Highlights from Facebook’s Libra Senate hearing
techcrunch.com
techcrunch.com
Take xbox live's original currency (still in use) where you pay $X for Y coin. They had your money in the bank, while you had some coins in your account, just sitting there, doing nothing for you. They had a bit more control and you could only buy amounts of coin that were not equal to the amount of coin you had to spend to buy anything, so you always had some left in your account.
In Facebook's case, just the time it takes to convert money to Libra and then back into actual money will net them some interest on it. On such a large scale, that's a constant income.
They're trying to be a non-profit because they don't actually charge for the service, but the investors still make money by way of holding on to your cash while it's in Libra form.
A not-for-profit can charge for service, and cannot return a profit to investors. Maybe they've ways to wiggle around the latter, but not charging for the service is simply irrelevant.
Oh, and they had fire dancers, an open bar, and taxi reimbursement.
10/10 would Christmas party again.
Compensation of employees of a not-for-profit is certainly allowed - that's a different thing than returning profit to shareholders except when it isn't (in which case, IIUC, it comes with restrictions, which isn't to say it's never abused, which isn't to say it's never/always prosecuted, etc, etc...).
I explicitly admitted the possibility of wiggle room around the restrictions - my point was about what the restrictions referred to in the first place.
Someone earning dollars in the US, can send libra to their folks in Ukraine, and they can spend them without conversion fees.
The open market faction in the US would love to see those trade barriers lowered. Money is expensive to move.
From an ofac perspective, an immutable ledger would allow investigators to trace the funds. Small time criminals use venmo already.
USD as a world currency. I really can’t imagine libra being anything else but an extension of USD.
While the immutable ledger is nice, it isn't new, nor does it change the game at all. To be honest, the Libra thing wouldn't be much different at all given the right set of business processes being built around it.
The problem is who is doing it, and what they gain if they are actually allowed to implement those controls. Facebook would have an undisputed goldmine. Full data on every transaction you process through Libra, all your information as collected through integration with services like LexisNexis (which is bloody creepy by the way, even if it is based on public records) plus their already problematic information w.r.t their social network graph.
There is no way that much data collected in one place isn't a societal liability. Period. But no, we're getting reporting that regulators are worried about terrorists. Never mind that private currencies just make auditing and forensic accounting that much more difficult.
Watching some of those Senate hearings is like a trial organized by superstitious villagers. Libra is just a company scrip, like poker chips, which happens to be facilitated by a distributed ledger. I don't use Facebook because it is an abomination, but given the trend toward de-dollarization, the return of currency baskets and reserves made of special drawing rights, and effective negative interest rate policies, Libra may be the last best hope of the US to maintain its current level of influence in the international currency market. Only thing I recommend is that the company should just change it's name to Statebook.
Sorry- what's the connection here? Libra will apparently be a basket of different major currencies, how does this benefit the US specifically? I say this as someone who would like to preserve dollar hegemony, I just don't see the connection
If you’re using a credit card as source payment, you get a bank to protect your purchase and presumably some points or rebate?
I understand cryptocurrency as potential replacement to wire transfers and cash payments. But as a consumer friendly choice, why would somebody choose to pay with crypto over NFC pay (with banks promising purchase protection when coupled with credit card)?
Social network payments will be a "radical monopoly," and the ability to manipulate exchange rates on that platform gives absolute power over import/export prices. Probably not something you want to yield.
Once you accept that senate hearings are more political posturing than an actual trial, they make more sense.
The output of a senate hearing is not a guilty/not-guilty verdict or a vote or a decision, but soundbites and video clips that a politician can use for their next re-election campaign to demonstrate that they care about their constituents and are tough on the boogeyman of the year.
Just do a search for "Senator X destroys Y for Z" - e.g. https://www.facebook.com/watch/?v=10156919959142908 or https://twitter.com/SenSanders/status/1085637715998195717 (not to pick on a single politician or company - these were just the first few I found)
As if Libra was an Arizona issue only.
"Better oversight" could just mean better oversight from facebook and affiliates. I fail to see the advantage.
I agree about the negative interests rates. Currencies like Dollar and Euro provide cash, but they are essentially configured to speed up consumption. So in that regard they are not sustainable.
And of course, they'll get consent with a small EULA update to their existing users, knowing they won't read it.
This article uses them interchangably, and does not seem to distinct between the two.
Edit: Looking more closely --
"That means that even though Facebook might not know how much money is in someone’s Calibra wallet or their other transactions [...]"
It seems that Calibra is the name of the 'wallet', and Libra is the name of the 'coin' itself.
Libra = currency itself
It's also a potential moat for FB to protect its ad business against encroachment by Amazon's own ad business.
They can make a killing on this without needing to touch anyone's data.
Besides, the lions share of FB's current revenue still comes from US Ad spending. Amazon's dominance of e-commerce threatens this because people who want to buy something increasingly just go to Amazon.com. Amazon's ads offer the opportunity to influence consumers at the end of the conversion funnel.
But this means that Amazon will get a bigger slice of both the ad spend and the purchase data which FB doesn't yet have. Their ad business already makes almost $3B a quarter - that's almost 1/5th of FB's revenue. This is money that likely would otherwise have gone to FB/Google, but isn't anymore.
This is big threat to FB's core business in what is their most lucrative market right now. Would they leverage this data to try to keep their ad business competitive? I certainly think so. Just imagine how much stuff an AI that knows your purchases and your social life can get you to buy.
But the largest opportunity for growth is in the emerging world.
(WeChat is very popular for p2p payments, as well as social networking)
We'd just be a nice to have.
If you a [dead] post that shouldn't be dead, you should vouch for it by clicking on its timestamp, then clicking 'vouch' at the top of its page. This is precisely why we added that feature.
Or to put it another way, what would be good justification to reconsider our political system? If the answer is nothing then we're just following our system like a religion. We ought to be able to discuss the upsides (there are some pretty great ones) and downsides (everything has tradeoffs).
I disagree with your dismissal of my point, with your saying that " Those are a lot of big conceptual ideas". These are big, but _important_ ideas. Abstract as they may be, they describe tangible concepts that have a lot of importance. "I think at the end of the day people just want to know what will make their lives better" - Yes, therein lies the unfortunate complexity of politics. As I said in my original post ( way up there ), I don't defend democracy because I believe that it best serves me ( I've felt for a long time that it serves other people's needs far better than mine ). I defend it because it's the best system I'm aware of for egalitarianism at scale.
Put like this it will start making sense to the institutions. Just give them some time to digest it.
Suddenly they can make money from their users directly, rather than from selling their users to advertising customers.
I think Apple should investigate doing the same; make it so you can have an iBankAccount, and use phones to transfer money and pay etc using Apple as a bank. Apple could beat Facebook at this. And with Tim Cook at the helm, we might actually trust them more than Facebook and the current crop of actual banks.
The thing I don't get is the 'crypto' part of the currency; why that? Why not just become FaceBank and do it the old fashioned way?
[0] https://en.wikipedia.org/wiki/KakaoTalk
That's not believable, but I think it was meant as a believable motivation that could be told to people to make them feel like they understood Facebook's motivation.
It feels like when FB told everyone that they would never data mine whatsapp, and then started mining like 18 months after acquisition.
See also: VR.
"Treasury takes very seriously the role of the US Dollar as the world's reserve currency, and will continue our efforts to protect our country". [1]
Are you supposed to say that out loud?
The US gains strategic advantage from the power of the USD, and signalling their intention to protect that advantage will only help reinforce it.
I'm confused by most of what you wrote. The rest of the world is looking after their own interests, that's why nearly every country has its own currency. It's why the Euro exists. It's why the Federal Reserve isn't literally the global central bank controlling a single currency that everyone on earth must use. The Eurozone - for one example - is and always has been interested in promoting the Euro as a dollar-competing global currency.
Russia and China, as the primary military competitors to the US (and China as the sole economic superpower competitor to the US), are persistently attempting to either compete with or undermine the US dollar hegemony. Russia hasn't been subtle about wanting to see the dollar's prominence reduced for most of Putin's time in office.
These two statements are contradictory. Ask the ordinary Greeks or Italians if they feel the Euro supports their national interests. The Italians are even talking about rebooting the Lira now.
The US government is, though, and the Fed is managed by and subject to the government.
My democratic involvement doesn't begin and end at the vote. I'm a participant in the culture that collectively makes these decisions. I feel that I'm a part of "our" decision on most matters, even if I sometimes don't like our collective choice. I expect that my fellow citizen is reasonably competent and in good intention.
Seems like Americans have a very low opinion of their "collective" and are simultaneously fearful of its power over them. If that's more generally true in USA than elsewhere, then I wonder if it's just a product of the country's size, or if people can feel differently about this regarding their state vs. country.
In addition, though the Congress sets the goals for monetary policy, decisions of the Board--and the Fed's monetary policy-setting body, the Federal Open Market Committee--about how to reach those goals do not require approval by the President or anyone else in the executive or legislative branches of government. https://www.federalreserve.gov/faqs/about_14986.htm
It seems like Facebook is worse in both directions. Both serving the interests of activist regulations and governed by a corporation with it's own interests first.
Actually that happens all the time; for example we have store credit, loyalty points, virtual "gold" in games, poker chips, and a long list of community currencies[1] like BerkShares.
Why wouldn't companies or individuals be able to create their own currencies? In the end it just means people are discussing and reaching consensus on the ownership and value of some common unit of account, which is a direct expression of the rights of freedom of speech, freedom of association, and ownership of property. (And by "property" I'm referring only to what is being bought or sold, not the currency itself, which in the case of virtual currencies or cryptocurrencies might not even be property, just pure information about a completely theoretical system which people happen to agree on, which is 100% a matter of speech.)
[1] https://en.wikipedia.org/wiki/List_of_community_currencies_i...
I guess that depends on how you define managing. I mean, the Fed couldn't do exactly whatever they wanted, the government would step in if it got too crazy.
But on the other hand, separating the government from the central bank is a fundamental idea in the whole central banking argument.
If it indeed was completely managed by and subjected to the full political influence of the government the US would probably have higher denomination bills [0].
[0]: https://commons.wikimedia.org/wiki/File:Zimbabwe_$100_trilli...
The Fed has clear interest and motivation to have priorities in line with the country.
Facebook absolutely does not.
What happens when Facebook goes under and private capital bleeds it dry? (cough Toys R Us). I don't think Bain Capital's monetary policy would be good for us.
The Board of Governors are government employees appointed by the President and confirmed by the Senate; the Fed is as much part of the government as any of the other “independent” executive board/commissions/agencies.
My point was more that colechristensen's "appeal to democracy" seemed somewhat misguided. Both the Fed and the Supreme Court seems like the least "democratic" government institutions, in some sense. Not that it's bad, nor that I think that FB would be a better guardian of our money supply, but still.
There's no dichotomy there, but straightforward transfer of soverenty to a corporation.
This comment may contain unrestrained cynism.
The government could choose to tax in gold, bitcoin, a foreign currency, or whatever.
There does not need to be a "government money monopoly" to have taxation and a government.
If a government only accepts taxes in gold, then it is still demonstrating it has a monopoly on currency, because now gold becomes something everyone must own and thus will serve as a commonly accepted means of exchange for all those subject to taxation from the same government.
EDIT: For example, Ecuador uses the US Dollar, but don't be fooled to think the Ecuadorian government doesn't have a monopoly on the use of the dollar within Ecuador.
I actually don't know of a government that has a money monopoly. That would mean making a government-controlled currency the exclusive legal currency in the country.
If you don't agree with that definition of the word "monopoly," that's fine, but I don't want to discuss it. It's a word that has a valid meaning but is most commonly used in a way that is self-contradicting.