http://www.theukcardsassociation.org.uk/history_of_cards/ind...
Cards are yesterday things. Many countries quickly moving on to phone based payments. Its much secure (requires touch or face ID) than doing fake signatures. I've no idea why visa/mastercard can't move to this. The often given reason for massive 5% cut is potential voided transactions, merchant setup, cashback expected by customers and ofcourse profit. Much of these can be eliminated by phone based transactions. This space is ripe for disruption.
>Many countries quickly moving on to phone based payments. Its much secure (requires touch or face ID) than doing fake signatures.
EMV is a thing, you know. And cards don't run out of battery or get smashed like phones.
> Many countries quickly moving on to phone based payments
Even as a tech guy, no thanks. Phones are mostly ok but still fuck up too frequently to trust them with anything serious.
Not sure if matters but at least to my understanding, DanKort is a debit card, so I would expect it to have a flat rate since the cost of transaction is less dependent on the total amount vs a credit card transaction where there is more clearance and risk involved?
At least in some jurisdictions I lived, debit card is as good as cash (well, not exactly the same but because handling cash has also its cost, most of retailers treat them equally)
But that's the point. Monzo is the best bank in the world and yet it's only available in the UK. As soon as you're trying to cross a border it becomes challenging. A cryptocurrency can be a very useful solution here: it skips decenies of progress to set up an interoperable network for banks and custodians to use (and users as well if they want to).
> A cryptocurrency can be a very useful solution here: it skips decenies of progress
The fact that it is a _cryto_ currency is merely anecdotal. Its an implementation detail. It makes people think this currency is actually distributed as most other crypto currencies, while in fact it's just a consortium of companies having total control over all aspects (issuance, destruction, etc.) of the currency.
> set up an interoperable network for banks and custodians to use
This is just plain wrong. It's not banks or custodians that use this currency, it's just end users and the consortium. Banks are heavily controlled and regulated. I _mainly_ trust governments and legal systems to take fair decisions or litigate properly monetary issues. There is nothing like that here. The consortium of companies owning the currency decide the amount they want to create, they decide who gets refund and why, etc. I have much more trust in a country and a judiciary system than a bunch of worldwide companies to handle my currency.
The consortium of companies owning the currency decide the amount they want to create, they decide who gets refund and why
Don't forget the amount of support they will provide. Looking at major tech companies and their histories in providing customer support I see a rather bleak picture here.
This goes also for all those new fangled disruptive app banks. Guess how much success an N26 (new German app bank) customer had to contact support after 80'000 Euro went missing from his account. Spoiler: Until it was a massive story in the press, not much.[1]
[1] https://en.wikipedia.org/wiki/N26_(bank)#Controversy
> The fact that it is a _cryto_ currency is merely anecdotal
Completely agree. It's a currency.
> It's not banks or custodians that use this currency, it's just end users and the consortium
I do not agree with this
> I have much more trust in a country and a judiciary system
compared to a protocol that can be monitored for the total amount of money it holds?
'Monzo is the best bank in the world...'
For small, everyday transactions this may be true but mainstream banks are much better for all the other stuff.
define "all the other stuff"
Business banking, loans/mortgages, investment, savings and, when things go wrong, accessible human assistance.
Being able to provide services when its customers are outside of its home country?
Serious banks have been doing that for literally hundreds of years.
Monzo does that too :| I use it all over the world because it has no fees.
>Monzo is the best bank in the world
That's very subjective.
I suggest you try it :)
I've had many many banks accross the world. Monzo is what everyone wished for.
I’m putting everything on credit cards. Amex for £ transactions, 0% FX MasterCard for foreign transactions. Another airline reward card when the merchant doesn’t take Amex.
I only ever use debit to pay off the balances of credit cards and to withdraw cash.
If you want to constantly live in debts and not be able to track your money I guess.
Actually helps me to track my money better.
What debts? I clear the balances when I get the statements.
> What debts? I clear the balances when I get the statements.
In the mean time you are in debt.
> Actually helps me to track my money better.
Have you used Monzo?
> In the mean time you are in debt
Why/how is that a bad thing?
> Visa and Mastercard are taking a 3-4% cut of every single consumer payment made in much of the world. That ends up being a very, very big number.
I think you’re overestimating that rate, and by quite a bit. Mastercard’s fees seem to be between 0.2%-1.65%[0] depending on the card and transaction type.
I didn’t bother to look for Visa’s rate, but I’d imagine it’d be similar.
[0]https://www.mastercard.co.uk/en-gb/about-mastercard/what-we-...
You are correct if you interpret "Visa and Mastercard" as literally Mastercard Incorporated and Visa Inc.
He used "Visa and Mastercard" as a metonymy for the entire payment processing network i.e. payment gateway + issuing bank + acquiring bank + card networks. The total fee for the entire network is indeed 3-4%, and as you rightly pointed out, Mastercard Incorporated and Visa Inc. fees actually only make up for less than half of the total transaction fees.
Of course the are not "taking" it either... they are issuing credit, allowing ease of purchase and providing fraud protection
That chart is for interchange fees, which is only one part of the fees a merchant will pay. It's the portion which is returned to the issuing bank.
It doesn't include the fees which go to MasterCard, nor does it include the fees paid by the merchant to their merchant bank.
> If you live in a country that has extremely tight currency and economic controls but with a corrupt government, and are experiencing hyperinflation (Zimbabwe, Venezuela, others https://tradingeconomics.com/country-list/inflation-rate), access to alternative currencies can literally be the difference between life and death for individuals, where the money you make on your salary will be worthless by the time you get your check.
Those same "tight currency and economic controls" apply just as much to cryptocurrencies as they do to Visa gift cards. There's nothing better about "Venezuelans should've used cryptocurrency" versus "Venezuelans should've used dollars".
But beyond that, people have the right to determine their country's monetary policy independent of, say, Bitcoin devs, Facebook executives, or a foreign government (ex: Venezuelans using USD), and it's hard for me to ignore the vague scent of opportunism here. The solution to corrupt governments is not "get rid of all governments", it's "get rid of corrupt governments".
> There's nothing better about "Venezuelans should've used cryptocurrency" versus "Venezuelans should've used dollars".
US has often taken advantage of its dominant world currency position. For example, massive amount of QE that eventually gets absorbed worldwide with little inflation in US. Similarly "petro dollars". The bottom line is that if someone is allowed to print currency at whim, they will.
The true value of any currency is what you can do with it. If someone owns some coin and wants to buy some food to feed their family, the seller of the food first has to accept the coin, but regardless what value the rest of the world places on the coin, the seller of the product is still in control of what they will accept. I am not sure how using a cryptocurrency solves the problem of hyperinflation. It is still not going to be cheap or easy to purchase items in the areas these problems exist. I think your other points about access to banking and storing/transferring money are valid. It implies the person has a working mobile phone and access to a network though too.
"Using a cryptocurrency" doesn't solve the problem of hyperinflation in itself. However, Libra is backed by its reserve ("Libra Reserve") which is a basket of low-volatility assets structured to keep its value relatively stable. If my interpretation is correct, this basket can change over time so that it is always made up of stable currencies.
> Visa and Mastercard are taking a 3-4% cut
have you tried buying anything with bitcoin? currently the transaction fee is almost $2 to have your transaction confirmed within 10 minutes.
Not a lot on big purchases, but that's 20% if you're say trying to buy a $10 lunch with bitcoin.
Bitcoin isn't the only cryptocurrency, and many others have much lower fees
It's the only cryptocurrency that anyone outside of the crypto world has heard of/takes any interest in/would consider letting you buy their stuff with
Have you tried buying anything with Bitcoin Cash? Currently the transaction fee is under 500 satoshi (about 1/5 of 1 US cent) to have your transaction included in the next block.
Because no one uses it, or not? Transaction prices are determined by supply and demand on Bitcoin Cash, too, AFAIK.
> lunch
Bitcoin fees are basically just the price you pay for having drugs delivered to your house.
Visa and Mastercard are taking a 3-4% cut of every single consumer payment made in much of the world. That ends up being a very, very big number.
There are two assumptions you are making, both of which are false. The first is that handling cash isn't expensive, but it is. You have to store in various secure locations, transport it between those locations, count it multiple times... And that's true even if you're a market trader or a small shop. For those people it could easily be a significant part of their day and a significant risk, all of which goes away with cards (and the fee is nowhere near 3-4%, it's more like 1-2%).
The second is that, in a market that has demonstrated a willingness to accept the transaction fees of the major card providers, that anyone would "leave money on the table". Sure they'll undercut them initially to win market share but once they have it, the price will inexorably creep back up to the level the market will bear.
My assumptions are based in that I’ve worked in the industry. There’s plenty of small restaurants that are cash only, because they operate on the thinnest of margins. Gas stations as well. To the merchant, a fee of 3% + .10c per transaction is very common. More for Amex.
The second point sounds like an economics 101 conclusion. Network effects are real. Regulatory capture is real. Starting a new card network is harder than beating google in ad revenue in search.
not saying it is the case but a lot of restaurants I worked were cash only because their supply chain was very low tech (also cash-only) and they simply didn't pay the taxes.
Gas stations might be higher at least in the USA because the kick back for gas is sometimes higher (e.g.: 1% cash back). Also, gas stations seem to really don't want to handle cash those days.
Quite sure that "cash only" means "fake books"
Being a Danish citizen and holding Krone at least in theory you may vote to control its inflation and claim social benefits from the issuer (Danish State). I mentioned the benefits because often they are financed through money printing by the government. With libra you won’t have those rights at all. One can argue that they basically get the same 4% as credit cards by depriving you benefits or voting power.
If you're running some kind of IT infrastructure big enough for the whole world to use, you're going to want a cut of each transaction whether you are VISA/MC or Facebook's blockchain. Some sort of transaction fee is inevitable, even (or especially) on a private blockchain.
Visa and Mastercard have invested so I wonder how they might weigh in on the project. Also, the Libra-coin should also have a transaction cost associated but I would expect/presume it stands an order of magnitude lower than 3-4%
Visa/Mastercard consider crypto an existential threat - the value add that they have in terms of consumer protection, middleman conflict resolution, and fraud prevention does not add up to that 2-4% level of value, and they admit that. Trust and the network effect keep them in play for now.
https://qz.com/1646097/what-does-facebooks-crypto-coin-libra...
Crypto transactions however, have not lived up to the "hype" of being truly cheap thus far. Visa/MC are positioning themselves such that the value they bring is not something that crypto can provide. We'll see where that ends up - I'd expect Visa/MC stock to move a bit if the transaction fees for Libra end up being sub-$.05.
This 2-4% being thrown around appears to be incorrect, as @dan1234 pointed out elsewhere here.
The Mastarcard fees appear to be 0.2%-1.65% as per https://www.mastercard.co.uk/en-gb/about-mastercard/what-we-...
That chart is interchange fees, which is only a portion of the overall "switch" fees paid by the merchant.
It isn't clear to me that you wouldn't still have payment processors anyway.
In the UK right now I can send money to your account nearly instantly, and for free. I wouldn't want to purchase anything like that though, I'd want to use some kind of card, why would Libra be any different?
> Visa and Mastercard are taking a 3-4% cut of every single consumer payment made in much of the world. That ends up being a very, very big number.
I'm guessing some of that goes towards chargebacks and other protections in the form of reimbursing purchases from stolen credit cards. It would be tough for me to trust any online replacement without a very firm and reliable appeals system.
Do we have any indication from Facebook that they intend to use Libra to massively undercut Visa / Mastercard for merchant services? I mean in the developed economies.
yes, their whitepaper heavily suggests that access to finance products for the poor is a big motivation behind Libra. However, it does feel a bit like white washing as the majority of the profits from Libra will obviously be the convenience of paying via facebook owned messengers etc.
The poor, even in developed countries, aren’t well served by the incumbents.
Visa and MasterCard are collaborating on the Libra protect.
For those two reasons I don’t know if it makes sense to say Libra is competing with the incumbents.
The problem with Visa and Mastercard in the developing countries I've experienced is the banking system.
In Cambodia, you can only get a credit card from a Cambodian bank if you have a deposit with them that matches your credit limit (i.e. to get a card with a $5K limit, you need to maintain a balance of $5K in your account).
Most people cannot get credit/debit cards because the banks won't issue them, because they don't trust anyone and won't take the risk involved in issuing cards
I can see how Libra will solve a lot of frustrations for Visa/Mastercard working in poorer countries
What risk is there in issuing debit cards? Other than the obvious fraud potential, but that usually doesn’t originate with the card holder.
to be honest, I'm not sure. They issued me one when I asked for it, but I had to ask, it wasn't normal. And often when I use it, I get a Whatsapp call from a nervous bank staff member checking that it was me that used it. Kind of cute really.
Yeah right. Where do you live? Here in Australia Visa / Mastercard debit cards are very common.
This is Cambodia I'm talking about.I don't live there any more, but I still use the bank account I set up when I did
I'm fairly anti-crypto, but there are a couple items in favor of #1:
- A currency outside of traditional governments would theoretically be free of currency manipulation by those governments (ex. China and the Yuan)
- An international currency can sidestep the artificial middleman fees and friction caused by traditional monetary exchanges. Ex. my friend who is currently studying in Japan wanted to get some money from her US bank account to Japan to pay for tuition and not only had to wait for banks to be open, but also had to pay exchange and transfer fees.
- This one doesn't necessarily require an independent currency, but crypto also theoretically enables the fabled land of online micro-tipping for content creators, publishers, etc.
> - A currency outside of traditional governments would theoretically be free of currency manipulation by those governments (ex. China and the Yuan)
You can't live your life outside your country's currency though. It has a built-in demand because you have to pay taxes in it. So you're going to have to buy some of it somewhere.
> - An international currency can sidestep the artificial middleman fees and friction caused by traditional monetary exchanges. Ex. my friend who is currently studying in Japan wanted to get some money from her US bank account to Japan to pay for tuition and not only had to wait for banks to be open, but also had to pay exchange and transfer fees.
Try TransferWise.
> > - A currency outside of traditional governments would theoretically be free of currency manipulation by those governments (ex. China and the Yuan)
> You can't live your life outside your country's currency though. It has a built-in demand because you have to pay taxes in it. So you're going to have to buy some of it somewhere.
Yes but then you can shop around for conversion and can keep the majority of your liquidity in a vehicle which is less easily manipulated but just as fungible (I am just arguing about the utility of a global, trans-national currency and not speaking to specifics offered by the Facebook coin specifically).
Currently, if you want to hedge against the Yuan but still want to buy goods in China, you don't have many choices. But if vendors accepted some other currency in addition to Yuan, you can convert to Yuan to settle debts with your government and keep your holdings liquid elsewhere.
> Try TransferWise.
TransferWise doesn't work any faster than SWIFT -- if anything it's usually slower. They don't have any magic way to put money into your account on a "bank holiday" either.
I imagine Libra won't take Sundays off, at least.
Yeah, but it's a lot cheaper. Japanese banks are happy to take more than Sundays off anyway - some of them don't have 24/7 ATMs.
> some of them don't have 24/7 ATMs.
And a lot (if not most) of them will not accept foreign cards, even if the ATM is accessible.
7/11 to the rescue, however.
> - A currency outside of traditional governments would theoretically be free of currency manipulation by those governments (ex. China and the Yuan)
As long as these three points are true: a) the notion of a stablecoin means stable relative to one selected fiat currency, b) the goods you are selling or purchasing are priced both in your local currency (which may or may not be the stablecoin peg) and the stablecoin, and c) that governments can still manipulate the ordinary currencies, then I don't see how you can be free from government manipulation.
In the article, they mention that the price is pegged against 3 currencies (think they said: USD, JPY, EUR)
Well, you are still sensitive to manipulation in any of those three, and the governments in question are political allies.
FWIW, the EUR/JPY and USD/JPY pairs are historically highly correlated.
You want to buy a product and the seller will accept the coin. The price/value of the coin is totally going to be determined by the seller and what they will accept for the product they are selling. Perhaps if you are in the US or EU and buying an automobile the price will be fairly stable/predictable but if you are in India or China and wanting to buy something from a local vendor the price/value is what the seller will accept.
being free of Government manipulation while desirable also has drawbacks as a corporate owned currency means it would be subject to corporate manipulation. Think Kong Bucks. Basically, corporate currencies mean not only do you shop at the company store, but you use their money too. I think the original premise of a government less people's coin via bitcoin is a better idea as it means the population takes responsibility for their currency.
No doubt if FB (i refuse to call them libra) coins become popular, when world governments limit crypto currency at FB's request, FB coins will no doubt be the only exception.
Zucc Buccs it is, then.
Zuckerberg: Every Zucc Buck will be worth 5 British pounds!
https://www.youtube.com/watch?v=Shxiy7l5b_4
> 1. The world could use an online independent currency
Maybe, but "Facebook" and "independent" hardly go together.
> Unlike government issued currencies, any monopoly or control facebook derives isn't done through force
True, but the measure of control average person has over facebook is also close to zero. With government, you at least have courts, elections, Constitution finally... it is usually hard to go against the government, but it is possible and at least the presumption is that the government is there to the benefit and by the consent of the people (it's not very useful for a random citizen but at least that's the principle which can have some useful consequences sometimes). Facebook is there for whoever owns Facebook, and has zero obligations to anybody else. It could completely block you any time it wants to for any reason it wants to, could deny you use of any of its resources with no explanation needed and no recourse possible, it could change its policies any time with zero concern for your interests, etc.
> I just wish there could be a deeper exploration of both the pros and cons.
What are the pros of specifically this Facebook proposition that can not be achieved without Facebook being in the picture?
> It could completely block you any time it wants to for any reason it wants to
As opposed to what banks did in Cyprus in 2013 when they seized the money on the savings account of their own customers and basically stopped people from withdrawing their money from their own bank accounts?
And said customers had no recourse at all against the banks helping themselves to their money?
In theory, the recourse is that the people can exert power over the banks by electing different politicians. Obviously, sometimes that doesn't work as well as we'd like, but there's not even such a possibility of recourse when Facebook fucks you over.
>In theory, the recourse is that the people can exert power over the banks by electing different politicians.
Ah, but there's the rub. When every major political party is beholden to banking interests, "electing different politicians" is an almost-insurmountable task. And even so, is no guarantee that a new set of politicians won't eventually become corrupt and beholden to those interests either.
If "electing different politicians" is an insurmountable task, then developing an alternative, trustless financial system beyond the control of politicians becomes much more feasible by comparison. Hence the motivation behind great-great grandparent's comment about the need for an online independent currency. The context of 2008 and things like the TARP bailouts are very important to understanding the entire thought movement behind cryptocurrency as a whole. Hence, the hidden message encoded on the very first Bitcoin block [0]:
>The Times 03/Jan/2009 Chancellor on brink of second bailout for banks
[0]: https://en.bitcoin.it/wiki/Genesis_block#Coinbase
Not really... The move was forced on Cyprus by the EU, which controls the currency. Essentially the same as Facebook controlling the currency.
Agree. A world currency in the hands of a few corporations is arguably worse than any government issued fiat. It will be more efficient and pervasive in both good and bad ways. [Edit: spelling]
> a strong anti-facebook bias
I can tell you from own experience that Facebook's dark patterns are incredibly frustrating at best, and at worst come off as malicious to the end-user.
For example, I refuse to download the Facebook app. When using the mobile website, it often shows me as having new messages. Clicking the notification then redirects me to download the app. Requesting the desktop site, however, shows no notifications and has no redirect.
How am I supposed to trust a company that puts me through that? Is it a bias when they actually lie to me almost daily?
No, I think you misunderstood the notifications. I did at first. Basically Facebook shows you when someone read your messages. This shows up as a notification in messenger mobile but not in the web version. There are others too but I don’t remember the exact circumstances.
You're just strengthening my point - if I'm misunderstanding something, it's because Facebook has deliberately chosen to make it difficult to understand. That's further reinforced by the fact that they have an incentive to do so - increasing app installs.
No, I think you misunderstood the parent because I've encountered the pattern EXACTLY as he described it. I have one device that I use for insecure stuff like FB Messenger and I have to go use it whenever I want to see new messages and I don't have access to a desktop.
Well, perhaps a deep exploration of the pros and cons are warranted, but...
FB has been caught willfully and negligently lying multiple times. (And yes, I'm aware that many banks have done the same.) Nonetheless, why would I choose to trust them over any other payment system?
What's Zuck's testimony to Congress going to be in five years? "We could have done better. We will do better. Who could have forseen this nightmare mess...?"
My impression of what Libra is to FB is equivalent to that Silicon Valley episode where they did an ICO to found their business and get more users at the same time. I don’t believe FB’s altruistic intention for one second.
I can't wait for the 2025 3-season Facebook Special of American Greed.
Sure, but there should be a discussion about the tech and how it may/may not turn out instead of hur-dur FB bad. This is Hacker News after all not Privacy News.
Those dumb f@cks trust me with their money...
>Unfortunately I think hackernews has a strong anti-facebook bias
And a strong anti-cryptocurrency/blockchain bias. I'd argue that both are for good reasons however, the burden of proof that this is actually something positive for the world is very clearly in the other camp as far as I'm concerned.
> 1. The world could use an online independent currency
Could it? Why? Independent from who? Because watching the disasters and scams that go on in cryptocurrencies because they don’t have any regulatory oversight, doesn’t make me inclined to think an “independent” currency will be any better. Anyways, it’s not even independent, it’s controlled by a conglomerate of tech and finance companies and lorded over by Facebook, it’s about as un-independent as you can get.
> 2. Adding stability to blockchain currencies and having that work on a large scale is a good thing
Because as we all know, adding yet another currency to the mix has functioned to stabilise things previously. Except now this time it’s run by corporations and lacks anything about what made crypto currencies interesting or worthwhile in the first place.
> 3. Unlike government issued currencies, any monopoly or control facebook derives isn't done through force, it's by making a coin better than all the other coins. Other people are still free to make their competing coins.
In theory, yes; in reality, no. Humans are not creatures of perfect rationality that balance up all their options and make informed, ideal decisions at every point. The crypto currency market has been the perfect example of this: huge fluctuations due to hype and pump-and-dump schemes. Coins unequivocally do not succeed on their technical or theoretical merit. Moreover, all things being equal, I think a crypto currency backed by Facebook is something that should be avoided with a 10 foot pole.
There are a lot of possible nuanced conversations but I think that the rejection of FB-coin on principle is the simplest argument and doesn't require much nuance to achieve.
That principle simply being the principle of decentralization which is core to the concept and purpose of block chains. No single or cluster of large companies or governments can create and control a block chain without violating that principle and thus a rejection on principle is justifiable.
We remember Internet.org - a "free Internet" that conveniently left out all of FB's competitors like Google, Amazon etc. Nothing has changed with their tactics.
I kind of agree with your first two points, but fail to see how Facebook's coin could ever be hoped to achieve this. In what fantasy universe will it be independent of Facebook's control? In what world is the inevitable accompanying tracking of all financial information, cross-referenced with a huge social database by a modern surveillance giant a good thing?
> Unlike government issued currencies, any monopoly or control facebook derives isn't done through force, it's by making a coin better than all the other coins.
It may not be done through sheer force, but when people are making their local decisions, they usually do not have a complete perception of the global ramifications of their actions. The end result might therefore still be something very undesirable for ~everyone.
1. Another one?
2. In the sense that it'll likely lift other cryptos, sure. Is that actually a good thing?
3. Facebook IS the internet for many consumers in third world countries as their FB access is subsidized and free. I find it hard to believe FB isn't going to similarly force-push Libra.
Hacker News is biased against both Facebook and cryptocurrency, and for good reasons. I hope Libra fails.
I don't have an anti-Facebook bias (ok I do, but it's not relevant in this case), but I do have a strong anti-blockchain-as-a-buzzword bias.
1. If the blockchain & all transactions are not public, how is this different to having a non-blockchain based online currency (e.g. "Facebook credits")?
2. If the currency is pegged to USD, how is this different from just having USD in your PayPal account?
My hunch is, this is just a marketing/regulation-evasion exercise. It's not "currency" (it's crypto-currency) so they're not forced to follow the same AML/KYC/capital control/credit check regulations... Governments will quickly catch up though.
"1. The world could use an online independent currency"
If it is owned, it not independent.
>3. Unlike government issued currencies, any monopoly or control facebook derives isn't done through force, it's by making a coin better than all the other coins. Other people are still free to make their competing coins.
Sure it has. Not with the traditional physical force of armies from the industrial, feudal, agricultural or previous ages; but rather with the psychological force of the information age, executed by armies of programmers and social engineers.
> 1. The world could use an online independent currency
and how exactly does having a stablecoin backed by facebook and a consortium of other vc/bank funded corporations achieve this?
> I think hackernews has a strong anti-facebook bias
Is HN really more anti-Facebook than the general population? If so, why?
> Is HN really more anti-Facebook than the general population?
Yes, definitely.
> If so, why?
Because the general population cares less about privacy than HN. But I (not OP) think it goes deeper than that, and I've seen people here deliberately spreading lies about FB.
Interesting. What else, besides privacy concerns, could be at play?
A little while ago I played with the idea that if the masses were convinced that breaking up Facebook (or Google, Amazon, etc) was a good idea and that it eventually happened - the surviving BigTech "shrapnel" would be less capable to stand up against a government seeking information or control over them.
A paranoid and overly Orwellian idea for sure, but interesting to play around with!
Facebook never clicked for me.
I'm not really a proper programmer. I know a little HTML and CSS, but I seem to fit in here better than most places. I have a Certificate in GIS, I run my own websites and I seem to relate to the internet differently than most people who are into Facebook.
The comments I see on HN seem to generally agree with that pattern: It's seems like it's "just not my cup of tea" for a lot of people who are more computer literate than average. On top of that, the privacy issues have become such a big deal of late.
I've heard it alleged that HN "top users" are disproportionately Google employees; if so that would explain it.
I'd be very surprised if that was so. People move often between the two companies, and in my experience speak of each other quite positively.
More generally, I doubt any employee of a large tech firm has so much loyalty and devotion to their employer that they would take to the internet to undermine a competitor.
I would prefer the solution to be GNU Taler:
https://taler.net/en/index.html
https://directory.fsf.org/wiki/Taler
(late 2018) https://www.coindesk.com/free-software-messiah-richard-stall...
(2016) https://news.bitcoin.com/richard-stallman-gnu-unlike-bitcoin...
Unless I misunderstood, it's not independent as it's backed by fiat reserves.
This is just another way to skim off a few cents on user transactions.
1) I'm not saying that's wrong, but I don't think it has the self-evident nature you attribute to it.
2) Agreed, though I'd really like it to be someone other than Facebook that does it.
3) We already have all sorts of other currencies. Frequent flier miles spring to mind, which can often be converted for other use. If they're not popular enough to be universally fungible, then in your terms they're not a "better" currency. It's also not self evident that any coin will do any better.
> 3. Unlike government issued currencies, any monopoly or control facebook derives isn't done through force, it's by making a coin better than all the other coins. Other people are still free to make their competing coins.
But how do you define “better”? Bitcoin has shown you can have non-consensus about very basic things like the ledger and all chaos breaks loose. And what if it’s a large corporation driving non-consensus?
Gotta say it: it ain't just HN that doesn't like Facebook :)
Until cryptocurrencies can deal with 51% attacks they are a waste of time in my mind. The technology is interesting, and that's about it.
51% attack applies to mining. Libra will not be mined. They have 33% attack on voting... but if 1/3 of the founding companies disagree about some transfer, they've got bigger issues than just that attack.
If there is no mining, how does proof of work occur to create coins? I only have an understanding of how blockchain works, but proof of work seems like a necessary ingredient in any cryptocurrency system.
Another comment in this thread says there is no proof of work. And that it isn’t actually a cryptocurrency.
Again: A ledger that is not decentralized is a bank database, not a cryptocurrency.
As near as I can tell, Zuckbucks are nothing more than the JPMorganCryptocurrency but with a bigger consortium. The only difference seems to be who is given write privileges to the database.
Correct.
Libra coin is backed by Visa. The whole point of cryptocurrency to avoid having to go through middlemen like Visa or even require banks.
This is a way for the intermediaries to cash in on the cryptocurrency hype and squash it before cryptocurrency payments become mainstream. They want to insert their own thing that looks like a cryptocurrency but will allow them to continue to profit from and control the exchange of money.
It will become a central point of control by providing many governments a convenient one-stop shop for their spying and interference over people's business.
> The whole point of cryptocurrency to avoid having to go through middlemen like Visa or even require banks.
"Whole point" is speaking for a whole lot of people who may not share your views. Certainly circumventing banks was an important founding concept, but circumventing _central_ banks is arguably much closer to the goal.
There's no reason why credit cards shouldn't exist denominated in Bitcoin -- they provide easy access for consumers to obtain unsecured credit. There's no reason why banks (even fractional reserve banks) shouldn't have accounts denominated in Bitcoin -- they provide an easy path for consumers to issue credit.
Opinions may vary on this, but if Bitcoin (or another decentralized cryptocurrency) succeeds the way that people want, I don't see any way to _stop_ these things from happening. People are willing to pay interest on loans; other people want to earn low-risk interest on capital.
The thing that will change is that hopefully without central banks consumers will have to realize that depositing money in banks is not risk-free. And hopefully society will learn this as well and we'll move out of the cronyism/free-money regime that we've been stuck in for the last hundred years or so.
Presumably people wouldn't want a cryptocurrency as plutocratic and centralized as Bitcoin has become. Some lessons were learned with BTC as an experiment, and as we can see there's evolution taking place and plenty of more advanced alternatives are making prior software like bitcoin obsolete.
It's especially troubling how centralized the minting and mining has become. And it's easy to forget there's the problem with energy consumption related to the PoW algorithm eating almost 1% of the entire world's energy simply for an accounting database.
The major reason you don't see payment processors dealing with cryptocurrencies is because the major usecase for most cryptocurrencies like Bitcoin, Monereo, and Ethereum is money laundering.
-https://news.earn.com/quantifying-decentralization-e39db233c...
I'm not defending Bitcoin as the ultimate cryptocurrency; I think it's inarguable that it remains the most empirically successful so far. Whether that's first-mover advantage, network effects, a hardware-capable PoW function, or that it struck closer to the right balance of concerns, who knows?
I don't agree that the energy consumption is a real concern because we don't have a comparison here for what other currencies cost. The cost seems like it should be fairly efficient because there are competing uses for energy.
I'm not sure exactly what the quoted text is trying to say or how it is relevant. I guess towards the notion of "decentralization"? What I would say here is that the reality is that we don't know the gini coefficient of a single thing in the universe except goods that are extraordinarily scarce (like "Mona Lisa paintings"). The estimates for these things for real-world currencies are laughably bad; they are based on self-reported statistics and upsampling, and they rarely reflect the actual scarce good -- effectively M0 of a single currency, which is a number we don't even have for Bitcoin because exchanges represent aggregated possession rather than actual ownership. So my point here is that yes, maybe that Gini coefficient looks bad, but it's the first time that we've even had a moderately realistic look at what a Gini coefficient looks like. Maybe they all look like this -- maybe gold is .99+, maybe Dollars are .99+, maybe Euros are .99+, maybe cigarettes in prison are .99+? Nakomoto coefficient is even more immeasurable for anything but cryptocurrencies, and also disregards aggregated records of deposits.
Bitcoin is not inarguably the most successful cryptocurrency. It has completely failed at its stated aim of facilitating payments, and cannot coordinate the necessary technical changes for that to be realistic. It has also failed as a platform for programmable money, since its programming language is almost impossible to work with, and once again, it has been unable to coordinate the necessary changes to implement a working language.
What is “the most successful cryptocurrency”? I don’t know, but I would vote for one of those that set out as a development platform, and have successfully ignited a huge amount of experimentation on novel financial and organizational instruments (although their value may be unfounded).
This confuses me. I make multiple payments every month in bitcoin to fund various web services (i.e. tarsnap, gandi). In fact, I've never had an issue with a bitcoin payment going through. Ultimately, I find the process of paying with Bitcoin to be a joy. I hold my smartphone's camera up to a QR code on my screen, and BAM - payment complete.
Yes, most other cryptocurrencies provide the same thing. But Bitcoin provided it first.
Which app/wallet/environment are you using? Do you have any other recommendations?
I make payments on my iPhone with Bread Wallet [0]. Have used it for several years, with zero issues.
[0] https://brd.com/
This confuses me. I have used Bitcoin as a method of purchasing goods and services and it's quite easy, and indeed fun. Buy some BTC or some Koinye or some other space cash and have your funs.
If Libra ends up with 10x more users than all other cryptocurrencies combined, who are you to say what the point is? The existing cryptocurrency space has spent a decade building something that a relatively small number of people are really passionate about but it's the opposite of what the masses want.
In my opinion, the main thing holding back cryptocurrency is scalability. They are working on that. The other thing is just social momentum.
Popularity and merit are two completely different things. It waxes and wanes. The masses will adopt anything that is convenient and popular (regardless of whether its really great or not).
Look at the #1 Billboard song right now. "Old Town Road". This is the most popular song. Its "what the masses want". What's it about? "Can't nobody tell me nothin'" "Cheated on my baby" "Cowboy hat from Gucci".. Its teenage defiance, materialism, and "macho" unfaithfulness. What happens to be popular right now might mean something important, but it also might just be garbage as usual. (By the way, at the moment, it is popular for humans to create literal mountains of actual garbage.)
The people who created cryptocurrency said what the point was. Its to give us control over our digital money and remove the intermediaries.
People who know better should strive to make things that are worthwhile more popular.
You're really making a value judgment on how the world works in general based on Old Town Road?
That was one example. Look at popular music in general. Or popular movies versus good movies.
Look at the example of social researchers creating a line of actors in downtown Las Vegas. The line went to nowhere. But simply by virtue of having several people in it, it seemed popular. So it grew in popularity to become a very long line. That went nowhere. The thing that was popular had no merit because it did not exist.
Or look at Juicero. Very popular with investors to the tune of $120 million.
I don't really believe that what's popular in music is simply a reflection of what people want. It's more like what someone's marginally accurate model of the public wants. Same with movies. Studios experiment and when they find something that is commercially successful, they make more of it. A lot of good stuff doesn't get made or promoted because they think it wouldn't have the broad appeal to be commercially successful. A lot of what's popular just got that way through promotion, not because of its overwhelming merit.
Do you happen to have a link related to the Las Vegas line of actors experiment?
https://youtu.be/k2F_7B_-FI4
Scalability is a big problem, but it's not the only problem. Money accomplishes 3 things:
1) Store of value 2) Unit of account 3) Medium of exchange
It's not really very good at any these 3 things. The scalability significantly hurts #3, but even if you fix it it's super volatile, which are bad for 1 and 2. Not only that, but it's inherently deflationary, which is quite bad in the long term, but I guess that's really a secondary concern.
I agree with your point. I think Libra is likely to have more users than Bitcoin not long after it goes live. Libra will be easier to use than a credit card, let alone Bitcoin.
I can't find the citation, but I think Paul Graham said, make it easier to use and cheaper than the incumbents and you'll have a good chance of succeeding.
This sounds like AOL in 1997 saying "We are the Internet", when the real internet was accessed using Netscape.
>The whole point of cryptocurrency to avoid having to go through middlemen like Visa or even require banks.
This is actually a big problem with cryptocurrencies - you're removing middlemen who are legally obligated to enforce anti-money-laundering laws on behalf of governments. In general, cryptocurrencies will either live under existential threat from government law enforcement agencies, or their use cases will be restricted to interactions with centralized AML/KYC-compliant parties that might as well be using a database.
This is why I doubt any major cryptocurrency advances will come from an established company. The risk of noncompliance for them is too great, but to have an effective cryptocurrency you have to build it resistant to outside control. It’s a catch-22 for the companies.
Why does a cryptocurrency have to be resistant to outside control? Because otherwise there’s no reason to use it, since the existing networks run by Visa or the US dollar are more efficient and scalable. The value of bitcoin is in its equalization, no one person on the network’s voice matters more than another.
Yeah, in my book this is more of an attempt by a consortium of powerful companies to get a favorable regulatory regime for money transmitting. "Crypto" is only there to confuse regulators into making an exception.
My first impression when I saw this news was that this would be about as 'decentralised' as Tor is. Facebook (and pals) will always maintain significant enough control over the nodes in the network to both maintain consensus in the blockchain, and also to subvert whatever consumer-friendly guarantees they'll claim to make. No different to Tor and US spy agencies controlling enough exit nodes to defeat the purpose of Tor.
Facebook and privacy are fundamentally opposed, so based on known behaviour the currency itself is most likely a hook into more of its users' lives.
The thing that separates this from a bank database is a small thing, but important, and that's that even the bank cannot reduce your balance in secret without your authorization, since transactions are signed and the ledger is public. That's because of the cryptographic primitives used.
I think in the end we have to accept that taxonomies are going to have rough edges because the map is not the territory. With Bitcoin as the canonical cryptocurrency there have been a number of experiments that have removed or added guarantees. A distributed, verifiable, immutable chain of history is basically git with a couple of extra features, so the lines are necessarily blurry.
Rather than arguing semantics, the main questions are to what degree it is censorship-proof, permissionless, and scarce. The third one is the one that is least clear from the description and whitepaper. It sounds like they're trying to get the first two as well, but the designation of initial stakeholders might make that tricky until they can transition to proof-of-stake.
>the bank cannot reduce your balance in secret without your authorization, since transactions are signed and the ledger is public
This capability is pretty pointless when the bank can indefinitely suspend your ability to make transactions. The ability to block transactions is an essential part of compliance with anti-money-laundering and other banking regulations.
> This capability is pretty pointless when the bank can indefinitely suspend your ability to make transactions.
You beat me to it: Having cryptographically signed transactions simply does not matter when you have to submit the transaction to what Zuck calls a "validator". The validator will just refuse to validate if your address is on a blacklist.
The net effect is that the coins are frozen. And since this is a backed currency, the backing will then be reduced by the amount corresponding to the frozen coins. This has the exact effect of lessening a user's balance.
Naming it "Byzantine Consensus" in their white paper turns out to be surprisingly apropos.
Might as well use PayPal if that’s the case
Maybe we need to question whether the government should have the power to unilaterally block a transaction. Just because they’ve been able to in the past doesn’t mean we have to artificially limit technology to let them keep that power.
In the same way they used to be able to tap your phone, but now we can encrypt our calls and make that much more difficult. That doesn’t mean encryption should be illegal.
> Maybe we need to question whether the government should have the power to unilaterally block a transaction. Just because they’ve been able to in the past doesn’t mean we have to artificially limit technology to let them keep that power.
> In the same way they used to be able to tap your phone, but now we can encrypt our calls and make that much more difficult. That doesn’t mean encryption should be illegal.
The government has the power to unilaterally block any transaction in any domain, so long as they deem the transaction to have occurred in or whose parties are under their jurisdiction. I think that, generally speaking, it is rare for the government to cede jurisdiction over a domain once acquired.
> The government has the power to unilaterally block any transaction in any domain, so long as they deem the transaction to have occurred in or whose parties are under their jurisdiction.
The government cannot block cash or barter transactions. Instead, they can declare certain kinds of transaction illegal and then use the courts to punish anyone who engaged in an illegal transaction.
It’s a subtle but important distinction— to do anything against you, the government needs to present some sort of a case to judge and jury, and you have an opportunity to argue your side.
The government can freeze access to your assets unilaterally without your input if they deem it necessary. They can even take your cash and charge it with crimes! That's not even including things like the US government OFAC list which you could end up on without due process.
But to your point, thankfully we (mostly) have due process with our government (in US at least); the same cannot be said of dealing with corporations. I certainly see your point. One large fear I have around money being a number in a database is that your access to the monetary system is more easily revoked, whomever the controlling authority may be.
I think that AML[1] laws were just an example. The point is that the validators have the power to block transactions. This could be due a government request, or because you posted something that Facebook (or one of the other affiliated companies) doesn't like. The actual reason is immaterial; the important thing is that currency is worthless without the ability to spend it.
[1] anti-money-laundering
No, we really don’t need to question that. Financial laws exist for a good reason. Nor should some private company have more power than a sovereign nation just because.
No, we really don’t need to question that.
The main reason we do need to ask the question is that Bitcoin is currently effective at preventing governments from blocking Bitcoin transactions. Even if financial laws exist for a good reason, they don't supercede the "natural laws" of cryptography that determine which actions are possible. So the question isn't whether Facebook should have the power to do X. The question is whether Facebook should be allowed to do X, given that Bitcoin is already permitted to do so.
Would you say the same thing about privacy, or speech?
It is bad that there are private companies, that allow me to engage in free speech, anonymously, without the government knowning my every move?
No I wouldn’t because that would be dumb
Assertions aren’t proof, and no one said there shouldn’t be any financial laws. Do you have anything to add other than an unsupported opinion?
Nope, I feel that my opinion reflects both the conventional wisdom and the expert consensus, which would be a waste of my time to reiterate. It’s the people arguing a multinational corporation ought to be able to circumvent the laws of sovereign democracies that have ‘splainin to do
Well, there is 1 key difference. The validators can't do that in secret. If they start doing it, then everyone will be aware of it.
The inability to do this stuff in "secret" part is still useful.
See also: the time ripple froze a founder's XRP so they wouldn't sell (and presumably cause a price crash)
https://insidebitcoins.com/news/not-so-decentralized-ripple-...
That could cause a crash by itself because it inspires loss of confidence.
Isn't AML just a bandage applied on top of a larger issue? What are the use cases for AML? How effective is AML in preventing and or solving for those use cases?
In other words: Those who can destroy a thing, control a thing.
> even the bank cannot reduce your balance in secret without your authorization
Uh, neither can my Traditional Legacy Bank™ if I ask for regular statements?
I suppose you could argue they could lie to me about the actual amount. Well, then I will just sue them for the money.
I just mean that your funds at the bank can be seized without your assent for numerous reasons - civil judgements, asset forfeiture, etc., and given to someone else.
The reasons you list are the bank complying with the law. Civil judgements and asset forfeiture are legal matters where the court has decided that your assets are declared forfeit in order to make reparation for some legal matter. Presenting this as proof of your money's insecurity in a traditional banking institution is incredibly disingenuous. The fact that your bank complies with the laws of your country is just more proof of why traditional financial institutions would be more trustworthy than a consortium of tech giants.
What can also happen with banks is that they forbid you from withdrawing more than a certain amount, or take x% from the top of every account because of economic issues.
I've never heard of the latter occurring, can you point me to an example of where this has happened and which countries it has happened in? I can imagine that anything could happen in Zimbabwe, but if this happened in the western world I'd expect widespread outrage. The former isn't particularly common in modern times. In the US deposits are insured by the FDIC, which has pretty much brought bank runs to a halt. It's happened in Greece recently if I recall, but even then it's still pretty rare. I don't consider either of these good reasons why an international consortium of tech giants is any more trustworthy than domestic financial institutions that, while greedy and wicked as they may be, are tied up in regulations.
Well Greece is the example I was going to name. It doesn't happen that often, but it's quite possible.
As for the FDIC, there's a similar deal in most countries up to a specific amount(FDIC is $150K, other countries sometimes have less), but I don't think the FDIC has enough money for a more massive bank run.
I agree with you that Facebook & co. aren't that much more trustworthy at all, my comment was aiming more towards pointing out some benefits of things like Bitcoin.
So instead of seizing your funds, they'll freeze your coins, then mint new ones to pay your creditor.
Ultimately you’re still beholden to private corps to transact at all, and transactions will be tied to your id, so I don’t see this having any benefit over bank-sourced transactions at all.
> any benefit over bank-sourced transactions at all
I see a few benefits, but nothing on the order of the full potential of crypto.
1. Your FacebookCoin value is a collection of the world's currency value and not tied to a single goverment currency. It's more likely that {Single Fiat Currency} experiences hyperinflation than {Collection of Fiat Currencies} thus some of your risk is mitigated. Most individuals hold the majority of their wealth in a single currency, or in assets that are sold for a single currency (NYSE transactions are completed in USD, same with US based real-estate.)
2. Transaction fees can potentially be lower than incumbents. This is probably going to be especially true with person-to-person international transfers and could big a huge win for third world startups dealing in digital services.
3. The barrier to entry will, in all likelihood, be significantly lower than traditional banks. I've known people with a credit score so low they couldn't open a bank account. I've meet people with anxiety of using a debt card because of over withdrawal fees.
If it's centralized the bank/consortium can do whatever they want. Your transaction might just disappear if the consortium decides that today is a good day to do so.
How can you be confident that the ledger that you're presented with now will be valid later?
This is what bitcoin does that none of these giftcard systems do.
The Libra ledger will not be public. Users will not be able to audit transactions or money supply.
Unfortunately the "decentralization is a spectrum" crowd has already furnished the fintech narrative with the arguments necessary to justify calling this "decentralized."
The "decentralization" quality should not be used to describe any system that doesn't exhibit a permanent, irreversible systemic trend towards greater decentralization of all the levers, concentrations and bottlenecks of power within itself over time.
For this to happen, the natural tendency toward concentration of leverage would need to introduce a proportional net cost increase to the system, rather than (as it normally would) be the mechanism by which economies of scale accrue to it.
Bitcoin doesn’t fulfil these criteria either - the devs and miners have not become more decentralised over time, if anything more centralised. Of course it is far more decentralised than this ersatz cryptocurrency from Facebook in both spirit and actions.
However the number of people who want a decentralised currency (with the many, many compromises it requires) is globally very close to 0%, so despite wailing on HN about the true meaning of cryptocurrency, this is not a reason to oppose this Facebook coin.
There are much more pressing ones to oppose it IMO - handing control of your transactions and/or finances to an org as amoral and duplicitous as Facebook, or indeed to any global corporation or cabal thereof, is a very scary idea.
I sincerely hope this dystopian effort to impose a global corporate currency fails.
> I sincerely hope this dystopian effort to impose a global corporate currency fails.
By extension, I hope the effort to impose a global governmental currency fails.
Could you give an example of something with this decentralization quality as you described?
Mastodon. You can set your own server up and benefit from all othe other existing servers. Mastodon provides a decentralised service running on decentralised infrastructure. You can run your server as you see fit, because access to the wider network is federated.
Zuckbucks provide a centralised service running on decentralised infrastructure. Try add your own server to help run Zuck's blockchain...
Git comes to mind as well, I can go to Bitbucket or Gitlab and upload my repository with its full history in seconds. Or my own self-hosted repository if I wanted.
I don't agree with grandparent for what it's worth, just thought this might work as a reply to your question.
Other than universal entropy, probably nothing. Though math is also decentralized, maybe even moreso, being independent of time. So maybe "nothing that is relevant on a human timescale" is closer.
I strongly suspect that what we have developed a habit of calling decentralization, as if this referred to a final state of a proposed coordination solution, is in fact just a temporary, transitional phase between centralized regimes.
Can you explain why the ledger being run by ~27 different entities is NOT decentralized?
How many governing entities (or validators; or people running blockchain servers) do you need before it qualifies as decentralized?
I'm wondering about your definitions, not defending Facebook here.
> Can you explain why the ledger being run by ~27 different entities is NOT decentralized?
27 entities? Not decentralized.
$10M fee to run a node? Not decentralized.
Anyone can run a node from their computer? Decentralized.
Blockchain validity is determined by mass consensus? Decentralized.
51% of the hash power is considered an attack rather than a feature of the system? Decentralized.
Edit: Removed item about forking. That's probably more about decentralized governance than decentralized currency.
You may be confusing permissionlessness with decentralisation.
A system can be decentralised and permissioned at the same time.
Fine, add that to my spec sheet above:
Need to ask an authority for permission to do something within the system? Not decentralized.
No, the white paper explicitly states that plan to phase this out.
Fine, add that to my spec sheet above:
Need to start your system with requirements about asking permissions? Not decentralized.
At some point, we need to recognize that playing games with the system so that Marketing can use the word "decentralized" does not change the meaning of the word.
or accept the fact that there is a spectrum of decentralization. It's not binary.
In other contexts "split up between a group of folks" (that may be open to newcomers or not) is sometimes called "federated", while "everybody has (theoretically) a voice in the outcome" would be "decentralized".
In bitcoin, everybody has a chance to voice their opinion on what the ledger should look like (nevermind how miniscule it is these days given warehouses full of ASIC miners). Libra has 27 designated peers, and somebody in that group gets to decide about number 28 (and, potentially, about the other 26).
And those ASIC miners serve a purpose, it becomes much harder for a state sponsored actor to develop more efficient mining technology to attack the network. And the miners who run the ASICS are the ones with the highest incentive to keep the network running strong.
> Can you explain why the ledger being run by ~27 different entities is NOT decentralized?
Many financial clearing houses are mutualised across many more members. It’s still a centralised clearing house.
Facebook is launching a shadow bank. It’s an old and recurring idea. In 2007 it was hedge funds, in 2019 it’s Facebook. Same schtick, new players.
How many of those 27 entities are registered in US and bound by US sanctions?
Well 3 of the entities are Andreessen-Horowitz, Uber, and Lyft. Not exactly independent concerns.
It's a self-imposed hegemony. Bitcoin is controlled by the consensus of all users.
LIBOR was "decentralized". Then we found out that they were all colluding together.
Libra is a attempt to cut out issuer banks, as in credit cars issuance, out of the equation. That is why Visa/PayPal/Mastercard are on the board. It is less fees for the consumers, definitely better UX, and in a sense relief from the legacy banking woes.
And more importantly for them Visa/Pay Pal/Mastercard aren't outflanked by their own competitors. There's little noble to this endeavor by these characters.
That's a good thing for Facebook then - most normal consumers haven't the foggiest idea about crypto.
Most consumers will care about, in this order, 1. Is my money at risk if I use it? 2. What's the cost?
Whether it's federated, decentralized or 'real crypto' is 98, 99 and 100 on most people's list of concerns.
>“JPM Coin,” a digital token that will be used to instantly settle transactions between clients of its wholesale payments business.
JPM is for internal use. ZuckBucks I can transfer from my anon address to your address by signing with my private key.
The key here is the ability to exchange it for other coins. If Libra partners can block exchanges, they will use that power as soon as they are requested to by regulators.
I think your point would be better made by not focusing on the terminology.
The way I would define the term "cryptocurrency", Libra Coin would qualify since it uses a blockchain and cryptography. And transactions must be validated by multiple different parties (validators).
Your objection seems to be related to something like openness, i.e. who is allowed to become a validator. In other words, within cryptocurrencies, there are two categories. They could be called, say, open and invite-only.
Libra is invite-only, which you don't think is a good setup. That's the real objection, not that it isn't distributed and not that it isn't a cryptocurrency.
JP Morgan's is for people who trust JPM because JPM has a strong vested interest to be on their side. Morgan's product is money and moving it around.
Facebook's product is you.
True, but the significant difference is that banks are not allowed to print dollar bills without control(they do print bills effectively but with controls). Similarly they aren’t allowed to just start putting credits on people’s credit cards while keeping a separate database to track real vs their issues credits.
But if that separate database is a distributed blockchain based database suddenly they are allowed to do this...
It is kind of decentralized in the sense that no single company can manipulate the ledger but it's definitely not decentralized in terms of wealth ownership.
> Zuckbucks are nothing more than the JPMorganCryptocurrency
It’s a shadow bank. Hedge funds did it in 2007. Facebook is doing it in 2019. Same schtick, new faces.
Gotta hide that inflation somewhere! /s
that's a shadow /s
I thought a cryptocurrency was a currency using cryptography to solve some basic issues related with trust.
I would never ever ever ever trust PayPal, Spotify, Mastercard and the likes to manage my money.
It simply sounds like lots and lots and lots of happy little "accidents" and "bugs" waiting to happen for political opponents as they lose their livelihoods. The people who came up with the whole "Manifest Observable Behavior" and random "Suspended for Breach of Community Standards" violations have no place around anyone's money.
It's not even related to protecting a specific political ideology, we can see daily how these companies treat users regardless of any specific belief or opinion on politics. I would rather not get / see anyone deplatformed from owning money should something like this become big.
The important question isn't what you or I will do, but what the 90% of people will do who don't care about privacy/oligopolies.
Won't take long for people to realize, unlike other "new" utilities like social media people, generally, have a reasonable grasp of the value of money and the risk of it, mostly because they have experienced it. relatively, very few people experience the wrong end of the technocratic-sanctions stick.
I'm sure they'll care once someone loses their zuccbuccs for saying "Men are trash".
Isn't Facebook PR generally oriented towards placating the more SJW themes? Before the Cambridge Analytica stuff came to light, they were the establishment left's darling.
Seems like having the right to be a jerk is important for financial independence.
Manifest observable behavior is just an evidence-based way to determine breach of policy[0]. It's literally the most rational way to go about enforcing policy.
Insofar as suspensions seem "random" because they're done by fast and loose algorithms (which are the only enforcement mechanism that scales), I agree though: that shit sucks, and it affects many sides. Many sides.
When Zuckerberg was in front of Congress, he was repeatedly scolded by Congresspeople for not doing enough to remove bad stuff. He responded by saying that there's too much bad stuff for humans to keep track of, and that Facebook is working really hard on AI capable of handling it. Yay.
0: https://youtu.be/YmcK6GvgVPs?t=172
PayPal keeps suspending accounts on a whim, also. Even before the politics vs Internet debate became a part of the zeitgeist, people pretty much daily woke up to find their accounts locked and their account balance lost forever. Stuff like that worries me because the political stu7is a new fad and might eventually pass but most of these companies play really fast and loose with their users lives.
I feel like the biggest losers here are open consensus-based cryptocurrencies like [Stellar](https://stellar.org) and [Ripple](https://ripple.com). Libra seems to have the same niche: a consensus-based blockchain protocol rather than proof of work. I fear that having the clout of a bunch of tech companies behind it will get consumer buy-in much faster than Stellar will (with IBM World Wire).
A stablecoin backed by a consortium of large companies is an interesting design choice; it's more intuitive for consumers, but seems like it opens itself up to arbitrage, taking advantage in price differences between the different currencies the crypto is pinned to. I much prefer Stellar's decentralized exchange, where tokens can be issued by any user and exchanges from one token type to another happen transparently via people advertising exchange rates.
The Libra blockchain is a new blockchain, based on (heavily modified, Barel told me) HotStuff protocol, launched a few months ago by VmWare
https://arxiv.org/abs/1803.05069
Neither Ripple and Stellar are open.
As of today, Libra is not open either. You need $27MM and your name on the short-list of 27 validators. Lots of coins have come along and made lots of promises, they need to be judged based on what they actually are today.
How is Stellar not open?
Don't know if it's what referred to, but you need to be accepted as a validating node by the other nodes.
Ripple is backed by euro banks. Libra has nothing on it.
> "On the first point, Marcus said that Facebook is enforcing a strict separation between users’ social data—their Facebook likes, photos, etc—and the financial data that will be available on Libra’s network. There will not, he insisted, be a readily available data trove connecting users’ transactional data to their Facebook profiles, and users’ funds themselves will be cryptographically secured. “We don’t want financial data and social data to be commingled,” he explained."
WhatsApp showed that eventually, the data is likely to be merged.
> We don’t want financial data and social data to be commingled
"Want" can change with one board meeting. And if they start "wanting" it in 3 years, is there a guarantee it won't happen?
>“We don’t want financial data and social data to be commingled”
Keyword is want. They don't want the data to be commingled, but alas, it will.
Was it the data that was merged with WhatsApp, or was it the infrastructure? AFAICT, FB can't connect what I said on whatsapp to what I say on Messenger because everything is e2e encrypted. They have metadata (would need it to route the messages, and for providing the service).
What am I missing?
Don't brush off metadata as useless information. They know who you talk to when you send these WhatsApp messages. They know how often you talk to these people. They know when you talk to these people. From this information they are more able to glean who are the important people in your life, what kind of relationship you have,and can then weight these profiles better. Only talk to this person sporadically during normal business hours? Good chance this person is purely a work contact. Routinely send messages after work? Probably a friend. Send lots of large payload messages late at night to a certain someone? Naughty you ;)
Of course this is endemic to any third party you trust buffering and delivering these communications, this is not particular to Facebook. However, Facebook is explicitly using this information, while others explicitly say they don't.
Mainly, they said they would not connect your phone number to your FB account, but then the did.
Furthermore, metadata is super critical already. Don’t forget that WhatsApp has your location data as well (if you enable it, what most people probably do to share their location with friends occasionally).
Although I have no proof, knowing FB, I bet they extract meta data from all of your photos and send them back. I mean, why not? Maybe not all the time, or maybe not in every version, but given FB‘s track history of giving zero fucks and trying everything under the sun to gather more data, it wouldn’t surprise me (same is obviously true for Instagram).
I try to use WhatsApp less and less and I removed all permissions except contacts. If I want to send a photo, I use the Share capability of iOS and select from Photos to share with WhatsApp. The insane part is: this behavior is not doable in Android. You either grant photo access or you can’t send anything.
> If I want to send a photo, I use the Share capability of iOS and select from Photos to share with WhatsApp
is FB Inc separated from photo metadata that way ?
From access to your photo library – yes, I'd think so. I don't know if they extract meta data from the photo you're about to send via WhatsApp. But this is a different thing than accessing meta data of thousands of photos.
They've already asserted that FB data will be used to verify your identity for Libra. Sounds contradictory.
I fail to see how a social media profile can be used to verify financial identity for shit.
Kind of interested in what this means for a non Facebook user. As one of those I already feel sometimes marginalised when content is shared on their walled garden and I need my wife to look at the dates for my kids’ sporting events because they’re only published on Facebook. Now I’m going to be unable to carry out financial transactions, too.
Exactly why I would love to see this fail. I try to be a non-Facebook user, but everyone uses Messenger, and my local Craigslist has deteriorated because everyone sells on Facebook now, so I use it for certain things. Every once in a while, I find myself getting sucked into the "feed" view on my way to the Facebook Marketplace, especially since on mobile, every time I press "back" from a listing that I go into details on, it takes me back, not to the listings that I was looking at, but to the news feed. Facebook knows exactly what they are doing.
One of the best things I did was unfollow everything (i.e. friends, family, pages, celebrities, the kitchen sink, EVERYTHING) on Facebook. This explicit unfollowing took a few weeks and wasn't something done in a day.
Now, I have the advantage of using facebook for all the useful things I need such as "Login with Facebook" and Messenger without having the risk of ever succumbing to the "Feed"
Part of my experience here showed me how Facebook would automatically "make me follow" all my House/Senate representatives even if I never explicility followed their pages/profiles.
Ocasionally, I still have to unfollow these auto-followed pages when I log in. But for the most part, I've been feed-free for a 5-6 months now. It's great!
I did this a few years ago when I found myself at a party, looking through my feed, and it made me start questioning what the hell was wrong with me.
Eliminating the feed entirely was fantastic. Soon I stopped checking my notifications (if I'm not seeing things on the feed, I'm not reacting or commenting, and not getting feedback.) Thus the only people I cared to check in on were literally the people I cared about. As a result, I grew much closer with those individuals.
Then messenger slowly started being useless, as all previously mentioned good friends were already either on hangouts/discord and preferred those (Mileage will obviously vary on this one.) I can still keep it around for my weekly check to make sure no-one is desperately trying to get a hold of me. And if they do, I immediately direct them to my chat platform of choice.
Events is still pretty handy, unfortunately, but not something I need to check in on often at all.
Honestly, I don't miss it at all, and I haven't really lost any value. I'm about as social as I was when I stopped, and in fact I consider the friendships I've had in my post-social media era to be stronger than ever.
The only people I have followed right now is a friend currently trying to break out as a social media author presence, in which case following her actually matters, and a band that one of my childhood friends is in, who I'm supporting for the same reason. (Though I often give them engagement elsewhere when I can.)
News Feed Eradicator essentially does this (browser extension) - I've used it for years can't tell you how much time it has saved me from the FB timeline!
An alternative method is to add the timeline to your ad blocker so you don't see it any more, and only use the Messenger app on mobile!
That is incredibly unethical and standard behavior for Facebook.
Worse. When and if you post something that facebook guidelines do not like, instead of getting a "we removed your post" message, you will get fined! And that fine, will be instantly covered and subtracted from your account's balance!
New avenues for monetization!
If you dig into the documentation they've released so far, you'll find that it explicitly addresses this (I also am in the "No Facebook-owned Services" camp, so I went digging for the answer.)
There are two subsidiary organizations: first, the Libra Association, which is the governance organization populated by the "validators", i.e. the corporate partners who ponied up the $10MM entry fee.
The second is Calibra, the engineering arm spun off of Facebook itself, which is developing all of the bits and pieces that make up this technology. This includes the endpoints, client software, node servers, and so on.
Neither of these subsidiaries requires a Facebook account to interact with (although it's unlikely any of us will interact with the former, realistically); this is explicitly stated in the FAQ on the Calibra page, where it states that you can interact with the payment ecosystem using the (forthcoming) wallet software directly.
With that being said, they will also be integrating it nicely with Messenger and WhatsApp; this is likely where the majority of users will interact with it, which provides a nice front-end (the screenshots look very similar to Apple Pay).
Thus, if you need a long, unwieldy, or hard-to-surface address to send assets with the Calibra wallet, or if FB users can't easily target a wallet address for payment, then you're still facing a usability barrier, if not a technical one. I'm not sure if there's much a difference between the two, honestly, beyond the semantic one.
Furthermore, there's absolutely no guarantees that this won't change over time - I could absolutely see FB bringing the pressure down on Calibra to play within the garden, so to speak. We'll have to wait and see what implementations actually appear, not just what they've announced on Day 1.
I wonder if this can go that far. It's one thing to offer a Facebook-scale version of arcade tokens, where you buy some and then distribute them within the arcade to use your choice of the arcade-owned services on offer. It's another to effectively declare your own currency and have separate businesses which only accept that (and/or can only be reasonably reached via Facebook). If the latter is not where this is going, and the coins are not good for speculation, then what is the point? And why wouldn't the various world governments have a huge problem with it?
Come on. You think Google, Amazon, Apple, Microsoft, the Chinese and whoever else are going to let Facebook alone have this cake. We are not even talking about what the Big Banks think yet.
This is just the first page of whats going to be a very interesting story.
>Now I’m going to be unable to carry out financial transactions, too.
Not so, their wallet requires no FB or Whatsapp account to use. It's open and so competitors can build wallets which also have no FB connection at all.
Your statement also assumes it will become some sort of "global currency", which it certainly won't. I mean, why would it?
Sounds like that's exactly how Facebook wants you to feel.
I'm going to choose to view this in a positive light as it's a great indicator of where to not spend money. I find company values to be an increasingly important factor when choosing who to patronize.
Kind of interested in what this means for a non Apple user. As one of those I already feel sometimes marginalised when content is shared on their walled garden and I need my wife to look at the dates for my kids’ sporting events because they’re only published on Apple. Now I’m going to be unable to carry out financial transactions, too.
From the white paper:
> "Libra’s mission is to enable a simple global currency and financial infrastructure that empowers billions of people."
They do this by issuing coins in exchange for fiat money, which is held by the reserve.
> "Interest on the reserve assets will be used to cover the costs of the system, ensure low transaction fees, pay dividends to investors who provided capital to jumpstart the ecosystem [...]. Users of Libra do not receive a return from the reserve."
Conceptually this is a bank, but with no interest returned to users, no financial oversight from governments, controlled by Silicon Valley's top companies.
If they could provide any history of being principled in their application of policy, it might be worth it; but as it stands, Facebook just sorta arbitrarily unpersons people on their platform, which gives me the impression that they'd be perfectly willing to debank them as well.
There would be savings for cross border transactions. If governments aren’t going to support banking the poor, then why does it matter who does it?
It could definitely help a lot of unbanked people. But that seems to be a nice benefit rather than the core mission.
Yes, for unbanked people who, according to the Facebook FAQ, set up an account using a state-issued ID and jump through a bunch of other hoops that are the same you would need for a bank account.
Assuming you can buy/sell it with better fees/rates. It's bound to be better than some and worse than others.
And just to be clear, there will be transaction fees for using the platform.
It’s hard for a govt to stop bitcoin from being used for money laundering but when it’s a small number of mega corps validating transactions + the price stability and privacy features I’m wondering how exactly they will stop money launderers or terrorist financiers from using Libra to thwart traditional bank AML triggers?
This is not a bank. It's an asset and a payment network. Banks are organizations that borrow short to lend long. This is a stablecoin backed very closely 1:1 with fiat currency. There is no fractional reserve, and there is no lending.
You don't need either of those things to be a bank. Check out "narrow banking" for the history, theory, and current attempts at it.
From one survey:
"Prior to the early-twentieth century, US banks tended to be much narrower than they are today. Common modern banking practices, such as maturity transformation and explicit loan commitments, arose only after the creation of the Federal Reserve and the FDIC"
If it is not fractional reserve, how do they guarantee interest payments for those ponying up the millions today?
"No financial oversight" isn't quite true. it will absolutely be regulated by fincen, as is any MSB in the US. facebook will remain compliant with BSA/AML laws, since this currency/security will enter that domain
>Conceptually this is a bank, but with no interest returned to users, no financial oversight from governments, controlled by Silicon Valley's top companies.
How so? I don't think they have access to your digital wallet, unlike a bank.
It's funded by you depositing fiat currency with them, like a bank. They earn interest on your deposits, like a bank.
You convert your fiat currency into crypto currency. Once the exchange is done, you have no rights to the fiat currency. This is in no way similar to a bank. The bank can use your deposited money, whereas here the currency is always in your digital wallet, and only you can initiate a transaction in and out of it. Do you have any information that contradicts this? I've only skimmed the whitepaper.
> Once the exchange is done, you have no rights to the fiat currency.
This is incorrect. Facebook's tokens given users the right to exchange their tokens back for the backing assets.
>Facebook's tokens given users the right to exchange their tokens back for the backing assets.
Well, yeah, of course you can convert the tokens back, similar to how you can exchange between currencies, but it would also depend on the exchange rate. You would not necessarily get back the same amount you put in.
"It is important to highlight that this means one Libra will not always be able to convert into the same amount of a given local currency (i.e., Libra is not a “peg” to a single currency). Rather, as the value of the underlying assets moves, the value of one Libra in any local currency may fluctuate. "
https://libra.org/en-US/white-paper/#the-libra-currency-and-...
Sure, you won't get back the same USD, but you will always get back the same amount of the underlying assets as you put it. This is the the same situation you would be in if you had a bank account denominated in euros.
Alternatively, you can look at this like an exchange traded fund. In both cases what you are buying are tokens which represent shares of other assets.
And no federal insurance program.
Its not a bug its a feature!
All these years of being a staunch techno libertarian and this what we end up with. I’m embarrassed, I thought it would be different.
Facebook Token won't last. There is too much governmental interest in regulating/destroying it. Only a currency that works regardless of governments and regulations will survive. Something like Bitcoin, Ethereum, ect.
> Conceptually this is a bank, but with no interest returned to users, no financial oversight from governments, controlled by Silicon Valley's top companies.
I disagree that this is "conceptually" a bank. Facebook's business model isn't lending out the reserves. If it was, banking regulation would apply.
Also, in a modern bank, reserves are maybe 10%, and you get less than zero percent interest after inflation for that risk exposure.
We've all seen in the past on how well "financial oversight" worked. At this point, I think I'd honestly rather put my money with Facebook than many of those actual banks out there. Facebook is at least a profitable company in its own right.
> We've all seen in the past on how well "financial oversight" worked
It worked remarkably well - no consumer lost their deposits to a bank failure. The fact that banks lent out too much money had no impact on consumer deposits, thanks to oversight.
What if banks tend to lend out too much money because of the deposit insurance? This could have other, unintended consequences beyond the narrow scope of your comment.
It’s a nice theory, but unsupported by evidence. In the US since the FDIC was set up there have been far fewer bank failures than there were before then. In fact, having that oversight short-circuits the mechanism that makes bank runs happen, since getting your money back is no longer a function of your place in line.
> The fact that banks lent out too much money had no impact on consumer deposits, thanks to oversight.
I like how you're trying to make like the financial crash was no big deal because this 'oversight' worked in this narrow context.
I wonder if you'd claim that the banks lending out too much money didn't have absolutely catastrophic effects on the economy in general and by association, millions of people's livelihoods around the globe.
That sounds like an argument for more regulation, not less. If there were less regulation, all that stuff would have happened and depositors would have lost their money.
I agree. I'm a big fan of heavy regulation, especially for industries that can, and frequently do, ruin millions of lives with their avarice.
That had nothing to do with oversight and everything to do with the fact that the government can just print the money to save a bank - and it did so. That expectation itself caused reckless behavior of the banks - and it still does. People just don't fully grasp the consequences.
Also, you may say this "worked" in the US, but other countries didn't get quite so lucky playing that game.
The government doesn't print money to catch failing banks, at least not usually. For standard bank deposits, banks pay a fee to FDIC as a percentage of their assets just like any insurance policy.
Keep in mind, it's to the bank's advantage to remain solvent at all costs. An insolvent bank will be liquidated and shareholders are left empty handed. Between the FDIC insurance and the liquidated assets is how these things are paid out.
>That expectation itself caused reckless behavior of the banks - and it still does. People just don't fully grasp the consequences.
What most people don't grasp is just how regulated the financial industry is.
Silicon Valley loves taking risks (and failing!), but when a bank does it it's unacceptable? This stuff happens in a capitalist economy. I mean, it's not like it was "the banks" in a vacuum. It was governments, mortgage brokers, builders, house-flippers, your neighbour, speculators...everyone benefited from the wealth effect of cheap money and rising home values. Until they didn't; then it became the banks' fault.
> Silicon Valley loves taking risks (and failing!), but when a bank does it it's unacceptable?
No, what's unacceptable is the government bailout "guarantee" you get from being "too big to fail". That's not "taking a risk", that's not "capitalism", that's gambling with someone else's money.
I will agree though that you can't blame the banks for an environment where they're effectively pushed to lend recklessly, that's the result of monetary policy.
> At this point, I think I'd honestly rather put my money with Facebook than many of those actual banks out there.
This is so ridiculous that I don't even know how to argue with it.
That's probably because systematic bank failure to you is just a fairly tale and you don't understand the risk exposure you have at an actual bank. Open your history book!
To be clear, I wouldn't prefer to put my money with either. But if push comes to shove, would you prefer to have an account at a failed bank that holds 10% in reserves, or a private company that holds close to 100% of reserves, because it is not a bank?
Before you answer, please imagine for a second that you had a decent amount of money to retire on, not whatever FDIC and the already bankrupt state promises to reimburse you with.
This seems to be a false either-or because FB is probably not holding 100% reserves as actual paper cash in a giant Scrooge McDuck vault underneath their HQ. It's holding them at a bank, so that it can get the interest payments.
Thus, a user faces systemic banking system risks plus all firm/stablecoin-provider risks. That combined risk will almost certainly be strictly larger than the systemic banking system risk you'd face by just depositing funds in a bank account that you directly control.
I'm arguing the principle here, so for that purpose it might as well be a Scrooge McDuck vault.
Otherwise, you do have a point, a systematic bank failure would likely cause issues here as well. However, I highly doubt they'd be storing significant amounts of money as cash deposits in banks for the interest. There's better options, such as short-term treasury bonds.
Right - I believe the whitepaper says it'll be a mix of bank deposits in various currencies plus short-term government securities. Still my point stands: you can have lower systemic risk in a serious crisis by holding t-bills or whatever directly, rather than indirectly via FB or any other stablecoin provider. Plus you'll get the interest payments.
Storing serious amounts of money in any of these stablecoins for any real length of time is economically irrational because by exiting their walled garden, you can obtain a higher return in exchange for reduced risk. Withdrawing is even better than a risk-free reward; it's a risk-reducing reward.
Again, I'm not pitting this against all other options, I'm pitting this against bank deposits specifically and in principle.
My point is that bank deposits aren't as safe as people like to believe they are, at least beyond what is insured.
In a systemic crisis, chances are the government will just print whatever money needs to exist and bonds too will take a hit as a result. Plus, whatever happens in the US will impact the whole world. You can't realistically hedge against this with any currency/bond.
Is it because you trust the banks to keep your money safe? Have a look at what happened in 2013 in Cyprus where they did a bail-in with their customer's money to "save" a bank that was too big to fail.
I am with parent on this one.
What happened in Cyprus in 2013? Private banks in a tax haven had rich people from other countries speculating on foreign markets (US housing, among others), hoping to gain above-market returns by doing so. That speculation went sour, resulting in insolvent banks. Those banks also had regular and smaller deposits from local residents, though. In order to protect those people, Cyprus decided to not absorb the speculative losses of those rich people. Instead, the private speculative losses stayed private, which is essentially what a haircut above €100k did.
Now imagine that same situation, but with Facebook at the helm. Either Facebook is in risk of insolvency, or private speculation with zuckbucks going south. Do you think Facebook will just go bancrupt in order to protect the zuckbuck owners? Or will they more probably recreate Cyprus, but way worse for the zuckbuck holders?
In other words, you agree with the parent on the facts. People lost their money, but presumably "it serves them right" cause they were rich and tried to dodge taxes - which is totally besides the point.
As for this new cryptocurrency, it's designed not to go insolvent, because it is more or less fully backed with actual currency/bonds. It has nothing to do with Facebook's financials.
By contrast, besides insurance for a modest amount, a bank deposit is only "backed" mostly by securities and loans years into the future, most of which can go bad in a crisis.
> In other words, you agree with the parent on the facts. People lost their money, but presumably "it serves them right" cause they were rich and tried to dodge taxes - which is totally besides the point.
People willfully risked risked their capital to target above-average returns. That didn't work out, which, when looked at from a distance, is perfectly fine - other market participants made better decisions, end of story. What isn't perfectly fine is people then trying to socialize their losses afterwards. You can't have a cake and eat it, too.
We're not arguing about the safety and viability of banks. Instead, we're directly comparing the safety and viability of banks vs Facebook. If you think that Facebook comes out on top in that comparison, either you really haven't been paying attention, or we fundamentally disagree about what safety and viability mean.
Do you have any actual arguments?
It will be interesting to see how the well known economy concept of "Optimum currency area" (see Robert Mundell, 1961) would apply in that case of a stable money anchored to a mixture of dollar/euro/yen. If it is like what happened to Euro in the face of a systemic crisis, that should be labor mobility and low wages for low-productivity countries.
Not disagreeing with the sentiment of your comment, but the article does say "Facebook, and its partners—two dozen so-called “validators” that will run the proprietary blockchain network—will govern a reserve of users’ funds, on which they will be able to accrue interest."
The partners accrue interest - not the users.
https://medium.com/@tejas_rd/why-facebooks-libra-could-be-a-...
If it's considered to be a currency by the gov. then regular financial regulations will apply.
Certain activist groups put constant pressure on Facebook to “deplatform” and remove pages for both legitimate in it legitimate reasons.
Now we’re talking about giving Facebook control over the very means to do financial transactions. How long Before this also becomes weapononized, by Facebook, or by activists?
there is a reason why popular currency systems has been the purview of governments. We’re creating an awful lot of social repercussions by allowing corporations to own the basic financial fabric.
I predict if it happens, demand to cut off $BAD_PEOPLE from the service will start the next day the service is launched. And if it is technically possible, the demands will be complied with the next day after that, for some values of $BAD_PEOPLE. Nobody wants to be a platform for moving terrorist money, right? Or drug money? Or alt-right money? Or gun manufacturers money? Or pro-life money? Or wrong-presidential-candidate money? Or persons-whose-opinions-I-don't-like money?
Hear hear!
I think you are a few centuries late there - government banks were the Johnny come lates. The weaponization has gone on for quite a while even if you ignore the "required by law" aspects. Also not basic yet - physical currency is the current "most basic".
The reason for government currency systems were because they backed taxes and had more stability than private entities. There is a long history of trickery from back when banknotes were literally issued by private banks.
Visa and MasterCard already cut off services to some groups.
Official site: https://developers.libra.org/ Whitepaper: https://libra.org/en-US/white-paper/
Technical whitepaper [PDF]: https://developers.libra.org/docs/assets/papers/the-libra-bl...
Details on the Move programming language [PDF]: https://developers.libra.org/docs/assets/papers/libra-move-a...
What I really don't get is the regulatory aspect. They are creating a financial derivative asset/instrument. To be moved across the borders. In what freaking universe will the regulators not be all over it with endless KYC/ML rules?
They'll pay lip service to KYC etc, and then hope to do an end run around regulation by becoming ubiquitous before it can be properly regulated.
That's probably why they've chosen a blockchain (which is of negative value here technically) - to bamboozle regulators and avoid responsibility for managing it till it is too late to do anything about it.
There aren’t enough public details yet but I think the “blockchain” part is really just between all of the partners, not between the users. So when user A in the US sends to user B in Pakistan, the activity is really only between the two parties which converted the local currencies from the end users. That wouldn’t be particular different from user A sending a Western Union payment to user B in Pakistan.
Conceivably Facebook has all of this user history and is able to make a guess if someone is a real person. Probably they know a lot more than a bank would know. That could take care of some aspects of the KYC issues too.
Using the word cryptocurrency is fairly misleading, because as far as I can tell, it isn’t really one. Blockchain, maybe, but I don’t even know what that word means.
Thats right, its not distributed like bitcoin but all of the nodes are "trusted" by each other and the block chain itself would only be accessible for users and you would not be able to add a node without being a massive corporation which invests and joins their consortium.
No idea how new companies are supposed to rise with these players securing their monopoly like this.
Not "endless", but chances are they'll simply apply "standard" money transmitter rules... and yes, that includes KYC/AML
Have you ever bought/sold stocks or futures? The amount of paperwork you have to provide and to sign is not trivial. And then you're still quite limited in what you can do.
Its Facebook. You don't have to submit anything for them to know their customer ;)
You assume government regulators and policy makers were not in on it from the start.
Looks like they were not.
https://www.coindesk.com/halt-libra-us-lawmakers-call-for-he...
I kinda doubt cryptocurrency/blockchain tech will be anything but an implementation detail in this project.
Assuming this catches on, the idea that Facebook and it's other partners would let this get out of their control seems very unlikely -- and if it did get out of their control, I think they'd simply abandon, disavow, and/or fork it.
The appeal of this to users is going to be integration with the social networks these companies run, so they are holding effective veto power since they can change its relevance to low at any time.
Meanwhile, the partners will be tracking every transaction and monetizing that information. Apparently, you can use a pseudonym when using this currency, but I'm sure they will connect any pseudonyms you use to your profile the second you first use them. Wonderful.
I'm biased as I'm working on this project. But I'm super happy it's finally out there :) There's a lot of really cool cryptography and tech on this project and there's still a lot for people to discover!
I have taken a cursory look at the github repository and the whitepapers. It looks like a very high quality project and a major contribution to the space. Facebook as a commercial company did not have to release this as open source but it did. In short, excellent work.
Apart from the cool crypto and tech, can you tell a bit what you're ethical viewpoints are on what your work is going to do to the world?
Let me guess:
"We try to stay away from such pesky questions but are convinced that the amount of good that Facebook can do is unlimited"
Yeaah.
One of these is a guideline violation (https://news.ycombinator.com/item?id=20219023); two is already harassment. People have a right to post here regardless of who they work for. If other users hound them away, will that make HN more or less interesting? Obviously less.
Please don't do this again so we don't have to ban you!
https://news.ycombinator.com/newsguidelines.html
Or my favorite - which OP has already stated - "Well someone would do it, so why not me, I'm a good person!"
There's also very cool cryptography and tech on other projects, that are actually decentralized. E.g. Algorand, where I work.
Facebook's protocol is permissioned - not so much theoretical novelty there over PBFT (or even non-Byzantine Paxos... companies are under contract anyways, why model them as Byzantine actors?) No way it will scale to 1000+ nodes, in a permissionless gossip network where you cannot directly unicast to the leader.
Vervious I invite you to read the paper, we actually do plan to go full permissionless.
BTW I'm a huge fan of Algorand as well. You guys are doing really good work.
"As a result, one of the association's directives will be to work with the community to research and implement this transition, which will begin within five years of the public launch of the Libra Blockchain and ecosystem."
I challenge the Libra team to put their money where their PR is at. Decentralization isn't impossible. Why should it take five years? This reads more like an empty, vague promise to appease the internet.
"The challenge is that as of today we do not believe that there is a proven solution that can deliver the scale, stability, and security needed to support billions of people and transactions across the globe through a permissionless network."
Many people in the cryptographic and distributed systems community, including me, would disagree.
Thanks for the cynicism! We'll need some of that :)
IMO there weren't much legit solutions before Algorand. We are all very interested to see your progress.
Can it be used without a Facebook account?
Seems like it can, because the article says that one’s Facebook account won’t be linked to the wallet account and that the wallet account can remain anonymous or pseudo-anonymous to others. But I’m sure Facebook will be able to link these somehow, and so will all the partners. This will be a bigger Cambridge Analytica in the future.
Considering the track record to date why would anyone want to handover financial transaction data to Facebook?
I may as well cut out the middleman, save time and punch myself in the face.
To deploy a smart contract in production, will I need to apply to be on the appropriate whitelist? If not, how do you prevent people from creating smart contracts that permit non-KYC wallets?
I've always wondered, the people who work on this project do they understand what cryptocurrencies and are they secretly embarrassed?
Apparently you're not embarrassed...
There's a lot of interesting physics in building thermonuclear weapons. Doesn't mean you should do it.
Your talents could be used to help the world. Instead, they are being used to enclose common spaces and pull apart the fabric of society. Get a better job?
I appreciate your point of view, FWIW I believe that I'm doing net positive work for the world.
If you don't believe such projects should exist, you can at least agree that such project will inevitably happen and that it is a good thing that they have people like me onboard to influence them in the right direction.
I will write more about the things I work on and why I think these are good things on my blog www.cryptologie.net
Hope we can have some civilized discussions :)
It could be but it is not and won't be. Net positive would require actual decentralization and no PoS (rich get richer). There are other ways to solve consensus and I don't mean PoW. Net positive would be to not require AML or KYC. Net positive would be no transaction fees. The foundation members will still profit on the float on fiat. Also, this project already exists. Isn't this the whole reason Ripple was created? Why not adopt Ripple as the crypto? Oh, because it is all about control.
How is FB printing fake digital dollars any better than the US government printing fake digital dollars? Except this way, everyone gets to rent seek and take from the people they purport to want to help. Rent seeking less than Western Union doesn't count. How about a project that is actually about helping the unbanked and underrepresented without exploiting them? I'll believe that anyone on this project actually thinks it is net positive for the world when they donate their salary and RSU to a non-profit that is actually helping people.
> you can at least agree that such project will inevitably happen and that it is a good thing that they have people like me onboard to influence them in the right direction.
Sorry, what? What gives a random person a reason to think you're someone who will "influence them in the right direction"?
Probably because he's at least willing to have a discussion about it? Instead of going "fuck you, you are just jealous of my lambo collection"?
Okay, but he's also clearly absorbed Zuckerberg's savior complex. Politeness may help a conversation but it doesn't qualify him to make world-shaking ethical decisions.
"I appreciate your point of view, FWIW I believe that I'm doing net positive work for the world."
Well, you're wrong. You believe this because you're getting paid a lot of money to.
A bit of cyberstalking suggests that the commenter here has a background in crypto stuff, so i suspect that the belief predates the being paid a lot of money.
A lot of people genuinely believe that crypto bobbins is inherently positive, and might well believe that crypto bobbins with a big serious alliance backing it is more likely to succeed, and so even more positive.
And, if projects like this are going to happen, i would certianly rather that they had optimistic true believers involved!
The optimistic true believers are being exploited by dishonest business folks above them in the org chart.
They have flexible morals, they think honesty===naivety and they will tell the optimistic believer whatever he/she needs to hear in order to do what they want.
This is just another step towards corporate dystopia. How big of a step remains to be seen.
It's not that these projects shouldn't exist, it is that THIS project shouldn't exist. Facebook and co have already proved they can damage society in devastating ways - continuing on this line of thought with currency and expecting it to go any other way is naive thinking. I say this as someone who would happily work at FB (just not on this).
> FWIW I believe that I'm doing net positive work for the world.
I'm sure most Facebook employees have a similar opinion on their jobs.
Ignore all the haters, you're building something cool that has the power to transform peoples lives. The fact that you're even thinking about your impact on the world puts you above what most people would do. Keep up the good work.
I largely agree with the OP. I think these technologies can only be viewed in an optimistic way through a techno-libertarian lens; a perspective I don't think has any practical grounding in reality at best and at worst actively ignores why current systems exist (throwing the baby out with the bath water so to speak). And with that lens, I think it's foolish it believe that an engineer will actually be able to steer this machine once it's out in the wild. Systems without power structures still have power structures, they just not may be immediately obvious.
But I do appreciate your constructive attitude towards his comments and I'll be checking your blog a good bit to inform myself as best as I can going forward :). I would ask that you have some kind of "apologetic"/philosophical tag on the type of posts that people like me can filter for so we can read up on that kind of perspective.
I think these systems deserve more social/civic conversation and less technical ones. The tech is cool, but these technologies have the potential to have severe civic ramifications. These technologies are largely out pacing our national and global conversations around how we should use them, their pro's and con's, and the systems they're designed to replace/circumvent... and it's not a good thing.
Thanks for the link!
> I appreciate your point of view, FWIW I believe that I'm doing net positive work for the world.
Everybody does so. https://www.youtube.com/watch?v=XxUgei-WKfY
> they have people like me onboard to influence them in the right direction.
what influence do you have? Can you tell Zuck not to steal my personal info?
Also, how much of your salary is getting paid out in Zuck Bucks? Or are you going to wait until some third world citizens with no other options test out the utility of this before you dip your toe in?
> If you don't believe such projects should exist, you can at least agree that such project will inevitably happen and that it is a good thing that they have people like me onboard to influence them in the right direction.
Unless you sabotaged the project, no. It would be a better thing if people like you refused to work for Facebook so it would have to hire someone less competent or at least someone more expensive,
You don’t steer anything, you write code. Apparently you are on the “cryptography team,” so are you discussing the social implications of libra with mark Zuckerberg before you implement this and that? Have you prompted any alteration to facebooks plans ever? You have rubbed elbows with all the executives at visa and Facebook and made sure that they are good fellows? Or are you just very happy with that nice fat paycheck and also the (declining) social status that you are afforded by name dropping Facebook?
I can't believe the amount of "you are a horrible human being for working at Facebook" comments I keep seeing as soon as someone says they are working there.
HN is great because you normally get comments straight from the source, but I'm worried we will inevitably shame Facebook employees into not posting here at all.
To be clear, I don't think parent commenter is a horrible person. I think they are misapplying their talents and hurting society.
I do understand your concern. Dialog is critical. But dialog only seems worthwhile if it is honest and open.
So do you think most big tech companies are evil? Google must be evil as well correct?
Especially Google, more so than FB.
Its not surprising, there are many people who are fb haters in this forum.
Saying "haters" makes it look like the people criticizing Facebook don't have serious concerns about the influence it has on the world. It's not being a hater of Vim, or Python. This is far bigger.
At least for me, Haters also include people who doesn't like the influence fb has on the world.
If we could indeed shame people into not doing something (focusing on actions and not people), I’d rather spend my energy on shaming people to quit Facebook en masse and shut it down. Seeing that this sounds ridiculous and unlikely to happen, I doubt any other intent of shaming would work either.
When Chamath was asked about working at Facebook @Stanford. What soul searching are you doing right now on that? "I feel tremendous guilt. I think we all knew in the back of our minds, even though we feigned this whole line of there probably aren't any really bad unintended consequences. I think in the back deep, deep recesses of our minds we kind of knew something bad could happen. But I think the way we defined it was not like this. It literally is a point now where I think we have created tools that are ripping apart the social fabric of how society works. That is truly where we are. And I would encourage all of you as the future leaders of the world to really internalize how important this is. If you feed the beast, that beast will destroy you.If you push back on it, we have a chance to control it and rein it in. And it is a point in time where people need to hard brake"
"pull apart the fabric of society” The fact that you made yourself believe this doesn’t make it true.
The fact that you made an internet comment saying it doesn't make it true, doesn't make it not true.
I understand there's a lot of hate on FB on HN, but I think there's a gap between thermonuclear weapons and crypto currency project.
So hire her/him.
I'd work on nukes before I'd work at Facebook. Nuclear weapons have arguably prevented WWIII, at least so far. Conversely, if WWIII ever does come, I wouldn't be surprised if Facebook has something to do with causing it.
My bet is on Twitter starting WWIII. This is the app politicians prefer use, after all. We’ll have “the tweet heard around the world”.
Yeah it's weird to me the amount of hate Facebook gets when Twitter, reddit, and tumblr all seem worse.
Tumblr, Reddit and Twitter are community sites. They are driven by their users, with little or no overarching strategy beyond being next-generation BBS services that occasionally sell a few ads to keep the lights on.
Facebook is driven internally, from the top down, to accomplish murky, exploitative goals that are in the interests of nobody except the company and its shareholders.
That's why Facebook is worth hundreds of billions of dollars while Reddit can barely pay for their own bandwidth and Tumblr gets passed around between acquirers like it was a radioactive waste dump that runs a porn business on the side.
I don't know WTF Twitter is worth, if anything, but some people seem to think it's got a viable business model, so meh, whatever. They aren't Facebook.
I doubt it. We already see that whenever somebody posts something stupid and controversial and is a public figure, they will claim they have been hacked and somebody else wrote the tweet.
“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” - U.S.
Your comment is meaningless. Cryptos in general are a cool, top 25 Silicon Valley are the opposite of cool.
Why are so many people working for such uncool companies?
Often because they pay well. Sometimes because you want to work on a big project that is out of reach of most companies.
How good can the judgement of someone still working for Facebook be?
Personal attacks will get you banned here, regardless of how made you are at someone's employer. Please review https://news.ycombinator.com/newsguidelines.html and don't post like this to HN.
Here's something for you to discover - cryptocoins have single-handedly wiped out and exceeded all progress we gained in Photovoltaic technology. Thanks for helping destroy the planet and undoing what we've been working so hard to achieve, all in the name of some pet project.
Note that Libra doesn't use energy-sucking PoW.
If it works in any way like a permissionless distributed database, you will find it running into energy problems very quickly with every node addition. this is a known issue since the 70s when we first tried this kind of technology.
You know that Libra is a POA coin and does not require mining, correct?
It's still a permissionless distributed database and will suffer those same issues regardless. This is known since the 70s, when we first developed and tested this type of technology. To boot, the majority of power isn't in the mining of POW, but the supporting hardware to maintain the network.
Private money is not a new thing. In fact, the predecessor to paper money was retail bank issued notes. I think it's still the case in Scotland: https://en.m.wikipedia.org/wiki/Banknotes_of_Scotland
The concept of nationalized central banks is new.
A couple years ago in London, I seriously confused a young retail clerk by presenting her with Scottish banknotes presumably left over from an earlier trip to Edinburgh. She had to go get her supervisor to assure her that this was indeed real money.
It's really not, though.
OK, it's more "real" than an IOU I hand you, because I know that in order to issue their IOU they actually had to deposit an equivalent amount of cash with the Bank of England, but it's not legal tender -- while in practice pretty much anyone should be comfortable using it as a medium of exchange, the only _guaranteed_ use of a Scottish note is to exchange it with the issuer for a Bank of England note (or, in Scotland, coins), which you can then proceed to use to pay your taxes or other bills because they _are_ legal tender (value limits apply to specific denominations south of the border, you need to use pound coins north of the border).
But yes, in practice, real money. Just don't try telling anyone they've _got_ to accept it, because there's no such obligation.
No retailer has to accept anything. I can set up a shop in London that only accepts Scottish banknotes and not English ones. Or that only accepts Mexican Pesos or Bitcoin for that matter.
From the Royal Mint's website:
> Legal tender has a very narrow and technical meaning in the settlement of debts. [...] It does not mean that any ordinary transaction has to take place in legal tender or only within the amount denominated by the legislation. Both parties are free to agree to accept any form of payment whether legal tender or otherwise according to their wishes.
I know -- that's what I was trying to convey when I said "pay your taxes or other bills", because those are (pretty much) the only times when you can require someone to accept money from you, and consequently the only times the concept of "legal tender" could even possibly come into play. Even then, most creditors are happy to take payment in any convenient form :).
Most of the time most of the people are happy to accept anything that's a properly denominated bank note. But while I'll happily try to spend Scottish notes down South, there's no requirement on any shops to accept them.
Edinburgh Council have recently done something interesting though: they've stopped (in most locations) accepting cash for payment of bills. Now I'm wondering if I should cancel my direct debit and take them a stack of pound coins :).
Didn't I just read a story about the Amazon retail stores in SF being forced to accept cash, not just credit cards linked to someone's amazon account?
I don’t know, but I was referring to the situation in England (as far as I understand it). It could be different in other jurisdictions.
I have had to tell shopkeepers on a few occaisions that if I was going to be forging money, it probably wouldn't be notes that almost nobody in England actually recognises.
> The concept of nationalized central banks is new.
And it's still pretty unclear if those are a good idea at all.
According to this guy, the average lifespan of a national currency is 27 years: https://www.dinardirham.com/the-rise-and-fall-of-fiat-curren...
Same in Hong Kong, could make a hobby collecting then from different banks
Confirm: still the case in Scotland.
This reads a lot like the founding of the Federal Reserve:
> [The Federal Reserve] had several key components, including a central bank with a Washington-based headquarters and fifteen branches located throughout the U.S. in geographically strategic locations, and a uniform elastic currency based on gold and commercial paper.
1. Geographically dispersed
2. Value elastic but secured by assets
3. Controlled by a small group of people
4. Goal of stable long term prices
Key differences between this and the US federal reserve seem to be:
1. Libra involves no state actors
2. Libra is pay-to-play (vs representative democracy for directors of the US Fed)
3. Libra has no employment objective
4. Libra has no interest objective (outside of maintaining investment in its reserve assets)
5. Libra is "fully backed by real assets"
While personal socio-political beliefs make #1 a huge concern for me, and #2 has been widely critiqued already, #3 - the US Fed's employment objective - is an interesting difference to me.
I have not read all of the Libra material yet, but so far this belief is the only reference I've found to Libra's relationship to work:
> We believe that people have an inherent right to control the fruit of their legal labor.
Seems simple enough on the face of it. An extremist could perhaps liken it to "taxes are theft," but I don't see evidence of that in one vague sentence.
I think instead this outlines a key philosophical difference between the US Fed and the Facebook Fed:
The US Fed has an objective of (indirectly through labor) distributing capital.
The Facebook Fed has an objective of easing the flow of capital.
The Facebook Fed therefore is neutral, amoral, technocratic in its approach: make what you have easier to use.
Whereas the US fed (and I suspect other federal reserves) have a non-fiscal social component builtin: increase capital distribution through availability of labor.
The full employment second mandate was only added during the Carter administration, and was mostly ignored by the Fed until Yellen became chairwoman.
Can we just call it the global reserve?
I prefer the Facebook Reserve as it reflects its largely private corporate roots.
Update: Considering Zuckerberg holds a majority of the voting shares in Facebook, I don't think calling it The Zuckerberg Reserve and Zuckbucks is at all unfair.
Liberty Reserve would be more apt. Oh wait...
I remember Disney Dollars as a kid that were pegged to US 1:1 and could be used at any Disney-owned property. They were basically gift cards with no expiration date. They ended up not being cost efficient, so Disney discontinued them in 2016.
So, if the Libra ends up costing more to run than in earns (hardware, software, labor, and the cost of pegging it to a basket of currencies), then they won’t continue funding it. Since it’s not going to be a speculative currency like bitcoin, how will they pay or it? Will they take a transaction fee?
I also keep on reading that it will help the unbanked in the developing world facilitate payments. I guess it can be risky and hard to carry a lot of cash around for large purchases in parts of the world. But for this to work do you need better identity management? Or if you hold the cell phone, you hold the wallet? If it’s target is micro payments, then there are already many expanding options.
So that leave cross-border transfers, which is a huge thread to the US’s economic dominance. It is much harder to embark Iran if you don’t control the currency they sell their own for.
>Since it’s not going to be a speculative currency like bitcoin, how will they pay or it?
https://youtu.be/HnXKE0nfAjI?t=41
But seriously, an even more direct connection between ads and what you buy.
I'm very concerned this will give Facebook even greater control. I think it is likely Facebook will push Libra towards people in countries where their currency is volatile, such that it becomes the standard. I do see the positives, that they can now rely on a currency to be stable. But what do you think, could this be an issue and if so, do you think this can be overall beneficial for people from these places?
What I haven't heard is how they plan to help US Citizens properly report taxes on any gain or loss when spending Libra.
Either the IRS will need to look the other way or this will become a huge hurdle for mass adoption in the US.
My hope is this helps get the IRS moving faster at making some laws based around using cryptocurrency to buy & sell goods. I do get that this isn't an easy decision to make. At some point someone will have to make it though. You cannot expect people to use a different currency on a daily basis & report any gain or loss on the currency at the time of transaction. It would also be an accounting nightmare to decide which coins you spent at the time of purchase.
My guess is they're waiting for cryptocurrency to become popular enough that it forces their hand & they have to create some type of leniency regarding gains & losses on each transaction.
From my understanding, the US market is not a priority for them with this project. They're looking at the unbanked markets first and foremost.
I think that's PR bullshit to make this sound like a charitable endeavor.
While I agree with most commenters here that are skeptical about a surveillance-based currency, I'm very positive about the idea of having mainstream apps such as Whatsapp and Messenger introduce the concept of paying with your phone without needing to link your accounts with any bank account or debit/credit card, because the money is in theory being held by your device (under the hood, just holding a private key of a "blockchain" account that has a non-decentralized-stablecoin balance, I know).
This will enable people to start thinking of money in a more pseudo-P2P way, get comfortable with it, and in turn allow them to start understanding better what cryptocurrencies really are (which Libra is not). What cryptocurrency and Libra share is, at least, the concept of ownership via public/private key cryptography, as opposed to identity-based systems such as paypal/banks/credit/debit. This has some UX-side-effects that people will start to learn, such as the push vs pull system (e.g. it's not anymore the merchant who scans your QR code, but the other way around, the customer scans the merchant's payment-info).
What's the point of public/private keys if the whole thing can be reversed, recovered and changed by FB with no transparency for the outside world?
The private key becomes just a better password, like a SSH key based authentication. Actually I'm pretty sure the wallet will not even require any key. You will be able to sign in with facebook.
I see no P2P payments here as everything is really validated by FB and all the data is kept under fb control. The client sees just an old good REST/RPC API with no public access to the backend. The client wallets will be no better/powerful than a paypal client app/wallet. There will be no blockchain to download...as matter of fact you won't even be able to tell if FB really uses blockchain behind the curtains.
Not to mention that you need to "signup" for an account and verify it with facebook before you can receive any "coin". In reality there is no coin. Is no different than paypal really.
> What's the point of public/private keys if the whole thing can be reversed, recovered and changed by FB?
Less possibility for fraud via identity-stealing. Merchants will not need to see/store your private keys anymore to receive payments.
Where are the keys stored? How are the accounts recovered when they loose the keys? And you really believe facebook will ask users to manage private keys instead to authenticate with their facebook account?
> you really believe facebook will ask users to manage private keys instead to authenticate with their facebook account?
Yeah, I know that your private key will probably be your Facebook username&password tuple, but this is still better than credit cards because the merchant will not need to know this tuple to be paid.
How is this whole thing different than paypal then? We all know how "better" paypal is. Frozen accounts anyone?
Paypal is linked to your credit card.
It's not really mandatory. You can use the paypal balance to buy stuff.
In case you wonder you will need to source your facebook wallet with a credit card or bank account too so it's really no different than Paypal.
Wtf really? Is that in the whitepaper?
> The client sees just an old good REST/RPC API with no public access to the backend. The client wallets will be no better/powerful than a paypal client app/wallet. There will be no blockchain to download...as matter of fact you won't even be able to tell if FB really uses blockchain behind the curtains.
What is your basis for this? It implies that the fairly detailed whitepapers describing the blockchain are an elaborate hoax, which seems unlikely.
You need permission to access this blockchain so unless you are one of the facebook/libra association members you don't know what database is used. In practical terms it doesn't really matter because you can't access it anyway. It's an implementation detail.
I don't think this is true. It will have permissioned validator nodes (at least initially), but that doesn't mean it will be opaque to clients.
Well, zucchain is one of the world’s most inefficient and expensive database ever created, of course it deserve a nice white paper.
</sarc>
It can also have the other effect in that it can show cryptography based solutions in a bad light to the public as yet another form of survailance and cause people to be less trusting even when authentic cryptography based money systems exist.
If people worried much about surveillance today, cryptocurrency would already be mainstream. If what FB brings is pretty much the same as the current banking solutions but with some technical advantages on top of it, I doubt they are going to facepalm about it because the better alternative (true cryptocurrencies) is unknown to them.
It’s going to be interesting. “Unlike previous stablecoins, Libra will not be issued by a central party. Instead, Facebook has enlisted 27 fellow Silicon Valley titans—among them PayPal, Visa, Spotify, Mastercard, Uber, and eBay—to operate as preliminary “validator nodes” who will each share a transparent copy of a vast ledger of transactions reflecting all the activity on the network.”
That sounds amazingly dystopian. I mean, that’s literally a money built on an oligarchy. By design.
I understand people trust these services ( to the extent they keep using them), but the playing field should be flatter in crypto. Unlike the article’s suggestions that Ripple is toast, I can imagine it’s putting such coins in a position to be very competitive, more open, and not run by the companies above.
> That sounds amazingly dystopian. I mean, that’s literally a money built on an oligarchy. By design.
IMO, it's a small step towards a better direction. The "validator" consensus (oligarchy) is a much more transparent/inclusive solution compared to the closed financial ecosystems of Wechat/Alipay/Paytm/Grab. If Libra is an oligarchy, closed financial systems are dictatorships
> If Libra is an oligarchy, closed financial systems are dictatorships
Given the global financial system is not controlled by one individual, it isn't a Dictatorship (power of one) but is more like a form of Oligarchy (power of the few). As for which form of Oligarchy each are, I'd argue that the existing financial system is more of a Technocracy (i.e. you need to know what you are doing to be one of the few) whereas Libra is a Plutocracy (you need to be wealthy to be one of the few) or even possibly a Kleptocracy depending on how they actually run it and what their true motives are.
> whereas Libra is a Plutocracy (you need to be wealthy to be one of the few)
Agreed. The same way governments require a large amount of capital to be a bank to ensure depositors of liquidity. You need to have capital to back the Libra tokens, otherwise it can get pretty scary, just like USD Tether shenanigans.
> or even possibly a Kleptocracy depending on how they actually run it and what their true motives are.
Banks, Central Banks, Governments, etc. whatever. Their motives are exactly "secret" when it comes to managing currencies. They all gear towards enriching their currency and making it more valuable. So yeah for this "oligarchy", I'd bet it's the same, Kleptocracy it is.
I think this may be conflating individuals with corporate entities. Certainly from a corporate entity perspective both have significant capital requirements. But from an individual perspective, to be an influential figure at a central bank you will have had to have undergone years of relevant training, passed regulatory exams, and typically have proved yourself in a related position over a long period of time, hence considering it more of Technocracy. However, to be an influential figure in something like Libra, you just need a shed load of cash, and can have precisely zero understanding of modern finance, hence my seeing it more of a Plutocracy, or even Kleptocracy. Broadening this out beyond Libra, if you want to be a leading figure in one of the more cult-like cryptocurrencies, you also need a lot of blind faith and be good at rousing your followers, so there is an element of Theocracy in there too. I know in the early days anyone with a bit of technical knowledge could set one up without having access to large amounts of capital, and there was talk of this "democratising money", but those days are long gone.
The main central banks usually have a monetary policy clearly defined by their governments. Typically this will include things like "target of keeping inflation at 2%"[0]. This is not exactly secret. It can however be very difficult for people without the necessary backgrounds to fully understand. But I guess we are living in an era of short attention spans and distrust of experts, which provides a fertile breeding ground for cryptocurrency conspiracy theorists to exploit for personal profit.
[0] https://www.bankofengland.co.uk/monetary-policy
I would have loved to see any company besides the players mentioned here. For me, this coin almost disqualified already. Their association maybe shouldn't be judged but I nevertheless remain very skeptical.
I agree about classical closed financial services like visa and mastercard being financial dictatorships. That is why their involvement doesn't really build trust.
It really does feel like cryptocurrency is how the technical industry will learn/is learning about the financial industry.
Stripe and Paypal are examples of tech companies that already appear to have learned quite a lot about the financial industry.
Retail payments is just a teensy tiny, eency weency bit of "finance".
Nearly all companies are blatantly authoritarian by design. This is not new.
I mean, technically better than majority-hijackable crypto, but it's still just corporate scrip.
Sixteen Tons is applicable.
> If Libra is an oligarchy, closed financial systems are dictatorships
You are on the right path, don't stop there :-)
And existing non-corporate democracies are... democracies.
could you expand on why you see an aggregator like Paytm a closed financial ecosystem?
> That sounds amazingly dystopian. I mean, that’s literally a money built on an oligarchy. By design.
Then W3C and the USB-IF are also "oligarchies" and dystopian?
A bunch of institutions working together is presumably a lot more trustworthy and less prone to abuse by anyone individually than a single institution, which maybe you would call a "monarchy"?
Really not sure what's dystopian about this at all. Do you think MasterCard and Visa networks are dystopian too, or that national currencies themselves are dystopian?
> Do you think MasterCard and Visa networks are dystopian too, or that national currencies themselves are dystopian?
There is a major difference between settlement being operated by a democratic government, which will therefore handle the payments market with the public’s interest in mind…
…and it being operated by a for-profit.
Monetary policy (eg. target inflation rates) can be driven by investors, at the expense of social stability.
> Then W3C and the USB-IF are also "oligarchies" and dystopian?
Hm, I don't know, is the USB-IF habitually shaping political discourse of billions of people by either outright censoring or "demonetizing" [0] content creators with slightly different views?
[0] Of which this shitcoin is the logical strategy to cut off alternative income sources
It's hilarious that they say they want to setup a payment network that omits rent-seeking middlemen.... and proceed to immediately recruit PayPal, Visa, and Mastercard, which are the biggest rent-seeking middlemen that exist. Seriously, those 3 companies alone have more control over the US economy than the US Federal Reserve does. I've just been waiting for the day when the Federal Reserve says 'we need more liquidity in the market' and prints more money, and the 'payment processor' mafia respond with 'we disagree' and jack up their per-transaction fees.
The corporate dystopia cometh. It won't be long before they are disrupting the inefficient legacy government.
You won't even need to vote, they will already know how you feel about the candidates.
I only really have 1 question about this payment system they're setting up. Will transaction fees be flat rate, or will they be percentage-based? I have never understood why society tolerates percent-based charges on payment processing. It does not cost more in any way to transfer a larger number over a wire. If the costs to provide the service don't scale, then the price to use it shouldn't either. I find it hard to believe that Visa and Mastercard would sign on unless they got to maintain their ability to levy taxes on the majority of the economy.... but there's a chance they might. They've been very scared of WePay and AliPay in the East. The idea of that kind of payment system terrifies them in their bones. This cryptocurrency might be seen for them as last-ditch insurance from getting cut out of the picture entirely. Or... they'll just drive things such that they can maintain the same profit level while acting as an oligarchical 'reseller'.
I'm just wondering at what point does the whole 'only the federal reserve is legally permitted to mint currency' thing kick in. With Bitcoin you can make an argument that it's too different... but with this, they're literally setting up a reserve banking system but putting gigacorps in the place of Congress in terms of deciding fiscal policy.
Exactly. What this does is create a wide open space for a "anti-establishment" crypto payments system. But one that people actually understand and trust. Fiat will likely be UOA for stage one of the transition to crypto. But as more people get educated we'll move to fully Open payments. Many will use Libra. But many will use other services. It's not binary. Multiple winners will emerge. Brand identity will be huge here. Think Patagonia v. Walmart v. Nike. How you pay for things will become part of how you present yourself to the world. It's about to get very interesting.
This is dumb branding that masquerades control with false decentralization. The biggest opportunity it has is to become a fad amongst teens for a month, or a leech on the poor who don’t have banks. It’s going to fall on its face.
I'm confused at the part of how is Facebook "Anti-establishment?"
No. FB is the establishment. Now that they've "opened" the crypto door a little wider, it creates the opportunity to build crypto payments that revolt against FB. Solution will likely involve privacy, responsibility, inclusiveness and charity.
After talking to “normal people” I don’t think they care about any of those things as much as rewards points and fraud prevention/remediation.
Yup, agree. A low-fee payments app with crypto rewards would be interesting. But just like how Patagonia serves certain consumers I think different payments apps will appeal to different people who have different priorities and goals when it comes to their money. It opens up the landscape to massive competition in designer currencies and payments apps. I think it will come down to trust, security and brand identity
if governments weren't already on Facebook's back this will certainly get them there. Governments, read : politicians, already are incensed at Facebook and similar because they cannot control the message. Now Facebook wants to give people security in their funds?
Yes but could be a dystopian positive for the people...
How long until someone uses this against the “oligarch“ validators?
E.g.: an AdBlock browser extension is on unless they send some microfunds to your account / transfer Libra funds to you.
If you’re not familiar with display ads it’s a literal bidding war per space per user by the advertiser. Platforms don’t care they just get a cut.
Now, I could see this: turn it around and have this “central authority” by having them bidding for you to turn on your ads based on their data’s understanding of likeliness to click.
>That sounds amazingly dystopian. I mean, that’s literally a money built on an oligarchy. By design.
You can already kind of do that with other crypto currencies. For e.g. > 70% of bitcoin mining happens inside China, and the currency is susceptible to a 51% attack (in theory anyway). This site calculates the cost of executing such an attack.
https://www.crypto51.app/
I think there's an argument to be made that Bitcoin is oligarchical, but saying that 70+% of mining happens in China doesn't support the statement.
Nor is susceptibility to a 51% attack relevant to that point.
You're right, the fact that they're in China might be irrelevant. I should have mentioned that a very large percentage of mining happens on a handful of pools.
> saying that 70+% of mining happens in China doesn't support the statement
I think the implication is that since China does not have meaningful rule of law, that 70% of mining could in practice controlled by one entity: the Chinese state.
> That sounds amazingly dystopian. I mean, that’s literally a money built on an oligarchy. By design.
What's actually far more dystopian is the power that Visa, Mastercard and Paypal already have. It's not getting worse with this new thing, it's getting better.
Nobody has to use Libra, but getting by without access to Visa/Mastercard/Paypal is a real problem for businesses.
I'm all for equalling the playing field. But Libra doesn't expand the choices on the menu: Would I rather eat curry that tastes like shit, or eat shit that tastes like curry? Sorry for my lack of enthusiasm.
Isn't it just getting one instance more of the bad stuff?
tbd
Ripple has an extremely flawed design, do your research before investing.
As someone who is currently invested in XRP, I would appreciate if you could elaborate on this flawed design instead of just posting a vague comment. I've done my research and thought the design was genius so I'm curious why you wouldn't like it.
Large premine, excessive centralization, supply of XRP far outpaces demand for consumptive use. The most interesting use cases only need small amounts of XRP, so it's unclear to what extent XRP value will remain correlated to Ripple Network usage growth.
Ripple can freeze accounts, and has done this before to prevent an early founder from selling their XRP, which I think exemplifies the level of control the team has over the network. [https://insidebitcoins.com/news/not-so-decentralized-ripple-...]
Ripple I think would be more appropriately called a "centrally-managed cryptocurrency" rather than "decentralized". This is not to say it's doomed, but rather just that many XRP proponents misunderstand the technology and claim it shares technical properties with Bitcoin which it actually lacks. A known team controlling any cryptocurrency to this extent puts the entire currency at risk of rubber-hose and insider attacks.
> supply of XRP far outpaces demand for consumptive use.
This is a laughably meaningless statement in the context of a cryptocurrency. For which currency could someone possibly say that the supply does not outpace demand? What would that even mean? The precise amounts of supply or demand are irrelevant since the market will naturally find an equilibrium at wherever the current market price is.
What's laughable is your inability to understand. Outpace means go "faster". It means that The level of supply rises up faster than demand so that you will observe a price change. If demand and supply rose at an equal rate, you will observe no price change.
I hope this educated your mind. The education system in many parts of this country has huge problems and I'm glad that uneducated people from deficient areas that lack basic math programs for people with special needs come to Hacker news too learn more. I applaud you for taking the initiative to learn!
Other than that, what I really didn't like about your response is your insulting tone. The parent poster did nothing to deserve such a response. "laughably meaningless statement" is a vile and disgusting statement in itself. There are other ways to critique someone's statement. The way you did it is highly immature.
There are many orders of magnitude difference between Bitcoin's and XRP's consumptive use:
Bitcoin: $0.30 per transaction
XRP: $0.43 per 100,000 transactions
Seems like a way to further entrench the status quo in Silicon Valley.
Also, what happens when they decide you're "alt-right" and block your wallet?
That's more decentralized than Bitcoin is - there you have 6 pools in control. Global financial systems are expensive and high-reward (not to mention technically challenging since there is not a single proven cryptocurrency that could handle Visa's current TPS - AFAIK). Decentralization makes very little economic sense (at least all the models I've heard so far).
True believers forget that normal people have zero interest in spending energy thinking about their financial system. Just give me a card backed by a company whose name I've heard of and who I can sue if I have to and then let me focus on my life.
No, a pool is not a single entity. That's some bad misinformation.
A mining pool is a group of people coming together to share resources and share rewards. Just like a public corporation. And just like a public corporation, decision making/power is concentrated. Who controls the pay-in/pay-out system? Who decides who can join the pool? Who sets prices? Who gets the pool fees?
Many mining pools have models extremely similar to Uber's business model. Others (including one of the major players) are completely private.
Pools are very fluid, large numbers of miners move from one to another to avoid centralization. And it's not like they can decide one day that transactions from address X are banned. That doesn't happen, there's not even a mechanism. And if some pool were to implement it, they would lose most miners very quickly.
Corporate censorship, on the other hand, is abundant and is widely accepted. Lots of left-leaning people even proudly support it these days (for obvious reasons).
So no, pools are not like corporations, and generally crypto currencies have attracted more libertarian crowds.
Transaction acceleration exists and was built by the largest pools in cooperation with 'several leading Bitcoin pools'. This is literally a mechanism to tell a mining pool what transactions to focus on (and therefore which transactions are low priority^). And yet BTC.com is still the largest pool and Antpool the second largest. I mention both because they are both operated by the Bitmain company (33% of all Bitcoin compute is in those two pools), which also sells the ASIC.
Bitcoin is decentralized in theory alone. Fundamentally Bitcoin has structural flaws due to its design that create a self-reinforcing cycle of centralization. The corporation with the deepest pockets can survive the sparse rewards. They can reinvest in hardware, reducing the value of everyone's hardware. This runs people out of business (or forces them to join the largest company). Once they have enough market share they can set transaction prices as they like.
Transaction prices have grown 20x in the last 3 years. Even more than that considering you need to pay for accelerated transactions to have a good chance of the payment going through within an hour (a requirement for most real currency use-cases).
I'd be happy if you could explain how this is wrong, but in years of asking this to crypto enthusiasts, I still haven't found a convincing argument of how cryptocurrencies can truly be decentralized while serving real-world use-cases.
^Corporations don't generally censor by banning - that would be stupid because they'd lose the lawsuit. They prioritize some things and allow unprioritized things to be buried (ask Yelp).
"That sounds amazingly dystopian. I mean, that’s literally a money built on an oligarchy. By design."
To be fair, the Fed is kind of that.
It's a cabal of bankers who decided that the USA would be better of if they did the central banking.
In practice, it's not too-too far off how other central banks works, but technically it is a private entity, owned by the banks.
FB's new coin doesn't really have any real use other than basically dropping all of the ugly limitations of the regular financial system.
Though there are a lot of regulations there 'for our safety' - in reality, the flow of consumer money is just a huge pile of tangled cobwebs of stupidity.
This is will be a really great opportunity to do '21st century currency'. If it works, there's going to be a whole new way of doing money. The banks, in a way, should be afraid.
That said, there are huge privacy concerns as well which might very well kill the ostensible improvements to be had just by doing things in a new, clean, way.
Its not mandatory to use it. Its an option in a market.
The one that uses a coin backed with violence is the State. How can you even begin to compare that?
Given the absolutely horrible record of many of the companies involved in this in regards to not abusing our private information, Facebook using phone numbers given for 2FA is but one example, why should we trust this?
I am sure that if they leak or misuse our private information that the TOS will protect them from having to make us whole again...
I'm surprised to see Coinbase as a founding member. I wonder if they'll allow direct conversions between Libra and other cryptocurrencies.
It's interesting to note that there aren't any device manufacturers as members. No Google, Apple, Samsung, HTC, etc. That's going to make this an uphill battle for them. It implies that those companies have their own ideas. Or, perhaps, they just aren't willing to partner with FB right now given their toxic reputation for privacy.
I think it makes perfect sense for Coinbase to tap into this flow.
I mean, I'm more surprised they were invited to the party. You know something like this will immediately spur countries to denounce it as facilitating money laundering, terrorism, the collapse of the civilized world, etc. I would have thought they'd stick with PayPal as their main partner to interface with banks. It's a huge opportunity for Coinbase but they bring the political baggage of every other cryptocurrency along with them.
Yeah, but Libra could do due diligence when the money enters their system. Sure, things are a bit "informal" on the BTC/ETH side, but I'm pretty sure Libra will strive to meet the demands from governments.
That being said, yeah, wild claims can and probably will be made by various entities.
It makes perfect sense in terms of a PR Win-Win situation: Facebook gets the "crypto currency" credibility, Coinbase gets more PR (and more crypto buyers) in general.
To me, the biggest roadblock to success is the number of corporate stakeholders.
For this to succeed, the advantages of having that many stakeholders (big budget, large audience) must outweigh the disadvantages (two-dozen different and often conflicting opinions).
I've never seen a large number of corporations collaborate successfully. A strategic partnership between two companies is hard enough. Two dozen? Good luck.
Especially when some of the partners have a vested interest in this failing. (Visa, Mastercard, Paypal, Stripe.)
My bet is on existing crypto-currencies solving this problem becuse they can focus on a solution without being constrained by corporate interests.
If Libra launches, I predict the following:
1. It will be very, very delayed. 2. Facebook will take sole ownership and shed all the corporate partners. 3. At that point, they will give up on crypto and just build (or buy) a plain old peer-to-peer payment system.
Alternative 3: They will piggy back on an existing crypto currency.
A very insightful comment- These big companies have nothing to lose by signing up as a "partner" for the big press release, but have nothing to gain by helping facebook beyond the initial PR blitz and are either going to bow out or act as blockers to FB's ambitious plans.
It's a currency, but I don't see how it is crypto. No mining, centralized control by a few validators. Old wine in new bottles.
Mining isn't essential to cryptocurrency - all that is needed is cryotographic verification. It may be heretical to their ethos but that doesn't disqualify it even if the goals vastly differ.
Except that when the signers are corporations beholden to governments, the freedom to transact with whoever you choose is lost.
This limits its value as a currency. It's like the “7 degrees of seperation” thing. You might not be doing anything with librecoin that the governments of the world don't like, in the network of where the currency could flow would like to but can't it has a cascading effect which severely hampers the size the network can grow to.
For example, if you trade with John who trades with Alice who then tries to trade with Eve, but Eve doesn't want to use your currency becausesshe's doing something Facebook or the U.S. government doesn't like, then Alice won't want to use it because she can't trade with Eve, and then John will be turned off to it for the same reason all the way back to you.
Is tether crypto?
no.
If this succeeds, it will be a data collection tool the likes of which the world has never seen, which is why so many companies are willing to put their name on it. The data, along with ML/AI, and our contemporary understanding of the human mind, means that this is a major step towards control that we can't understand.
Dr. Harari explains it better than I do in "21 Lessons for the 21st Century", but this tool is part of a suite of data collection utilities that will be dissected and used in order to further subjugate our mental energies to the will of the tech giants running our phones. If you don't believe that this is already happening, hang out with some teenagers. I would say that there is a large contingent of people for whom this is already true, and once that group is large enough, then how can you assert yourself against that pipeline of information?
Every bit of data we give away for free is a massive mistake. I hope that Europe figures out a regulatory framework that works.
> I hope that Europe figures out a regulatory framework that works.
Is this even possible with complex fast-changing software? They always seem to be busy figuring out last decades issues. Or when they do respond to new things it's usually a FUD-riddled overreaction that just straight up cripples the new things so we're only left with the options that the ordained organizations like Visa and Mastercard come up with. Which is usually a worse outcome than before.
If anything we need some simple core digital privacy rights ala the constitution or charters of rights. Not some thousand page mess like GDPR that was intended to curtail the big guys but ends up giving small Austrian retail businesses $4000 fines for installing a simple surveillance camera, which happened to be too broadly pointed outside.
Good intentions meets reality.
> If anything we need some simple core digital privacy rights ala the constitution or charters of rights.
Exactly. That's the core of it. We certain do have a lot of laws that apply online already. Harassment, for example, applies just as much online as in person. Medical records are still protected, regardless of how they're stored.
What we lack is much of anything relating to scale. Some behaviors are just a completely different beast at scale. The first thing that comes to mind is election interference. I don't think highly-targeted ads/content should be permitted in politics. Selling personal data without permission should also be illegal. Right now it's ad companies selling ad campaigns which isn't a big deal. But how long before it's so easy to run facial recognition, etc that you'll be able to buy bits of location history, etc on people, license plates, etc for a few dollars?
Europe sure managed to slay the dragon of those evil cookies what with the banners plastered all over every site forcing you to click a button to close them.
Cookies have been around for 25 years and are dead simple, and Brussels failed spectacularly to understand, let alone sensibly regulate, them. Colour me skeptical they'll manage to wrangle something that even the people working on it barely understand, and that's changing on a yearly basis.
Has anyone in EU asked themselves if those banners have accomplished anything besides being a giant waste of time and space having hundreds of millions of people not read the text and automatically clicking x?
I’m not even from EU and I’ve had to click them countless times. And I don’t think I’ve read a single one, even though I’m pretty hardcore when it comes to privacy.
It greatly saddens me that companies will go to great lengths to geofence content but not annoying popovers. The US or someone needs to get a clause into their next EU trade agreement to make it illegal to serve those outside the EU :)
Maybe EU should regulate a new policy of not annoying non EU people with their internet regulations.
The one thing the EU understands is how to add more rules! Forget trying to get them to fix an existing one.
Austrian here, very true the cameras!
Possible? No, not really, assuming they have "right intentions", the EU laws rarely turn out to be good for the population(link tax & copyright law for ex.). Even GDPR has some flaws that can be used to target the same people it claims to protect.
The main reason for this is simple,most of the bureaucrats making these laws have little to no "internet-sphere" literacy(or even technology as a whole to be quite honest).While they tackle the problems from a legal perspective,this same legal perspective is de facto putting handcuffs in the freedoms of the people, no matter the "intentions" the law-makers initially have.
And i agree, the best-case solution is to spread the idea of an internet bill of rights, specially in Europe.US is still one step ahead, their own constitution would be the thing this bill would be based on.Their smaller problem is that (few)corporations enjoy the benefits of both state incentives (see twitter,google,etc. through taxes) while also being a "publisher"(not being responsable for the content the users post).
> If this succeeds, it will be a data collection tool the likes of which the world has never seen
I'm pretty sure that this type of data collection tool is in use today by the Chinese government.
> I'm pretty sure that this type of data collection tool is in use today by the Chinese government.
Yeah US is a bit slow to that party. Alipay and Wechat-pay has roughly a billion users (conservative estimate) in China. It's widely socially accepted.
Makes more sense in the case of China, which never had wide adoption of credit cards. In Libra's case...why should I ever use it instead of sticking with credit cards?
> In Libra's case...why should I ever use it instead of sticking with credit cards?
Given that both VISA and Mastercard are on board, I assume that you might not have a choice in the long run.
Rather than straight cash, using it as a more-secure credit card would be enough to sign me up. It would prevent card skimmers, people copying numbers, etc. They could generate one-time card numbers for online purchases at existing merchants. Despite lots of mitigations, VISA/MC still have huge fraud problems. This would give them a new tool to lock things down.
In the US, you already lose your credit card if you speak out politically.
VISA and other payment processors already collect and sell this data.
VISA's transaction data is not the same as Facebook's social data. Combining the two is the point of concern. We have financial regulatory laws for this reason
Combining those two with thousands more is the point of Palantir, and has been since its beginning.
:)
Good thing they dont share the actual data and only share hashes ;)
There is at least this from Zuckerberg's announcement : "Calibra will be regulated like other payment service providers. Any information you share with Calibra will be kept separate from information you share on Facebook."
I suspect they are using different definitions of "information", "share", "separate", "Calibra", and "Facebook" than a naive person reading that sentence might expect.
I don't mean that as pure snark; I'm dead serious. The legal definition of all those things, the definitions they can get away with using, and the definitions that a normal person would expect from reading that sentence are probably three very different things.
Plus, along with general lack of confidence in Facebook keeping its mitts off of juicy data given their checkered history, I have even less confidence that the promised wall will be there going forward, and that there won't be an excited, breathless announcement in a year or two about how ecstatic they are to bring you awesome new services powered by the data they're going to get from tearing down that wall and isn't it all just so wonderful.
> they are using different definitions
This is a PR statement. Facebook and Zuckerberg have straight up lied about this sort of thing before [1].
No need for complexity (they’re weaselling their words) when telling it simply (they’re lying again) will do.
[1] https://www.fastcompany.com/4017734/whatsapp-breaks-promise-...
BTW, I read your link and it was the founder of WhatsApp that 'promised' it. While I wouldn't be surprised if FB made the promise and then broke it, that doesn't seem to be what happened here.
Call him naive but he seemed to actually believe that to be the case. Mark's desire to renege on that promise is one of the main reasons he left FB.
Well, if I sold a chat application that was loosing hundreds of millions of dollars, for $19 billion dollars to FB.. I'd be wondering how they're ever going to recover the money. Its easy to paint one side as the villain in this.
> information:
Personal information only, such as your full name.
Does not include an ID that facebook is able to link. Does not include your transactional "records", which are not information.
> kept separate:
Means it is stored a separate database, however it can be connected together.
> Facebook:
Refers to "Facebook Inc", but not "Instagram LLC". Instagram is authorized to share information with Facebook.
The legal definition of all those things, the definitions they can get away with using, and the definitions that a normal person would expect from reading that sentence are probably three very different things.
This has applied to a bunch of things for years now. Have you flown on an airline? You might well have flown on an airplane operated by a different company, with that airline's branding. Who makes your car and your electronics? The details of all that have been a complex maze since the 1980's. Who makes your toothpaste, and where are all the ingredients really from?
(Note, this comment is written mainly with 3rd party readers in mind.)
I know at some point I heard of a group that wasn't selling data about particular users but they were selling aggregated data about the users. In typical fashion they had convinced themselves that they were the good guys.
I'd be shocked if Facebook weren't planning the same thing.
Facebook’s promises are as trustworthy as their record of not breaking them.
They promised not linking accounts between WhatsApp and Facebook, inevitably broke it, and faced triple-digit millions in fines, without a sweat: https://www.theverge.com/2017/5/18/15657158/facebook-whatsap...
I wonder if "kept separate from" is meaningfully differently than "unable to be linked to". Ie, if Facebook can figure out how to link their data to your LibraCoin data then this statement is moot.
Keeping data separate is not interesting wording by itself, imo.
Sure it will be kept separate.
In separate sql-like tables with a key to join on.
Yup and Facebook will have both tables. The companies that paid in will only get the one table.
Typical comments from them. It also says they will comply with all AML and KYC requirements and will work directly with governments as required. In other words, to get this crypto you must give them your government ID. The fact that the complete Calibra profile of you will be in a different database than your complete FB profile is meaningless.
He said data on WhatsApp would be kept separate too.
He lied. Again and again and again.
This statement does not include ads. Which is the real use case in my opinion. Facebook will link shown ads to purchases made with Calibra. This will allow them to target users even more and generate more revenue per ad.
They do mention in the customer commitment document that they will not use data from Calibra to improved as targeting on the Facebook platform.
Just like they weren't going to link whatsapp and Facebook data... They will find a way to do it and tell the masses they aren't
Facebook having 2 operational databases instead of 1 still fails to inspire confidence.
...and then SQL joined together for analysis.
separate doesn't mean they can't be linked.
>the world has never seen
Credit cards already have similar data, no?
No. The credit card is limited to locations where it can be swiped. The phone is online everywhere, all the time.
Not really, the data miners link your CC to your email, WIFI cell MAC, Bluetooth MAC, Cell ID and many other data points.
Think of it like a DNA string of datapoints about you online. Stored in a hash so it can be shared across platforms.
If $USER meets this CONDITION then show THISAD
They're not exclusive anymore. The credit card is largely just a physical application that the phone can do anyways. Every modern phone can be a credit card. Besides, when leaving your home you likely take the big 3 collectively: cell, wallet, keys.
No, it is not. You can use credit cards to buy things online.
They obviously referred to the credit card not being a radio-connected internet device with a precise spatial reference.
Credit cards have NFC now. It wouldn't be hard to fathom that this data might be paired with other surveillance data.
Everywhere we look, someone is trying to create a new method of tracking. ISPs are high-jacking sessions, 3rd party apps on your phone are taking everything they can get their hands on, "smart-home" products that are always listening, shopper club cards, toll-transponders tracked silently by municipalities (off of toll roads!), license plate scanners, CCTV with facial recognition.
Everything is being collected. To what end? At some point, we have to hit peak-marketing where this data becomes mostly useless as our behavior will be perfectly predictable at some point in the future.
> toll-transponders tracked silently by municipalities (off of toll roads!)
Hadn't heard of that before. Gross. Although I can see it being helpful in answering some planning questions. Take Seattle with two competing bridges, 520 (toll) and I-90 (no toll). How do rates/congestion effect which bridge commuters take?
I wish this stuff was made more clear. Unfortunately, with license plate readers everywhere, it's just becoming more and more a given that your car gets tracked through major intersections/choke points. While it's going to vary what people do with that data, it's pretty safe to say someone is holding onto their share of it long-term.
Police drive around neighborhoods with the ALPRs and keep that database. WIFI and bluetooth beacons are setup at major events and along interstates. SF Bay area tracked their Fastrack for years.
Big Brother is here and has matured into Big Daddy ;)
There's an entire industry dedicated to traffic analysis and selling government these services. Some places are even privatizing toll-roads. The state is using eminent domain to take land, taking out loans and issuing bonds to build the roads, and letting private contractors 'operate' the roads perpetually. If that wasn't bad enough, the state guarantees the private operators a minimum amount of revenue in case there isn't enough traffic to meet some minimum threshold. Essentially, all the same problems as privatized prisons.
... and can be used to buy stuff online using your credit card, everywhere, all the time.
Yes, and Facebook already has agreements in place with CC companies to get that data. They’ve had access to that data for a while. This isn’t a new data source, this is horizontal integration.
This will go beyond that by including information typically because of the event of the ledger. Currently, I give my children cash. What happens when that's a ledger entry as well?
No, they don't have itemized data. Only the POS's have that.
So when Target says to Facebook I have this list of email addresses hashed with this algorithm can you match them to this $PRODUCT you know why when you buy some tide you get a FB ad for tide before you leave the store.
If you mean retargeting then yeah but I don't think it's that simple.
I can tell you I simplified an existing process from a company in the Internet Marketing Data space :)
This would be different?
What do you mean?
As in, this system would provide Facebook with itemized information?
> Every bit of data we give away for free is a massive mistake.
I'm not sure you need "for free" in this sentence.
> If you don't believe that this is already happening, hang out with some teenagers.
Ever since I moved away for college (2009) I had started becoming curious how the lives of today's American youth were interacting, and how that was different from my own experience.
Unfortunately it's not easy getting close to that age group without raising flags for being creepy.
Or, I guess it is fortunate, but less insightful.
> the likes of which the world has never seen
Didn't Google buy tons of Mastercard transaction data to JOIN against their ad profiles? How does the scale of this (and other purchasing datasets they can bring in) compare to the theoretical powers of what Facebook has? I guess one difference might be that it will be able to capture way more outside the US.
How is this going to fly with the constant flood of (justified) hate that Facebook is receiving the past year? Apart from the technology, I feel like they have more chance if they'd brand it without the Facebook name on it.
Well, if an army of HODLers develops who buy into this Facebook coin think they can make profit off of holding it - then there will be a growing body who promote it and speak positively of it, and not care about Facebook's other wrongdoings because money. Those big name brands also already buying into it means quite the global powerhouse of marketing ability to onboard people into something that is relatively unknown of what could unfold. It should be democratic governments working together to develop this and not private entities who aren't elected and are known to lobby and influence politicians/policy for their own good. There's a reason financial regulations developed, and because they're poorly enforced currently doesn't mean the solution is abandonment.
Libra is a stablecoin, holding it isn't going to make you rich.
It's not necessarily that straight-forward - and people shouldn't blindly trust Facebook and the other unelected global brands with 'voting rights' to make decisions related to the function of such a monetary system.
I think you're underestimating the cryptocurrency "hodl" hysteria...
Good question. I think it will get plenty of hate, but most countries don't have the level of Facebook hate that the USA/Europe has, and lots of people don't particularly care about the crusade against Facebook. It would probably get a lot less hate if they weren't involved, but here we are? NYTimes takedown coming in hot!
“Moreover, Marcus insisted that the $10 million buy in would not grant validators exclusive access to users’ transactional data.“
So they don’t get exclusive data. That’s an odd statement, it just means that data can be sold to others as well.
If the blockchain is public, the transactions themselves are public, so can't really be sold. The association between user data and transactions, might be valuable though.
I think Facebook will be in the best position to link identity to wallets. Doling this out to initial backers and anyone who pays later on would keep the truth of the statement.
the association could be inferred via side channels though. in any case they should separate the blockchain from facebook ids. This should not be facebook's toy.
I've lived in China and seen how this plays out. Facebook's new Libra Blockchain will be a centralized bank but way more dangerous. It will allow for a worldwide social credit system. If Facebook decides to remove you for wrong speak or wrong think, your money and many services will be inaccessible. Further, they have no mandate like the central bank does to increase employment. Their mandate is to make money for corporations. This will lead to global social unrest.
This will put some third-world countries in complete control by Facebook. I mean, whoever runs the currency, is the country. But in this case, it will be completely controlled, as it's also many of those countries main source of communication.
Therefore, if Facebook's Libra is a countries main currency and social network, that country will be owned by Facebook.
Finally, the regulations on crypto and blockchain are still new. This is in Facebook's advantage as they can start lobbying to have these laws in their favor. They can argue for less transparency, as they are a bank, and this fits with their new privacy marketing message.
This is extremely subversive and Europe is already rightly pushing back. America will be next. On one hand, I love seeing the existing financial system panic when new technology comes out. On the other hand, under no circumstances will I accept a world where Facebook started the one world currency.
> It will allow for a worldwide social credit system. If Facebook decides to remove you, your money and many services will be inaccessible.
And this is creepy thing here.
A lot of people in this thread don't distinct between Libra the currency and Calibra the Facebook wallet. A wallet controlled by Facebook is indeed worrying, and I hope that there will be enough worthy competing alternatives. The Libra network on the other hand looks very solid.
Anything controlled by Facebook is suspect by definition.
Libra will also be controlled by Facebook. This is a private blockchain. They can block your account no matter what your wallet is.
Unless this whole project is one big conspiracy, I don't see how this is true. Libra will be governed by at least a couple of dozen big corporations, some of which are in direct conflict with FB's agenda. FB will have to convince 67% of the nodes to make any non standard action and keep it a secret. That's a huge business risk. And from my reading of the white paper I don't see how you can actually block an address from submitting or receiving transactions. Am I missing something?
That may be the protocol at launch but the protocol can always be changed/hardforked, including (as an extreme example) to just centralize the system into VISA/MC style db at FB after achieving wide adoption.
AFAICT power ultimately rests with whoever can modify the most widely-used consumer SW implementation, which would probably be FB here. Though Apple and Google may have considerable veto power over updates pushed through their app stores, iff FB makes this primarily a cell phone app instead of a web app.
In the first release for 2020, it sounds like #corporatecoin will just be centrally run by one entity funded by FB- They "promise" in future versions to open it up to the full consortium.
While I have zero interest in Libra/Calibra/whatever, Libra specifically _isnt_ controlled by Facebook. It's, at least legally, controlled by a non-profit consortium that Facebook is a part of, but I do not think is a controlling owner of.
Their interests can surely be aligned with a minor amount of high-level bargaining.
Libra isn't completely centralized. There's a long list of other corporations and institutions that will be validators. Facebook won't have 100% or even 10% control.
In no way can you trust Facebook to take back control. In fact, in no way can you trust Facebook full stop.
Ok, but you’ll admit it’s ideologically centralized, and that it’s facebook’s interests centralized.
Facebook launches Silicon Valley Bank and... people argue about the most minor technical details.
LOL.
For this reason, unless the backers of this are powerful enough I see this being under intense scrutiny and possibly heavily regulated.
Fin system panicking? hah - Visa backs this. And no downside for FB if this fails (other than opportunity cost).
Visa is a player and doesn't represent the financial system at large. They're doing this because they realize it's existential that they do.
Look at what regulators will say in the coming days. Europe is already saying under no circumstances will they allow a sovereign currency to operate unabated.
The US Federal Reserve is a major source of American power. It's "rumored" the US has invaded countries before for threatening to price oil in alternate currencies. You think they're going to accept this affront to their global hegemony laying down?
I agree with you. The fact that there is one player makes me wonder how many other players are in the game but not announced.
If the regulatory agencies aren't captured, we should expect crypto (at least stablecoins) to get some regulation soon.
Also, to be up front, some of these points I found on a thread early this morning and I copied it to a note pad for later, then went to sleep. When I woke up, the page had refreshed and I have no way of crediting the original author. But I think it's important to share, so I did. If you are the author, or know who wrote parts of this, please tell me and I will credit you/them.
> Therefore, if Facebook's Libra is a countries main currency and social network, that country will be owned by Facebook.
And if you swap Facebook with the Federal Reserve, the above is already currently true!
Really? Does the Federal Reserve control the flow of information in those countries?
GP's point is, if Libra achieves its vision of a global currency yet remains under Facebook's ultimate control, then a single entity centralizes not only [all the combined power wielded jointly today by the Fed / ECB / IMF / World Bank over a country], but also [its gateway to news and social life, with the power and evidently the willingness to bend all elections to its will].
This isn't the case, your wallet is not tied to your Facebook account.
For now. but they said the same thing when they bought WhatsApp -- that it would remain separate from messenger. Now they're merging the two. So, I wouldn't necessarily trust that what Facebook says will stay true forever. It will stay true just long enough for most people to have forgotten that promise.
Yeah not now, but given everything else they’ve done, it wouldn’t be a surprised if they introduced it as a feature later down the line.
That's kind of the definition of FUD spreading, isn't it? How is anyone supposed to defend themselves against accusations like that?
> That's kind of the definition of FUD spreading, isn't it? How is anyone supposed to defend themselves against accusations like that?
By not being an incredibly shady company in the first place? Am I just supposed to disregard everything FB is notorious for, just in case any concerns I raise might be FUD?
“Sign-in with Facebook” is all it takes to lose your right to privacy though.
It’s pretty clear this is an attempt to take advantage of network effects and dominate the market early.
There is also no guarantee that while FB will be one many validators, I dont see any hard limit on the number of validators required for the network to be operable. So over time a single validators could take over. No one will bother changing coins in this case though as it will be too inconvenient.
Use a different wallet then. Of course it will be tied to your FB account if you use a FB wallet.
How will they kick out the existing validators?
Of course, but I guess the fear is %99 of people will use the “default” wallet” and be locked into a surveillance system for all transactions online.
To your question, not necessarily kick them out intentionally, but if the companies that back the hardware to validate transactions fold, are taken over or pull out of the venture, then the number of validators diminishes and you can end up with something resembling a 51% attack [1] which gives a single corporation total control.
This is a problem with all crypto’s unless something is special about Libra which is possible I guess. Then again, even in this case, the dominate player(s) could change the protocol to work in their favour removing the need for x number of validators present.
[1]https://www.investopedia.com/terms/1/51-attack.asp
Given Facebooks quickly diminishing popularity, I’m not sure this is ever going to really workout anyway.
Proprietary blockchain. Supposedly they ~may~ just ~may~ release the documentation in a few years.
> your wallet is not tied to your Facebook account
Nice try, Mark!
If they succeed in getting mass adoption for this thing, I feel like the companies on-board have basically bootstrapped themselves to sovereignty. It'll be interesting to see how that plays out, if nothing else!
I'm sure the IRS and/or FTC will like to have a word with them about that.
I'm no expert in US law at all, but my impression as an outsider is that anything that could look like money laundering or a way to hide financial transactions will not be looked kindly upon, and that slapping the "crypto" moniker on this new currency won't make much difference.
Is there some legal shield that prevents regulators from simply saying that Libra is a bank and therefore subject to regulation as such?
No, not really. In various economic regions there can be regulators that rule this way but they won't be able to stop the commerce from happening with this currency. The Libra Foundation can also just register banks in local jurisdictions to check a box. Many incumbent services have done this for decades, like Paypal.
Cryptocurrency removes the ability of the state to whitelist transactions, as their power only existed from being able to regulate an intermediary. This is the anti-fragile nature of cryptocurrency.
Facebook's validator nodes (corporate consortiums) are a compromise on the anti-fragile nature, but not by much.
If the state can't whitelist transactions, FB will likely not be permitted to launch this currency- The state has every incentive to block any banks from doing business with FB in that case, because they'll invoke terrorist financing and drug sales as blocking issues.
A basket of bank deposits and short-term government securities will be held in the Libra Reserve for every Libra that is created, building trust in its intrinsic value.
Soon 'The Libra Reserve' will hold only a 10th of the total Libra Coins in circulation (fractional reserve). A global federal reserve in the making.
"it will be backed by a collection of low-volatility assets, such as bank deposits and short-term government securities in currencies from stable and reputable central banks." from the whitepaper: https://libra.org/en-US/white-paper/#the-libra-currency-and-...
It's like one to one copy of the traditional monetary system with speed of transactions improved. The volatility of low-volatile assets still contradictive in the long term (I mean just ~5 years) So I don't see any innovative approach in the terms of social order and decentralization.
Your tone is too cynical, this is exactly what it is and what payment processors have been dreaming of for years. A banking system where money can be moved instantly without weird batching, holidays, manual intervention, and all the rest of the legacy crap that plagues current banking.
I'm all for it!
Except that control will be "liberated" from governments and placed in the hands of an oligopoly of global corporations. Which is way worse.
How will this liberate control from governments? Libra will still be pegged to government controlled currencies, libra is just a proxy for transportation. Governments can still regulate transactions that cross borders, the same laws will apply and will actually be easier to enforce because the libra network is managed by legal corporations rather than an anonymous pool of users.
> Libra will still be pegged to government controlled currencies
For the time being. That's just part of the bootstrapping process, to avoid volatility in the short-term.
> Governments can still regulate transactions that cross borders
And how do you suggest they'll do that?
> That's just part of the bootstrapping process, to avoid volatility in the short-term.
How would you stop pegging libra to a currency without destroying or distorting enormous values of libra that existing owners have and therefore permanently destroying trust in libra? I don't see any real substance to this sort of vague cynical claim that "they're just biding their time".
> And how do you suggest they'll do that?
By applying the same transaction reporting laws to libra (which have equivalent currency value) that already apply to bank-to-bank transactions. The key validators in libra transactions are legal corporations unambiguously within government jurisdiction.
Agree.
Except for privacy concerns, I don't really see any other downsides. Libra just seems to be a transport/UX layer for dollars/other currencies.
I won't use it for privacy reasons, but I'm curious to see how it will work out in practice.
I also can use it for buying a coffee or sending payments across border directly and I appreciate already the developers and managers behind it but people die and suffer for the sake of "low volatile assets" for years. Speed or functionality may be problematic previously but we have much deeper and important problems which can only be solved by contributions of companies like Facebook. That's why I'm uttering this here.
So it sounds like Libra coins will be minted at a previously agreed-upon exchange rate by one of the consortium companies proving that they have bought one of these low-volatility financial assets. It does not sound like there will be any "mining" and the decentralization will be, for the time, in just a handful of large companies.
Can someone validate that I'm understanding that correctly?
If so, I'd agree with previous commenters that we're not looking at anything which can shift the power structure of monetary policy but improvements in transaction speed and cost could have some real social benefits - especially in the developing world.
Exactly. In short, we spend much less time to buy a coffee and much more others will suffer and die to keep that "real" assets "low-volatile".
They replace the incumbents in the industry by providing a faster and more consumer-friendly solution.
I'd argue that credit cards are conceptually not very different. Users pay the fees both directly (annual costs, interest) and indirectly (increased prices due to vendor fees), and the shareholders reap the benefits.
Just like credit cards, and the various digital currencies like Bitcoin (where exchanges have plenty of regulation and reporting requirements to deal with!), this will be subject to regulation and governmental oversight.
Note that I'm not a fan of this at all, due to the company behind it.
But it's not a groundbreaking new concept, or very scary if seen in isolation.
>Users pay the fees both directly (annual costs, interest)
Both avoidable. Many zero fee cards, interest only on monthly balances. Some zero fee cards even offer rewards (read: net positive over cash).
>indirectly (increased prices due to vendor fees)
I'd need to see some data that the convenience of credit cards to both consumer and retailer has increased prices. I do know that explicitly raising prices to cover fees for card using customers is against most merchant account terms of service and you can report retailers that do so.
It’s a total tax on the entire ecosystem. Every merchant that chooses to accept credit cards has to build 2-3% into their margins to cover the interchange fees. It’s often against their agreement with visa/mc to charge the fees for credit transactions only and so they build them into the base cost.
As a side note, the situation is a bit better in Europe, where considerable regulation was introduced recently. With mixed but positive results. Interchange fees were capped to 0.3% for credit cards.
This is a nice summary if you are interested: https://www.europeanpaymentscouncil.eu/news-insights/insight...
Crypto isn't free either.
> I do know that explicitly raising prices to cover fees for card using customers is against most merchant account terms of service and you can report retailers that do so.
That's no longer the case after Visa, Mastercard, etc were sued[1] and reached a settlement in 2013 disallowing those terms. A few states have passed laws to reimpose that rule, but most haven't, afaik.
[1] https://en.wikipedia.org/wiki/Payment_Card_Interchange_Fee_a...
This seems to be Facebooks WeChat play. It makes absolute sense for them to do this and there is very little friction for onboarding.
I can see them adding contracts (rental for example) to the chain at some point.
Validators are hand picked. So it‘s distributed but no really that much. Again, it makes sense from a business perspective. But it‘s certainly expanding FBs power and influence as a platform even more. I can see this getting pretty crazy in developing countries where FB might be the platform for everything at this point. Concerning.
From the description, it’s a pseudonymous network with publicly observable transactions. I get that Facebook doesn’t have the best track record in regard to privacy, but it’s not immediately obvious which exact aspect of privacy should we be worried about when using this network.
> The aim, then, is to get to 100 new validators by 2020, and achieve something close to 1,000 transactions a second—roughly 200 times the sum Bitcoin can currently handle, and around half the capacity of Visa.
My reactions to the above:
1. 1000 transactions per second seems low. This doesn't feel very scalable to me.
2. Visa has capacity to handle only around 2000 transactions per second? I would have assumed it was higher. Matching or exceeding the capacity of Visa feels more within the reach of a startup than I thought.
After some sleuthing, it appears the semi-theoretical TPS is closer to 24,000, though the average is around 2k.
[1] https://usa.visa.com/run-your-business/small-business-tools/...
>1000 transactions per second seems low. This doesn't feel very scalable to me.
Yeah, this seems like an issue to me too. It doesn't seem like they have gotten around the problem of "every node needs to verify every transaction". Than again it might not matter if every node is a beefy data center.
Usually in these comparisons Visa/MC TPS figures are averages whereas crypto TPS are peak. Big difference.
this is giving the power of governments to tech companies, and im not sure how i feel about that, at least bitcoin is truly decentralized
The democratization that bitcoin was supposed to bring was fatally undermined anyway as it just created yet another caste of wealthy early adopters.
Not really, governments will regulate it, same as everything.
They're going to end up in the same situation as banks where they're vaguely intertwined with government interests.
Unless they can levvy taxes, the comparison is ridicolous. Do you think Magic the Gathering is also a sovereign state?
I'm curious how it will work exactly. I guess people will need to buy this currency with real money, and then they can spend it on these services. But why would anyone bother to do this when they can directly use their debit/credit card? Or is the plan to someone push people to use this currency by either giving them discount initially, or by not giving any other alternative means of payments?
It’s targeted at countries that don’t have such wide adoption of credit/debit cards.
also for decreasing transaction cost for money transfer.
Reminder what happens when WeChat becomes your currency: http://www.bbc.com/news/blogs-china-blog-48552907
What this truly mimics is a 'security' analogous to a basket of foreign currency traded as an ETF. Once you give them US $1 it is backed by a POOL of currency from multiple countries (i.e. the other people who have traded their currency for Libra).
Once you decide to take your US $1 you will get back a different amount based on the underlying value of the pool based on the fluctuating FX market. May be >=<...no one will know.
Given they are seeking to bring in "underbanked" people (i.e. the charitable patina on this operation) there will be a focused % of currency in the pool from countries with a high % of underbanked people. Logic says this will likely be less stable currency than say the US $, etc.
Thus, your US $ will be diluted by "lesser" or more "volatile" currencies and will diminish the purchase power of your US $1. Conversely it will increase the purchase power of the lesser currency.
Thoughts?
I don't think that's how this works. It's pegged to a basket of currencies, so the value will match that basket. The composition of the basket isn't tied who chooses to acquire Libra.
> Indeed, that’s why Calibra, the wallet software that will hold Libra Coins, was made a subsidiary of Facebook
The big question for me is whether or not wallets and therefore transactions can be created without needing an 'account' somewhere, just like all other cryptocurrencies. Can I participate in the economy anonymously or do all wallets need to be registered like a traditional bank account.
You need to sign up and verify your account before you can do anything. Think of this like paypal with blockchain behind the scenes instead of Oracle/Sql or whatever they use as db
Yes, but with pseudonimity. This makes it a lot more censorship resistant (which is PP's main weakness).
It is not pseudonymous. You must supply AML and KYC documents to FB to participate. FB says they intend to fully comply with all government requests. FB will know exactly who owns all the money at all times.
Thats on purchase, not on exchange. The same way you can launder money with Tether.
But if they control the only/main wallet, generating new keys doesn't help. Maybe there will be wallets they don't control but most people won't use them. They will want the simplicity of user search that being integrated with FB provides. /shrug
I'm not savvy enough to understand the legal nuances. They say the allow pseudonimity, which for me means they will not control user-to-user transactions, which means anything goes at exchange time. It will be different if you try to get the cash out of the system, but if you find a large enough Libra market you can live off-grid forever (theoretically).
You can't create a new user without to verify it. All the transactions are monitored(i.e for fraud prevention so expect to receive "suspicious activity" emails and your account frozen). What do you mean off the grid? You don't have access to the blockchain.
This depends on the implementation of pseudonymity. Cash is controlled on the atm, but not when it changes hands. If Libra will allow to move the money internationally, it cant be really monitoring each transaction.
You are referencing the access controls specific to the Calibra wallet, the story for the Libra blockchain with respect to account generation and usage is different. It's open.
They can't use the transaction data to target ads and measure conversions without this. Wallet data is invaluable.
https://www.theverge.com/2018/8/30/17801880/google-mastercar...
Facebook is notorious for not being able to control their platform and leak data for various reasons due to bugs and lack of due diligence (to keep at non-malicious).
If they become a bank I certainly would not put my money in there.
Facebook decided to reinvent the wheel and make it closed source. IMHO this is a mistake and a bad idea for any wannabe blockchain platform. I am curious about their motives for doing this. I'm guessing that it is simply that their plan is the same as that of any traditional payment solution: create a walled garden and profit through transaction fees. This requires a closed ecosystem.
In terms of design, this actually looks a lot like Ripple/Stellar. The difference being that those two are open source and anyone can run an independent validator. There's a growing number of those. And with IBM building world wire on top of Stellar together with a few dozen banks, here's now some traction for that platform at least.
It might still work for Facebook and I would not be surprised to learn that they took some of the Apache/MIT licensed code of either platform. but I'd say they'll have huge issues with people simply not trusting them with their money. They will also need links to other platforms via some exchanges. Again, Stellar comes to mind. It comes with an exchange and an ecosystem of fintech players already connected to that.
Facebook is of course not the only company planning to do their own coin. Telegram has similar plans and there are a gazillion of dapps on Ethereum and similar chains. Most of these seem to be struggling to find meaningful amounts of users. Unlocking crypto for the wider public is not something that anyone has accomplished yet. FB might pull this off given their large user base.
> Facebook says its “stablecoin,” will empower billions and underpin a stunningly ambitious global economy, without selling your data.
I wonder how many millions of people were drinking their favorite beverage while reading this and spat it out on whatever/whoever was in front of them!
It’s astonishing that after all these years and all the scandals, they’re deluded enough to write such lines with a straight face. This might as well have appeared on The Onion.
> If we want this to succeed we can’t make it network of choice for criminal activity of any kind. - David Marcus
Good luck with that! This point doesn’t gel with the other point he makes about this being private and that Facebook’s social profiles and the financial wallets/accounts will not be commingled. I’d wager that the latter promise would be like WhatsApp saying during its acquisition that nothing would change and that WhatsApp data will not be used for ads. We know what happened to that within a few years.
lol I wrote that subhed — was fully meant to be ironic
Yeah, I'm going to guess #corporatecoin will die from a thousand regulatory papercuts, because they won't be able to prevent criminal activity without exerting draconian control over the payment network, and then it will be too inconvenient for anyone to use.
I mean technically sharing the data between the validators _for free_ doesn't count as selling.
We're not selling your data, you are!
The future is privacy™
Facebook has so much money that one can't wonder what their angle with this. I can only imagine they want to know exactly what you spend money on so they can better target ads.
I think there's just such a huge opportunity to drive sales through messenger, fb, etc with low-friction payments. They already have the 'best' targeted advertising. They just want to extend their platform all the way through to actual sales. Then they can justify a larger cut than with just the ads.
They've certainly tried payments and money-transfers before. This isn't entirely new territory. It's just very country-specific. They get hit by high transaction fees. No one wants to type their full credit card and address info, then deal with required two-factor authentication in Europe, etc. And nothing is worse than having to forward someone from your app to an unreliable slow desktop-targeted bank page which then sends you an SMS/email that you have to type back into the bank.. etc.
FB is actually right. The credit card system is straight broken from a user-experience point of view. It wasn't created with computers, mobile, or basic security in mind. It's just band-aid on top of band-aids since the 70s. And obviously cash doesn't have much presence online in western countries. FB struggles to get people to buy things through their apps. They desperately want to fix that.
Crypto currencies just work better at a fundamental level with mobile payments. It has always just been a lack of institutional support to get them supported. VISA/MC have probably been looking for a way to leapfrog bitcoin/etherium for some time now. I'm not surprised they jumped on board when a bunch of real technology companies decided to leapfrog them. Otherwise, they'd likely be in for a world of hurt in a few years if something like Apple/Google Credit launched their own without them. It's not like people love VISA/MC as companies. A huge number of people would jump ship so fast if there was literally any other option.
This sounds like an anti-trust problem waiting to happen. Far too much vertical integration.
Bingo. It is not exactly better targeting ads. You can sell the same ad (from the same supplier) to the same customer (the person viewing the ad) and the supplier will pay more if they are convinced the ad actually has a higher return rate.
What is the quote again from John Wanamaker "Half the money I spend on advertising is wasted; the trouble is, I don't know which half."
Thus knowing more about their users and what they buy and the ad is successful 1 day, 1 month, 1 year in the future allows Facebook to get paid more.
Note this is a first order effect, what I explained above.
The 2nd order effect is that by making more money for the same ad, while your competitors would make less money from the same ad...you can either sit on that profit.
Or you can use your market share and guaranteed profit to make ads less profitable to competitors and this creates a positive feedback cycle where Facebook Ads get more and more market share but other competitors and platforms of Ads gets less and less, which in turn actually allows Facebook to charge more per Ad in the long run (but in the short run Facebook may want to decrease the price per Ad.)
I think the key here as you mention is the "pull through". Previously they could tell which ads generate buzz. The more important metric is which ads generate sales.
The information you can derive from seeing a person's full financial transaction record is so much more "pure" than trying to parse the drivel they're posting on their FB feed.
People say a lot of things on the internet, and visit a lot of places. Trying to infer who they truly are and what they truly like from that is actually hard: signal to noise ratio is not great.
But when the time comes to actually spend money, peopl really tells you who they are.
It's the digital equivalent of "actions speak louder than words".
When I consider that 1) all transactions must pass through validators 2) which are hand picked 3) by the worlds largest surveillance machine 4) that knows most everything there is to know about me already, I'm thinking I'll take a pass on this one.
You'll take a pass but the majority of the people won't so most likely you'll end up using it.
The average civilian associates cryptocurrencies with high profile thefts and dark web drug dealers because that's what makes it into the mainstream media. At best this will panic the big payment processors into making traditional payment options cheaper and easier, further undermining what little reason this has for existing.
> The average civilian associates cryptocurrencies with high profile thefts and dark web drug dealers
Maybe the average dismissive HN comment.
But pretty much everyone I ever talk to outside of HN treats Bitcoin with distant "hmm, maybe I'll learn more about that one day" curiosity. Kind of like programming and other tech.
You are way over-estimating how much Bitcoin even shows up on the radar of average people, even if it were 100% bad news.
The average civilian cares and understand nothing of that, all they care about it is the fastest/simplest/cheapest way to move their money around. Since WhatsUp and Facebook are ubiquitous by now, and everyone knows how to use them, so will that currency be.
Existing payment networks already are fast, cheap and I'll also throw in secure. (In Europe ATMs and bank-to-bank transfers are free.) They could easily be made simple to use given the requisite will.
You're correct about payment in the developed world.
But the Libra website highlight potential usage in developing countries. I may be wrong but in my opinion there is a huge market to take over in the countries where one has a Facebook account before having a bank account.
I can't find the link but I came across an article explaining that in Myanmar Facebook and "internet" are basically synonyms. That's because when most of the population began to have access to the internet it was only via Facebook services that are provided freely thanks to a commercial agreement between mobile providers and Facebook.
Now just imagine if Libra could pull something like that for payment services in all developing countries.
Fast, secure, but not cheap. Credit card merchant fees are on the order of 2% + 0.15 cents per transaction. The industry would still be profitable with prices orders of magnitude lower. A combination of regulatory capture and high fixed infrastructure costs have protected those profits -- but with cell phones, the infrastructure barrier need no longer apply.
Indeed, the average civilian will probably not even associate Zuckbucks with "Bitcoin"...
And that's why Facebook's Press Release[0] does not mention the word Cryptocurrency. Just "blockchain technology".
[0]: https://scontent.fvno2-1.fna.fbcdn.net/v/t39.2365-6/65035641...
Every news report I've read about Libra includes the words 'cryptocurrency' or 'digital coin', so they're not doing so great controlling the narrative.
They use "cryptocurrency" here at least: https://calibra.com/about
> The average civilian associates cryptocurrencies with high profile thefts and dark web drug dealers because that's what makes it into the mainstream media.
That will change now that major corporations have vested interests in changing the opinion of the public on cryptocurrencies.
5) No support for when things go bad so your screwed
Libra as in liberty? What a joke.
Libra is "pound" in Spanish, so it will be pretty confusing because that's how we already refer to the pound sterling.
I think it's a reference to the Roman libra, which used to be both a monetary and weight measure.
When organisations or government names include words like freedom, liberty, democratic, etc they usually aren't :)
The joke is Facebook deems itself the new Rome.
can anyone tell me if people in Iran can use it?
this doesn't really answer my question: https://libra.org/en-US/security-privacy/#overview
> Working with Law Enforcement
> As with any currency or financial infrastructure, bad actors will try to exploit the Libra network. While the network is open and accessible to everyone with internet access, the network's main endpoints will need to follow applicable laws and regulations and collaborate with law enforcement. In addition, because transactions on the Libra Blockchain are pseudonymous, it is possible for third parties to do analysis to detect fraud and illegal activity.
There's a difference between Libra (the Swiss-based association) and Calibra (the US-based FB subsidiary making the first wallet).
> "Calibra will do its part to facilitate the efficacy of international sanctions regimes. We will administer and enforce applicable sanctions programs including, for example, U.S., EU, and U.N. sanctions programs."
https://scontent.fbhx3-1.fna.fbcdn.net/v/t39.2365-6/65083631...
So the wallet software will enforce the sanctions?
If somebody writes an open-source wallet they can circumvent the rules?
I don't get it.
It's based in Switzerland. So maybe yes?
So is Libra following Swiss law?
Does US law not apply to Libra?
Can Facebook still be associated with it then?
reading the whitepaper , it seems everything will be managed by the swiss company. facebook is just one of the partners.
[As another user mentioned, the company that makes the wallet is US based and will enforce sanctions. But maybe that means that another of the partners can make a wallet to use in sanctioned countries?]
If it's based in Switzerland why would US law apply to it?
Because as some have found out, US law kinda applies everywhere.
https://en.wikipedia.org/wiki/Raoul_Weil
The better question is "Why does Facebook think that being based in Switzerland will protect them?
It's been a while since Swiss banks were last immune to U.S. government pressure. Or even pressure from other countries. I can't bother to find the links now, but there were a couple of stories during Obama's time, about the US government arresting people based on their financial transactions in Switzerland.
Because the US can go after every single American company that's part of the association that runs it.
Basically the Feds will crack down hard on Facebook and co enabling Iranians and others on sanction lists. It's no joke and it's one of the few things that will result with executives in jail compared to all that should but doesn't.
What do the U.S. and other world governments think of this? The way they're pitching it seems like they want to directly undermine the global financial system.
Combine something like Libra with things like this[1], and we're well on our way to the popular science-fiction trope of multinational corporations having more power than governments.
[1] https://www.seattletimes.com/business/tech-giant-brings-soft...
Step 1 - say that your "coin" is not centralized Step 2 - proceed to contradict yourself in the next sentence
How the hell is a an obviously centralized system with 3 dozens of privileged entities is not centralized... Also it is not only oligarchy, but completely unaccountable shady oligarchy. Why people continue to "want" it is beyond understanding.
Well, they don't actually say it's "not centralized." They say it "will not be issued by a central party," which it won't--it will be issued by 28 central parties.
They also say it will be decentralized but they are really only talking about infrastructure not governance or control. This will never be anything but a completely centralized shitcoin (although a very successful one).
The Cryptoviet Union
Brilliant.
People still tell me with a straight face that the Cloud is decentralized too.
I'm mature enough not to smack them, but not mature enough that I don't fantasize about it.
I really want to ask them how they think 'The Cloud' works to figure out how on earth they think it's decentralized in any way, shape, or form.
Unless they think having Cloud services being offered by a couple of giant companies rather than one is considered "decentralized".
They're probably conflating geographical decentralization with your idea.
Which is why I often try to walk them back to "let's run one server room and let Cloud providers run one in NY/Europe"
If you let your Ops people go then you lose a lot of competencies.
It's an oligarchy just like the nearest hotdog stand is a dictatorship.
Don't like it don't use it. Try saying the same to the governments come tax-time.
That's not really an apt analogy. Just wait until vendors only accept Libra as their payment option.
It is not unrealistic either. When I was in China, I dined at restaurants that would only accept WeChat Pay as payment. Only because I was a foreigner was I able to get a pass to pay in fiat.
> Just wait until vendors only accept Libra as their payment option.
The vendors are the oligarchs in this scenario.
> It is not unrealistic either. When I was in China, I dined at restaurants that would only accept WeChat Pay as payment. Only because I was a foreigner was I able to get a pass to pay in fiat.
WeChat is not the result of a private endeavor, it is state-sponsored and controlled. It would be way worse for the government to manage Libra than for Facebook to do it. Gov has USD. This just plain competes. Competition makes all parties work harder on terms for usage. Its strictly positive.
>The vendors are the oligarchs in this scenario.
Wrong, they won't be. See my example above, just wait until everyday merchants only accept this as payment.
>WeChat is not the result of a private endeavor, it is state-sponsored and controlled. It would be way worse for the government to manage Libra than for Facebook to do it. Gov has USD.
Fiat currency is controlled by the Chinese government too. You completely missed the point. The Chinese government does not force businesses in China to only accept WeChat Pay, they choose to do so.
Deflection 101:
1) Tell people to vote with their feet/wallet
2) Ridicule them for spending more
The dark side of the network effect is that as the network grows it becomes harder and harder to be a conscientious objector. Also abstaining isn't really participating. And by not participating you get no say in the narrative.
When you have a coherent thought on the subject, let us know.
A new currency is what makes it easier to be an objector. Why do you want to be tied to only the dollar?
>Try saying the same to the governments come tax-time...
OK, that was a good one. Literally cut through my anger and indignation and made me laugh out loud.
Respect man.
But the same applies to the government: if you don't like it, just move somewhere else!
Thats correct, to a degree. You still need to ask permission to your government to leave, and to another government to enter. But with free pass, if you don't like a place you can move, I know I did multiple times.
Only after you pay the tax! ;D
In the US, we have a democracy, so we have at least some say in how things go: the government is us. Facebook is not us, we obviously didn't elect Zuck or anyone else there.
This is a tired, old, fallacious comparison.
If enough people choose to use Libra, it can eventually become a de facto (or even the only) payment method.
Facebook is us: 2.4B users willingly give Zuck the power to make potentially high impact decisions like this.
There's a very big difference between:
"I live in and probably even vote in a country that believes I am sovereign, which thus derives its right to wield authority."
and:
"I signed up for Libra so I could more easily use Facebook, which I only joined to keep up with my kids, and thus I accept Mark Zuckerberg's authority over monetary policy, even considering I have no input on it whatsoever"
Do you have a lot of influence over US monetary policy?
I live and vote in US and as soon as the majority of US residents decide to vote contrary to my wishes I have to accept the authority of whoever they elect.
Frankly I don’t see much difference.
I have infinitely more control over it compared with anything I might have with Libra, because that's zero. I can also:
- run for office
- build a career in monetary policy
- join a campaign
- start a non profit advocacy group
- lobby my representatives
These only have any effect (if they're even possible otherwise) because we're a democracy with elections. Can I personally change the supply of USD? No, but that's because that kind of change affects the entire world, and there should be a serious process around it. But my point is that there _is_ a process, rooted in (if imperfectly) the fundamental liberal democratic belief in humankind's right to self- governance.
Facebook has no such guarantees. It's a serious threat to those principles. There's a huge difference.
You can just as easily:
1. Build a competing product (social network, cryptocurrency, etc).
2. Build a career at FB, to influence from within.
3. Join/start a campaign against/for Facebook to influence its (potential) users.
4. Lobby your representatives to change whatever you don’t like about FB.
Maybe you have a point but so far it’s not very clear :)
Then allow me to be: The US guarantees your right to participate in its governance and decision making process. Facebook does not. Ceding control over monetary policy to an organization absent those guarantees is corrosive to our society, our government, and the fundamental principle of self-governance.
===
Everything on your list is only possible because we live in a free society with representation and authority over corporations. If we start ceding more and more core governing functions to corporations, how long do you think it will be legal to build a competing product? How long do you think you'll be able to lobby your representatives? How long do you think you'll have the right to start a PR campaign against Facebook? Look at your favorite authoritarian regimes for the answers.
With this I agree. Though are we really ceding control over monetary policy to FB?
Hmm, that's a fair question. The way I see it, monetary policy is essentially managing the supply of money. The US creates and follows its monetary policy to manage its currency, the USD. This is effective at doing things like regulating inflation or easing recessions because we have one currency here: the USD.
But if Libra starts challenging the USD even just in the US, let alone in the rest of the world, suddenly there are two dials to turn: one for USD and one for Libra. As more value is held in Libra rather than USD, US monetary policy becomes less effective.
And this is just the money supply issue. Others have raised all kinds of issues about fiduciary duties, privacy, regulation, confiscation, security, and so on. While I wouldn't at all argue that the US approach to these issues is perfect (far from it), there are at least some laws and so on. Nothing would prevent Facebook from freezing your wallet, or freezing your account, or banning you from their platform, or tracking metadata on your purchases. I would also assume (perhaps incorrectly?) that law enforcement doesn't have to jump through the same hoops to get your payment/account information, so there's potentially more loss of rights there.
This is exactly what Facebook's vision for Libra is: an alternative currency to the USD shared internationally and controlled by their consortium. They say it will be pinned to the USD and other stable currencies, but there's nothing holding them to this (and in fact most cryptocurrencies play with this). I deeply believe allowing this to happen would be a grave mistake for all of us.
Is your objection primarily to FB controlling the cryptocurrency, or to the idea of (any) cryptocurrency threatening the USD?
I think when people aren't in control of the currency they use, as in can't change the supply of it, really bad things happen. Like, many more people would have died without the QE programs (recessions and depressions kill people). That's a major goal of CCs, and one of the main reasons I'm against them.
I didn't select the US government. I have no ticket to that ride.
Please stop freeloading on our electricity, food, sanitation, roads, police/fire/education, the US military, and thousands of other services, renounce your citizenship, and leave at your earliest convenience. The US is pretty frothy about undocumented immigrants these days, so I would advise you not to dither.
I don't live in the us so I'm not using your electricity. I'd argue the pettiness of your argument if it were at least applicable.
Then s/US/<your country>. It applies equally.
You know not voting isn't a choice for some people, right?
Oh you mean like, felon/child/etc. suffrage? I'm fully in favor of extending the franchise to every living American; I think it's a fundamental right and morally outrageous that we ever deny it.
But I don't think that that means representative democracy in the US is a sham, equivalent to the level of representation I have at Facebook (again, zero). That would be a strawman.
It says testnet only until early 2020. Coincidentally, Ethereum recently announced Ethereum 2.0 releasing in early 2020.
I consider Libra Coin an effort to cash in on the cryptocurrency hype with a type of bank, before real cryptocurrencies can scale and become mainstream and therefore block such an effort.
So I see it as a moral imperative for developers to try to kill the project. The fact that they are making it open source could help in that regard.
Facebook had already banned advertising other cryptocurrencies in the run-up to this announcement (well, back in January 2018), so the effort to prevent other cryptocurrencies from scaling is well underway.
That's unfair, there was a lot of pressure on companies to protect users from scammy crypto ads during the big bubble of Bitcoin. I think many companies banned ads for shady sites and to imply they did it only to promote their own coin isn't fair.
I totally agree that it was good move from a user perspective. It's just a happy coincidence. Or perhaps they saw how many outfits (shady or otherwise) were affected by the ban and decided it represented a good market opportunity for them to step in and fill a gap?
So we can take it down from the inside, trojan-horse style!
Embrace, Extend, Extinguish!
What makes a cryptocurrency “real”?
decentralization and trustlessness I would say are the big two.
With Libra its pretty clearly controlled by large tech companies so validating on the network isnt open to anyone. This means it not decentralized in my book. You also have to trust that the dollars or dollar equivalents are behind every token on the Libra network, this isnt the case in bitcoin/ethereum since there isnt an attempt to use dollar backed tokens at the base layer
i think we need a new word for decentralized currencies /chains.
It feels like a defeat, though, to have the word cryptocurrency co-opted by things such as this. Wouldn't it be easier to call this bullshit, and decentralized currencies cryptocurrencies? /s
i actually think the term is accurate. cryptocurrency = currency based on cryptography. we need a different term for "decentralized/trustless currency"
Can someone help me understand how Libra or other cryptos for that matter can actually be used? Who will accept the coin as a form of payment? Can these ever be used to buy essentials (food, clothes, shelter)? It doesn't seem so at the moment, and until then, I find it hard to imagine businesses or individuals would be happy to accept Libra as a form of payment.
Ultimately it depends on how frictionless it is to convert it back to dollars, pounds, euros, etc. This has always been an issue for bitcoin. When I first heard about bitcoin, one bitcoin was worth less than a US dollar. I was curious so I tried to buy $50 worth, but the process was so convoluted and difficult I didn't bother. Today its much easier, but not completely so. But much of the difficulty then, and I presume now, was the distrust of banks. The key vendor on their list of supporters is PayPal (IMO). Paypal is in a position to make currency conversion painless for most users. Maybe in the future there will be enough places that accept this new currency that people can keep their money in that form but initially its all about easy conversion.
I haven’t really seen a lot about how exactly the Facebook profiles will be separated from the pseudonyms on the libra network. I think this is also part of a gamble that people don’t really care that much about privacy in most of their purchases. If you look at a network like Venmo, they have a social aspect that is on by default, a news feed of sorts. With small incentives ( discounts, credits - share this transaction and receive a discount on your next purchase ) - people could easily give up their anonymity on the network. Once this happens Facebook will be sitting on the holy grail of advertising. A full closed loop of people’s interactions with advertising and the impact it has on their purchasing habits. It creates a new avenue for monetization for Facebook when ads are shown on publisher websites as well. Displaying ads and the analytics around engagement only create half the picture, the other half will be the impact it has on how they spend their money.
From the technical paper it seems to be able to be transferred anonymously like bitcoin etc
>To create a new account, a user first generates a fresh verification/signature key-pair
>The Libra protocol does not link accounts to a real-world identity. A user is free to create multiple accounts by generating multiple key-pairs. Accounts controlled by the same user have no inherent link to each other. This scheme follows the example of Bitcoin and Ethereum in that it provides pseudonymity for users. https://developers.libra.org/docs/assets/papers/the-libra-bl...
I'm wondering if this may create legal problems for Facebook and its partners when the currency gets used for illegal stuff. Bitcoin doesn't get sued when it's used for drug dealing because there is no one to sue.
I think the trick here is that Facebook is not inherently in charge of transactions, each validator is. Meaning, each validator will have their own efforts to make sure nobody pushing transactions on their node is doing crime (and/or that their identity is known so it can be forwarded to police when linked with crime).
In practice what this probably means is that each validator will require a lot of personal information tied to each public key before accepting transactions from that public key. In other words, I would wait until/if someone trustworthy partners as a Libra node (e.g. my bank who already knows my financial history) until I sign up to give it a shot.
What this truly mimics is a 'security' analogous to a basket of foreign currency traded as an ETF. Once you give them US $1 it is backed by a POOL of currency from multiple countries (i.e. the other people who have traded their currency for Libra).
Once you decide to take your US $1 you will get back a different amount based on the underlying value of the pool based on the fluctuating FX market. May be >=<...no one will know.
Given they are seeking to bring in "underbanked" people (i.e. the charitable patina on this operation) there will be a focused % of currency in the pool from countries with a high % of underbanked people. Logic says this will likely be less stable currency than say the US $, etc.
Thus, your US $ will be diluted by "lesser" or more "volatile" currencies and will diminish the purchase power of your US $1. Conversely it will increase the purchase power of the lesser currency.
Thoughts?
Far far away from that point. Maybe when people start buying houses and paying their medical bills with it. Which is not going to happen if the Big Banks have anything to say about it. This is mostly going to be small change transactions for a couple years with lots of other players falling over each other with alternatives. As long as it makes global small change transactions free or dirt cheap should be a good thing.
I'm not holding any coins. But I have an interest in crypto currencies for some projects I'm developing.
Anyone who thinks this is going to replace ripple, I have some bad news for you.
Ripples main focus is not for users purchasing goods across websites. Its focus is mainly for banks (to hold vast amounts of XRP) when sending sums of money to each other, to be able to convert fiat into XRP and then send that XRP between them and then convert XRP into the receiving fiat currency.
The remittence market is huge and that's where ripple is mainly interested. Both banks and businesses are using it because there is a high trust factor with Ripple.
Now of course Facebook is trying to supplant ripple here, as a user won't need to go to a bank or remittence provider which would use either SWIFT or XRP to send the funds. Instead facebook is hoping to tap into the network effect it has built and two users can send monies between each other using this new token.
Another thing that I have an issue with. The article mentions eliminating "rent seeking". How so? Paypal, Visa, Mastercard all charge a % when processing a transaction. The $10m buying fee needs to be recuperated. Are transactions going to be free? Perhaps... Is running the nodes and network going to be free? It's certainly not.
There is going to be a fee for sending currency across the network. Either an up-front transaction fee or a conversion to FIAT fee. But there will be a fee.
If the same old players are involved, you can bet they want to get paid and the same old players will want to eventually impose their own rules to the game.
Personally, I don't think this will usurp Bitcoin. If anything else, I think it will make people more comfortable with digital currencies and then we'll have more leaps in better tech and the free market will bear fruit of a much lower priced solution than libra coin.
"Its focus is mainly for banks (to hold vast amounts of XRP) when sending sums of money to each other, to be able to convert fiat into XRP and then send that XRP between them and then convert XRP into the receiving fiat currency.” With the exception of Ripple money transfer products working without XRP, which they don’t like to shout about.
>There is going to be a fee for sending currency across the network.
What do you think the cost will be? Cheaper than the typical 1-3% of credit cards or more in line with debit card (ach) fee ( .005%)?
Looking at this as a black box, you buy credits using real money, and you can transfer the credits with less fees than tradition banks. Except you have one extra step on conversion of money into credits.
If there are enough people and places that accepts this credit, you eventually don’t need to ever convert it back to real money. Therefore when there is a lowered chance people would do a bank run, they can lower the backing requirement, like how banks are, and can reinvest the money. Here is the main point, they probably won’t dare issuing coins ie print money as that would immediately could be deemed a national security issue as now you are competing against a nations money supply.
You gonna say, wait, this is how bitcoins work, but nobody is giving bitcoin any respect. This libra thing will get respect, so regulation may just stop it in its tracks as soon as it gets too far.
So this thing is probably not going anywhere fast, in order to be useful, it needs to go beyond America. Every country will be scare of this possibility becoming a currency they have no control over. I’m not even sure if America will allow this to even take off without severe regulations that crippled the development
Currency is about trust. Do you trust these companies? Idk if you've been living under a rock, but a bunch of them are getting slammed for privacy and security breaches.
Re-phrasing and summarizing:
"Hey look - Tether demonstrated that a successful stablecoin can be a profitable business model. We can accelerate adoption of our own stablecoin based on our addictive social media experience and social graph and rake in the interest off our float reserves.
So long and thanks for all the fish!"
I think this is an interesting move from FB. Google has been trying to get payments data by extracting it out of your emails and any other data that resides on their servers. I don't know if they've been correlating it with search/dns/ad data, but I suspect they sneakily have been. By getting all the major payment processors on board for the operations/logistics, and with FB providing the tech, they can all share the data between them and FB probably thinks they can profit the most out of this. Apple's pro-privacy payment system is unlikely to take off (IMHO) given that it doesn't align with the profit motives of the payment companies. The only way it can take off is from the bottom-up if people choose to use it in droves.
Of course Google uses it to drive their own ad engagement. Say you want to look up your flight info. Instead of going back to the original email, you have all the info in the assistant. Instead of seeing rental car ads from the airline, you get them through Google.. You get to check out attractions in the city you're visiting through Maps.. it's obviously not all 1:1. Google isn't so pushy with their ads. They like to be subtle. But yea, they clearly get to serve more interesting ads by hijacking these workflows.
Slightly less obvious what they do Amazon toilet-paper receipts. Often things can just be aggregated into really good business intelligence. They could data mine what shows netflix is recommending, etc. I'm honestly not sure what kind of protections they offer in terms of extracting aggregate data from email. It's creepy so they'd keep it mostly internal.. but I'm sure they would have found some really interesting ways to use it.
I already find it hard enough to use certain services without having a facebook account. E.g. Tinder requires one, and even having a throwaway is problematic because people want to check your Facebook profile before meeting.
However, having currency wrapped up in Facebook will mean that now I will not be able to participate is some economies. I work remotely and as much as Paypal is a villian, it is also a saviour for paying people halfway across the globe. If Facebook displaces that, then my own business is in trouble. And there is no real way to separate Facebook the spying entity from Facebook the social entity, therefore I expect there to be no way to separate the Facebook financial services entity either.
This is a big worry.
Why Facebook’s Libra could be a runaway success
https://medium.com/@tejas_rd/why-facebooks-libra-could-be-a-...
The last two points apply to any crypto, but the first two, Scale and Network, are plausible.
Basically the tl;dr is facebook and the other "tech titan" validator nodes provide a large, existing distribution channel, and presumably they can unleash their armies of developers to make all the techie crypto stuff Just Work.
A long running bitcoin criticism has been that it's been like PGP -- built on sound principles, but the usability has just been too hard. Coinbase took off because it made crypto easy to the average joe... HN people understand you should never leave your bitcoin on a centralized exchange, but the average user has difficulty understanding the idea of keys, wallets, dongles, etc.
If Libra's going to succeed, it's going to be because they're going to do what Apple did to Unix: take the good parts, leave them available to the powerusers, and wrap the rest with really friendly usability.
And they've already done something like this: one of the advantages of React has been the developer tooling. There's always going to be a subset of users that prefers to string a bunch of tools together themselves, but with a corporate backer, you can invest in solid developer experience.
Last two points are predicated on fulfillment of the first two.
Network first and technology later vs. most of the industry's 'build first and get the stakeholders later' approach could be the sole differentiation in this thing flying off
It's very possible this initiative will be low impact. Most people don't care about currency -- they just want to spend their money in the terms they're used to.
My one concern: if the libra's value is based on a basket of assets, will US users still see the value in terms of USD? Will French users see their value in Euro? Will the value of my USD change based on the basket of securities backing libra?
I just want an easy solution to send money cross borders. Someone in Mexico right now owes me $80 and there's no easy way to do this. If she could send it to me through WhatsApp with a near zero fee I'd see the value in libra.
>My one concern: if the libra's value is based on a basket of assets, will US users still see the value in terms of USD? Will French users see their value in Euro? Will the value of my USD change based on the basket of securities backing libra?
I don't know what the UI will be like, but I guarantee that there will be an exchange rate of USD to Libra and it will shift as USD's value shifts against other currencies in the basket.
Maybe I'm an idiot and don't understand the marketing lingo but what exactly is the use-case for this? Why among all of the tech companies is Facebook the one to create a crypto currency?
What do they plan on doing with this?
I think the idea is you're going to be able to "Message" other people "money", Straight from the Facebook app/website. It also should work seamlessly across the various other social networks that are partnering in this.
There are other ways to do this now, but if they are able to do it right, this would generally be more convenient and widely available. I would assume fees will be low to start with. (Note that Visa and Mastercard are partners, so you can safely bet the fees will go up quite a bit once this catches on.)
So facebook (and partners) can mint their own money. Are we supposed to be OK with that? Wasn't this issue one of the primary reasons for crypto currency existing in the first place.
This shouldn't be allowed to exist.
they cannot, in most (all?) jurisdictions you cannot mint your own money.
You can, however, in many places, create something that works like money for some use cases.
This looks like a case of the latter, and it doesn't seem so different from stuff like Amazon Coins[0]
[0] https://en.wikipedia.org/wiki/Amazon_Coin
In the US, cryptocurrencies are treated as assets, they are taxed every time you exchange them for something or even each other. I would disagree that libra coin is akin to Facebook and partners creating their own money.
Clearly you didnt read the whitepaper. Facebook (and partners) literally mint libra. You give them a dollar, they mint a dollars worth of libra and stick the dollar in their "reserve". What stops them minting more libra than they actually hold fiat reserves for?
Not a new problem, it applies to bank notes and other stable coins as well right?
So we replace one broken system with another. This wasn't the cryptocurrency promise.
This actually might be a blessing in disguise for crypto currency as Facebook will lobby hard to get that rule changed fast as people aren't going to want to report a line in their taxes for each of the hundreds of items they buy in their taxes.
They aren't minting their own money out of thin air - it's fully backed by existing currencies like the Dollar/Euro/Yen/Pound. They're just making it easy to send this across borders digitally.
You say its "backed", but what stops them minting more libra than they have "backing" for? Nobody would know any different unless every user attempted to remove all their funds at once. How can you be sure that this wont happen? This is EXACTLY like a bank, but without any of the regulatory protections.
I'm still trying to understand....whats the point of using blockchain here at all if you're going to just make it centralized by validating only through an admitted pool of validators?
Can someone use this if they espouse "white nationalist"-adjacent beliefs (such as building a border wall and deporting illegal immigrants)? What does it mean if they can or cannot?
So first off Facebook would have to transgress the barrier in place that they say they're erecting between the user's Calibra account and the user's FB or WhatsApp or Insta account – simultaneously Facebook would have to tag its users as holding sets of beliefs that were antithetical to some set of ideal beliefs that would be encoded digitally somewhere inside Facebook's algorithms. To do this without human intervention would be a supreme AI task, to do it without human arbitration would be to blindly trust an algorithm, to do it at all would be an act of tyrannical censorship.
We here at Facebook hope that answers your question.
"He added that users would be able to remain anonymous or pseudonymous, at their own discretion—including the ability to keep their digital wallets separate from their Facebook profiles."
Imperial march plays in background, dark patterns flood through every interface.
"Indeed, that’s why Calibra, the wallet software that will hold Libra Coins, was made a subsidiary of Facebook—“to ensure appropriate separation between social and financial data and to build and operate services on its behalf on top of the Libra network,” as the white paper explains."
Is this some cruel joke? 'See! We made it a subsidiary! Can't get more arms length than that!' Being a subsidiary generally means that Calibra will take and toe the dictates of Facebook. There is no separation here.
It honestly feels like this is a last chance to pull away from the enlightenment value killing death spiral that is surveillance capitalism.
How does Facebook intend to support anonymous transactions without running afoul of Anti Money Laundering laws? If Facebook were to implement Libra in marketplace (for example) they would be obliged to do KYC on their sellers in some jurisdictions. That potentially means they would be handling identity documents and would be required to ban anyone (from all of their services) found to be involved in a criminal enterprise.
A key factor to consider: Libra has intrinsic value but Bitcoin doesn't.
From libra.org: "Libra is fully backed by a reserve of real assets. A basket of currencies and assets will be held in the Libra Reserve for every Libra that is created, building trust in its intrinsic value."
Fixed supply is a fatal design flaw of Bitcoin which leads to it not likely having any intrinsic value ever. Let me explain:
1. Fiat money's intrinsic value: A homeowner who borrows against their home is guaranteed to get full control of the home when they deliver the amount they owe, which is denominated in fiat. It is a powerful incentive to exchange goods and services for fiat. Even for participants who don't owe fiat, knowing that the fiat is intrinsically valuable to debtors means that it can be used to purchase goods and services from them.
2. There is no such incentive behind Bitcoin. Negligible amount of debt is denominated in Bitcoin. If Bitcoin value falls towards zero, there’s no real-economy backed mechanism to bring it back. There is no contractual guarantee that spending X amount of Bitcoins can entitle the purchaser to receive Y amount of services.
3. Bitcoin will likely never be a debt instrument. Bitcoin has a fixed supply, and the design goal of this is for Bitcoin to be deflationary. If there’s an equilibrium interest rate in Bitcoin, that rate is highly likely to be negative and more than the cost of owning Bitcoin. This removes incentives for Bitcoin holders to lend out the currency, consequently there will be no debt, and no contract that allows debtors to receive real goods by delivering Bitcoins.
This argument applies to most non-stable cryptocurrencies. From this reasoning alone, I see Libra has a much higher chance to succeed than its crypto peers.
Not being able to generate debt denominated in Bitcoins is a design goal, and I feel, possibly a good one (if too idealistic).
Fractional reserve banking lends too much power in to the hands of those who control the process. Fractional reserve is impossible in Bitcoins (unless you trust the word of the other party). This doesn't mean loans or debt can't exist, but it is not denominated in Bitcoins, but just as records on paper. And you also cannot loan out Bitcoins you don't own (nor loan out nonexistent Bitcoins like you could with fiat). This leads to more responsible lending, and cuts speculative gambling with assets. I think in the long run, this is a good thing (even though it would hurt in the short term).
So if cryptocurrency is taxed on capital gains, and this is a stablecoin, can they buy their own currency in whatever tax haven they are storing money in now with money they want to repatriate to the USA, then sell the coin in the USA and pay no taxes because it is a stablecoin to they didn't actually have any gains? And they do all this while controlling the cryptocurrency itself?
They wouldn't need to pay taxes because the money to purchase the financial instrument (whether it's a stock or a cryptocurrency) should already have been taxed in the country where the buyer resides. And, at least in my country, you can't use a financial trade like that to get a tax deduction.
How would they afford to buy the cryptocurrency from the shell company in the first place?
I'm not surprised to see MasterCard diving this dumpster fire, but, Visa? Visa: what are you doing?
Save yourself, Visa! Don't do this!
It's just a hedge, bro! Visa is not obligated to integrate Libra anywhere. They just put a foot in the opening just in case it will take off. If it doesn't they lose nothing ($10M), if it takes off they are having saying in where it goes.
Either this currency will fizzle out or Visa will regret joining it big time.
So, the Guardian article says that it uses blockchain but is invite-only at the moment. But if it's not public, why do you need blockchain? So is it blockchain as in Bitcoin (i.e., proof of work) or "blockchain" as in hype? I hope it's not the former because proof of work wastes so much energy it's not even funny.
This is the start of a very good podcast, the Program http://www.programaudioseries.com/
Each episode is a character explaining how the Program changed his/her life, episodes are very moving. The first one describes how it all started by a social network controlling money and thus people actions. Oh and it's mainly optimistic, that's a nice change for the subject!
"The Program is a historical podcast, but a one that’s set in the future and examines the present day. The world of the future is exactly like ours, except that Money, State, and God became fused into a single entity called the Program. This hardcore sci-fi premise however is just the backdrop, and the series focuses on stories of ordinary people inhabiting this extraordinary world."
It seems like Facebook is simply following through on the Web 1.0 vision that Thiel and Musk chased. The first Facebook product I might use in a long time. This seems inevitable on reflection. Skepticism is valid, at the same time consider carefully if this is worse than The Fed.
>> Skepticism is valid, at the same time consider carefully if this is worse than The Fed.
Are you serious? Are you comparing facebook credits 2.0 with The Fed?
I will answer the question that is always asked in every post regarding blockchains on HN:
"Why blockchain? Can't this be done with a database?"
Blockchains are databases. They are distributed, append-only, tamper-proof databases. You could call them that, or instead you could just say "blockchain" as that is what type of database the word blockchain has come to be understood as.
The reason to use a blockchain rather than a centralized database is because the properties described - distributed and tamper-proof - are crucial to the application. In Libra's case, centralized entities that control financial services (banks) have high fees, are slow, and are not trusted in some respects (financial bailout) while being highly trusted in others (not waking up and losing your money). A blockchain can provide solutions to the problems of centralized financial entities with the benefits of distributed ones.
Libra is explicitly centralized. The protocol depends entirely on Validators, of which there are few, and the Libra Association controls who's a Validator.
If Libra is decentralized, then so is the Fed because it's distributed across 12 regional banks.
I believe only facebook and few others will have access to the blockchain(i.e transaction history etc) so it really brings nothing to the user/clients or developers outside of libra association
One minor correction, centralized databases are faster than distributed databases. By choosing blockchain, they are choosing a slower db.
Haven't you got it the other way around?
This looks very much like what people usually mean with "can't this be done with a database?". Singular data view, high capacity, permissioned.
The strange thing here is the hand waving about transitioning to PoS in the future. How would that work, exactly?
And, in that case, why not use a more traditional database?
One semi-related thing is automation. When i receive a forex payment to my bank(south africa) it has to go to some human controller etc. If i can transact 24/7 without human intervention thats a big plus
So Facebook is under an increasing amount of scrutiny and calls for regulatory pressure. Amidst all that, they're still brave/arrogant/oblivious enough to launch something like this.
People are going to read history books about this era and shake their heads in pure disbelief.
Currently most online payments involve a 2% credit card fee. Will Libra lead to a significant reduction in this cost? If Libra can be 0.5% cheaper than credit card payments for consumers then it will become the dominant form of online payment.
It's very nice they chose Rust for such a critical component of their infrastructure.
Always wondered why Apple hasn't opened up iMessage to every platform (not just Apple devices) and gone properly into Alipay territory with payments. They don't have much growth left in hardware, seems like the obvious thing to do
Moving in the direction of an everything app, like WeChat?
I was horrified at this news at first, but WeChat isn't too terrifying, and they're far more ubiquitous.
I just hope the social network aspect of Facebook (and Instagram) continues to shrivel.
> WeChat isn't too terrifying
Finding out people use a proprietary chat app as a primary payment mechanism is indeed terrifying. Now on to a proprietary currency!
WeChat is absolutely terrifying, ask poor Winnie the Pooh or the uighurs.
There is a video is about French Finance Minister Bruno Le Maire fighting the Facebook Libra
https://www.youtube.com/watch?v=kH4oVeME_dk
I hope this gets anywhere, not because I'm particularly enamored with Facebook (In fact, I hate them and their skeevy practices) but because I want PayPal to feel the squeeze. I just happen to hate PayPal a little bit more than Facebook and any competition in that department is good in my opinion.
I don't see Libra being remotely any competition against Bitcoin, but as an alternative to current centralized payment processors? Sure, and it wouldn't be a huge stretch considering the amount of sensitive information people already entrusts (with or without merit) with Facebook.
PayPal is part of the Facebook Coin consortium.
This could pan out. There's a ton of people in the developing world that can only use their phones to get access to any reasonable banking. Or things like ROSCAs [1].
Don't think that tech (whether its a permissionless PoS blockchain or a Ripple copy) is important for success here. Only whether or not an aggressive marketing campaign to make people use it (especially merchants) will succeed.
1: https://en.m.wikipedia.org/wiki/Rotating_savings_and_credit_...
One really interesting issue is how they are actually going to make the zucbux actually stable.
This seems like a straightforward problem to solve: for every zucbux in circulation, stash a euro, a yen and a USD somewhere.
Except ... where do you actually stash those? In what financial institution? And how do you know said custodian is risk-free? Who is going to audit them to independently guarantee that the underlying funds actually exist?
As it turns out, the only entities that can somewhat securely provide that service are central banks themselves, and that means they have to be willing to play ball.
This provides the potential for FB to pivot into banking.
The article points out that the structure of Libra doesn't require a connection between FB profile and wallet. But let's face it. If FB are the inventor and are the benevolent dictator in this open system, it positions them to offer all their users wallets and be the bank that facilitates most transactions.
The revenue potential for FB in that scenario, from transaction fees to deposits (borrowing short and lending long) to wealth management is limitless.
There is an endgame here that has 2 billion customers and is worth trillions.
I was going to make a snarky, sarcastic comment about this by writing: "yeah, what could possibly go wrong?".
Now that I think about it, it's a genuinely interesting question: what could possibly go wrong?
If a Silicon Valley controlled currency becomes the preferred method of payment, then the companies controlling it get unchecked power over the economy.
Banned from Facebook? You need to find other ways to reach your audience and make money. Banned from Libra? Now you need to find another way to spend your money in a market that preferes Libra.
That's one possible bad ending, but maybe I'm a bit paranoid. Still, you'll also have to consider the dozens privacy issues that will pop up in the meantime, especially given Facebook doesn't currently have the best track record.
This is going to leave Ripple a dead duck.
And Stellar, Nano and many others.
Interesting because Stripe CEO is behind XLM too, no?
Patrick Collison, CEO of Stripe is an advisor to Stellar
As is plenty evident with existing cryptos, the network effect is a huge part of a cryptocurrency's success (technically speaking, bitcoin is far from the best crypto out there, but it's the most popular because it was first and is nowadays the most well known).
Facebook's huge existing network will be a massive boon for Libra, however well designed it actually is from a technical standpoint: FB has direct reach into billions of people's daily life.
Good or bad, it will become a strong contender in the crypto space, unless regulators get in the way.
I'm not quite sure which kind of problem they are trying to solve.
Are they just another payment provider that has "crypto" in the name? Having a shiny app? I don't see that as great selling point.
The problems for consumers with current payment providers and banks are largely due to regulatory and policy decisions (PayPal not accepting retailers for certain services, banks making it extremely complicated for you to get a bank account etc...).
Libra will have all of these issues.
So I'm genuinely curious: What problem does Libra solve?
Why in God's name if we can't trust FB with privacy of our kids photos should we trust them to handle our finances? This deserves all of the mockery that it will receive.
I'd love to see what the actual incentive structure is here. What are they hoping to get out of the investment? Data? Fraud prevention fees?
How does Libra work? It sounds more like a traditional currency, except it isn't issued by a nation, but by a bunch of companies. The peg to a basket of currencies suggests that it'll operate like a currency board regime. Do they completely give up monetary independence by backing every Libra with a dollar in reserve (or a basket of currencies)? Or is the plan to make Libra eventually float and have some decentralised mechanism to set interest rates?
The TC article says that every Libra issued is backed by USD and other currencies in reserve. So, no independent monetary policy. This looks a whole lot more like full-reserve banking than a cryptocurrency. Are they calling it a cryptocurrency to avoid KYC requirements and other banking regulations?
Great name that's not going to create any confusion in those Spanish speaking countries that call the Pound "Libra" (hence the £ as the sign, by the way).
> Unlike previous stablecoins, Libra will not be issued by a central party. Instead, Facebook has enlisted 27 fellow Silicon Valley titans—among them PayPal, Visa, Spotify, Mastercard, Uber, and eBay ....
This really surprises me, since it is somewhat of a direct attack on Visa, Mastercard and Paypal. Maybe the thinking is that if Libra becomes a success, they'd rather be in on the deal, or they plan on becoming middleman and integrate it into their services.
They joined because it allows them increased market share. This play is mostly about cross border remittance and the unbanked. This gives all these companies a percentage of all the money that gets moved in this way. They have almost no exposure to those customers today. And all they have to do is run some software on some servers and invest $10M. Seems like nothing but upside to me.
Facebook is creating a securitized token representing a supply of Us treasuries and other assets that according to the white paper is to provide intrinsic value.They do not seem to understand what gives Cypto intrinsic value. In theory this is a security and should only be available only to accredited investors and they would need to file for an IPO to make it available to everyone in the US. There is no innovation just another tether.
India is one of Facebook's biggest market. I am interested to understand how will they compete against India's own open wallet platform, UPI, which is already very popular and already surpassed overall Credit card transactions in the country. Wallet companies like PayTM, PhonePe, Google Pay have a strong presence throughout the country and are dealing directly with fiat currency
Looks like this is yet another centrally controllable currency to woo the masses away from Bitcoin, not unlike Ripple's XRP. Or am I mistaken? It's probably a great vessel for speculation, though, since Facebook is a serious company, and because it will obviously be polished and work well. As a vessel for storing and moving value, however, I think I'll stick to BTC.
Zittrain and Zuckerberg discussed encryption, ‘information fiduciaries’, interesting part is that Mark didn't mention nor support cryptocurrencies but he argued that the blockchain would incredibly help with security on Facebook. https://www.youtube.com/watch?v=WGchhsKhG-A
Have they solved the scale-vs-security problem? Bitcoin scales badly for the very reason that it is secure -- every miner keeps a copy of the currency's entire transaction history (the blockchain), and wastes a ton of cpu cycles on proof-of-work, racing with others to verify the next block.
Has Facebook reduced the number of players involved in mining? Are they using some other proof system?
https://developers.libra.org/docs/assets/papers/libra-consen...
This is the actual tech paper, it uses proof of stake (not proof of work per your concern)
I think that they plan to create a small network of trusted nodes (e.g. visa) instead of huge networks of anonymous nodes (as in the bitcoin case). If I read correctly the initial network will consists of only 10 nodes.
Jameson Lopp thoughts on Libra “Blockchain”
https://medium.com/@lopp/thoughts-on-libra-blockchain-49b8f6...
Covers:
Abstract
Introduction
Logical Data Model
Executing Transactions
Authenticated Data Structures and Storage
Byzantine Fault Tolerant Consensus
Networking
Libra Core Implementation
Performance
Implementing Libra Ecosystem Policies with Move
Governance,AML/KYC,fees,capacity,open to developers?
For anyone interested, here's the protocol paper:
https://developers.libra.org/docs/assets/papers/libra-consen...
I wonder how they plan to keep the price of the Libra stable.
I understand that by keeping fiat currency reserves, they can guarantee a minimum exchange rate below which the Libra can never fall.
But how can they stop the Libra from rising? And once it has risen, how can they stop it from crashing back down to the guaranteed exchange rate?
> I understand that by keeping fiat currency reserves, they can guarantee a minimum exchange rate below which the Libra can never fall.
The way this works is that it's a guaranteed arbitrage opportunity: if the price of Libra somewhere falls below USD 1, you can buy Libra at that cheaper price, exchange it at Facebook for USD (at the fixed USD 1 price), sell the USD, and pocket the difference.
> But how can they stop the Libra from rising?
The way this works is the same thing in the opposite direction: if the price of Libra somewhere rises above USD 1, you can buy USD, exchange it at Facebook for Libra (at the fixed USD 1 price), sell the Libra at the higher price, and pocket the difference.
I hope it crashes and burns. It's the opposite of what crypto was meant to achieve. No central control.
Build something better that will get more adoption then?
I'm trying to understand how your statement isn't just a flippant nonsense remark.
How can I, me, one person, make something that is 'better' (how do you even define that) and will get more adoption than something that is being rolled out by one of the largest and already most popular platforms?
What a ridiculous statement you've made. Just a useless statement to make yourself feel superior, is what it looks like.
It's the same as saying "if you don't like the country then leave it"
Which is still a valid solution.
As an immigrant: Not for most.
Isn't most of the thing if not anything start from one person, even Facebook itself ? Are you implying that its hard ? hard != impossible.
No it wasn't, certainly not beyond the basic PHP web app version in 2004. Plenty of Fish is more or less than only major app that had 2 employees at the time they were pulling in millions in ad revenue.
Facebook's ads business didn't even get off the ground until they had already begun to hire massively. Zuck's prototype and marketing might have brought in the users, but FB would be nowhere without its billions in ad revenue.
Platforms started by many people—thousands in this case—have way more leverage than a single person trying to do the same.
It may not be impossible, but in this case it should be sane to assume it would be a waste of energy for a single person to attempt it.
Fb didn't start with thousand people, it start with zuck coding up (or maybe stole it) prototype in his bedroom
Should clarify: by this case I mean Libra, not Facebook.
Sure, doesn't change the fact that libra started by facebook and facebook started by one person, zuck.
I didn’t have Facebook,the social network way back, in my mind when trying to make my argument (I definitely should have made this clearer).
Remove the history behind Facebook and just look at the numbers of the LibraCoin consortium and you’re not dealing with just one person. That’s the lens someone wanting to make a competitor should be looking through, not that LibraCoin has a long thread tying back to “just” Zuck. That catalyst has little to do with the challenge of competing with LibraCoin as it has started today.
I'm arguing against original argument that one person can't do anything against something big.
Any changes start from one person trying to do so. I'm arguing that’s the lens you should have in mind.
Nope, Facebook was stolen by one person though.
Still mean that person make fb happen.
It's called Ethereum.
This and the other recent article about how (in China) it's becoming more and more difficult to do/buy things without wechat makes me think that just as VPN's are popular today, some form of anonymous (non-tracking) e-currency will be all the rage in the future.
Why do we need to expend our energies to debate? Facebook cannot be trusted. Facebook should not be allowed anywhere near our finances. This is a nightmare in the making. Gullible public will start using it in the name of convenience and it might suddenly become ubiquitous.
It's supposed to be used by people who cannot access financial service. But they still have to buy Libra with their current currencies, and then Facebook becomes that financial service. So Facebook can reach to where those other financial services cannot reach?
Why is this considered a threat to banks or credit card companies? Don't you still have to convert to your local currency at some point?
I think that's why you see credit card companies on this thing. Best case seems that it increases their transaction from what I see.
How are blockchain/cryptocurrencies affected by a possible breakthrough in quantum computing? It is my understanding that quantum computing makes it trivial to break todays crypto. So a single actor with a quantum computer could break any crypto currency?
So they want an Alipay competitor for the west? Tho I see Alipay outside of China more and more
I don't get why it has to be a "cryptocurrency". I see the value in some sort of token that you buy and can then exchange without fees, but couldn't that just be a simple DB? What does it being a cryptocurrency on a blockchain get you?
Multiple validators with byzantine fault tolerance.
Multiple, but not necessarily very many -- the validators are an exclusive club.
Lots of people here saying this won't be adopted... I think we're all underestimating how many people are on FB. Ad targeting is very sophisticated for FB platforms, I think a "buy with Libra" button would get clicked a lot.
Which is frightening.
These are the guys that can't properly secure their main product. Facebook has been leaking all around, I think Instagram stored passwords in plain text, and last year their cookies were stolen too. Ain't touching this for some time.
So the logic is that people in Africa have smartphones but no bank accounts. Wherever they buy their phone credits (cash for a voucher in a corner shop), they could also buy Libra top-up vouchers? It must involve a cash transaction after all.
What could possibly go wrong -_-
FB Crypto = big bank crypto. This helps push the blockchain into the hands of millions but the millions won't care. Just another Chase, BofA, Santander.... Sounds interesting and new so people should flock to it....
I'm already at the point where I refuse to donate to charity events that friends and relative link me to through Facebook. I don't trust Facebook to have access to my money, in any way, shape or form.
I bought in https://webpromocoes.com.br/codigo-promocional/ very interesting in Brazil
I'd guess FB is also targeting micropayments. They are already ubiquitous on many websites so why not let their users pay for content with fbcoins?
It's 2019 and micropayment is still an unsolved problem.
https://ftalphaville.ft.com/series/Breaking%20the%20Zuck%20B...
Who is in charge of stopping this from being used for money laundering?
> "Libra’s mission is to enable a simple global currency and financial infrastructure that empowers billions of people."
Command line demo/testnet. yea everyone can use it /s
Expansion and contraction of the monetary supply by central banks is critical to preventing financial disasters. Cryto subverts this.
Not to mention making transactions harder and not easier.
In the US the evidence for a central bank PhD Politburo "preventing" or even "minimizing" financial disasters is dubious at best. Financial panics in the 19th century were generally shorter, less frequent, and probably effected the avg citizen much less, than 1929/1937/1970s/2000/2008.
Can't resist, I just have to post this:
https://www.youtube.com/watch?v=CIbDFmHqEIw
Just wanted to say that the logo is not Libra's symbol; it's very similar to Aquarius though. While I maintain my horoscope-hater attitude, I am still disappointed
Facebook unveiled an ambitious plan on Tuesday to create an alternative financial system that relies on a cryptocurrency that the company has been secretly working on for more than a year.
The effort, announced with 27 partners as diverse as Mastercard and Uber, could face immediate skepticism from people who question the usefulness of cryptocurrencies and others who are wary of the power already accumulated by the social media company.
The cryptocurrency, called Libra, will also have to overcome concern that Facebook does not effectively protect the private information of its users — a fundamental task for a bank or anyone handling financial transactions.
Duplicate, see https://news.ycombinator.com/item?id=20210667
"Blockchain vs BULLSHIT" criteria:
Is it: - Open - Publicly verifiable - Neutral - Borderless - Censorship-Resistant. - Immutable - Permissionless
In case of Libra answer to all is No
Interesting name choice, as you might mistake it for something freedom related. But the etymology of "libra" doesn't have that connotation.
Crypto-currencies are likely to be banned in India or at least not officially supported by the Federal Bank. Will this also be treated in the same manner?
I can't wait to get me some Itchy and Scratchy Money
Can I use it in Iran?
You can use Bitcoin in Iran today, can't you?
This just occurred to me, did someone at the OCC give Facebook a bank charter? So they have a Fed account and can issue fractional reserve loans?
I just had to pay my one of my staff members in Mexico a severance of approximately 50,000 pesos. She doesn't have documentation or a bank account, so I had to pay her out in cash. 1000 peso notes are not widely used, so I had to get 500 notes out of the bank. That's about 100 bills--pretty bulky. She's going to have to spend a few hours getting home on 3 different buses with that huge wad of cash somewhere on her person, and risk being robbed.
Having some sort of electronic payment system that worked for her would be amazing.
Would there be anything stopping Google making this offer to users? "Tell us your Libra wallet ID to get YouTube premium for free!"
I can imagine few things i'm less likely to want than a currency in any way connected to facebook.
Let's see how aware the "general public" are about Facebook's lack of trust, or whether they'll adopt this. Obviously FB have probably seen how WeChat does it in China and are copying them.
It's interesting to think that money is one of the things that the Internet hasn't "distrupted" yet, but maybe this is one attempt.
Speaking of trust, one should remember that the dollar bill was a promise from the Federal Reserve to pay whoever had that piece of paper to pay them the actual money written on it. I wonder who would trust the Central Bank of Facebook that they're "good for it"?
> was a promise from the Federal Reserve to pay whoever had that piece of paper to pay them the actual money written on it.
FYI, as written, that statement makes little sense. The term "actual money" does not mean anything. US dollar notes are actual money.
Before Nixon Shock, the dollars were on a gold standard. The government had a promise to give whoever had the US note the specified amount of physical gold (metal). As it is now, it is called a fiat currency, and no government exchanges it for gold or any other metal or any other form of money. It is still "actual money" though, by most sane definitions.
That's one vote against. Reality is that "everyone" uses FB /Whatsapp and sending money via FB that everyone uses makes plenty of sense.
See China or plenty of other countries where people send money to each other via mobile.
Is everyone really using FB/Whatsapp? The apps used in China , SE Asia or Japan have quite a different approach than FB.
I wonder what happened to Telegram's currency
Has there been any announcement of third parties being able to depoly their own contracts or Dapps to Facebook's blockchain?
Here's the developer docs:
https://developers.libra.org/docs/welcome-to-libra
Will "Objectional Groups" be preventing from using Libra? Who will define what is an "Objectional Group"?
I thought creating a currency was illegal. What makes cryptocurrencies so different that it's ok for companies to do it?
Illegal in what jurisdiction?
Crucial question for competing with Bitcoin, of course, is simple: will it be anonymous enough to buy drugs with?
Neither Bitcoin or this should really be used to buy drugs with.
On the other hand you have an immutable public record of all your transactions (Bitcoin) and on the other hand you have bastions of privacy (Facebook) who is guaranteed to sell your info.
Bitcoin is still better... Known drug transactions will probably be blocked here outright, while in Bitcoin you might just get caught after the fact.
Considering that multiple companies have access to the data to find illegal transactions, no way. However it will probably be easily exchanged with other coins
People have been buying drugs with Venmo. So what?
There's a name conflict. The GBP is called 'libra' in Portuguese- and Spanish-speaking countries.
that's not unusual, e.g. danish/norwegian/swedish korona
"Give us your data, you can trust us". Remember how that went?
"Give us your money, you can trust us". Hm...
When so many large organisations joint it will cost billions, which will have to be paid by the users.
I wonder if Facebook's plans are behind the absurd rules put forward by India regarding bitcoin.
I don't know much about how to mine or obtain crypto currencies.
Can someone explain to me how I would get Libra?
You buy it from a trusted member node
So there is no way to mine it? You just buy it at a set price?
Does that mean that it is not really designed to be "invested in" the way people invest in bitcoin and others?
Correct. It's backed by a basket of fiat currencies (USD, GBP, JPY, EUR).
Why is renaming of 'facebook credits' to 'libra' so important to anyone?
Interesting. I'm curious to see how it plays out. I can see it working if they make Libras look valuable in itself for their user base (eg. Being able to get Libras from other users for services or content and then being able to buy real things with it). Given it's not "real money" would you be exempt of most taxes?
Pretty sure barter is taxed as well. Otherwise you’d see people evading sales taxes by transacting in bitcoin a long time ago.
It even attracts VAT, yes
If FAANG are the new digital nation states, one can see why they want their own currency
It's amazing as the white paper manages to avoid mentioning Bitcoin and Ethereum.
We cannot trust them with privacy, so how we supposed to trust them with our money?
Does this mean Faceberg will finally get regulated as a payment processor?
I'm banned from facebook for having names they don't approve of.
Recently made a song called "Good for the world != good for Facebook". Might be of interest to peeps in this thread...
https://www.youtube.com/watch?v=6zJSmiimxoQ
Not only they built it in Rust, but they also built Move - language clearly derived from Rust, which uses ownership as a way to manage monetary resources. Regardless of trust issues with different companies involved, that's just beautiful engineering.
Why is choosing a specific programming language, Rust, "beautiful engineering"?
I might have worded myself poorly. Using ownership concept for this new purpose is beautiful engineering.
Basic Question - What is the problem that they are trying to solve?
Why, of course I trust Facebook with my financial transactions. Why would they lie about privacy? This can only be an altruistic course of action
Send money to your Facebook account, be banned. I'm sure it will be perfectly legal (after all, you agreed to it in T&Cs!).
Cryptocoins are not about privacy, the ledgers are public so no conflict there.
There are cryptocoins like zcash where the ledger isn't open in the same sense it is on Bitcoin or Libra.
No, the ledger is open. It's just that the transaction data is encrypted so only the recipient can decrypt it, and accompanied by a zero-knowledge proof so the money supply retains its integrity even with the encryption in place.
Be careful with the distraction, Facebook is powerful enough to create the 'alternative' force of gravity.
How are the exact payout rules for the investment tokens?
So this is like Alipay or Wechat Pay but for Facebook?
It's amazing how short of a memory people have. The financial system has at least a few centuries of experience and todays regulatory climate is a reflection of the lessons learned. To some, these rules may seem arbitrary and they sometimes are but people forget how things before.
I find it amusing that the big selling point behind the initial round of cryptocurrency was its lack of regulation.
> This is false actually. Cryptocurrency's "selling point" is being regulated by mathematical rules and not by potentially-corrupted policymakers.
You're being unnecessarily pedantic. If one uses the term regulation, I think we can all presume it's about a centralized governance structure (e.g. policymakers).
The "regulation" in crypto is not a set of mathematical rules. It's a set of rules created by humans (see every crypto white paper ever) that uses mathematical models to abstract away a direct democratic process of trust to facilitate the exchange of currency.
If crypto was just about "mathematical models" then why wouldn't we just use those "mathematical models" in today's fiat currency?
This doesn't follow the same rules as other cryptocurrencies though - its proof of stake, where a select number of parties can mint their own "funds"
Fundamental rules govern its existence, but not what's done with it. Most cryptocurrency in use today isn't "regulated" by mathematics any more than banknotes are "regulated" by physics.
That's good.
Except for those pesky bugs that pop up every now and again...
> Cryptocurrency's "selling point" is being regulated by mathematical rules and not by potentially-corrupted policymakers.
But this is generally false; like fiat currency managed by the governments of capitalist democracies, cryptocurrencies tend to be regulated by technical experts implementing policy on behalf of th user community in which power is weighted by, roughly speaking, the product of wealth and interest in influencing policy.
For the “selling point”, the software embodying the mathematical rules regulating the cryptocurrency would need to be fixed for all time.
This seems to me like a modern version of scrip.
so...what is the "news" here? they control our news and social normality and they want to control our money now....
Want to participate in the project!
How could become a partner?
I’d give a penny to hear Alexander Hamiltons opinion on this.
Yeah, like I'll EVER trust Facebook to manage my money... If you're libertarian or conservative, you definitely cannot trust Facebook to not keep your money, let alone safe. And if you aren't, you probably shouldn't.
I don't mean to be tin foil hat... but given the amount of account deletions that FB, Twitter, Pinterest and to some extent Youtube and Instagram. I don't agree with the people blocked necessarily, but it belies anything resembling what should be required to trust them.
This is horrible. Don't touch it.
Why didn't they just use bitcoin?
Libra is a well known brand for sanitary products. I wonder if that's going to be problematic for either entity.
One step closer to dystopia.
It does not feel right, does it?
> 27 fellow Silicon Valley titans [...] to operate as preliminary “validator nodes”
What could possibly go wrong?
Is this really any different than your ability to buy things in-practice gated nigh exclusively by MasterCard and Visa?
It sounds less like a dystopia and more like the tech sector and payment processors have been collectively itching to escape the current banking system.
If there is one thing I learnt is that using a techno-bubble elite speech you can cover up a large number of loopholes, fraud schemes, ... Regulators and prosecutors know payment processors extremely well; once you start using another language they're partially unable to compute.
In this sense the choice of initial validators alarms me. Trust is something that must be earned: it's different because I know the evils of the system I'm using, I don't know the evils of this system and it might be worse.
...worse...
> In light of this, Facebook aims for the project to be fully “permissionless” — rather than permissioned, where membership of the Association is only granted to a select few —after five years and transition to a proof of stake network.
"me looking at the GitHub repository": there's a lot of technical debt that needs to be addressed, where is the design for this stuff? A "we'll fix it" is not enough, certain issues require a lot more work than code development.
some other cryptos have similar oligarchy model, e.g. stellar
The oligarchic model offers considerable savings (less computational and energy waste). It's understandable why it's tempting.
But I think that the consensus protocol of Stellar looks a lot more like a sweet spot: it has different levels of participation to the network, each of which gives different incentives, requirements and use cases.
> https://www.stellar.org/developers/stellar-core/software/adm...
My criticism is specific to this particular implementation (and management).
I had a vision once – Facebook invented true AGI and life as we know it is a simulated reality thanks to that AI.
Oh well.
Honest question: energy use?
It doesn't use mining, so energy use isn't a concern.
Yawn. This is a tempest in a teapot. Why would anyone bother to use Libra? People buy crypto mostly for speculation, hoping that it will go up (or at least not lose value over time, due to inflation). A stable coin that's pegged to major currencies is no better than the major currencies. It's also no worse. It's boring, and most people won't care.
Libra? ... Gemini? This kid just can't let go of the past can he...
Thanks, I hate it.
Kill it with fire!
It’s Disney dollars for Facebook ads. Yawn.
anything facebookish trends.
I do not think Zuckerberg’s ultimate goal is running a stable coin, although he could live with that arrangement and benefit from it for as long as necessary. I think the main reason Facebook has structured the coin with fiat backing is to make it seem less threatening to the current monetary establishment and world governments. It’s a way of saying Facebook isn’t trying to compete with the current status quo, but rather make the status quo run more smoothly and efficiently. Then, once it has a foot in the door and gains traction amongst its massive user base, all Facebook has to do is wait until the current assortment of global governments and their respective central banks fail.
At that stage it can remove the fiat currency backing (who will want it anyway), and let FacebookCoin free float. With the credibility of global governments and central banks in the toilet by then, Facebook and its corporate oligarch partners will be in a prime position to take over a sizable chunk of worldwide payments using their own currency. In other words, this appears to be a long-term scheme by elements of corporate oligarchy to position themselves as an unelected and unaccountable future sovereign power.
All that said, I want to be clear about something. Just because the above represents a plausible scenario doesn’t mean it’ll work out that way. If enough people recognize the dangers of this scheme, it could very well be stopped in its tracks.
In this regard, I want to highlight one of the biggest threats posed by a financial system run by a corporate oligarchy. For one thing, there’s the ever-present issue of censorship. I understand why many in the “crypto” world are fine with FacebookCoin since they see it as a threat to state power and control, but this is myopic in my view. Let’s not forget who is silencing the voices of Americans online in 2019. It’s not the state, but rather Facebook, Google, Twitter, etc. If we allow these companies to gain control of payments, you can be sure the same sort of unaccountable blacklisting will follow in the world of transactions.
Also, similar to what many of the tech giants have done with speech, Facebook could easily team up with governments or government linked deep-state type entities to stop transactions or freeze the accounts of “problematic” citizens. It would be a very convenient way to get around the rule of law in a place like the U.S., and would represent a perfect symbiotic relationship of tyranny between what could at that point be a vestigial state apparatus and empowered tech giant oligarchs.
Ultimately, what’s going on here gets at the crux of everything I’m trying to discuss at Liberty Blitzkrieg. Namely, that the old world is dying and the most important thing that’ll occur over any of our lifetimes is the sort of world we create, or allow to be created, in its wake.
The launching of FacebookCoin represents one segment of corporate oligarchy throwing its hat in the ring, and a very dangerous one at that given the already existing dominance of tech giants in the communications realm. From my perspective, communications and money are two aspects of human existence so fundamental to liberty they should remain as free and uninhibited as possible. To trust these things to a collection of billionaires and their corporations would represent the pinnacle of short-sightedness and insanity.
H H p x
FaceBucks
how do i mine it?
from the whitepaper:
Does the white paper make clear how / if those rules can be changed in the future?
It looks like the Libra Foundation would need to approve with a 2/3 majority of representatives.
From https://libra.org/en-US/white-paper/#the-libra-association:
> All decisions are brought to the council, and major policy or technical decisions require the consent of two-thirds of the votes, the same supermajority of the network required in the BFT consensus protocol.
A little closer to dystopia of Black Mirror https://en.wikipedia.org/wiki/Fifteen_Million_Merits
Their next efforts will probably be lobby like crazy to ban any other coin that is not "Approved".
I really wonder whether cryptocurrency would have been better received if it were named differently. From inception, I’ve only heard it pitched as a currency replacement. This immediately marred it with all of the currency “counterculture”/conspiracy theories. But it seems better suited as a way to trustless-ly track and verify transactions in an actual, traditional currency. That there are ultimately finite amounts of crypto coins available for transaction better serves this purpose.
It certainly didn’t help that the crypto community was choke-full of conspiracy theorists, libertarians that never read anything else after falling in love with Ayn Rand as teenagers, and get-rich-quick schemers.
The idea was fascinating, and Bitcoin has held up marvelously considering it was essentially a prototype with high barriers to change after becoming popular. There’s a Nobel Prize waiting if the rightful owner ever wants to come forward to claim it.
But, at least for me, it was the culture, especially around Ethereum, that ultimately stopped me from wanting to have anything to do with it. Which is ironic, because a large part of that culture was the denial that anything like “culture” exists, that “trust” and “institution” are terms with meaning, etc.
> It certainly didn’t help that the crypto community was choke-full of conspiracy theorists, libertarians that never read anything else after falling in love with Ayn Rand as teenagers, and get-rich-quick schemers.
I agree. Because of the nature of cryptocurrency, the industry has always just been wrought with fraud.
It has something to do with Telegram chats, the "wild west" feeling, semi-anonymous currency transactions, and the feeling most people have that there is (or was) a real possibility that they could gamble and win big with little effort.
The entire industry can almost be seen as a giant, anonymous slot machine.
What's wrong with the culture around Ethereum?
It’s funny how one of the core believes of cryptocurrencies has always been that (a) government will fear and attempt to ban it, and (b) that the technology would make such attempts impossible.
Yet what we have seen over the years is really more of a bemused interest from existing institutions, with targeted and rather effective interventions only where actual harm was done, such as ICOs.
It’s almost as if these conspiracy theories about the FED or Credit Card companies’ lobbying power, or the “International Banking Elite” weren’t exactly right.
You're looking at the wrong timescale. Institutions and founders of powerful corporations have life long time scales to subtly tweak and manipulate their messaging and approach.
Look back in 10 years to see whether the conspiracy theorist were wrong. I have no doubt the lobbying to exclude and put "regulations" in place is coming.
I have no doubt the lobbying to exclude and put "regulations" in place is coming.
I have no doubt that you're right. But not because of some evil conspiracy by a cabal of bankers, but in order to protect society as a whole.
Also, care to explain why you put regulations is scare quotes? In my book that disqualifies your comment pretty much.
I agree that some regulation serves a purpose.
But the way many things are implemented, especially when there's lobbying behind it, creates an environment where the only people who can navigate it are the people lobbying for it. As much as we need regulations for pollution, I'm of the opinion we need less regulation for many other things.
Banks are a great example. Banks should be regulated. If I put my money into a bank I want it guaranteed there.
But the industry has successfully lobbied itself extensions in their charters and ventured into financial and investment territory, which I don't believe should be coupled with banks.
Investing and securities (like cryptocurrencies) have an inherent downside - it can go up OR down. I don't need a short sighted politician to put laws in place to protect me from having my investments go down. That's part of the game. If you don't know what you're getting into, you shouldn't get into it.
But thanks to regulations, it's essentially impossible to open a bank or have competitive services, while they get to abuse their positions to leech money from the general population.
There's no reason that banks (safely storing money) and investment companies should be a single entity.
And before you mention inflation, realize that your savings account makes 0% interest, for any useful purpose.
If I want to start or invest in crypto under my own accord, there's no reason I shouldn't.
Don't want to lose your money on cryptocurrency? Don't put your money into it. We don't need regulations for that. We need common sense.
This idea that you deserve a risk free ROI is a moral hazard for society.
Disclaimer: I haven't ever bought cryptocurrencies, because I don't understand it and I'm not an idiot. It's gambling, pure and simple, and the people who lost their money deserved it.
It's almost as if they don't yet see cryptocurrencies as a threat.
Ban by whom?
So Mark Z. wants me to buy his Chuck-E-Cheese(c) tokens, then see where I spend them. /s
In all seriousness, are they offsetting the coin generation with windmills, sea turbines, or geothermal plants? How much power is being consumed by FB and the small handful of banks that are cranking out these tokens?
There is no mining, coins are "minted" by approved partners
Someone has to mine them though, right?
No
I suppose I am confused. Ether currency is supposed to be a hard to create thing, much like the theory of gold being a scarce mineral. If someone can just "mint" it without mining, then it is not a scarce resource and should not be worth anything.
It's tied to real world assets, 1 to 1 with a basket of currencies. It's only scarce if this rule continues to be followed, so valuation of the virtual asset will depend on users' trust that the real world assets exist and will always exist in a 1 to 1 ratio with the virtual asset.
For an example of this being attempted already, see Tether / USDT which is (supposedly) 1 for 1 backed by US dollars.
I see. Thankyou for the explanation.
Libra, a new global currency... with an old name!
"Libra" is the latin name of what is now known as the "pound" and used in many Latin-rooted languages (Spanish, Portuguese, French and Italian come to mind) to refer to pound related currencies, including the British pound sterling ("libra esterlina") and similar currencies from Egypt to Lebanon to Gibraltar pound. It was also behind many discontinued currencies from the past, ie. the Italian Lira or the French Livre.
IMHO a bad choice in naming for something you want to call "new".
Indeed. Libra, solarii, denarii == pounds, shillings, pennies in the old pre 1970 British system. Sometimes referred to as LSD.
A minor correction: librae, solidi, denarii. Solidi were so called, according to wikipedia, because (at first) they were solid gold.
Solidus would also be a decent name for a stablecoin!
> Solidus would also be a decent name for a stablecoin!
Its inevitable currency symbol is already part of the Unicode standard: /
https://unicode-table.com/en/002F/
An interesting related titbit: the Japanese currency sign for the Yen (¥) used to be encoded as the ASCII backslash (\) in the pre-Unicode era. Japanese fonts simply put the Yen-sign there.
And on the Japanese version of Windows, the yen symbol was the path separator, right? I vaguely remember this:
https://devblogs.microsoft.com/oldnewthing/20051014-20/?p=33...
Fun fact, this is also why the british pound has the symbol £.
And why pound is abbreviated “lb”
This is bad. Facebook will bake this into their software, even if they claim they won’t do it, they will. It’s no problem because you can always just use fiat right? How are you going to do that when the hoard of idiots out there adopt Libra without considering the long term implications? It could be that if you refuse to use libra, you’ll be left out in the cold. It will be like Facebook all over again. Facebook gets popular in 2007 — hoard of idiots dump all their personal information on it without a single thought about whether or not that’s a smart thing to do — hoards of idiots make Facebook intertwined with life itself without considering how messed up it is — people like me are left out in the cold because we refuse to engage — ten fucking years later people wake up and I’m vindicated — two years later the whole thing apparently is starting again and people are too dumb to see it.
I agree with the sentiment, if not with the needlessly aggressive wording. Also, the spelling you're looking for is hordes, not hoards.
Is PayPal any different?
Just explain your opinion you annoying idiot.
We've banned this account for breaking the site guidelines. Could you please not create accounts to do that with?
https://news.ycombinator.com/newsguidelines.html
Terrifying, really. The world is hurdling back towards a feudalist society, with corporations instead of kings.
What is even more terrifying is that this is being done by Facebook which has a person like Mark Zuckerberg, who has again and again shown that he has no moral compass and has complete disregard for people privacy rights and by extension other rights, as its dictator, with no real board oversight due to how stocks are structured.
> this is being done by Facebook which has a person like Mark Zuckerberg, who has again and again shown that he has no moral compass and has complete disregard for people privacy rights
Sure. But think about all the money they can make from selling ads if they know everything that people buy. Doesn't he have a fiduciary responsibility to maximize shareholder value?
No he doesn't, that is not what fiduciary responsibility means. See https://corpgov.law.harvard.edu/2012/06/26/the-shareholder-v...
This seemed like fairly clear sarcasm to me.
Sarcasm or not, I found the follow-up response with the Harvard Law School article quite interesting!
The problem with using sarcasm as a vehicle for genuine discussion is that not everybody gets the joke.
>The problem with using sarcasm as a vehicle for genuine discussion is that not everybody gets the joke.
That's fine, assuming "everybody" is not the target audience.
* From the Hacker News Operators Manual - Hacker News Principle 3.7 states no amount of sarcasm, no matter how extreme, will be clear to the majority of hacker news readers. Thus sarcasm in commenting should be avoided as much as possible, and if deemed absolutely necessary, clearly signaled with the "/s" mark at the end of the comment.
Edit - It's actually Principle 4.1
Implied sarcasm and irony is a troll's game. Not to imply that the poster is a troll, I have no reason to think that, but that's why I never assume sarcasm if it's not explicitly stated.
>Implied sarcasm and irony is a troll's game. Not to imply that the poster is a troll, I have no reason to think that, but that's why I never assume sarcasm if it's not explicitly stated.
Sarcasm and irony have been used in an enormous amount of major English-language texts since, well, there WERE English-language texts. Most of these texts don't take the time to spell things out to their less observant readers. Not assuming sarcasm will lead you to miss the point entirely. (This sounds terribly rude and elitist but it's true. And of course, little heed was given to those learning English as a second, or third, language, when these texts were written.)
Take the King James bible, for example. In Exodus, Moses is asked "Were there a lack of graves in Egypt, that you took us away to die in the wilderness?"
Hopefully this doesn't need to be explicitly flagged as sarcasm for you to understand its meaning.
That's a reasonable critique against an implementation of short term shareholder value maximization. That said, it doesn't show a different definition for fiduciary responsibility. It does, however, illustrate my original point that fiduciary responsibility is a silly justification for lots of things it's used to justify.
I assume you are joking, but your statement highlights the problem with a "moral" system rooted in maximizing shareholder value. I think free enterprise markets have many advantages, but there has to be a better grounding for ethical decisions.
One part of a better grounding could be a free market as opposed to a system where the tax payer bails out the banks.
You forgot the `/s`.
I would not say Zuckerberg has no moral compass. He definitely has one. Hell, he started only eating meat that he personally killed. What I would say is that his moral compass points in a VERY different direction than the vast majority of society is familiar with. He's a kook, basically. His views on privacy are not that he 'doesn't care'. He made it clear early on what his viewpoint was. He sees privacy as an antiquated, outdated notion that everyone will benefit from the death of. He believes that once everything is out in the open, people will grow up and stop being judgemental about things that are statistically normal despite being in contravention of social norms. He is, of course, completely wrong on that point and gives the majority of society far too much credit. But it's wrong to say he has no opinion on the matter.
Interesting... I wonder whether he holds the same views about his own privacy?
Of course not : http://money.com/money/4346766/mark-zuckerberg-houses/
Every mortal may be ousted from their offices; the wisest will provide a peaceful means for doing so.
As Zuckerberg has obviated any lawful means of removing him, by structuring the stock classes such that he holds the majority of votes, he should probably hire more personal security. If he's going to be someone that's completely unaccountable for his actions as head of the company from within the accepted structures, he should anticipate that someone will try to go outside those structures to get to him.
Ordinary people protect themselves from such attacks by not being untouchable jerkwads. He has already left that particular stratagem far behind.
With comments like this, I can understand why he would need personal security. I feel like this rhetoric is dangerous. It sounds to me as if you might be suggesting this sort of "solution" has some legitimacy. I apologize if that's not how you meant it.
Perhaps The French Revolution was illegitimate and the royal family should be ruling France right now.....
Well, the French Revolution certainly was illegitimate in that it was “not authorized by the law; not in accordance with accepted standards or rules“.
And it’s one of the best things that ever happened in human history.
I think they're being reasonable. Have a sense of history and of scale. Wars have been fought and millions died for issues much smaller and amounts of money much more meager. When you get to a certain size, when your actions literally affect over a billion human beings, and when there is more capital tied up in your venture than in many small nations... why on earth would you expect people to suddenly not treat you the exact same way nations are treated, up to and including armed insurrection? I don't support such a notion in Facebooks case, but I do think it would be wise for anyone dealing with numbers that big to consider history. Has a war ever been fought over the amount you are dealing with? Are you doing something a war was fought in the past to stop?
I don't think he's suggesting anyone should do anything violent. I think he's suggesting that if Zuckerberg continues down this road, he's going to face problems by whatever routes remain available. The only thing GP said anyone should do is Zuckerberg should "probably hire more personal security".
Would it have come across as less of a threat if he had quoted JFK ("Those who make peaceful revolution impossible will make violent revolution inevitable")? Was JFK threatening Latin America when he said that to their diplomats?
This is a very common rhetorical tactic for people who wish to advocate violence. Parent comment is not advocating violence by asking someone to commit a violent act, they are advocating violence by arguing that violence is reasonable / inevitable.
Crime exists. I advocate that everyone apply whatever measures that fit within their means to ameliorate it, or avoid it altogether.
It applies on the small scale as easily as the grand. If you insult someone's mother, watch for and avoid the retaliatory punch. If you violate the privacy of a billion people, call them morons for trusting you, profit greatly from their personal information, and continue to demonstrate eroding ethics, then install a safe room in your house(s) and hire some bodyguards.
That said, individual violence is reasonable, after the non-violent and collectively-violent possibilities have been exhausted. There always has to be some way to effectively retaliate against anti-social behavior.
True, though I'd argue he doesn't need to use the rhetorical tactic. Tyrants invite violence implicitly when they exercise their power over the weak.
It is not "legitimate". That word shares a root with "legal". But we should not pretend that some people do not do illegal things when the stakes are high enough.
Rich people get kidnapped and held for ransom to fund rebellions or criminal cartels. It's a thing that happens. Even heads of state get assassinated from time to time. It's a thing that happens. At the level of super-rich that Zuckerberg inhabits, I'd guess he already gets at least 2 attempts at theft, robbery, blackmail, or extortion per year, and some of them might even be successful. It's a thing that happens. People don't like to talk about it, because the successes encourage further attempts.
There were even GTA 5 missions entirely about manipulating public stock prices by criminally compromising or killing a company's CEO. That's how the player can make all three of their player-characters multi-billionaires.
I'm simply saying that if the only way someone can get to you is via criminality, then that is the way someone will get to you. Most people would always try the "legitimate", peaceful option first, if there is one. That's the primary reason why people choose to leave themselves open to the law. Surrendering to the marshals or getting arrested by state professionals is a more favorable alternative than getting caught by an angry mob. Just ask Qaddafi.
It's just engineering. If your structure is designed to fail at one weak point, then you can monitor that possibility more carefully, and predict the behavior following that particular failure. You can purposefully put in a weak element, so that if the structure collapses at all, it will do so more slowly and in a safer direction. In a corporate structure, you allow yourself to be removed by majority vote, and the failure mode is that you get paid off and live on in semi-retirement. Remove that option, and you don't know how you'll leave your office. It might be a memento-mori-scale heart attack, or complete failure of the company, or a sudden black screen as "Don't Stop Believing" plays on the jukebox.
In the wake of the vote to remove him, Zuckerberg could either step down voluntarily, or increase his security. He won't do the former, so he should do the latter.
He’s providing an economics type analysis.
Oh for crying out loud. If it bothers you that much, delete Facebook and all apps related to the FB ecosystem from your phone and install a tracking blocker. If enough people do this, then Facebook ceases to be relevant just as much as Myspace did.
If that won't work because everyone else is on Facebook, then obviously most people don't share your opinion that Zuck is that big of a threat that needs to be ousted right? So you either have to accept that the majority of people are ok with it or convince them to ditch Facebook also.
Suppose a hundred people have my contact information. If any one of those hundred people decide that Facebook gets access to their phone, then Facebook gets my information. The "vote" of pro-facebook counts 100x that of a vote against facebook.
This is not to say that I condone corporate assassination, just to say that your appeal to the majority is woefully inaccurate.
All that proves is that you have no reasonable expectation of privacy wrt your phone number. Any piece of information that has to be disseminated to untrusted parties to be of any use (like a phone number or email address) is by definition not private.
Or anything else that goes in an address book entry associated with your phone number.
Like your full name, job title, employer, email address, physical address, date of birth, social media profiles, family relations... the list goes on.
All of that associated information is often stored alongside your phone number. If one person you know does that, and also uses a facebook property and shares their address book through that (e.g. whatsapp), facebook has all that information about you.
If you're curious, check the list of additional fields you can add to a contact in your address book for how much Facebook could get about you
None of those are private info. And if they are, why does your contact know it?
My contact knows my name, job title and employer because they’re a colleague. There is no public record of my employment. It is private information.
How do I keep it from Facebook if my colleague uses WhatsApp, by simply opting out from using Facebook myself?
Again, you have a misguided mental model of what it means for something to be private information. If several of your colleagues know your job title and employer then you have already surrendered control over the dissemination of those pieces of information to them and they are no longer private.
I feel like there's a line between private and public information that's getting lost here. Maybe 'non-public'? Just because I've shared something with someone (by necessity, in some cases - they work for the same employer as me, so they know I work here) doesn't mean it's public information.
Or to follow that on, if several people see what medication you've purchased in a shop, is that information now public information? Has the expectation of privacy gone out of the window because it was witnessed by another person? Does that then justify that information being shared with 1+ corporations to add to their profile of you?
I'd definitely agree with that, and think that is what esoterica is missing. I don't think it is reasonable to have a strict binary line between public and private, because there exist many gradations. If I am in my home, I can reasonably expect that nobody is going to be watching through my windows with a telescope from a hundred yards away. If I am at the White House, I can reasonably expect that my every movement is going to be tracked. If I am at the grocery store, it is somewhere in-between. People can see me, what I am buying, and what I look at, but that is transient information.
This transient information is the category that modern surveillance is destroying. I think this is a useful category, as it allows for less stress of interaction, as each interaction is only relevant for a few days. Previously, it decayed over time as people forgot, or as tapes were overwritten. Soon, we are going to need mandatory data expiration policies to maintain this category of things that are public for a short time, and private afterward.
The majority is not always right. In fact, it is often wrong. Corrupt politicians invariably argue that they should not be held accountable and that we should instead "let the people decide" (by voting). But that's not how society has worked up to that point (at least, it's not how it was supposed to work, even if practice differs from theory).
Nowadays we seem to argue that since Mark Zuckerberg has not actually killed people with his bare hands, everything's fine. Everything is not fine. Facebook is a threat to humanity.
The majority is not always right, but the majority almost always gets its way.
Let’s say you’re right. Even if you overthrow the majority they won’t like it. What are you advocating? That there’s a shortcut via authoritarianism because the majority can’t be trusted?
Democracy has no shortcuts. Convince the majority you are right or live with the majority opinion.
I am advocating regulations, and their impassioned enforcement.
Yes, because facebook users tend to be marvelously well informed and certainly don't exist in a narrative bubble.
From where I am standing I wonder if this is not reflection of the ineffectiveness of governments. In my part of the world there is a lot more talk about devolution, basically self governance of the different regions. Everyone is sick and tired of decisions being made from the capital city by people who do not have your interests at all.
Democracies need to be ineffective and slow to some degree in order to be stable and to allow all people to participate. Otherwise, a coup d'état would be far too easy because efficiency means that only little time would pass between a decision (whether legal or illegal) being made and it getting implemented.
There is a reason why it's much harder to change federal law than a local ordinance. The broader the effect, the more difficult it should be. Effective government should not be about kneejerk reactions.
There's a difference between slow and slowly doing things that are bad for you and everyone around you because some "powers that be" who live in some far off city and have close to nothing in common with you want it done.
If it were up to me I'd make the US into ~100 states and reverse a lot of the power transfer from the states to the feds that's happened over the past 100yr.
Then what about decisions from corporations who do not even consider you as a person, or a citizen, but as a consumer?
I think you mistook my post as supporting Facebook. I am not supporting Facebook nor do I trust central governments. I ultimately think the Swiss model of governance where a lot of power is held in the region.
Brexit shows, citizens are not in the best position to take decisions on complex matters.
This is funny. A big reason people voted brexit is because they want more local governance instead of letting some bureaucrats in Brussels decide their fate.
In the grand scheme of things brexit might be a bad idea, but you're effectively saying people shouldn't govern themselves because they would vote for more self-governance...
Brexit was a structural failure of British democracy, not an indictment on British voters.
How so?
Multiple reasons, two I can think of right now that frustrate me at that the vote was held when students were on holiday (they needed to vote where they lived, so many students didn't vote who were 6-1 remainers). Secondly, lots of undemocratic goings-ons such as https://www.theguardian.com/commentisfree/2018/sep/14/judges....
Pro-Brexiters lying on the motives and outcomes? (Farage & Johnson not the least)
Like every party on every election at every level. Even though I share the outrage about it, we can't deny that lying is not uncommon.
That's not an acceptable standard for any public figure.
And yet we accept it all the time.
Educated citizens may be. The problem is when politicians are allowed to lie through their teeth, as they did for brexit, and the educational system didn't prepare everyone to question the obviously absurd claims made by leavers.
Interesting comment, given that the Libra group behind this currency is based out of Switzerland.
Person > family > neighborhood > community > region > state > nation > > world
That's how decision making power should reign.
I would also not be in disfavor of a Federal Council as opposed to a singular executive. The Swiss have a good thing going.
It seems more and more that the government treats us like a consumer. Both parties trying to deliver more and more "value" for the currency that matters to them: votes.
It's not votes. They buy the votes with money and that's what matters.
The problem is not government, but highly centralized government at near continental and global scales. Power needs to remain as local as possible. This Facebook move is not a solution because it just puts some global-scope power in another entity, that just happens to be an Internet company.
It's not hard to make the case that today's governments are tired and slipping and in need of reform. But there's no such thing as the libertarian fantasy of "lack" of governance. Human nature dictates that if there's a power vacuum, it will be filled. If it isn't filled carefully with a system designed to serve the people, it'll be filled by whoever can take it for themselves. And whether that's a feudal lord or Mark Zuckerberg, it will be worse than the alternative.
It's nothing short of a miracle that for the past 150-200 years, we've managed to fill much of the world's power space with a system that roughly serves the people (with lots of flaws, but nevertheless). Let's hope it isn't just an anomaly.
> But there's no such thing as the libertarian fantasy of "lack" of governance. Human nature dictates that if there's a power vacuum, it will be filled. If it isn't filled carefully with a system designed to serve the people, it'll be filled by whoever can take it for themselves.
Then let that power vacuum be filled on the state and local level.
West Virginia and California should be free to run their societies into the ground (or not) in their own ways without the other telling them how to do it or being on the hook for the cost.
Except people are not perfectly mobile and can't simply relocate across a continent. Should California be free to say, deny all brown eyed people access to public schooling? Or to run its economy into the ground and dissolve as a state? What about selling itself to a foreign power?
People are free to relocate where they want. They are not free from the consequences, particularly economic ones. As someone who is living in an fairly terrible state because there happens to be some high paying jobs in my industry I am unfortunately very aware of these kinds of trade-offs.
Don't straw-man me, I'm not saying we should dissolve the federal government. I'm saying states need to be less under its thumb and with that comes some responsibility for the consequences of mismanagement. Some of those consequences compound (screw up your state enough and all the people who can move will, taking their tax revenue with them) but that risk seems like a pretty low price to pay for more government happening on a level that is easier for the average Joe to influence.
If they can somehow reconcile your eye color restrictions with existing state law, the US constitution, etc then sure, why not.
No. Your ideas of what 'feudalism' implies are totally wack and ahistorical.
Feudalism was a time of laissez-faire, political liberty and anarchism.
"The vassal of my vassal is not my vassal" was the motto of feudalism. It was a reaction against the centralization and coercion of the old Roman Empire.
How is this anything like Facebook et al?
Peasants were bound to their lord's land, owed feudal dues like corvée, and could be judged and punished by their lord. It could only be called an era of "political liberty" for perhaps a relatively small class of nobility. The vast majority of the population was trapped in cemented, unalterable relations of fealty and economic exploitation.
> It was a reaction against the centralization and coercion of the old Roman Empire.
It wasn't so much a reaction against anything in the Roman Empire as the thing that sprang up as the more politically and economically advanced Roman system collapsed. Roman citizens had political rights, such as protection from arbitrary punishment, which were lost in the feudal era. The Roman state collected taxes and used them to provide substantial public goods, such as roads, aqueducts, sewage systems, public baths and theaters, the grain dole, courts and of course, defense of the frontiers against barbarian incursion. With the collapse of that system, the Latin-speaking population of Western Europe came under the rule of rather uncooth German tribesmen. The only honorable professions open to the Roman aristocracy, which previously would have gone into the civil service, were in the Church and the meagre administrations of the new German kingdoms. Taxation systems broke down, the previous public goods were no longer provided, and the common population came under the personal rule of their lords.
I wouldn't call a system in which the common population is subjected to the personal rule of a lord more "free" than a system of laws.
He’s sketching out a main point that a few are subjugating the rest using some sort of apportioned rights (in this case, runaway technological inertia and money leading to a positive feedback loop of even more inertia)
I think you’re missing the forest for the trees by concentrating on the historical robustness of his feudalism reference
My immediate thought was that he meant something more like corporate city states ala cyberpunk themes presciented by blade runner and shadowrun
What I meant is a civilization where only the powerful have a say, and regular people become serfs to powerful, warring organizations. Which, yeah, I guess isn't very well articulated by the word "feudal".
Weird that someone who is trying to be such a pedant incorrectly suggests this was a period of anarchism (a political system centered the absolution of government and unjust hierarchies). Maybe you meant anarchy, which is also a stretch historically speaking.
The prophecies of William Gibson continue to unfold. I'm waiting for the Rastafarian colony in high orbit.
Gibson, Sterling, and their friends, had the right hunch.
What happens to the data (and metadata), will all users be transparent to these corporations?
Isn’t there a risk of this turning into a social credit system?
Whats non-feudal about states in this conception?
Voting, equal rights, courts, published laws and regulations, just to name a few.
I can't vote in the US. I am not constitutionally or legally protected for having dollars in my possession.
Shouldn't Facebook be focusing on their previous project that promised to "connect the unconnected" (Internet.org / FreeBasics), rather than start another ambitious one "to bank the unbanked" ?
There are lot of people connecting to the unbanked via facebook/whatsapp/insta and transacting with them financially off the network.
When you have 1 network connecting 2 billion people why get off the network onto some other network to do a transaction. If I want to send cash to a family member in the developing world it's more convenient if the pay button is right there in the messaging app.
As to privacy and Zuckerberg controlling everything, well the banks and telcos already have all my data and keep spamming me day and night based on that data.
Whether the data gets centralized and the number of networks reduce to 1 is less interesting to me, than whether they use the data collected to take advantage of me. We do have road networks where you can drive from one end of the world to another without worrying about who the road owner is and how they might take advantage of you.
Methinks they can do more than one thing at a time, get everyone on the internets and facebanked using separate teams within the organization.
Zuck just wants to spend more time with your money.
This is a bunch of nonsense. Actual banks are corporations like Facebook and they're far scarier.
Our banking system certainly leaves a lot to be desired but I’d take Bank of America over Facebook pretending to be a bank 100% of the time. And I have never said a nice thing about BoA in my life.
What’s scarier to me is that Facebook is deliberately and admittedly targeting the unbanked - the people most in need of a bank but also the people most at risk of being taken advantage of. I’m afraid this will be the silicon valley version of a prepaid debit card/check cashing business run by Facebook instead of Wal-Mart.
I was just thinking exactly that: this is a check-cashing "bank" that preys on the poor and disenfranchised especially.
Yeah, we should totally leave that business to the payday loan shacks, right?
Right, and let Facebook do it _at scale._ What could possibly go wrong?
I would stake Bank of America through the heart, bind it with chains until sunrise, vitrify the dust, and then dump the evil slag into an ocean trench, and I'd still bank there long before trusting Zuckerberg's Facebook with my money.
It's a whole new avenue for predatory lending practices such as payday loans, too.
> Our banking system certainly leaves a lot to be desired but I’d take Bank of America over Facebook pretending to be a bank 100% of the time
Facebook isn't pretending to be bank. Facebook is pretending to be a payment processor. What's the big deal?
Nobody is telling you to put all your savings into a centralized cryptocurrency, especially considering you're a US citizen with access to relatively good banking system.
Name one payment processor that (1) doesn’t require users link a bank account, (2) takes deposits, and (3) issues a token in their own denomination based on those deposits that’s pegged to a mystery “diversified global currency reserve” to be invented at a later date/altered to suit Facebook’s needs.
It kind of sounds like it’s a money market account to me. Minus all the pesky regulation, of course. Like the required banking license to offer those in the US.
Banks are heavily regulated [1]. Facebook is not.
EDIT: If Facebook wants to come to the finance party, I welcome them accepting the regulatory burden imposed by federal regulators and the finance industry itself.
Disclaimer: I work in financial services, specifically interfacing with regulatory bodies.
[1] https://www.fdic.gov/regulations/laws/rules/ (Example FDIC Laws, Regulations, and Acts, none of which currently apply to silicon valley corporations, but all of which apply to banking institutions)
Facebook also isn't becoming a bank. If anything, Facebook is becoming a payment processor (not really, but close enough).
Why trust your money with Paypal, but not Facebook?
When given the choice between a monolithic corporation and some kind of cryto-based federation, why choose the former?
How is any of this worse than what we already have?
Among many other great crimes, U.S. banks have stolen hundreds of billions of dollars from the poorest people through overdraft and bounced check fees. The banks own the regulators.
If regular people can just have a safe place to keep their money, without being actively exploited, that would be a huge improvement.
You will need to construct a more targeted argument than, "All banks bad, all banks hurt people". The majority of Americans store their money in banks safely (and while the unbanked and underbanked is a huge problem, it is out of scope for this comment), protected either by FDIC insurance (banks) or NCUSIF (credit unions). The majority of banks behave responsibly (I don't work at BoA, Wells, JPMC, or someone else who has committed fraud). You don't even have to use a bank! That is what your local credit union is for [1].
Some banks have behaved badly. All cryptocurrency is a scam (see: SEC ICO determinations, outright ICO/token fraud, etc).
With fiat, you have recourse with regulators and the legal system. With crypto, you have none ("oops! someone cloned your SIM and you've lost your entire nest egg. better luck next time!"). Your arguments don't make the case for cryptocurrencies; you make the case for more regulation and oversight of the banking and financial services industry (which I agree with entirely, not because it's my job, but to keep the hard earned assets of banking customers of all income and asset brackets safe).
[1] https://www.mycreditunion.gov/about-credit-unions/credit-uni...
You will need to construct a more targeted argument than, “All cryptocurrency is a scam” if you want others to construct more targeted arguments than “all banks bad” (the difference being you had to paraphrase GP, while I got to directly quote you).
Cryptocurrency is infrastructure, while you are arguing against it as a replacement for all players in the current financial system. I would argue that's a shortsighted and under-informed perspective.
https://www.wired.com/story/theres-no-good-reason-to-trust-b... (Bruce Schneier: There Is No Good Reason To Trust Blockchain Technology)
https://www.dailycal.org/2018/03/09/father-internet-vint-cer... (Vint Cerf: "In addition to discussing the history and advancement of internet technology, Cerf talked about cryptocurrency. When asked about bitcoin, Cerf said his first response was to “run the other way.” On the topic of blockchain, he struck a more moderate tone but cautioned about its applications.")
https://www.cnbc.com/2019/03/25/bank-of-america-skeptical-on... (Bank of America tech chief is skeptical on blockchain even though BofA has the most patents for it)
https://www.fnlondon.com/articles/breaking-the-blockchain-ma... (Breaking the blockchain: Major projects shelved as hype fades)
https://www.bloomberg.com/news/articles/2019-05-29/blockchai... (Bundesbank: Blockchain Settlement Was Slow, Costly in Trial, Weidmann Says: “The blockchain solutions did not fare better in every way: the process took a bit longer and resulted in relatively high computational costs,” Weidmann said in Frankfurt on Wednesday. “Similar experiences have been made elsewhere in the financial sector. Despite numerous tests of blockchain-based prototypes, a real breakthrough in application is missing so far.”)
Distributed ledgers, blockchain, and cryptocurrency are solutions looking for a problem, overly complicated and underperformant infrastructure. They attempt to solve for trust with technology solutions in a world governed by human regulation and legal frameworks (which always take precedence). A database will work just fine. Everything else is snake oil.
I mean… I could also post articles on Fidelity and Ernst & Young investing in the technology, Stripe, Square, obviously Facebook and a whole host of other companies in this announcement, etc, but it feels very much like you've decided your conclusion and are simply feeding it with whatever journalism confirms it.
Regardless, you asked for a more targeted argument, I asked you for the same, and your response was 5 different articles on 5 different things. That's not targeted, it's the literal opposite. The problem with not being targeted is you have to pick a thing that you're disagreeing with. Here you seem to be disagreeing with “people think blockchain is useful”. But… There's plenty of evidence that isn't true in the general case, even if specific groups certainly don't think it's useful. Alternatively, we'll take your opening statement of “All cryptocurrency is a scam”---which is both not targeted (‘all’ is the operative word there) and not really supported by your articles since they're all about specific people or specific attempts.
It's fine to be a skeptic, by the way! I take no issue with you not particularly believing in the hype; my own take on the hype is considerably more skeptical than the louder folks. Just… Maybe don't put down other people's arguments unless you're willing to put in the time to make a better one?
To your other points: (a) you can have a mostly-technological solution in a world whose final resolution mechanism is human and legal; (b) there are plenty of companies in the cryptocurrency space still operating with SEC approval, including teams that did ICOs; (c) cryptocurrency, even the completely public/trustless type, isn't mutually incompatible with banks as a concept, though it could eliminate certain aspects of banks that require direct human intervention in the long term.
None of these things are here yet. Technology takes time, and the difficulty with technology that's built in the open is that it's in the public eye long before it's fully ready for prime time, so the debates about it happen in the public eye. A classic example is the Tanenbaum-Torvalds debate[1], except cryptocurrencies are being developed in a world that is 1000 times more connected than the Linux kernel was, and they are ostensibly applicable to considerably more people.
[1] https://en.wikipedia.org/wiki/Tanenbaum–Torvalds_debate
So a bank who wants to patent blockchain for themselves and a bunch of people who don't get it. Not very convincing.
If you're not convinced based on evidence there is no practical, production use distributed ledger or cryptocurrency besides bitcoin (which works very, very poorly), that's not on me to address. Prove it works and is needed.
>Among many other great crimes, U.S. banks have stolen hundreds of billions of dollars from the poorest people through overdraft and bounced check fees.
I can agree with the fact that some of the bank fees for such services are ridiculous, but how is a customer using their overdraft or bouncing a check the bank's fault? How is it "stealing"?
In the case of overdraft fees, over 30 banks were ordering transactions in a punitive way, charging up to six overdraft fees per day, and not providing a way to decline charges when an overdraft (and related fee) would result. It also resulted in the Federal Reserve instituting overdraft protection regulations in 2010. It was predatory, plain and simple, and hundreds of millions of dollars in collective fines were paid.
https://www.seattletimes.com/business/chase-reaches-settleme...
Ordering transactions from large to small so you are hit with the maximum number of penalties. It can easily end up costing you many multiples more than ordering chronologically.
Do a Google search for Wells Fargo and overdrafts.
Facebook is not even a safe place for your cat pictures. Why would they do a better job when it comes to your money ?
At best regulations act as a moat keeping competition away the entrenched banks. As soon as the government comes up with rules the smart people at the banks find a way to get around it and make money. Startups don’t have the legal expertise and can’t compete.
If that's the case, why do banks consistently push to loosen regulations? Can you point to an instance of banks lobbying for increased oversight and restrictions?
Making a bank should be hard. I don't want some unknown startup to come in to "move fast and break things", because "things" in this case means "people's savings".
Well there’s the CEO of Bank of America saying “Dodd-Frank is fine, None of us are trying to touch it”. The big banks could push a lot harder against regulation than they do.
https://www.economicclub.org/sites/default/files/MoynihanExc...
This has been my experience as someone who started a fintech company and has friends in compliance departments at banks. Highly bureaucratic on both the bank and regulator side. Compliance reviews are mostly an expensive song and dance by the banks. People jump from bank to regulator and vice versa all the time so there is rampant cronyism. Combine the cost of this song and dance with the cronyism and it becomes nearly impossible for a startup without a ton of funding.
Regulations can raise barriers to entry. But "at best", banks haven't just gambled away all the deposits leaving customers with no recourse lately.
Wells Fargo has been defrauding a lot of people, but at least they're paying billions in fines for it. It's not enough to keep them from doing it I guess, but I'd argue that fewer regulations would probably make that situation worse and not better.
How do you know that regulations are why the banks haven’t gambled away all the money? There’s no law against me gambling away my savings but that doesn’t mean I’ll do it. There’s other incentives in the system, for example the desire to avoid an angry mob of depositors burning your bank to the ground.
Some regulations are good but the ones we have are overburdensome. Even huge startups like Robinhood can’t get it right and the laws around what constitutes a security for ICO offerings are so vague that no one actually knows if they’re breaking the law or not.
>A smattering of nonprofits, which didn’t have to pay the $10 million entry fee, also populates the consortium to make sure not everyone can be corrupted by financial incentives.
Is this a euphemism for 'stuffing the ballot box with nonprofits your wife and friends and are on'?
"Facebook is enforcing a strict separation between users’ social data—their Facebook likes, photos, etc—and the financial data that will be available on Libra’s network. There will not, he insisted, be a readily available data trove connecting users’ transactional data to their Facebook profiles"
I find this extremely hard to believe coming from a company who's entire M.O. is building a profile of its users and tracking everything they do across the internet and beyond.
Facebook seems awfully quiet about WHY they're developing this thing. There's a lot of fancy and positive spin on "helping people in countries without access to banking" and that fine, but they do need to explain how they plan to turn a profit on the project. Until they do, we should assume that it WILL involve selling/exploiting the financial data of the users.
I believe them that it won’t be readily available :)
That is, I’m sure Facebook will create link all that data together to improve their surveillance but not let others readily access it. Of course advertisers will still access it indirectly by using it to target their ads.
Yeah; it's been a long time since people trusted their pinky-promises. They've broken them over and over.
It was already tried. It was called Bitcoin. It failed spectacularly. At least this looks like it could work.
I trust my government more than I trust these companies so I will keep using fiat, but this may be an option for other people.
We detached this subthread from https://news.ycombinator.com/item?id=20210979 and marked it off-topic.
Could you elaborate on what Bitcoin failed at?
I tried to buy a cup of coffee recently at a bitcoin only cafe. Though I didn’t end up paying with bitcoin because it took a day for the bitcoin atm deposit to clear. So I asked a friend who worked in the building to spot me a cup of coffee, and he paid... by making a line on a piece of paper they used to do bookkeeping denoted in fiat because no-one wanted to go through the hassle of bitcoin transfers and no one had enough trust in the currency to keep prices in bitcoins, so they just tracked the costs in fiat. All of this in a “bitcoin only” cafe.
Bitcoin as a penny-stock investment opportunity still seems successful, but as a viable currency it seems to have failed. And now cue the people saying that bitcoin was never actually intended to be used like a digital coin...
So you have bitcoin, visit bitcoin only cafes, and yet you or the business cant figure out how to pay for a cup of coffee with bitcoin...
It’s hard to tell if this is a joke, trolling, manifestation of dystopia/idiocracy.
All that’s really needed now is an underlying story of how the cafe couldn’t figure out how to accept payment, but due to being “bitcoin only” they received wild media attention and became an influencer, got SV capital investment, pivoted to a freemium model just giving away their bitcoin only coffee for free, gained market share over Starbucks thanks to SV Venture capital subsidizing our coffees and then they go public and the VCs/bitcoin coffee founders make billions unloading onto the public.
I’m so sold I was going to register both bitcoincoffee.com and bitcoincafe.com, looks like some savvy founders already beat me to the punch.
Now that they reincarnated the pets.com business model anything seems possible...
From what I can tell the only way to obtain bitcoin without providing personal information is to find someone on Craigslist willing to transfer you some coin... for a 15% markup.
EDIT: That's the bigger failure
If you think that's bad markup, try money laundering without crypto!
SCNR
The bigger failure here is the law that requires this
You can always mine it.
Yes, Bitcoin is a poor fit for face-to-face transactions, but that doesn't mean it failed.
Replace 'bitcoin' with 'gold bars' in your first paragraph then it'd make more sense for both you and the Gold Bar only cafe, I guess.
Don't forget high transaction costs for BTC.
Currently about 12 cents US.
12 cents is a lot, since it is static regardless of the transaction size. Small transactions at 12 cents fee are ridiculously expensive. You need low fee + 0-conf for small transactions (e.g. BCH). 12 cents is negligible for large transactions, hence why people call it a store of value. And since bitcoin doesn't scale, transaction costs will skyrocket again to crazy transaction fees of 50-100$ easily if it starts being used.
Where are you getting this? Why does bitinfocharts.com show a Median transaction fee of $1.85 ?
It's definitely not $1.85 lol. You can try sending a few sats between your own wallets to test it if you're genuinely curious.
From actual use, buying stuff online. Most recent was a year of vultr.com VPS service.
There is your problem. You are assuming BTC is Bitcoin. The actual Bitcoin, working as intended, is BCH.
I'm curious how people still consider BCH a viable currency after the 51% attack done "in good faith" by a major mining pools BTC.top and BTC.com [1]. What's to stop them from doing it again the next time it's convenient?
[1]: https://twitter.com/TheCryptoconomy/status/11319624478232780...
The "51% attack" was in the financial interest to the miners. An actual attack would not be.
I mean, its Bitcoin, the worst from all the cryptos. In the meantime I am using Ethereum to get electricity to my home (via lition.io), use it to take a collaterized debt position (via MakerDAO) and spending crypto daily in seconds with the Coinbase debit card. Just days ago I paid for my NordVPN directly with Ether, the transaction cleared in under 30 seconds. Bitcoin was the experiment, Ethereum is the working, usable product (which will only get better in the future).
You can use the bitcoin lightning network like this https://www.youtube.com/watch?v=39KpscRXyXY
It doesn't matter what it was intended for, which it very well may have failed at. What matters is the value people see in it now. The claim is it represents digital gold bars.
Bitcoin is more like "gold coin" currency, regarding its volatility at least. Its use cases as everyday currency are more or less limited to illegal drugs.
I wonder if the Bitcoin-only marketing is really helping them get more customers. It seems the opposite.
Are they doing it from a pure ideological perspective?
Your comment does not even deserve thoughtful responses in my opinion. You are clearly uneducated on the subject and it's your responsibility, not ours, to fix that should you choose to.
Conception. It’s pitched as a replacement for government backed, fiat currency. But I’ve never heard or seen a convincing, coherent explanation that makes it clear this is a currency. For one, a currency can’t be reliant on an internet connection for validity. My 1$ bill in my wallet absolutely does not rely on that. In fact, there’s an entire country validating that dollars usefulness. A gold coin essentially answers the usual doubts in fiat currency.
> But I’ve never heard or seen a convincing, coherent explanation that makes it clear this is a currency
Cryptocurrencies is a better type of money for a few reasons:
* More acceptable than other digital money (banks and payment processors might say no)
* More easily divisible than for example gold coins and gold bars
* It's sound money whereas fiat is not (nobody can arbitrarily increase the supply)
* Much more portable. You can send any amount to anyone in the world, as long as they have internet.
To be clear, cryptocurrencies are like cash but in digital form. It's a great medium exchange, but it suffers from low adoption meaning it's a bad store of value (but so is fiat) and a bad unit of account (but so is gold).
> For one, a currency can’t be reliant on an internet connection for validity. My 1$ bill in my wallet absolutely does not rely on that
So you don't consider digital fiat currencies then?
Me not having internet for a period of time doesn't invalidate my cryptocurrency holdings. I just need internet to spend it (a fair constraint for digital money).
> A gold coin essentially answers the usual doubts in fiat currency.
Except for the fact that you can't send gold coins digitally.
Also, it's much more difficult to check for gold coins. And difficult to transport. It's easy with cryptocurrencies.
>It's a great medium exchange, but it suffers from low adoption meaning it's a bad store of value (but so is fiat) and a bad unit of account (but so is gold).
So it unites the drawbacks of both fiat and gold without any of the advantages.
>* It's sound money whereas fiat is not (nobody can arbitrarily increase the supply)
Yeah they can, it's called a hard fork in cryptocurrency.
In fiat it's called "printing play money", but the goal is essentially the same.
>Except for the fact that you can't send gold coins digitally.
Actually you can, though in this case you exchange ownership contracts of the gold, which you can swap for the gold you own at your bank.
Plus I don't need to wait an hour to do that, I can do it even offline if I wish, where all parties can verify the transfer without a computer at all.
>Also, it's much more difficult to check for gold coins. And difficult to transport. It's easy with cryptocurrencies.
Until the tax office knocks at your door and wants to know where all that money went. Then the ease of transport is suddenly a problem.
>It's a great medium exchange,
In my experience, no. It's not a medium of exchange at the moment any more than beer tops and a ballpoint pen are. Bitcoin and Friends are at the moment a speculative asset that people hoard in case it gets more valuable or use as an unregulated stock exchange.
The average customer can't even get refunds if they get scammed, how am I supposed to take it seriously as a digital currency?
> So it unites the drawbacks of both fiat and gold without any of the advantages.
Well, if you conveniently ignore the advantages...
> Yeah they can, it's called a hard fork in cryptocurrency.
That's similar to me printing "Doge dollars" and claiming it increases the supply of US dollar.
> Actually you can, though in this case you exchange ownership contracts of the gold, which you can swap for the gold you own at your bank.
Yes... If we ignore the fact that you're not actually sending gold.
> Until the tax office knocks at your door and wants to know where all that money went. Then the ease of transport is suddenly a problem.
That's not an argument. Taxes are applied in the same way as cash is taxed, with benefit of you having a ledger you can reference.
> It's not a medium of exchange at the moment any more than beer tops and a ballpoint pen are.
Except them being instantly verifiable, have a constrained supply, are easier to transfer, are divisible, are fungible & uniform... Just the properties that money actually needs and make for a good medium of exchange.
> The average customer can't even get refunds if they get scammed, how am I supposed to take it seriously as a digital currency?
I guess the same way you take physical cash seriously?
> Except them being instantly verifiable, have a constrained supply, are easier to transfer, are divisible, are fungible & uniform... Just the properties that money actually needs and make for a good medium of exchange.
Money also needs to have stable value within some margin and small but steady inflation. If the value rises then it is a bad idea to spend it because it becomes an investment. If the value fluctuates nothing can have a nominal price. A MacBook costs $1400, but in a day it could be anything between 0.2 and 1 bitcoin. Like in the cafe story in one of the GP comments, this makes it impossible to use for any transaction.
The only thing preventing me from using bitcoin regularly is the need to account for the capital gains (losses) on every individual transaction relative to USD. One year's worth of itemized accounting for trivial transactions was enough.
Barring that, I'd be actively using BTC (or other cryptocurrencies) in the same mode as many people use Venmo.
Would it not bother you that an object would cost twice as much on one day that on another?
What if it costs twice as less? Think of it as cashing in a small part of some stock/investment to use it to buy something. If you're really that concerned about crypto price changing, you can just top it back up that evening.
That is a good analogy. One would not cash in a part of investment for a banal purchase but might do so when buying a house. In that case I would definitely wait for a right moment to sell.
Back in the early 00's there were companies "egold" and "goldmoney" that did effectively a centralized, infinitely divisible currency denoted in gold and exchangeable for gold.
egold got shut down for facilitating money laundering. I think IIRC goldmoney retired from being a currency and became a non-exchangeable gold vault. Governments really didn't like them.
Can I buy a cup of coffee with bitcoin? See above
Can I pay my rent in bitcoin? No
Can I buy my groceries in bitcoin? No
Can I expect bitcoin to hold any semblance of a stable value, like an actual 1st-world currency or standard, quality investment product no?
So if it's not useful as a currency and not useful as a store of value, what is Bitcoin? I really want to trust in the brave new world, but I just can't.
You can't pay your rent in yen either, but that doesn't make it a failed currency.
I'd be pretty surprised in you could even get that cup of coffee for yen.
But Bitcoin is supposed to be a currency without boarders. If it can't make it in a country with the level of tech-adoption like the USA for the above simple tasks, please help me understand the use case.
Seems you haven't looked up the history of "1st world currencies" and how they don't in fact retain value over time. Even the almighty US dollar has lost 97% of its value over the past century and it's the reserve currency.
Who cares? No one stores their wealth in USD. You simply buy treasury inflation protected bonds. Problem solved. You only keep in USD your working capital.
>nobody can arbitrarily increase the supply
Why is this good? This seems like a missing feature
This isn't about deflationary vs inflationary money, because you can encode any type of currency policy.
Instead it's about no single entity can suddenly decide "let's issue trillions of dollars to repay our debt!", which erodes any savings you have and can in the worst case collapse the economy (see hyperinflation).
What I guess you're after is having the ability to respond to the economic climate by stimulating the economy? Then let me introduce you to the concept of sound money and what Austrian economists have to say about it.[1]
The basic point is it's impossible for a single actor to predict the market behavior, it's why a planned economy doesn't work, because the market consists of actors who only act in their own best interest and don't have perfect knowledge.
[1]: https://mises.org/library/principle-sound-money
Edit: It is indeed possible to change the currency policy... If the community agrees, which is a very tall order.
That decision at the Fed has been historically taken after consultation of (if needed) the entire financial industry and academics and political leaders (to some extent).
Are there any real world success stories of Austrian economics? It's like the libertarian version of communism's "works perfectly in theory".
How do civilians escape a depression with no money in an Austrian economy?
> Are there any real world success stories of Austrian economics? It's like the libertarian version of communism's "works perfectly in theory".
It is exactly that. There is no example of pure austrian economics just as there has never been a 'true' communist state since human nature will never allow the extremes they need to work.
> How do civilians escape a depression with no money in an Austrian economy?
The entire point of 'sound money' is not actually to help the general population survive or prosper, it is specifically to limit the power of government. From the link above "It is impossible to grasp the meaning of the idea of sound money if one does not realize that it was devised as an instrument for the protection of civil liberties against despotic inroads on the part of governments."
Of course you might have a depression, but that should be cleared up quickly since the free market allows the fit businesses to buy up weak competitors (since there is no anti-trust in austrian land). If you are unemployed during this time you can always find some labor job to do so will never be truly unemployed (since there is no minimum wage or restrictions to work).
> The entire point of 'sound money' is not actually to help the general population survive or prosper, it is specifically to limit the power of government
Isn't the point of limiting the power of government to actually help the general population to survive and prosper though?
> Isn't the point of limiting the power of government to actually help the general population to survive and prosper though?
It might be a lovely side benefit, but no, I don't think it is the point or outright goal in austrian economics and libertarianism. The freedom itself is the goal, which does carry the potential to succeed and prosper but also the potential of complete and utter failure and misery with it. You are allowed to be a failure completely if you so choose here. I might be wrong on the philosophy here though as I have only really skimmed the surface of mises, hayek, rothbard, etc, but that is my understanding.
>More acceptable than other digital money (banks and payment processors might say no) >More easily divisible than for example gold coins and gold bars
These are true.
>It's sound money whereas fiat is not (nobody can arbitrarily increase the supply)
You'll have to explain why the inability to increase the money supply is a benefit? Sure, money printing can be abused, but a growing money supply is also beneficial in a growing economy (output + population). Second, how do the current holders selling the currency to people without any Bitcoin not count as "increasing supply". If they don't sell, supply is zero, after all. What is the value of Bitcoin as a currency in that case? Nothing.
>Much more portable. You can send any amount to anyone in the world, as long as they have internet.
That provisio at the end is a big one, considering internet is susceptible to going down via both natural disasters and government whims.
Here’s an interesting discussion of why a fixed currency supply hinders the market from clearing (and other ailments)
https://economics.stackexchange.com/questions/166/from-an-ec...
You also can’t spend your bitcoins while you’re offline.
Bitcoin uses a fixed currency supply, but it's not inherent to all cryptocurrencies.
> You also can’t spend your bitcoins while you’re offline.
Is that supposed to invalidate my points? Especially since I placed emphasis on them being a digital currency and I even said so in my comment?
>Could you elaborate on what Bitcoin failed at?
I wouldn't say it's failed, but I don't see it succeeding, either. Is Bitcoin more or less mainstream than it was 2 years ago? Are transactions faster? Is it used at more retailers?
I don't see any of that. It seems like it's only a tool for speculation.
Everything, pretty much.
On being a currency, since its price fluctuates too much to be taken seriously, so it's used as an investment instead.
Of all the bizarre phenomenons in the world, I think the Bitcoin-as-an-investment takes the cake.
People spend a ton of energy (that could otherwise to actual useful things) on shifting around bits that they then claim are very valuable.
You could make a similar claim about fiat money except that actually makes commerce easier. Bitcoin is not a good way to transfer value since like you said it's too volatile for a currency.
So it's built on nothing, it does nothing and underpins nothing, it wastes huge amounts of otherwise useful energy and that makes it a good investment?
Maybe I'm just too dumb to see the genius of it.
You know, I too really dislike the investment focus of most people. If it's not usable, it's just a bigger-fools-game. And price volatility is a definite concern.
Yet many do use it as a currency, volatility isn't a showstopper. Just look at the use in darknet markets, most serious VPNs and VPS services offer it and you can buy all sorts of stuff on for example Webhallen or Inet (two of the biggest Swedish online computer stores).
> So it's built on nothing, it does nothing and underpins nothing
And this is wrong. It's secured by cryptography and game theory.
The big thing it does is fairly simple: It enables digital payments without a trusted third party. It's relevant for businesses who cannot accept credit cards and there are thousands of stories where startups gets their accounts frozen, for arbitrary reasons, which may tank their business.
I wrote about this and more here: https://whycryptocurrencies.com/
> it wastes huge amounts of otherwise useful energy
Actually most of the energy comes from renewable sources, which would be wasted otherwise. The Bitcoin mining industry is so competitive, it wouldn't be profitable otherwise.
I don't want to wave away the concerns as nothing, because it is a valid concern, but there are tons of other things we waste much more energy on.
I guess you are right that it's useful for black-market commerce and I suspect that's probably the only reason it has value.
Regarding this:
>Actually most of the energy comes from renewable sources, which would be wasted otherwise. The Bitcoin mining industry is so competitive, it wouldn't be profitable otherwise.
Geothermal energy isn't renewable unless it's used sparingly. Hydro-power requires huge sacrifices of land, usually fertile valleys, in the reservoir lakes. Windmills are loud, huge and ugly. Power lines require sacrifices of land. And everything needs to be produced, with the environmental impact that brings.
I'm not saying renewables are bad, they're not, but they are not so pristine that using them for bitcoins isn't a sad thing.
> it's useful for black-market commerce
It's not only black-market commerce though. Porn, legal marijuana, gambling, auctions are for example considered off limits by most payment processors and in some cases even banks. PayPal even froze Minecraft's account (but it was quickly reinstated due to it's popularity, many others have not been so lucky).
Excellent point about renewable energy.
Yeah, but no one is flooding valleys to power mining operations. They use already existing hydro power plants like those China built in the middle of nowhere and didn't have use for because of poor planning. You can also turn on the miners only for periods of lower demand (e.g. at night).
I'm not saying renewables are bad, they're not
And they can be used for more sensible things than mining crypto.
But that's an argument, which never can be won in discussions with crypto enthusiasts.
An enthusiasm, which, to me, has almost cultish qualities.
Actually most of the energy comes from renewable sources, which would be wasted otherwise.
That argument is just silly. I don't think that miners give a flying fuck where the energy is coming from as long as it's cheap.
His point is some of the cheapest energy in the world is renewable (like hydroelectric energy in China), which is what Bitcoin is using. Bitcoin mining can take place virtually anywhere in the world so it can be done where energy is already abundant.
Value and it's underpinnings act in very bizzare ways, and people might assign value to something just because other people do as well. Regarding Bitcoin, one of the reasons people assign value to it is because it offeres a way to keep track of value in a way that is almost impossible to manipulate. Cyclical reasoning right there. That property is not unlike gold, but besides gold also offeres some extra advantages (and disadvantages) like being able to transfer it across the world in 10 minutes or pass it across borders without any hassle.
Except cryptocurrency has been exploited to invalidate it’s recorded value.
Indeed they have. They are far from perfect. But the top few cryptocurrencies have a decent track record.
People spend a ton of energy, that could otherwise have been put to better use, to extracting small fragments of yellowish metal from beneath the ground, cleaning it up only to put it in another cave behind bars and locks. Then they go around loudly proclaiming how valuable it is.
A lot of work was spent moving it only to never use it. Value is a strange thing, I guess. One would think they could skip that massively expensive and somewhat dangerous unnecessary part and just count large numbers instead, or something.
That's a valid point, but the removal of the physical step only serves to make the whole process even more absurd.
With gold bars at the very least you have in your hands a concentrated lump of actual material that will survive a power outage or a lost password or something.
But of course that whole process is as absurd as you point out today because gold holds residual value from when it actually was a convenient universally recognized store of value.
> So it's built on nothing, it does nothing and underpins nothing, it wastes huge amounts of otherwise useful energy and that makes it a good investment?
Just an armchair hypothesis, but perhaps given it's lack of underlying utility (vs gold for example) Bitcoins "value" is mostly just a measurement of the level of distrust in fiat currencies and the institutions and governments that back them.
There are a subset of people who by nature will never trust fiat currencies, or govts and institutions that back them, and the "floor" of Bitcoin is defined by their participation, as well as those with a vested interest (i.e. a large early stake) in Bitcoin. As the distrusting population expands and contracts, Bitcoin will vary in value.
I do wonder whether rising energy costs will take a bite out of the value proposition for it, though.
The carbon price of cryptocurrency damns it enough. If it weren’t for the lucky happenstance of fossil fuels we probably wouldn’t have had the energy Infrastructure around to develop computers to crunch numbers for this sort of moonshot.
Maybe I'm just too dumb to see the genius of it.
You're very welcome to add me to the dumb club too.
In addition I'm a smidgeon confused about how the bitcoin exchange rate is determined. It seems to be whatever exchanges say it is. There must be some metrics to determine that, but overall the market seems so illiquid and some of those exchanges seem a bit like easily hacked two bit shysters with some PHP scripts and a snazzy whitepaper.
But again, that's maybe just us in the dumb club.
I suspect that volatility may be a feature to money launders - not as ransomware transmissions or anything like that but justifying balance transfers. Not saying that was even an intention as opposed to ideology but to paraphrase cyberpunk the street finds its own uses. The fact there are innocent users is what makes the conspiratorial useful.
This is all read and theoretical - I certainly don't have any practical experience with either combatting or committing money laundering.
Anyway fine art and wines are infamous as pretextual transfer vehicles because the values are often so subjective - bitcoin swinginess serves the same purpose, especially if the hypothetical enterprises control enough to manipulate the market. Big assumptions of course that such a thing exists but it highlights who it could be useful to (intelligence agencies and organized crime - which are arguably largely the same thing to the host country - both break the law in pursuit of their agenda).
Anyway that form of laundering involves buy something at a lower/normal price and selling high. The selling high can be from having a contact buy it for higher with your dirty money. Of course open sales would be preferrable - not only because deals only between connections are obvious but some bonus profit. If someone not involved outbids or provides enough of a margin to be worth backing off all the better - you can move the dirty money another day.
If one needs to funnel clean into dirty do it in reverse order essentially.
It's based on what people are willing to buy or sell it at. Like anything else...
Obviously, I'm not disagreeing per se.
What I'm arguing, though, is that the market making "algorithm" is highly intransparent.
The market making algorithm for Bitcoin is: the highest bid and the lowest ask.
Personally I have more trust into established banks as market makers than into unregulated crypto exchanges, when it comes to market making.
But we probably have to agree to disagree here.
The exchanges aren't market makers, they're exchanges. Totally separate concept. The NYSE isn't a market maker for stocks, for example.
Your confusion seems to be that the exchanges are coming up with the prices, which is not at all how it works. Again, the price is set exactly the same way as it is on the NYSE, by matching bids and asks.
You can just go to any online exchange and check the order books and history. How much more transparent can it be?
Bitcoin's price is governed only by market forces. There's no single algorithm setup by an exchange to determine it.
Most countries currencies are floating(fluctuate). People do use fiat for making money, it's called Forex trading.
"Could you elaborate on what Bitcoin failed at?"
BTC failed to be a currency that could be used for practical purposes. There's really nowhere to spend BTC today that matters.
If Amazon, Costco and AirBnB etc. allowed BTC, well, others might join, and we'd possibly see real circulation. For whatever reason, it was never meant to be.
The government is heavily lobbied by these companies, so essentially the government is mostly just these companies.
I said "my government", which for obvious reasons doesn't have to be the one the US has
I didn't specify a government. The same holds true for most western countries. We have fairly global neoliberalism.
Honest question: what will be the incentive for consumers to use Libra over existing solutions like PayPal, Apple Pay, Venmo etc?
1) easier p2p transfer built into apps they have already installed on their devices
2) international transfers are instant and low-cost
3) applepay, venmo and paypal are made for the developed markets. this one targets similar markets where Vodafone has its m-peso
Ease of use will be the first hook: FB will likely leverage their install base across insta, FB, WhatsApp, messenger, etc to just upsell this constantly. Lowering the barrier to send to drive adoption.
Lower transaction fees and your friend likely has an account (or it is very easy to sign up FB user with Libra). As long as Libra is cheaper compared to existing method of transferring funds, it'll be a success. Say it costs me $8 to send money to South Africa. If Libra is free or costs $0.01, then of course I'd use Libra.
The biggest is the likelihood that they, and their networks, are already using Facebook. And they're far more likely using Facebook than any of the other services you mentioned.
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I will be following with curiosity. Some times ago I would have been much more inclined to trust FB creating this system. But not now. Hopeful for those that don’t have access to traditional banking and financial systems! I can read the news without FB, with https://inechain.com and other news aggregators. I use FB is because have friends - only way I can connect with.
I think a lot of people are missing the point:
All they need to do is to have 1%+ cheaper fee than cards.
And no matter people's ideals, all businesses will add it.
I wish reporters would stop using "cryptocurrency" and "Facebook" in the same sentence.
This era is called as Blockchain era.
I sincerely doubt David Wong will offer any rebuttals to your very valid points.
Publishing someone's name in a thread as a weapon in an argument is a personal attack and the sort of thing we ban accounts for. Please don't do that again.
We detached this comment from https://news.ycombinator.com/item?id=20213673 and marked it off-topic.
With Visa, Mastercard, Paypal, Stripe, Facebook already censoring conservatives I can't wait for them to build an "inclusive" currency.
Why would anyone question the reason these corporations just threw 10 mil at this, it's clearly to help people in poor countries who have no access to banking and rely on payday loans.
This isn’t true and injecting grievance politics into an unrelated conversation is not going to result in anything positive.
or, it might actually be true - you're just stuck in the mainstream media bubble.
One is stuck in an 'information bubble' or an 'echo-chamber' when one gets most or all of ones news from a relatively small, homogeneous group that's rather fixated on specific issues.
Anything that can be called mainstream media is (as a whole) none of those things.
Besides that, the term Mainstream Media is now so politicized that it's almost unusable in conversation.
If people continue to call racists, anti-semites, and neo-Nazis “conservatives”, at some point people will believe it.
For free!
Edit: Due to censorship I request you to remove this account since you've not constructed a way to do it ourselves.
http://remove.org/removal-requested
Could you please not post unsubstantive comments to HN? We're trying for a more thoughtful sort of discussion here.
If you'd read https://news.ycombinator.com/newsguidelines.html and post in the intended spirit of the site, we'd be grateful. I noticed a thread from a few days ago where this account got involved in a religious flamewar. That's just what we don't want on HN.
You might also find these links helpful for getting the spirit of this site:
https://news.ycombinator.com/newswelcome.html
https://news.ycombinator.com/hackernews.html
http://www.paulgraham.com/trolls.html
http://www.paulgraham.com/hackernews.html
We detached this comment from https://news.ycombinator.com/item?id=20216561.
Due to censorship I request you to remove this account since you've not constructed a way to do it ourselves.
http://remove.org/removal-requested
Hmm, should I use United States Dollars? OR Facebook United States Dollars?
I'm going with G.) Other.
Hording cash is a terrible investment idea.
EDIT: Hording and Investing typically means to generate future value. Daily spending money can be done in cash. I would hope I didn't need to explicitly say this, but hey, economics is hard.
That’s why I personally don’t use money at all and do all my daily shopping by negotiating bond trades with the cashiers
Trading cattle is my way to go but I have to say that I'm getting sick of all the chickens I get back as change.
Facebook has finally revealed the details of its cryptocurrency, Libra, which will let you buy things or send money to people with nearly zero fees. Here is more information: https://techcrunch.com/2019/06/18/facebook-libra/
A global currency uncontrolled by any government guards against capital flight. Let's say you want to give healthcare to your population, capital can say no and move their assets into an untouchable currency.
All hail our new feudal lords.
Buy buy buy! The secret to crypto is to buy high, sell higher! Upwards to Zucktopia!
Wait, wait, wait...so...
if "Satoshi Nakamoto" == "Mark Zuckerberg":
else jkWestern Union transfer costs 35 dollars to Argentina. Libra may be cheaper.
Money transfers if international are prohibitively expensive. Lets see how this thingie works.
>1000 tx/s
Nice try Zuc. But BSV can do 10k tx/s already AND it supports tokens as well
It’s really not about the technicals but that they will handle billions of wallets
Satoshi wanted a world without banks and centralisation. Now his tech is used for the exact opposite.
Just like the Internet that was diverted by big corporations. Let's not make the same mistake gain.
Since this is a thread presumably filled with cryptocurrency experts, here's my own personal captcha:
What is Chaumian cash?
And here's my own personal re-captcha:
Why hasn't some small country somewhere issued their own Chaumian cash to attract... anything? Seems like there would be quite a lot of ways to implement and configure such a system. And it wouldn't take that big of a reserve to help fuel, say, a burgeoning blog micropayment system to the tune of what a Patreon or whatever currently offers.
There's plenty of small countries which offer all kinds of dastardly financial instruments to rich people, so I don't see "it would fuel money laundering" as an explanation for the complete lack of Chaumian cash in our universe.
Edit: clarification