Facebook reveals its cryptocurrency Libra
decrypt.co
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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.
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...
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.
[1]:https://www.google.com/search?q=Zuckerberg+hug+modi&prmd=niv...
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.
It's not about censorship, it's about taxation.
zuckcoin isn't cryptocurrency, it's digital currency, like gold in WoW
Anything which is not official digital currency will be liable for action.
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.
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.
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
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.
Please appropriate your logic on that.
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.
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 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?
If following the principles leads to a degradation of the rule of law what would you do?
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.
Indeed, this is currently done. For example:
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...
Or if they had been owned by Disney for that matter...
It's been around for a long time.
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.
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.
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.
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.
The world reminds me more and more like the world in the book(s) of shadowrun, minus the magic stuff..really facinating...
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.
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.
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.
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.
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.)
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.
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.
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.
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.
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.
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.
The line no one can disagree with.
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.
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.
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.
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...?"
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.
- 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.
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.
> 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.
I imagine Libra won't take Sundays off, at least.
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.
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.
FWIW, the EUR/JPY and USD/JPY pairs are historically highly correlated.
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.
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-$.05.
The Mastarcard fees appear to be 0.2%-1.65% as per https://www.mastercard.co.uk/en-gb/about-mastercard/what-we-...
In the UK right now I can send money to your account nearly instantly, and for free. I wouldn't want to purchase anything like that though, I'd want to use some kind of card, why would Libra be any different?
In Denmark we solved this the lowtech way. Visa cards have to be Dual visa/dancard, where the dancard has extremely low cut limited by law(0,055$/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.
If there was political will, there is nothing stopping governments from capping the fees taken by Visa/MC.
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.
You can't guarantee or even approximate a given input and output for a scenario like this.
But we also don't need to specify initial conditions exactly to do science.
I'm less convinced that the equations themselves are unknowable.
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.
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.
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 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.
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.
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.
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.
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...
EMV is a thing, you know. And cards don't run out of battery or get smashed like phones.
Even as a tech guy, no thanks. Phones are mostly ok but still fuck up too frequently to trust them with anything serious.
For small, everyday transactions this may be true but mainstream banks are much better for all the other stuff.
Serious banks have been doing that for literally hundreds of years.
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.
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?
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]
That's very subjective.
I've had many many banks accross the world. Monzo is what everyone wished for.
I only ever use debit to pay off the balances of credit cards and to withdraw cash.
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?
Why/how is that a bad thing?
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)
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-...
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.
It doesn't include the fees which go to MasterCard, nor does it include the fees paid by the merchant to their merchant bank.
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 fees are basically just the price you pay for having drugs delivered to your house.
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".
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.
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.
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
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.
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.
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.
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.
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 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?
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?
and how exactly does having a stablecoin backed by facebook and a consortium of other vc/bank funded corporations achieve this?
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.
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?
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?
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
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.
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.
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...
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.
> 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.
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.
If it is owned, it not independent.
Is HN really more anti-Facebook than the general population? If so, why?
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 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.
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. 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.
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.
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.
Zuckbucks provide a centralised service running on decentralised infrastructure. Try add your own server to help run Zuck's blockchain...
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.
I don't agree with grandparent for what it's worth, just thought this might work as a reply to your question.
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.
By extension, I hope the effort to impose a global governmental currency fails.
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.
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.
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.
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 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.
"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.
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)
https://news.earn.com/quantifying-decentralization-e39db233c...
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.
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).
Yes, most other cryptocurrencies provide the same thing. But Bitcoin provided it first.
[0] https://brd.com/
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.
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.
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.
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.
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).
LIBOR was "decentralized". Then we found out that they were all colluding together.
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.
A system can be decentralised and permissioned at the same time.
Need to ask an authority for permission to do something within the system? Not decentralized.
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.
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.
JPM is for internal use. ZuckBucks I can transfer from my anon address to your address by signing with my private key.
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.
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.
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.
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.
[1] anti-money-laundering
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.
It is bad that there are private companies, that allow me to engage in free speech, anonymously, without the government knowning my every move?
> 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 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.
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.
The inability to do this stuff in "secret" part is still useful.
https://insidebitcoins.com/news/not-so-decentralized-ripple-...
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.
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.
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.
This is what bitcoin does that none of these giftcard systems do.
It’s a shadow bank. Hedge funds did it in 2007. Facebook is doing it in 2019. Same schtick, new faces.
that's a shadow /s
Facebook's product is you.
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.
But if that separate database is a distributed blockchain based database suddenly they are allowed to do this...
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.
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.
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.
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.
WhatsApp showed that eventually, the data is likely to be merged.
Keyword is want. They don't want the data to be commingled, but alas, it will.
"Want" can change with one board meeting. And if they start "wanting" it in 3 years, is there a guarantee it won't happen?
What am I missing?
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.
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.
is FB Inc separated from photo metadata that way ?
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!
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.)
New avenues for monetization!
This is just the first page of whats going to be a very interesting story.
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.
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?
> "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.
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.
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.
Also, you may say this "worked" in the US, but other countries didn't get quite so lucky playing that game.
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.
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.
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.
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.
This is so ridiculous that I don't even know how to argue with it.
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.
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.
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.
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.
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.
I am with parent on this one.
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?
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.
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.
How so? I don't think they have access to your digital wallet, unlike a bank.
This is incorrect. 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-...
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.
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"
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.
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.
Details on the Move programming language [PDF]: https://developers.libra.org/docs/assets/papers/libra-move-a...
https://www.coindesk.com/halt-libra-us-lawmakers-call-for-he...
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.
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.
No idea how new companies are supposed to rise with these players securing their monopoly like this.
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 may as well cut out the middleman, save time and punch myself in the face.
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?
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.
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.
I do understand your concern. Dialog is critical. But dialog only seems worthwhile if it is honest and open.
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 :)
Sorry, what? What gives a random person a reason to think you're someone who will "influence them in the right direction"?
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!
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.
I'm sure most Facebook employees have a similar opinion on their jobs.
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?
Well, you're wrong. You believe this because you're getting paid a lot of money to.
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!
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.
Everybody does so. https://www.youtube.com/watch?v=XxUgei-WKfY
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,
Apparently you're not embarrassed...
"We try to stay away from such pesky questions but are convinced that the amount of good that Facebook can do is unlimited"
Yeaah.
Please don't do this again so we don't have to ban you!
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.
BTW I'm a huge fan of Algorand as well. You guys are doing really good work.
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.
IMO there weren't much legit solutions before Algorand. We are all very interested to see your progress.
The concept of nationalized central banks is new.
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.
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.
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 :).
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...
> [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.
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.
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.
https://youtu.be/HnXKE0nfAjI?t=41
But seriously, an even more direct connection between ads and what you buy.
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.
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).
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.
Less possibility for fraud via identity-stealing. Merchants will not need to see/store your private keys anymore to receive payments.
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.
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.
What is your basis for this? It implies that the fairly detailed whitepapers describing the blockchain are an elaborate hoax, which seems unlikely.
</sarc>
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.
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
I agree about classical closed financial services like visa and mastercard being financial dictatorships. That is why their involvement doesn't really build trust.
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.
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.
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.
Sixteen Tons is applicable.
You are on the right path, don't stop there :-)
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.
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?
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.
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.
The one that uses a coin backed with violence is the State. How can you even begin to compare that?
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.
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.
Many mining pools have models extremely similar to Uber's business model. Others (including one of the major players) are completely private.
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.
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).
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.
Nor is susceptibility to a 51% attack relevant to that point.
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.
You won't even need to vote, they will already know how you feel about the candidates.
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.
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.
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.
Bitcoin: $0.30 per transaction
XRP: $0.43 per 100,000 transactions
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.
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...
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.
That being said, yeah, wild claims can and probably will be made by various entities.
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.
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.
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.
Keeping data separate is not interesting wording by itself, imo.
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.
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-...
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.
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'd be shocked if Facebook weren't planning the same thing.
He lied. Again and again and again.
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...
In separate sql-like tables with a key to join on.
I'm pretty sure that this type of data collection tool is in use today by the Chinese government.
Good thing they dont share the actual data and only share hashes ;)
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?
Given that both VISA and Mastercard are on board, I assume that you might not have a choice in the long run.
Credit cards already have similar data, no?
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
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.
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.
Big Brother is here and has matured into Big Daddy ;)
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.
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).
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?
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.
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.
The one thing the EU understands is how to add more rules! Forget trying to get them to fix an existing one.
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.
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.
I'm not sure you need "for free" in this sentence.
So they don’t get exclusive data. That’s an odd statement, it just means that data can be sold to others as well.
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.
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?
Nice try, Mark!
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.
How will they kick out the existing validators?
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.
And this is creepy thing here.
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.
Facebook launches Silicon Valley Bank and... people argue about the most minor technical details.
Fin system panicking? hah - Visa backs this. And no downside for FB if this fails (other than opportunity cost).
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?
If the regulatory agencies aren't captured, we should expect crypto (at least stablecoins) to get some regulation soon.
And if you swap Facebook with the Federal Reserve, the above is already currently true!
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].
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.
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.
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'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.
I'm all for it!
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?
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.
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.
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.
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.
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.
This is a nice summary if you are interested: https://www.europeanpaymentscouncil.eu/news-insights/insight...
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...
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.
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.
[1] https://usa.visa.com/run-your-business/small-business-tools/...
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.
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?
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.
https://www.theverge.com/2018/8/30/17801880/google-mastercar...
If they become a bank I certainly would not put my money in there.
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.
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.
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.
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.)
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.
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".
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.
That will change now that major corporations have vested interests in changing the opinion of the public on cryptocurrencies.
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.
[0]: https://scontent.fvno2-1.fna.fbcdn.net/v/t39.2365-6/65035641...
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.
Does US law not apply to Libra?
Can Facebook still be associated with it then?
[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?]
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.
> "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...
If somebody writes an open-source wallet they can circumvent the rules?
I don't get it.
[1] https://www.seattletimes.com/business/tech-giant-brings-soft...
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.
Don't like it don't use it. Try saying the same to the governments come tax-time.
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.
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.
OK, that was a good one. Literally cut through my anger and indignation and made me laugh out loud.
Respect man.
This is a tired, old, fallacious comparison.
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.
Facebook is us: 2.4B users willingly give Zuck the power to make potentially high impact decisions like this.
"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"
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.
- 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.
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 :)
===
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.
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.
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.
I'm mature enough not to smack them, but not mature enough that I don't fantasize about it.
Unless they think having Cloud services being offered by a couple of giant companies rather than one is considered "decentralized".
If you let your Ops people go then you lose a lot of competencies.
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.
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
>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.
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.
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?
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.
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%)?
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.
"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!"
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.
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.
https://medium.com/@tejas_rd/why-facebooks-libra-could-be-a-...
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.
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
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.
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.
What do they plan on doing with 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.)
This shouldn't be allowed to exist.
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]
We here at Facebook hope that answers your question.
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.
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.
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).
How would they afford to buy the cryptocurrency from the shell company in the first place?
Save yourself, Visa! Don't do this!
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."
Are you serious? Are you comparing facebook credits 2.0 with The Fed?
"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.
If Libra is decentralized, then so is the Fed because it's distributed across 12 regional banks.
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?
People are going to read history books about this era and shake their heads in pure disbelief.
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.
Finding out people use a proprietary chat app as a primary payment mechanism is indeed terrifying. Now on to a proprietary currency!
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.
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_...
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.
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.
Now that I think about it, it's a genuinely interesting question: what could possibly go wrong?
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.
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.
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?
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.
Has Facebook reduced the number of players involved in mining? Are they using some other proof system?
This is the actual tech paper, it uses proof of stake (not proof of work per your concern)
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?
https://developers.libra.org/docs/assets/papers/libra-consen...
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?
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.
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.
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.
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.
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.
Any changes start from one person trying to do so. I'm arguing that’s the lens you should have in mind.
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.
Which is frightening.
It's 2019 and micropayment is still an unsolved problem.
Command line demo/testnet. yea everyone can use it /s
Not to mention making transactions harder and not easier.
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.
Is it: - Open - Publicly verifiable - Neutral - Borderless - Censorship-Resistant. - Immutable - Permissionless
In case of Libra answer to all is No
Having some sort of electronic payment system that worked for her would be amazing.
See China or plenty of other countries where people send money to each other via mobile.
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"?
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.
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.
"Give us your money, you can trust us". Hm...
Can someone explain to me how I would get Libra?
Does that mean that it is not really designed to be "invested in" the way people invest in bitcoin and others?
(is-coincidence? (= (alpha->num-sum "Libra")
42
answers/life
answers/universe
answers/everything))I find it amusing that the big selling point behind the initial round of cryptocurrency was its lack of regulation.
its lack of regulation.
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.
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?
How could become a partner?
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.
Oh well.
What could possibly go wrong?
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).
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.
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.
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.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.
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.
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.
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.
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 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.
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.
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?
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".
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.
https://devblogs.microsoft.com/oldnewthing/20051014-20/?p=33...
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)
If regular people can just have a safe place to keep their money, without being actively exploited, that would be a huge improvement.
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...
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.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.
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.
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"?
https://www.seattletimes.com/business/chase-reaches-settleme...
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".
https://www.economicclub.org/sites/default/files/MoynihanExc...
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.
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.
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?
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.
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.
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.
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...
That's how decision making power should reign.
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.
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.
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.
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.
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?
That's fine, assuming "everybody" is not the target audience.
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.
Edit - It's actually Principle 4.1
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.
And it’s one of the best things that ever happened in human history.
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.
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?
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.
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.
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.
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.
This is not to say that I condone corporate assassination, just to say that your appeal to the majority is woefully inaccurate.
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
How do I keep it from Facebook if my colleague uses WhatsApp, by simply opting out from using Facebook myself?
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?
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.
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.
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?
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
> 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.
Isn’t there a risk of this turning into a social credit system?
Is this a euphemism for 'stuffing the ballot box with nonprofits your wife and friends and are on'?
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.
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 trust my government more than I trust these companies so I will keep using fiat, but this may be an option for other people.
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.
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.
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).
Excellent point about renewable energy.
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.
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.
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.
What I'm arguing, though, is that the market making "algorithm" is highly intransparent.
But we probably have to agree to disagree here.
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.
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.
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.
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.
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.
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.
https://economics.stackexchange.com/questions/166/from-an-ec...
You also can’t spend your bitcoins while you’re offline.
> 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?
Why is this good? This seems like a missing feature
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.
How do civilians escape a depression with no money in an Austrian economy?
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).
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.
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?
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?
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.
Barring that, I'd be actively using BTC (or other cryptocurrencies) in the same mode as many people use Venmo.
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.
I'd be pretty surprised in you could even get that cup of coffee for yen.
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.
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.
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...
[1]: https://twitter.com/TheCryptoconomy/status/11319624478232780...
EDIT: That's the bigger failure
SCNR
Are they doing it from a pure ideological perspective?
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.
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.
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.
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
All they need to do is to have 1%+ cheaper fee than cards.
And no matter people's ideals, all businesses will add it.
We detached this comment from https://news.ycombinator.com/item?id=20213673 and marked it off-topic.
Edit: Due to censorship I request you to remove this account since you've not constructed a way to do it ourselves.
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.
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.
if "Satoshi Nakamoto" == "Mark Zuckerberg":
print("Whoa, mind blown!")
print("Carry on. Nothing to see here.")
Nice try Zuc. But BSV can do 10k tx/s already AND it supports tokens as well
Just like the Internet that was diverted by big corporations. Let's not make the same mistake gain.
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