Comment by aakilfernandes | Hacker News Reader

Comment by aakilfernandes | Hacker News Reader

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Libra isn't a cypherpunk wet dream, but it moves us in that direction and thats a good thing. This article is written from the perspective that crypto mass-adoption is right around the corner (i.e. just a few UX tweaks) and that Libra will displace the crypto-utopia that could-have-been. I couldn't disagree more.

The lack of adoption is a combo of a 1) network "dead-zone", 2) reversal risk, and 3) regulatory friction.

FB & Co are uniquely situated to fix these 3 in a way small companies just can't.

1) Any network is useless unless people you need to use the network are using it. Cryptos are still in the "dead-zone" where there's not enough people using it where it has value as a payment platform. By integrating into existing apps (Venmo, FB Messenger, Paypal) that could change

2) Every fiat transaction has some level of reversal risk. There is legislation in the US that requires, and companies that implement, reversal of payments if the payor claims fraud or account takeover. Any company that sits in between fiat systems and the crypto systems have a huge amount of this risk cause they can't reverse crypto payments. These companies are uniquely capable of handling this risk because they already spending resources to figuring out that you're a real human being and you are who you say you are.

3) Regulatory friction (AML/KYC) is something these companies are uniquely able to tackle because they have your identity. Furthermore, they have the legal resources to find out how far they can push the line and lobbying to keep them from harm when they get too close.

In cypherpunk terms, what’s dreamy about a crypto currency with no anonymity, that shifts power from international democratic governments to private US corporations?

It's not cypherpunk at all, but it's cyberpunk in spades! The world switching to corporate currency is like something out of a 80's/90's William Gibson novel.

1) Irreversibility. You have a payment system with that small companies can actually build gateways to true cryptos. Not to mention the “high risk” businesses locked out or priced out of fiat gateways

2) Cryptographic proofs of payment. With that you can do a lot of fun stuff, especially with smart contracts. Going back to #1 you can make the gateway trustless

strong irreversibility sounds nice for a financial business of for b2b, but from a common usage perspective it has no benefit whatsoever.

You can build reversibility on top of irreversibility but not vice versa.

I understand that there are important use cases where irreversibility is must. My issue is that in a typical consumer-focused market (like most if not all online shopping or physical shops) it is only to the advantage of the seller and has essentially no benefit for the buyer.

Nothing, really.

Because you thunk governements having power over currency is a good thing? At least with corporations you can choose to deal or not with them, that's the dream.

> At least with corporations you can choose to deal or not with them

That position beaks down when the corporations control the means of transaction.

It would be a different story if Libra was a bunch of companies making an arrangement to accept each other's individually-issued cryptocurrencies, but instead its a cabal issuing one scrip that they all control.

> Because you thunk governements having power over currency is a good thing?

I don’t have too strong an opinion, but certainly it’s a well-understood thing.

What specifically is bad about it? The ability for governments to seize money or interfere-with/surveil transactions looks like it will be preserved via Libra’s KYC/AML surveillance/protections.

I suppose for people with very large amounts of money, they might disagree with their government’s currency policy re: inflation/deflation. But for those people, a huge range of investment products exist to hedge.

It is much harder to choose whether or not to deal with them than you imply.

For example, Experian has your data and is a significant factor in whether you can get a loan. You never chose to do business with them.

The whole idea of fiat currency is a centralized power e.g. a government to control the printing, security and value of money.

How/why is a corporation better? A corporation's main goal is to profit.

Is Bitcoin governed democratically?

No, the consensus could be defined democratic maybe, but the coin and protocol are clearly not.

Nothing, unless you're a anarcho-capitalist libertarian.

I highly doubt anarcho capitalists would want to replace the government with another, even worse government

But perhaps they wish companies became independent of the Federal Reserve, and more in control of the value of their own currency, both in terms of exchange rates and the ends to which they can be used or not.

They also happen to be a conglomerate who’s a EULA-change away from pushing at the very least millions if not more people into this. From a person’s point of view there’s no freedom to be gained here and those people generally tend to be about personal freedom.

The libertarians, perhaps, yes. But not the anarcho-capitalists, who will always defend the right to property and freedom of agency in the markets above all other things. Which includes minting your own coin, if you choose to do so.

If this works. You will have a mainstream cryptocurrency that you can directly access. No middle-man.

> Libra isn't a cypherpunk wet dream, but it moves us in that direction and thats a good thing

A cryptocurrency pegged to USD and ran by some of the most sliney, privacy-hating, PI-hording megacorps - is that really a good thing?

Not a good thing and moving heavily in the wrong direction.

To be honest, the 'reversal risk' issue is a red herring.

Consumers are not going to be thrilled about storing their money in a system where there's no official "if your account gets compromised or suffers a technical difficulty, you'll be made whole" policy. If it turns into a knock-on situation where they buy third-party insurance at their expense, it looks even worse.

For merchants, even if not technically required, legitimate players are going to have to find a way to bolt refunds onto such a system. The risk to reputation would be too great-- nobody wants to be known as "this is where people go to buy stuff with stolen crypto because they never refund." And this will be priced into things, just like now they have to price in losses due to bad cheques and stolen cards.

What's the best a perfect crypto dream can offer? An appeal to super-high-risk (and outright fraud) merchants who might benefit from not having surprise clawbacks and chargeback fees.

> The lack of adoption is a combo of a 1) network "dead-zone", 2) reversal risk, and 3) regulatory friction.

No, no, no. It’s the lack of a killer app, which the author bizarrely confuses as the lack of a phone app with a good UI. What does cryptocurrency (or a currency managed by a company) do that the fiat system doesn’t, /from the perspective of a consumer/? In other words, what am I currently using USD for that would be significantly easier or cheaper with crypto? Nothing. The majority of my money goes to taxes, loan payments on large assets, and food. Those are facilitated by... the government, banks, and a bunch of merchants who are not involved in this project. Good luck to Libra!

The “crypto system” is just an algorithm. It can be changed to anything. It is merely a convention that all participants follow the same algorithm. If this thing ever takes off you can safely assume that it will be regulated the way all other financial transactions are and the algorithm will include some nice reversal features & co.

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