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Comment by Lucadg | Hacker News Reader

This is the part where they reveal how they plan to negotiate with regulators:

"At the core, we believe that a network that helps move more cash transactions — where a lot of illicit activities happen — to a digital network that features regulated on and off ramps with proper know-your-customer (KYC) practices, combined with the ability for law enforcement and regulators to conduct their own analysis of on-chain activity, will be a big opportunity to increase the efficacy of financial crimes monitoring and enforcement"

In other words: let us do Libra and we'll help you win the war on cash.

The biggest blow on privacy in the world's history, brought to you buy Facebook.

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Not just privacy. Democracy in general.

No cash mean you can't do anything that has not been validated by the state first.

It means kids will have less options to foul around without the parents checking it.

It means you won't be able to pay in a gay bar anonymously.

It means any new (and hence controversial) political concept will have no way to financially grow to acceptance.

It means no living off the grid.

It means hobo will be even more excluded.

It means in case of crisis, the financial system is paralyzed.

It means if powerful people wants something bad for you, you can't be on the run.

It means easy censorship against unpopular activists or artists.

It means no way to test a weird idea off the record to see if it's worth it.

It means no escape if the gov raises taxes in an unjust way.

It means no workaround for paralyzing bureaucracy.

It means no grandpa selling his home grown vegetable at the farmer market on the side.

It means everything you do, where you do, at what time and with whom is tracked, permanently recorded, then passed to algo or AI for analysis.

No grey area. No margin of error.

Just the immovable, inflexible structure of current society imposing itself to everybody.

in other news, wechat pay has 900M users monthly.

In the same news China is an autocratic regime to be feared and avoided, not emulated.

+100000000

Apparently Zuck disagrees.

> Not just privacy. Democracy in general.

So yeah, China...

There has never in all of history been totalitarianism like what is possible now. We are building the technical infrastructure for our own total enslavement.

Of course it makes me wonder if this is just history repeating in some sense. People came to the new world in part to flee European monarchist tyrannies. Now people will go to space to flee the Earth technocracy.

Only it's a bit easier and cheaper (en masse) to go to the New World instead of space which will likely be quite exclusive.

Getting to America in the 1500s and 1600s was very expensive and came with a high risk of death. I'm not sure how it would compare to a ride on SpaceX's upcoming Starship but it was definitely tough. People found all kinds of ways to finagle or mortgage (e.g. indenture) a voyage. Eventually the price dropped of course.

How would you get to space without the help of industry, which would be controlled? Underwater is much more likely. Even on the water.

International waters have already seen a lot of creative uses to avoid governments.

> There has never in all of history been totalitarianism like what is possible now. We are building the technical infrastructure for our own total enslavement.

This is one of the primary reasons that I'm planning an exit from software development. I see most of what we do as being a useless waste, and at worst we're building our own enslavement. I'm fortunate to be working on something harmlessly entertaining, but I want to exit all together and start a business that will actually help people.

The unbounding optimism of technologists is pretty disturbing. We can see for ourselves how tyrannical those at the top of our industry can get, yet we are easily chatteled into helping them because of the paycheck and the prestige. It should become less socially acceptable for us to assist tech zealots who want to involve data warehousing technology and AI into every single problem and facet the world is facing.

> It means no escape if the gov raises taxes in an unjust way.

This is already the case, and has been for almost a hundred years.

Govt spending/taxation is 38% in the US! So, I we're already there.

Not to defend them, but this is exactly what happens to all non cash transactions. Which you kind of have to do to with any sizeable quantity of money (say over 100k) for practical reasons, like theft.

True. This is exactly the problem with non cash transactions. Every single transaction, no matter how small, is recorded forever and shared with several governments and secret services. I never signed up for this. This is why we need cash and why they are fighting it.

Another question on my mind (again, just my random thoughts, not representing others) is: How could this be used to undermine countries economies who are possibly earmarked for regime change by a company with strong ties to the US State Department affect the current geopolitical landscape...especially when some "developing nations" populations literally see Facebook as the Internet?

Same as Trump's (and his predecessors) financial blacklists. Huawei CFO is prosecuted and currently in home arrest in Canada awaiting extradition to the US for allegedly bypassing sanctions on Iran.

In simpler words: another US-domiciled lever that can be switched to the off position.

> Huawei CFO is prosecuted and currently in home arrest in Canada awaiting extradition to the US for allegedly bypassing sanctions on Iran.

Huawei's CFO is currently on "house arrest" in a $10 million dollar estate in one of Vancouver's best neighborhoods, but free to move about the city so long as she's accompanied by a minder. As contrasted with the Canadians that China has kidnapped in retaliation and remain in secret prisons 8 months later with limited consular services. [1]

She's under arrest for wire fraud because to be extradited from Canada you have to have committed what would be a crime in Canada, and violating US sanctions is not a crime in Canada. She is not awaiting extradition, the trial hasn't happened yet, and she may well not be extradited if this is in fact primarily case of US extraterritoriality. One of her best arguments, per usual, is Trump's comments on the whole situation.

[1] https://www.bloomberg.com/news/articles/2019-05-08/huawei-cf...

So, you basically agree with me.

The problem with cash is that it prohibits sensible monetary policy in certain situations (i.e. negative interest rates). So instead of cash we would need anonymous physical (and digital) tokens whose value is not fixed, but is adjusted according to the interest rates.

I guess main problem is that to a very good approximation nobody wants these. Generally, the ones understanding monetary policy don't understand the need for privacy and the ones understanding need for privacy don't understand the need for negative rates and the rest don't care.

> The problem with cash is that it prohibits sensible monetary policy in certain situations

This is a feature not a bug.

> So instead of cash we would need anonymous physical (and digital) tokens whose value is not fixed, but is adjusted according to the interest rates.

So what you want is... cash. But cash from a separate currency. This is identical to what we had here in Brazil in the 90s during the Plano Real transition: the cash everyone had was in the Cruzeiro Real currency, but all the prices were denominate in URV (a "virtual" currency, which months later became a real currency called Real). The Cruzeiro Real was suffering from inflation at the time, but the URV was stable, so to buy something with a price of 1 URV you might pay CR$ 864,14 one week and CR$ 1004,68 the next week (source for these values: https://pt.wikipedia.org/wiki/Unidade_real_de_valor).

Yep, that is one way to do it to have an exchange rate between cash and account currency.

It astonishes me that you refer to Negative Interest Rates as "sensible monetary policy."

The reason they are fighting it is because cash transactions are mostly transactions which will not be reported for taxes. When Greece implemented capital controls in 2015 the country's tax income skyrocketed because everyone started using debit cards.

"all non cash transactions. Which you kind of have to do to with any sizeable quantity of money (say over 100k)"

Sort of related, in the Netherlands, we will soon (2 years or so) have a ban on cash transaction of more than 3000 euros. Not to one-up, just saying that it's happening. To be fair, I contribute to this by doing pretty much all payments electronically. Just like I contribute to local bookstores disappearing by buying from Amazon, although I claim to like local bookstores.

The same €3000 limit for cash transactions has already been implemented in Belgium, France has an even stricter limit of €1000.

Starting in January, the ECB will stop the distribution of the €500 bill.

We're nearing the death of cash.

Italy as well, and other countries are following suit / will do.

Interesting; I believe the creation of the 500 bill was at the request of Germany. This is the second visible 'give in' from Germany after not getting their candidate at the head of the ECB. Makes you wonder what they have traded this for.

Does that ban apply to to individuals, though, or only companies? In the European countries I know of, it’s the latter.

From what I understand, all transactions. It's very hard to enforce between individuals, of course.

Did you read the Guardian articles about UK Gov't sponsored money laundering? An eye-opener to be sure: https://www.theguardian.com/world/2019/jul/05/how-britain-ca...

This is exactly how all cryptocurrencies already are allowed to operate. Any domestic crypto exchange has to do KYC, but also cooperate with the IRS. With most cryptocurrencies, transactions are public and traceable.

You mean exchanges.

Exchanges != crypto.

Individuals can use btc anonymously. It's public, but only the person you deal with know who owns your wallet.

Those exchanges are those "on and off ramps" that the Facebook is talking about here.

Otherwise, Libra can be used "anonymously" just like Bitcoin. You download a client, you generate an identity and then you can receive/send it.

https://developers.libra.org/docs/my-first-transaction#creat...

That's why the whole money laundering issue comes up in the first place, because Libra is a cryptocurrency much like many others.

Its distinction is really that it's not decentralized (like Ripple), that it's backed by real assets (like Tether - supposedly) and that Facebook and some other big corps are involved.

Those are all reasons for crypto-idealists to hate on it and spread FUD, which the Facebook-hating rest of the interest readily gobbles up.

In practice, those are all reasons for Libra to actually work as a means of exchange, as opposed to a highly speculative risk asset. Ripple transactions are instant. Tether price is stable, despite its sketchy background. Big corporations can influence points-of-sale.

What we call a "cryptocurrency" must be decentralised otherwise it is a Paypal version X. Ripple is 100% centralised by the way.

I would agree. Ripple is not considered a cryptocurrency by most, as it is simply a centrally validated bank coin.

Who is "we"?

Ripple (or rather XRP, which I referred to as "Ripple") is widely referred to as cryptocurrency. It uses a distributed ledger and cryptography, like a cryptocurrency. It is traded on cryptocurrency exchanges and can be sent/received like a cryptocurrency (requiring no account registration like Paypal). Also, like most cryptocurrency it is backed by nothing and its price fluctuates and moves along with broader cryptocurrency market trends. For most intents and purposes, it is a cryptocurrency.

Of course one can make the distinction that a "true" cryptocurrency should be fully decentralized, but that's besides my point.

If it is not decentralised it defies the whole point of the solution. You then don't need a distributed decentralised network of independent transaction validators aka miners. You don't need any blockchain solution for it all. You can as well stick with MySQL and call it PayPal v2. Paypal also uses a lot of "cryptography" in its solutions but it doesn't make it a cryptocurrency. How many validation nodes are there in ripple? Less than a hundred. Can someone with bad intention and CPU power overtake it? No. It is a payment solution that is using parts of bitcoin ideas for no reason, really, rather than making quick cash on the hype.

Fundamentally I think both XRP and Bitcoin are equally worthless tokens with little practical use. However, XRP at least doesn't waste a huge amount of electricity in the process of sending those tokens around - and it does so instantly. That's a consequence of not being fully decentralized and trustless. Another consequence is that it isn't vulnerable to a 51% attack or a 33% attack.

Of course the market says both of these tokens are worth billions in market cap. It treats it exactly like a cryptocurrency, feeding on the cryptocurrency hype. Clearly the market doesn't value decentralization to the point where XRP is shunned.

Of course it is instant - any centralised payment solution is instant as they live in a a zoo rather than a jungle. That's what I'm saying, Ripple looks like a duck but is not a duck, it has some features of a cryptocurrency but lacks the core one - decentralisation. Also its blockchain is screwed - initial 30k transaction or so are lost. And on a personal level I dislike this company as I was constantly removed from their channels asking why their escrow in 2017 hold more coins than their total supply. They couldn't even get it right. D. Schwartz is probably a decent programmer, and I sort of admire how they became rich by building a lame replica of an expensive watch (bitcoin) - I read all of his posts on bitcoin stackexchange some time ago while learning about the industry...

XRP (or Libra) has decentralization, just not in a form that is accessible to the general public, because that brings in all sorts of other issues.

If you look at how we generally solve problems in the world, the idea that the untrusted general public should be involved as a matter of principle is ludicrous, because that requires significant defenses against bad actors at multiple levels.

Bitcoin didn't even solve this problem, it just raised the economic barrier for bad actors to cause trouble. In practice, many smaller cryptocurrencies are highly vulnerable to 51% attacks, but even Bitcoin mining power is highly centralized to a few companies.

I think the way XRP or Libra solve things (in principle) has very strong arguments going for it, but they are pragmatic, not idealistic. I haven't heard any good arguments on how the way Bitcoin solves things is so beneficial that it becomes a worthwhile tradeoff. I don't see why it should be the defining factor on what is or isn't considered a cryptocurrency.

There are no decentralized cryptocurrencies.

A decentralized cryptocurrency would not reward economies of scale the way Bitcoin does.

"Otherwise, Libra can be used "anonymously" just like Bitcoin. You download a client, you generate an identity and then you can receive/send it."

Bitcoin can be used anonymously if you avoid KYC on/off ramps and specific transactions tied to your identity. Hard but possible. From Libra's white paper this appears impossible. That's a big difference.

> From Libra's white paper this appears impossible.

How so? Can you be specific? I quote the whitepaper:

"The Libra Blockchain is pseudonymous and allows users to hold one or more addresses that are not linked to their real-world identity."

The only difference that I see is that you could mine Bitcoin anonymously. You could also buy Bitcoin with cash in a private transaction, but the same can be said for Libra.

Our best hope against cashless remains seniors and immigrants: https://www.npr.org/2019/02/11/691334123/swedens-cashless-ex...

Otherwise we end up with cash that only outlaws use:

"His total assets were quickly converted to New Yen, a fat sheaf of the old paper currency that circulated endlessly through the closed circuit of the world's black markets like the seashells of the Trobriand islanders. It was difficult to transact legitimate business with cash in the Sprawl; in Japan, it was already illegal."

Hey remember how the press has been pushing for total control of money and transactions? Under the guise of fighting money laundry?

This is what you get. How do you like the "deprecation of cash" now?

Don't worry, the million/billionaires will still put their money on real estate or other places where there are convenient exceptions for it, make no mistake.

I made this video today on the subject. It's an analysis of the Facebook post linked in the parent. https://youtu.be/1BVXc3jUsSU

Typo, sorry: brought to you by Facebook

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