Nipping Libra in the Bud
mondaynote.com
mondaynote.com
- The article implies Facebook "already made money off Libra", that's false. That $270M goes to the non-profit Libra Association in Switzerland, of which Facebook is 1 of 28 current members. They don't "get" that money, it's there to fund the Association's maintenance costs.
- Facebook built this, yes, but they do not have full control. In both governance and validation, they have 1 vote of 28 (currently, the number is supposed to go to 100 by launch). Will Facebook have the largest deployed Libra wallet? Yes, at least initially. Can anybody make a Libra wallet? Yes.
This isn't a data play, it's very clearly a play at getting a bunch of people in developing markets that can only pay with cash right now the ability to pay online. That's a HUGE opportunity all on its own, they don't need our data to make this worth it if it works.
How can they sell ads to people in emerging markets, Facebook's fastest growing userbase, if none of these people can buy the things they are advertising?
Facebook doesn't need an ulterior motive to make a buttload of money off of this, if it works. I don't know why "experts" are looking for one.
Edit: I originally said the initial $10M buy-in per member goes to the Libra Reserve, but that was in error. It goes to the Association to fund the non-profit itself. The Reserve will be funded by the initial on-ramp of users.
Well, the Libra documents are vague about timelines and how/if they plan to move to a "permissionless" system- Instead of saying "they do not have full control" you should qualify it to say that "their marketing materials claim that even if it launches with full FB control initially, they state that they hope to eventually transition to lower amounts of control."
The 28 (will be 100) member companies do (or rather a majority vote of them do). But Facebook itself will not have full control, from the start.
This is really important and something the media keeps getting wrong. Facebook isn't dumb, they know no one will trust something they control right now, so they made it so they aren't the ones in control.
They likely will be the biggest wallet app though, which is significant. But they still can't single-handedly change the rules of Libra, they need a majority of the Libra Association members to do that.
[1] https://libra.org/en-US/white-paper/#the-libra-association
"The association is governed by the Libra Association Council, which is comprised of one representative per validator node. Together, they make decisions on the governance of the network and reserve. Initially, this group consists of the Founding Members: businesses, nonprofit and multilateral organizations, and academic institutions from around the world. 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."
Edit: the things they are describing that "need to be done by Facebook" likely means software dev work, done in open-source (it's already open-source), cause they have a ton of well paid people already that know how to do this whereas Visa, for example, might not. They are recognizing that early on, they will be doing a lot of heavy lifting, that's all.
I should point out I'm not necessarily anti-libra, but I just think anyone claiming that we needn't worry because "Swiss Association" seems unreasonably sure of the situation.
When the "main net" launches, it'll need all 28 members to run validator nodes to start it up.
Several of the members are already software shops that would gladly manage an implementation if the interests of Libra (and therefore, their own interests, cause they would only care if Libra were successful) were threatened by the Facebook implementation.
the released code appears to be rudimentary at best https://www.bloomberg.com/opinion/articles/2019-06-20/facebo...
Idk, we don't need to depend on Bloomberg's opinion, we can check out the code ourselves: https://github.com/libra/libra .
Don't you find it odd that all of the member companies either (1) are based in SV and/or (2) have strong ties to SV? You don't think these people would collude with each other "offline" if they needed to?
I don't think most of the new 70+ members they add by next year should be in SV, or even in the US necessarily, and it would be dumb if they did that.
I don't think collusion is a huge risk:
1. Many of these companies are direct competitors (Visa, Mastercard, Paypal, Stripe, etc.), you would need the silence of ALL of them in order to get away with some manipulation (cause they can all independently validate) AND
2. They would have to somehow spoof the public Validator API they are planning (which allows us peons to validate the ledger), without anyone noticing.
That's quite a caper, I think there are easier ways to make money at that point that are way less risky.
Why would a non-profit or NGO or university (several are already in the Libra Association) stay silent? Where do their interests align with Visa and Mastercard?
I'm offering several mechanisms built into the proposal, in law and in math, that work against collusion, in addition to market dynamics.
Because they don't have equal say perhaps? Or more realistically, because staying silent would politically benefit their institutions.
Right and that's precisely the reason drug cartels are so attractive to the people who run them....what's your point?
> Visa, Mastercard, Paypal, Stripe, etc.
Are you serious? If you don't understand how in bed these companies are with each other then I have a bridge to sell you.
You've brought up some seriously good points about how Libra is a reaction to WeChat, but IMHO this is a naive perspective into historically how companies work with each other in markets.
Do you think Zuckerberg just magically became a trustworthy person?
FB isn't dumb, they know they're reputation is in the toilet right now.
I agree.
Facebook's leadership is smart. They know what they are doing. They just hope that most of us would be dumb enough to believe them.
https://www.democracynow.org/2019/6/19/big_techs_war_for_you...
They just say "Facebook controls this and they just want your data" and either conclude that it's stupid and will fail or it's evil and must be stopped, with no other reasoning.
It has potential to undermine the monetary systems of poorer nations, in essence (re-)colonialising them on the currency front
It has the potential to destroy decades of efforts in achieving monetary transparency and fighting money laundry on a global scale.
Even though some of the more libertarian minded contributors here seem to think that fighting money laundry is a bad thing I can assure you that it's not.
In addition I'm a bit flummoxed about the trust you seem to have in Facbook and they doing the right thing. A trust which is absolutely not warranted when I look at the short and dirty history and the constant lies and evasions of this company.
I'm personally in the "rising tide lifts all boats" camp atm; I think Libra will act as a bridge and help explode the rest of the crypto economy by making the fiat -> crytpo acquisition process way quicker and easier.
So I guess my answer is, I don't think you should use Libra if you don't trust it, and I'm not asking you to. I'm just pointing out that there's a lot of FUD right now about it from people not reading the whitepapers or not caring to be accurate.
They even designed/are developing a smart contract language called Move to facilitate DAO exchanges and the like.
Libra's use of buzzwords like "blockchain" and "decentralized" are just PR.
In the emerging markets Libra is primarily targeting (Facebook's fastest growing market), many people have phones and internet (and FB/Whatsapp), but no banking. This doesn't need to beat our fiat, it just needs to beat fiat in Africa.
That said, Libra still has many of the benefits of other crypto for general consumers (ie. the grand majority of people who aren't very worried about the government seizing their accounts or freezing transactions):
- It's safer than a credit card, since payments happen by sending currency (like cash) rather than forking over bank or credit card credentials to a website (the equivalent of forking over private keys)
- Transaction fees are far lower
Why should it be safer than paying by credit card? If a payment is fraudulent it's not my problem and I get refunded. If the service I paid for isn't received or is not as advertised I have the means of a charge back. With crypto no matter how turn it it's gone. And looking at customer service at tech companies I put exactly zero stock that I get help from them. So I think you have that backwards.
Transaction fees are far lower
Says who? We don't know that yet, do we?
Edited to add: I think the comparison between handing over my credit card number to a website with handing over my private keys is beyond ludicrous.
You cannot build a stablecoin on crypto-assets that have limited issuance.
https://trendwatching.com/trends/SACHET_MARKETING.htm
> In Brazil, fast moving consumer goods giant Unilever sells Ala, a brand detergent created specifically to meet the needs of low-income consumers who want an affordable yet effective product for laundry that is often washed by hand in river water. In India, Unilever successfully markets Sunsil and Lux shampoo sachets sold in units of 2-4 dollar cents; Clinic All Clear anti-dandruff shampoo sachets at 2.5 rupees each; and 16 cent Rexona deodorant sticks. In Tanzania, Key soap is sold in small units for a few dollar cents.
They'll sell it, they'll advertise it.
More advertisers means more demand means price-per-ad goes up and makes them more money.
If Facebook is really trying to grow further, it certainly sounds like some bean counter's idea to go with "let's try and extract advertising revenue from people who have no money to spend", that is to say, it doesn't sound like it will end very well.
You can't throw cash at your mobile phone (and 500m+ in these markets have internet and phones, and many have Facebook already).
These markets already have a lot of internet access and mobile phones, just not a lot of banking. This is Facebook's fastest growing market right now, by far [1]. The Facebook app (and Whatsapp) is the on-ramp, that's why this is a good play for them. They have early advantage, but not because they have control of the currency, they have control of the initial users.
[1] https://www.statista.com/statistics/268136/top-15-countries-...
It's not impossible to build this network, Western Union has it, but they will want a cut.
That's a great question. I'm pretty sure enterprising locals will start up "exchange banks" that interface with larger "authorized resellers" that interface with the Libra Association to turn cash into Libra. So you would go to a local exchange and turn your cash into Libra.
1. Are there enterprising individuals that see value in operating local exchanges for Libra <-> local currency?
2. Do Facebook's users in these areas see enough value in obtaining Libra (including the overhead transaction costs of switching to/from Libra) to be worthwhile, for access to goods/services that would otherwise be unavailable via local currency?
On the second point, we'll see, but Facebook and the rest of the Libra group seem convinced enough that there is to try, right?
They DO have money to spend, they've just been ignored by the digital economy. The "let's say" part of your comment shows why.
Of course that's a significant (the most significant?) aspect of Libra for Facebook. Do you know much about their business model and history?
But you DO NOT need a Facebook account to use Libra, and Facebook CANNOT reverse lookup what non-FB Libra account maps to whatever person. So it's not much more useful as a data play than Facebook's existing Payments play.
This is a play for the 1.3 Billion + users that they are getting in droves in their userbase, but currently make them less money than people in first-world markets cause of this payments problem.
Sure they can. They're already tracking non-members today. It's trivial to extend this to whatever Libra data they can get. Yes, it's not 100% certainty in most cases, but that doesn't make it less dangerous.
But I'll grant that it's not impossible, just wayyyyy more expensive and more trouble than it's likely worth. Especially since most Libra users (at least at first) will already be using Facebook app or Whatsapp as their Libra wallet, which they can of course get data from.
The RFID technology that is widely deployed today was reaching wider adoption in the early 2000s and the AM radio conspiracy hosts I used to listen to for fun were spinning wild yarns about how RFID would be going underneath everyone's skin soon and everyone would be rounded up and put into camps.
I think there's a subterranean truth hidden in the ravings of madmen. It is a frightening prospect to empower further the people at the top who make the most impactful decisions in our society. RFID and Libra both make the global economy more efficient and that puts more power in the hands of our financial overlords. Now, it is also the case that financial overlords spend more time worried about themselves and their families than they do trying to control individual people's lives and make them worse.
So conspiracy theorists are wrong about the ultimate outcome of new technology, but I think their fears would be well served by distributing power as widely as practically possible. The principle of sharing power to put people's minds at ease is what you referred to in your second bullet point.
Now it's just a PR problem of everyone believing they are in full control, when they actually aren't.
Now, in court, they argue that there's no expectation of privacy on Facebook.
They are just now telling you what you want to hear but that's probat not what they will do.
This isn't relevant to the Libra discussion, because of the way Libra is designed. You don't have to trust Facebook to trust Libra.
They built it this way because they know we don't trust them right now.
Do you really believe that each of these orgs, many traditional with whole legal departments, would sign on to a public association with this potential without crossing their i's and dotting their t's?
Don't trust Facebook, trust that the 27 other companies (and their lawyers) don't trust Facebook.
Unless all the contracts are public you have no idea what kind of backroom deals they have with different organizations.
It may sound paranoid but that’s the level of trust many people feel Facebook deserves at this point in time.
This particular problem, payments, I think is an ok thing to solve on a global level though, since it's the same everywhere basically, and they are involving NGOs and non-profits so there is buy-in from orgs that don't make profit and have good context into the real problems in emerging economies.
This sounds like a an extremely bad version of what the TPP aimed to achieve.
My issue is everyone is talking about this being some secret data play or Facebook owning a currency instead.
I agree that there are concerning attributes when talking about a world where fiat currency has a true global alternative (if Libra works).
Just like Facebook Zero was simply a play at getting a bunch of people in developing markets with no internet access a way to use the internet and not just a way to use Facebook as the internet?
- Facebook wants to make more money, they stand to make the most money if this thing works they way they say it will. Surely we can trust their greed?
- You don't need a Facebook account to use Libra.
- The thing is built so Facebook doesn't have full control, enshrined in Swiss law and math.
Your bullet points all fail to recognize the threat that Facebook (consciously) poses to real alternative currencies which truly are based on altruism and decentralizing financial control. Facebook lifted every play from our book and used our own words against us in order to control the narrative and produce pointless bickering while they progress unhindered.
This is evident from the core to the skin, with the most shining example being the name of the coin itself: "Libre coin". Remember the PATRIOT Act? Funny how that turned out have very little to do with true patriotism to the US. I don't mean (and don't wish to) start a conversation about US politics, I simply mean to illustrate my point with another notorious example.
I can trust Swiss non-profit corporate governance law, math, and the fact that keeping a secret between 28 (or 100+ soon) organizations, with many being non-profits, NGOs, and universities, whose interests do not have clear reason to align otherwise, has never been done before in history.
I think true decentralization is super interesting and I'd like to see it happen (I think, there's some unease for me still relative to fiat). I think Ethereum 2.0 with it's proof-of-stake and sharding to combat transaction speeds is super interesting, for example.
Libra is an in-between that could bridge today to tomorrow for true decentralization.
That may be the case with Bitcoin/Core, but it's not the case with currencies like Bitcoin Cash. Every payment I make is snappy as hell. Ethereum has some nice ideas but ultimately poor leadership and bad hype management; some of its better ideas, like smart contracts, are being worked into other currencies.
Facebook argued Zero was a bridge from no internet to full internet, but then everyone learned that Facebook intended for the "internet" to just mean their own ecosystem.
I wouldn't count on it making it to China anytime soon though, WeChat and Alipay have that locked up and I doubt Libra makes it through the Chinese Firewall given China can't control it.
I would guess that it's because Facebook is a company with a history of selling toxic things and trying to convince people that it's good for them.
In this case, the question is essentially what it means to be one of the other 27 members. If the remaining 27 groups aren't free to take the currency in a direction that undermines Facebook's business, then they really don't counterbalance Facebook. If Facebook can unilaterally shut down the ecosystem, then the other members don't counterbalance Facebook. Etc.
Every major cryptocurrency I'm aware of is essentially controlled by one or two entities. Even Bitcoin's development direction is controlled by a small number of companies, and the business goals of those companies influence what features Bitcoin supports.
If it took off, unilaterally shutting down the ecosystem (or otherwise hurting it), in a scenario where they are market-place dominant (when it comes to Libra wallet users, which is likely at least early on) would hurt them the most.
I get why Twitter users are looking for it, I don't get why people that present as experts are after reading the whitepapers. It's like they aren't actually reading them, or are just arbitrarily ignoring them for the clicks (gasp).
The Ethereum hack and the subsequent actions have already put holes into the decentralized - no one controls anything - argument. In Ethereum's case we at least had two chains existing because everyone can run whatever chain they want. With Libra, a corporate product, you can bet that though it looks like Facebook doesn't have any significant influence, covertly they will control the largest vote share. If not, there is no point for them to build this product.
> This isn't a data play, it's very clearly a play at getting a bunch of people in developing markets that can only pay with cash right now the ability to pay online.
The rise of mobile banking through e-wallets like WeChat Pay, upcoming Whatsapp Pay, Google Pay, Paytm etc are already breaking down the barriers to banking. People often don't need banking accounts to use these ewallet products.
The second point you mentioned literally disproves this point. There's a massive opportunity for making money if Libra works exactly like they say it does.
Google Pay and friends can't move into emerging markets because they depend on banking infrastructure that doesn't exist there. WeChat maybe could, but that's a scary thought, so I'm glad this alternative will exist.
Still, how does it disprove the point?
Most ewallets are designed to solve the fact that there is no banking infrastructure in developing countries.
Libra will still need the same infrastructure to get people to buy those coins.
> WeChat maybe could, but that's a scary thought, so I'm glad this alternative will exist.
People who use WeChat everyday don't care.
It seems sometimes SV fails to understand what they care about and what their customers want are two different things.
Go try to offer Paypal to people in developing countries!
Libra is a cryptocurrency. I can sell it, you can sell it, anyone can sell it. You can't sell Paypal "currency" in developing countries (well you could, but they would either need an account with wrong informations or use your account directly for the transaction, which in both case doesn't make sense) but you certainly can sell Libra currency pretty easily.
That's the beauty of it. If Libra takes off, Facebook won't have to build infrastructure anywhere, simply because it will be simple (and relatively profitable) for anyone to build infrastructure anywhere and act as a middlemen.
> Most ewallets are designed to solve the fact that there is no banking infrastructure in developing countries.
Um...no? Most ewallets are designed by extreme Libertarians that believe that we would be better off without government regulation, or that government collapse and somehow them having Bitcoin will make them safe.
So let me ask you directly without any hand waving - how will Facebook or anyone handle a big Libra hack without trying to centralize the power?
> Most ewallets are designed by extreme Libertarians that believe that we would be better off without government regulation, or that government collapse and somehow them having Bitcoin will make them safe.
What are you talking about? I have given examples of ewallets like Paytm and Wechat Pay which work without bank accounts and you start talking about Bitcoin. sigh I give up.
What if Zuckerberg is simply a very idealistic person who happens to have full voting control of one of the largest corporations in the world, and insists on pushing it to idiosyncratic ends? This is a guy who a couple of years ago decided that "we will cure all disease" was a non-ridiculous goal to put his and his wife's name on.
A lot of the complexity around Libra can be explained as Zuckerberg pushing for unfettered access to the financial system for everyone, and the many smart legal and technical minds at Facebook trying to protect the company from the regulatory and criminal nightmare such a system would pose in practice.
I may be wrong in this analysis, but in general I think we spend too little time analyzing what vapid thought may have come into Zuckerberg's head this time around, when it is a perfectly sufficient explanation of Facebook's behavior. In this model, the complexity and subtlety of the strategy come from people around the Great Leader trying to mitigate his vision, or adapt it to their own bureaucratic or ideological ends.
I like to give people the benefit of the doubt too. But his main mantra since forever has been that he wants to connect the world. But if that was really his goal, then facebook wouldn't be such a closed, proprietary system.
It doesn't really matter whether the motives are pure or base; my point is more that the system is set up to amplify the wishes of one person with no recourse. So when the pharaoh gets obsessed with something weird, the empire must follow.
Still, it's important to understand that there are people who disagree with you, and who do things that you view as objectively wrong, that are driven by idealistic impulses.
Coming up with a project of "we will cure all diseases" show that well, it's just some pipe dream that sounds good for the mere mortals hence why Mark came up with it. Not because curing diseases is good for humanity, but because it will look nice on his CV.
Him, together with Bill Gates, look like the kind of people who would sell their own mother to make more money.
The moral here is you can't concentrate power this far, not that Gates or Zuckerberg are history's greatest monsters. No human being should have that level of power.
More like extremely self centered
> It's becoming clearer with each day that Zuckerberg has no concept of morality or humanity
You might know all about morals and actively go against them. I don't think that's what's happening here
But hey, I could be wrong. Maybe he's doing it because he's an idealist and wants to help the Africans.
I hadn't made this connection before (although I'm sure it has been made many times in the bitcoin and cryptocurrency space already). Just to spell it out: the Winklevi's cryptocurrency exchange is called Gemini, the first air sign in the zodiac and also the sign of twins. Libra is the second air sign and also the sign of scales, or measuring & balance.
Seriously though, assuming this is a zuckerberg brain fart, is that not more reason to be wary, more reason for regulators to close it down. If compliance are doing contortions to make a bad idea legal, that doesn't seem the best basis for a global currency.
If anything its more damning.
Libra's sole purpose is to let FB do this kind of stuff while sidestepping the regulatory red tape.
You can, right this second, create a smart contract that allows extremely sophisticated financial instruments and attract real users. The initial shoots of innovation are already happening, such as MakerDao's Collatorized Debt Positions (CDPs)[0] and Compound Finance for money market crypto instruments.[1]
Regulators and governments can stick their fingers in their ears, outlaw the technology, and drive everything offshore or underground. The point is that these technologies are permissionless and unstoppable. As long as the internet exists, you can't eliminate such technology and behavior.
Rather than knee-jerk outlaw progress in the industry by projects such as Libra, governments need to let the industry mature and eventually pass laws that protect consumers without stifling innovation. HN users especially need to embrace their so-called "hacker" roots and stop lobbying for the state to crush such innovative technology in its infancy.
Seriously - the outrage to blockchain and crypto on HN is entirely absurd. This is cool, interesting technology and entrepreneurs should be analyzing it for its disruptive potential rather than whining that there aren't enough licenses and bureaucrats involved.
If Libra actually does become the dominant world currency, a handful of individuals beholden to only to corporations and not to any nation can make decisions which affect all of humanity. They can cause hyperinflation spikes or prolong depressions with credit crunches. They can unilaterally cripple the finances of critics by removing their ability to process the currency and create an atmosphere where people are fearful of speaking out. They'll be able to control the actions of countries by making their entire economy dependent on processing the currency.
Their actions could send all of humanity into desperate destabilization, and by the time you realize there's a problem it's too late. You can't undo, with regulation or anything, power of this scale.
Also, the technology isn't permissionless, it's permissioned.[0]
That is my definition of progress. I want experimentation, not being handcuffed to centuries of theory which can never be proven. Economics is not scientific, and I don't like the system we currently have. We need more private innovation and less state influence.
* Libra is "fully backed" by "a collection of low-volatility assets, including bank deposits and government securities in currencies from stable and reputable central banks"
* "for new Libra coins to be created, there must be an equivalent purchase of Libra for fiat and transfer of that fiat to the reserve. Hence, the reserve will grow as users’ demand for Libra increases. In short, on both the investor and user side, there is only one way to create more Libra — by purchasing more Libra for fiat and growing the reserve."
* "The association does not set monetary policy. It mints and burns coins only in response to demand from authorized resellers. Users do not need to worry about the association introducing inflation into the system or debasing the currency. For new coins to be minted, there must be a commensurate payment of fiat by resellers into the reserve. Through interaction with authorized resellers, the association automatically mints new coins when demand increases and destroys them when the demand contracts. Because the reserve will not be actively managed, any appreciation or depreciation in the value of the Libra will come solely as a result of FX market movements."
Any changes to this require a supermajority vote by the association's council. Each member has one vote, the association is established as a Swiss non-profit.
As to control of processing and monetary flow, I think it'll just reflect/perpetuate current power structures, but considering that Libra will make it easier for people to access/exchange competing coins (fiat or crypto), I don't see why it'll have less market pressure to function (as a medium of exchange) than any other currency.
And with blockchain/crypto we have people who have lesser grounding/experience with finance putting even larger faith in math. They obviously haven't learned the lesson and trying to recreate history.
- Validators can take transaction fees, as most cryptocurrency nodes do, but we're likely talking very tiny fees. The primary money from Libra for members comes from the underlying basket of asset's appreciation, which members get dividends of as pay back for being part of the network. The REAL money is in the massive economic opportunity that could be built on top of a successful Libra though.
How much control Facebook has? In the future they 'would like' to make it fully independent, that isn't how it will be launching though.
If facebook wants to control users and their financial data, wouldn't it be easier to simply make a fintech?
I mean, sure libra gives them more data, but the same could easily be reached if facebook founds a fintech?
With the current libra afaik they only have 1 seat out of 28 so less control than with a fintech.
With libra you could at least control more than with a fintech.
Who are you going to contact when something goes wrong? Facebook won’t pick up the phone, you can’t vote for regulation or changes, at best you’re a number.
Just try and use PayPal as a bank account and see what happens.
So yes, I'd love another competitor to all the holes that the existing system has. A lot of these comments just seem a bit... sheltered. Like wondering why people go to Mexico for dental care because your stellar white collar insurance covered 100% of your dental surgery.
The current system has major issues. And btw, I'd gladly compare mortgage terms from my bank vs from Zuckerberg.
But it is much less useful than it could be. Just paying a small debt (like 20 pounds for a restaurant) to a friend who visited from another country is nightmarish now when your currency is run by Bank of England and your friend’s currency is run by eg FRS, in terms of both fee, time, and numbers of fields need to be filled in the forms. When you need to send these money to your parents in Moldova or Kenya, it’s 10 times more pain.
I could definitely use this currency.
My issue is that experts right now are instead just dismissing Libra is a dumb idea that will simply never work. It isn't dumb and it definitely could, I wish they would consider that for a second and talk about whether it SHOULD work.
The piece starts by claiming that Facebook is profiting from Libra by collecting one-time fees from participants, and that this would somehow be motivation to launch the endeavor. This is so wholly wrong that my head spins a bit at this - the Libra Association members pay in $10M (which gives them a single vote, and "Libra Investment Tokens"), and the cash goes to support 1:1 backing into the Libra Reserve - while there may be a float, the return is basically de minimas since it's basically going into short term treasuries and the like. Considering these funds are controlled by the association (a Geneva non-profit) and that all members have equal voting right, I don't see how there's any way that Facebook Inc (or any individual member) could actually make a "cool billion dollars" in any way from this. Either this argument was made from not taking a few minutes to make a cursory read any of the website announcements or white papers, or is, I don't know, pure imagination?
The second argument is less bewildering, but shows even less understanding of what kind of play Libra is. It imagines that somehow FB will benefit (as a 1/100th investor in the LA) from transaction fees! If the goal were to maximize tx fees from a payment system within FB properties, they'd have been much better off launching a first party payment system (the same is true if the only goal was for collection of transaction data, btw). Sure FB wants to make money from Libra, but it'll be by creating exactly what it says on a tin - an open access, low friction, cross-border, transactional digital currency. FB benefits from opening up huge markets in (especially) its EM marketplace, which has been largely underserved by er everyone, and by creating new markets (microtransactions, small international transfers) that have been simply impossible without a true "internet" currency.
Of course there won't be any privacy, but this IMO is driven as much by KYC/AML/global money flow of sovereign interests, as much as for consumer data mining purposes. We know how to make private cryptocurrencies, but it'd simply be DOA if that were what were proposed to any regulatory authority around the world.
IMO FB has pushed the conversation forward in a good way and I'd say that it's up to everyone else (whether its competing national or corporate consortiums, or open-source/independent cryptocurrency projects) to step up and offer some better alternative.
For those arguing that this should simply be stopped (or for the status quo of how money and banking currently work globally, which I personally think is much worse than what Libra promises), well, I guess at the very least, argue better.
The next level of grasping this is to realize that real scalable cryptocurrency is the actual threat to the establishment. And secondly to realize that Libra is the polar opposite of real cryptocurrency.
Cryptocurrency that scales is digital cash. It is controlled entirely by citizens. It is difficult to track. Difficult to tax. Nearly impossible for governments to disable access for person's or countries. It is difficult for centralized companies to profit from it. And it provides a direct competition to all fiat currencies.
Libra on the other hand is none of those things. It is totally centralized, completely dependant on fiat currencies. Controlled by one company who will give backdoors to governments. Visa, MasterCard, and PayPal (all sponsors of Libra) will be able to continue to take a cut of all digital transactions. The Libra group will profit from interest on your assets and happily freeze them if the government sneezes in your direction.
So my main concern is that the government may realize this and do a 180. And that Libra could block adoption of real cryptocurrencies that are making big pushes for scalability.
Libra is a real cryptocurrency. There is zero ambiguity here.
Why do I get the feeling like you are describing these as positive attributes? Last time I checked, unfettered money laundering, tax evasion, and buying illegal shit like hitman contracts isn’t exactly a good thing.
>It is difficult for centralized companies to profit from it.
Oh, you mean like premining or ICOs?
I’m pretty sure all of dark web hitman contracts are scam. There’s no evidence to believe otherwise.