Comment by jasode | Hacker News Reader

Comment by jasode | Hacker News Reader

>Libra’s mission is to enable a simple global currency and financial infrastructure [...] This document outlines our plans for a new decentralized blockchain,

The "decentralized" can be parsed different ways. Facebook Libra is decentralizing the transactions but it does not decentralize the currency creation. (This partial decentralization happens because Facebook wants to peg Libra to stable asset reserves.) This is different from Bitcoin's idea of decentralizing both the currency creation _and_ the financial transactions.

We can see this distinction in its list of partners...

> Members of the Libra Association will consist of [...]

The bulleted list includes:

- transaction processors such as Mastercard/Visa, PayPal, Stripe, etc

- ecommerce marketplaces such as ebay, Uber, etc

- telecomm such as Vodafone

We see the industry that's noticeably missing: no banks mentioned such as JP Morgan Chase, Citi, HSBC, etc

That's because Facebook wants to be the "bank" in this new Libra economy. It wants to be the "Federal Reserve" that creates bank notes.

If I misunderstand Facebook's intentions and how it wants to position Libra in the financial world, please correct me.

> This is different from Bitcoin's idea of decentralizing

Libra is Facebook Credits [1] rebooted. All that changed is the meme it’s attaching to, “cryptocurrency” being better at suspending consumers’ scepticism.

[1] https://en.m.wikipedia.org/wiki/Facebook_Credits

>Libra is Facebook Credits [1] rebooted. All that changed is the meme it’s attaching to, “cryptocurrency”

My posting history will show I'm skeptical of Facebook but setting my biases aside, I think there's still a real technical difference here.

I believe the old Facebook Credits required the transactions to go through Facebook's centralized servers. (The programming api for processing Facebook Credits communicated with Facebook's servers.) This would be similar to a customer holding Marriott Hotel points and she wants to give them to a friend; she would have to call up Marriott customer service and have them transfer the credits/points from her account to someone else's. The transactions can't happen without Facebook and Marriott getting involved. That's fundamentally different from Libra since its transactions are validated by external partner nodes.

Therefore, the Libra isn't a cryptocurrency in just a "meme" bandwagon sense; it's actually designed for decentralized transactions that don't require centralized Facebook servers.

Whether the public (and merchants accepting payments) finds that technical difference of any value and massively adopts it, I don't know.

> different from Libra since its transactions are validated by external partner nodes

“Facebook is expected to maintain a leadership role [in the Association] through 2019.” The Association (“an independent, not-for-profit membership organization, headquartered in Geneva, Switzerland”) holds title to the reserves, has a monopoly on coin minting and destruction, and has sole determination over new Association members (who each get one vote).

It’s Facebook Credits with co-branding.

Speaking of that branding, it was pointed out in a different thread somewhere that FB/Zuckerberg have opted to name this currency "Libra," which is quite the coincidence given that the Winklevoss twins' Bitcoin exchange is named Gemini (and touts "regulated" as its value prop no less - what a circus the crypto world is).

>Initially, the association (and validators) will consist of a geographically distributed and diverse set of Founding Members. These members are organizations chosen according to objective participation criteria, including that they have a stake in bootstrapping the Libra ecosystem and investing resources toward its success. Over time, membership eligibility will shift to become completely open and based only on the member’s holdings of Libra.

So it's not going to be Facebook's centralized servers, but Facebook + their friend's centralized servers. There are some vague promises, but this will start out just as centralized as Facebook Credits.

It's secured via BFT PoS, which means if more than 1/3 of the validators are malicious, then the network halts until there's a supermajority (2/3). With BFT PoS blocks have finality, which means you need a supermajority of the validator set to "fork" the chain and rewrite the history.

It does seem life is imitating art here [1]

[1] https://www.e-coin.com/

[2] https://mrrobot.fandom.com/wiki/E_Corp

"Can't wait for a cryptocurrency with the ethics of Uber, the censorship resistance of Paypal, and the decentralization of Visa, all tied together with the proven privacy of Facebook."

https://twitter.com/SarahJamieLewis/status/11394299139229573...

so that we aren't cherry picking here, from the White paper:

> To ensure that Libra is truly open and always operates in the best interest of its users, our ambition is for the Libra network to become permissionless. 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. One of the association’s directives will be to work with the community to research and implement this transition, which will begin within five years of the public launch of the Libra Blockchain and ecosystem.

> Libra is Facebook Credits [1] rebooted.

Absolutely not. As someone heavily involved in social gaming and related payment solutions at the time, Facebook Credits were only intended for one-way transactions, from users to game publishers, with Facebook getting a 30% cut. You weren't able to transfer these credits to other users, so it was never any form of real currency.

>We see the industry that's noticeably missing: no banks mentioned such as JP Morgan Chase, Citi, HSBC, etc

As far as I know, they're missing because they refused to be part of the association:

>Originally the company had ambitions to get Wall Street involved, but found a lack of interest among institutional giants like Goldman Sachs and JPMorgan. It is still looking to have 100 members in the governing association, the person said.

https://www.theblockcrypto.com/2019/06/14/facebooks-cryptocu...

Sounds about as decentralised as my private collection of cloud servers I get to make all the decisions on. Decentralised is supposed to mean individuals are both the caretakers and the users.

There are lots of decentralized processes unfolding in your body that you have no control over.

I would also like to add that FB is going to tie wallets to accounts so FB will know information about every transation. "Pseudonymous" wallets aren't going to be anonymous to Facebook.

Their "customer commitment" document claims otherwise https://scontent-frt3-2.xx.fbcdn.net/v/t39.2365-6/65083631_3...

I think the devil is in the details. The claim `Calibra will not share account information or financial data with Facebook, Inc. or any third party` is followed by `without customer consent.`. From reading through the document you linked, the infrastructure will definitely be there to support the sharing of any and all data. Considering Facebook's history with getting "consent", I am willing to bet that they will take every chance they can get to manipulate users into giving such "consent".

"We will implement cold wallets and multisig wallets that allow Libra users and association members to add extra security for their Libra coin and Libra Investment Token holdings."

security != privacy

“When Facebook notified the acquisition of WhatsApp in 2014, it informed the Commission that it would be unable to establish reliable automated matching between Facebook users' accounts and WhatsApp users' accounts. It stated this both in the notification form and in a reply to a request of information from the Commission. However, in August 2016, WhatsApp announced updates to its terms of service and privacy policy, including the possibility of linking WhatsApp users' phone numbers with Facebook users' identities.”

European Commission, 2017

Yep, except this time the infrastructure will be in place from the start.

FecK, I missed that. Source ?

I guess it's time to drop Whatsapp definitively.

Based on historical precedents, I will not believe any "customer commitment" / "privacy commitment" statements from Facebook.

Not believing Facebook is a lot different from stating as a fact that the FBI will be able to tie every wallet generated to a FB account.

I didn't say anything about FBI. FB = Facebook

I swear to god I read FBI? Did you edit it? IF not apology from my side.

That isn't worth the bits it's written on. They are free to change their TOS any time they want.

https://dud.inf.tu-dresden.de/literatur/Anon_Terminology_v0....

Zawinski's Law:

“Every program attempts to expand until it can read mail. Those programs which cannot so expand are replaced by ones which can.”

If you'll allow me to riff on jwz, I think another law is applicable to social media:

"Every social media company will expand until it becomes a bank. Those social media companies which cannot so expand are replaced by the ones which will. A bank is meant in the sense that it will store and mantain things of value including favors, records, and money."

dude, that sounds pretty intimidating. Does MZ want to take the absolute control over the world.

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