Diem – A rebrand of Facebook’s Libra
diem.com
diem.com
Basically, I think the underlying idea is valuable - low-cost, fast, reliable, accessible money transfers - clearly something missing right now in this world, even for the "global rich" (citizens of first-world countries), let alone for the "unbanked". It could even scale even more to a money store but that's basically being a bank, which is related but somewhat orthogonal (e.g. both Revolut and TransferWise started as mostly money-sending services and are now moving towards the "bank" stage).
So, my thoughts / questions are the following:
1) Is there a reason this is tied to the blockchain? For most purposes, blockchain without proof of work is just a glorified git repository, and I'm pretty sure that not even the most law-abiding citizens want all their transactions to be public.
2) Is there a reason this would be tied to a company, instead of being run by e.g. a charity? I understand why Facebook / Apple might be more successful with launching this than e.g. TransferWise (they can utilize their platform to push this (or any other) idea to a massive userbase), but really there's no underlying reason why you'd want this to be run by a non-financial company (and an ad ("use people's data to manipulate them") company) and many reasons why you wouldn't want to comingle your financial data with the likes of Facebook / Google / Apple.
3) Why a "new currency" ("stablecoin")? I understand that it might have some desirable properties but I'm pretty sure that most people would be negatively surprised if their "stable" coins started losing value (in terms of their local currency). Also, I'd say that most people don't even care/think about "FX rates" etc. and those that do are mainly currency traders / "speculators". So I envision the "ideal" system to be basically just an app displaying "sending 100EUR to person A in country Z will cost you 0.3% and the payment will arrive in 20 minutes" and the other person seeing "person B sent you 8919 INR".
4) I'm sure there are many issues with fraud/reversible transactions/KYC/anti-terrorism/anti-money-laundering that would need to be resolved somehow.
I think this is an ideal case scenario for a charity - an almost-government (non-profit, "for the people") organisation handling an area of "social tech" that global governments aren't tackling (because they aren't incentivized to) but fundamentally all the pieces of technology are there.
If anyone is interested in funding / founding such an organization, let me know.
That's quite a high bar for rival payment methods to clear, but I think the main problem for corporate currencies like this will be rivalry from government issuers. Governments jealously guard the right to issue currency, as they rightly perceive it as one of their biggest holds over citizens. Any sufficiently powerful currency would attract their scrutiny.
I do think payments are ripe for disruption though - when money is sent over a free global network between pre-vetted partners (i.e. bank customers) there is no reason the transaction fees should be high, even internationally. I'm not clear how a blockchain based currency is going to help facilitate that, but would love to see a revolution in payments which made them simpler and not tied to archaic concepts like sort codes and account numbers, and reduced the fees charged to customers and merchants for payment networks or card issuers which don't do the hard KYC work (banks and payment processors do that).
The problems here are in verified identity tied to real people, not how to perform transactions quickly, or things like anonymous trust-free transactions which nobody actually wants.
It is also a reality in Brazil. Last month the government and the banks released a standard money transfer protocol (PIX) which superseeds the other protocols (similar to ACH in USA). Cheap, instant payments 24h a day regardless of the bank are a reality here today.
Hence I don't see FB having much success in Brazil with this product.
Really?! They just need to tie whatsapp payments with a novi wallet, perhaps offer a few bucks as bait and suddenly they get millions of users.
Never underestimate the power of a monopoly position.
As an EU citizen living in the UK, it boggles my mind that "EU Faster Payments" was not implemented as part of the eurozone, if not the EU as a whole.
As far as I know there's nothing technically preventing this, anyone has an insight into why it isn't a thing?
Most/all Dutch banks have adopted it already.
https://www.europeanpaymentscouncil.eu/what-we-do/sepa-insta...
Banks wanting to make more money?
What are the problems with sort codes and account numbers? Are you after binding the account to your identity like Australian PayID?
The only legitimate reason I can think of would be cynically drafting on the hype cycle. But I've been reading David Gerard's book Libra Shrugged [1] and it looks like the actual answer is that "blockchain" has a quasi-religious belief system built up around it, and the people involved are members of the faith.
One of the stunning things for me about "blockchain" revolutionary hype is how long it has gone on without significant accomplishment. It started only a bit after the iPhone, which has had a huge impact on things, including payments. It's hard now to imagine a world without the internet in one's pocket. But if every blockchain stopped working tomorrow, few would notice. Contrast this with M-Pesa [2], a different approach to digital money. It started at around the same time but has had huge uptake. A recent report in Kenya [3] says M-Pesa has 30 million accounts, which is approximately the number of people in Kenya age 15 or over. To me, that's what successful digital money looks like.
[1] https://www.amazon.com/dp/B08M8DGKY4/ [2] https://en.wikipedia.org/wiki/M-Pesa [3] https://ca.go.ke/wp-content/uploads/2020/07/Sector-Statistic...
I think that there is a lot more money in the world right now than 20 years ago and definitely than 400 years ago.
A lot of it is just dumb (people inheriting money or getting it for other reasons than intelligence or financial acumen: singers, athletes, etc.) and some it is exploratory/inherently risky (VC) or both. So a bubble can last much, much longer and be much, much bigger.
We're probably going to see more of these.
I guess at this point I should probably just say that I regret not being smart/connected enough to be at the collecting end of one of these hype trains :-)))
This seems more likely to me than someone at Facebook saying "We need a our own money system," evaluating blockchain against a centralized design, and deciding for technical reasons that Facebook Money should be a blockchain project.
This is pretty much how it happened. A Bitcoin fan started at Facebook, started from "how do we use a blockchain here" then came up with something to use a blockchain for, and recruited some executives who thought similarly.
Most of what's weird and dumb about Libra/Diem is because it was started by four bitcoiners, from bitcoin ideas. It turns out that ideas from a cryptocurrency that was started in order to evade government control don't play well in the heavily regulated environment of Other People's Money.
As to blockchains, that's because this is the hype of the last few years, is it not?
As to currencies, IMO the vision of the people hyping bitcoin was that your pizza place would accept BTC (and not after converting their USD price to BTC) because their supplies would be happy to do as well. A single currency for the world would be interesting, but as economists have pointed out, devaluing your currency is a way to escape economic crises, but e.g. Euro countries can't do this any more, hence the problems the PIIGS countries had.
I get the VC appeal of blockchain, but Facebook already has the money to fund it. Outside tech circles I don't think slapping a blockchain label on a product will make it more appealing.
I kind of hope the word "blockchain" should soon make it less appealing especially in tech circles.
It's a term without an accepted definition. A lot of useless branding is expected. Just you wait until IBM gets their hands on .. oh, they already did.
Both the Bitcoin-like zero trust ledger and the m-of-n trusted notaries model have useful use cases. While more descriptive terms would have been great, arguing definitions only goes so far.
The reason for the blockchain: Libra was founded by four bitcoiners (Morgan Beller, David Marcus, Kevin Weil, Christian Catalini) who wanted something like bitcoin, but not volatile, and run by sensible people, i.e. them.
2) it is tied to non profits as well! The whole point is to fund this project by companies, no a company
3) we will support single currencies (a USD coin, for example)
4) that’s what we’re working on!
3) So if I want to send money (from say GBP) to someone in Japan, what would happen? Is the FX exchange seamless or will I need to use some intermediary coin?
3) That's a complicated answer that involves more than just the blockchain (as you need to convert fiat from/to digital currency) so it depends on the VASPs (the wallets) not on DIEM.
Missing in the US.
At least Europe has had those for a long time already, using normal banks.
I just checked - paying 10EUR from my UK account to the EUR area takes 2-4 days (I'd need to pay 15GBP for an "urgent" next-business-day transfer) (same rate as TransferWise) whereas if I want to send 10kEUR I'd pay 250 GBP (!) for a "no-fee" (!!) transfer than with TransferWise (a.k.a. scam). Paying from EUR to EUR account (cross-border) costs about 0.1% (0.38 EUR fee to send 350EUR) which isn't too bad.
Suffice to say, room for improvement.
Euro transfers have become instant and 24/7 thanks to the SEPA Instant Credit architecture:
https://www.europeanpaymentscouncil.eu/what-we-do/sepa-insta...
You can transfer up to 100k EUR in less than ten seconds; works overnight and during weekends and holidays.
In the UK, at least Revolut supports this already:
https://blog.revolut.com/sepa-instant-euro-transfers-now-ava...
NatWest app says £0.00 fee and some FX rate but when I compare with TransferWise, the difference is £250, which means that the "FX rate" implicitly contains the fee.
Maybe not "fraud" legally but I don't want to support such non-transparent business practices.
2.5% is a rather expensive fee for a GBP-EUR transfer, especially on £10,000! Some banks offer as low as 0.4% (on top of the real mid-market rate), probably even less on large transfers.
There's sometimes a nominal fee across countries (mandated to be "no more than a local transfer"), but in many cases they are free.
Unless you count cryptocurrencies nobody actually uses.
> 1. Is there a reason this is tied to the blockchain
For FB, you're 100% right. FB could have likely just used a relational DB in the short term. However, if you don't want to tie this to a single company (your second question), then a blockchain does make it easier for multiple entities to agree on the state of the db. I would argue that modern Proof of Stake protocols are starting to be competitive with Proof of Work in terms of security, in large part because unlike Proof of Work, they allow for both positive _and_ negative incentives for incentivizing behavior. For example, we've yet to see the types of double spend attacks on newer PoS chains (e.g. Cosmos) like the ones we saw on Ethereum Classic a few years ago.
> 2. Is there a reason this would be tied to a company
No, and in fact, this is what makes most permissionless blockchains so valuable. The problem is that most of them are not useable enough for what Facebook wants to accomplish. I say most because, in my view, Celo (https://celo.org and https://valoraapp.com) does. It's permissionless, programable, highly scalable, has a built in stablecoin and identity protocol, and most importantly, uses new zk-SNARK cryptography to let mobile apps sync trustlessly and near instantly. It also offsets 100% of its carbon emissions by buying carbon credits using block rewards.
> 3. Why a "new currency" ("stablecoin")?
I agree 100% and already the market is starting to tell us that USD pegged stablecoins are the most interesting of stablecoins.
> 4. I'm sure there are many issues with fraud/reversible transactions/KYC/anti-terrorism/anti-money-laundering that would need to be resolved somehow
Yes! This is an interesting read on the topic: https://www.coincenter.org/how-i-learned-to-stop-worrying-an...
(1) build a giant sucking data-miner atop all consumer commerce;
(2) print their own money in such quantities that governments can't tell them what to do any more;
(3) establish themselves as providers of the digital identity standard for the world, so that you need to go through Facebook to use money at all.
There are those who have proposed Libra-like basket currencies seriously; Yanis Varoufakis seriously proposed that the Libra 1.0 plan would be a great idea - if done by a public institution such as the IMF, and not by a private company. https://archive.is/YKgQ9
And has recently come out with a book on Libra. I haven't finished it yet, but it's great so far: https://davidgerard.co.uk/blockchain/libra/
The video shots of small merchants and everyday people, with voiceover "what if everyone is invited to global economy" was bothersome to watch. I don't like their underlying characterization that the lack of frictionless banking and payment systems are what's holding back Africa and poorer parts of the world. It's just not true.
For most of the "banked" in the US, doesn't Zelle cover all that for transfers within the US?
I thought stellar was similar to what the parent comment describes, but it’s also not proof of work (which makes need for blockchain unclear).
For all intents and purposes, Zelle is the bank software, and it’s free. Zelle is backed by a bunch of banks - the majority of US checking accounts have access to use it at no cost.
From a user point of view, it doesn't look like an additional service.
Of course Bitcoin was ideal for this but it went off the rails for the banking the unbanked dream when it refused to scale from a blistering 7 transactions per second and the associated high fees. Ethereum fees aren't great either, but my understanding is that massive increases in throughput are coming with sharding etc. in Ethereum 2.0. Monero would be perfect for this, but I don't know if the world is ready for true privacy and fungibility in their e-coin.
https://bitinfocharts.com/comparison/transactionfees-btc-eth...
You can check any bitcoin dashboard (such as https://bitbo.io); the current transaction fee is 1 satoshi/vByte for a transaction. The average bitcoin transaction is ~250 bytes. 1 satoshi = $0.00019273. A transaction that can wait an hour costs about $0.05.
The "bitcoin doesn't scale" thing really isn't a thing. Lyn Alden addresses this in her "7 Misconceptions about Bitcoin" article [1]:
"In other words, suppose that the Bitcoin network is limited to 250 transactions per minute, which is low. Those transactions could average $100 or $1 million, or any number. If they average $100 each, it means only $25,000 in transaction value is performed per minute. If they average $1 million each, it means $250 million in transaction value is performed per minute. If Bitcoin grows in use as a store of value, the transaction fees and inherent limitations prioritize the largest and most important transactions; the major settlement transactions.
Additional layers built on top of Bitcoin can do an arbitrary number of transactions per minute, and settle them with batches on the actual Bitcoin blockchain. This is similar to how consumer layers like Visa or Paypal can process an arbitrary number of transactions per minute, while the banks behind the scenes settle with larger transactions less frequently."
Lightning Network is a layer 2 protocol on top of bitcoin; transactions settle in seconds and the fees are tiny—about 1 satoshi—(a fraction of a penny) per hop. Not only are they cheap, they're private as Lightning runs over Tor.
The UI/UX of the current crop of Bitcoin/lightning wallets for iOS and Android, such as BlueWallet (https://bluewallet.io) is quite good.
I can send money to friends via PayPal or Venmo completely free. What’s missing?
The reason it isn't free is that there are loads of anti-money laundering laws that require paperwork on both ends. Sure Cryptos avoid this problem, but just means it'll get regulated or banned.
Could you expand on that?
> and I'm pretty sure that not even the most law-abiding citizens want all their transactions to be public.
I believe some blockchain provide anonymous transactions (based on zero-knowledge proofs for instance).
Yes: so that Facebook can do as it wishes and not have to follow government financial regulation.
Yes, this could help us to faster get rid of ads as a monetization model.
But in any case, that's at most the "next" step. First one is, literally replicate what banks do right now (possibly including minimum transaction fee on small transactions - depends on local banks / regulations) except with non-backwards tech.
https://www.coindesk.com/billion-dollar-returns-the-upside-o...
the main point is that Bitcoin is decentralized, there are many nodes in China, Iran, etc. that is why it has so much value
You need an all digital currency to keep transaction fees cheap, and to speed up transactions especially accross countries.
Just think about it, today's currencies are backed by physical paper. At some point, if A paid B, B should receive the physical paper money for the exchange. This is known as liquidity, and it's the major reason why money transfers over the internet today are expansive and slow.
> Is there a reason this is tied to the blockchain?
Yes, blockchain is key. Look at what all modern currencies in use have in common? They are backed by a very powerful entity, mostly governments with real power (weapon and authority on actual land and people). This isn't a coincidence, whoever controls the currency has huge power, imagine being able to make money as you please and give it to yourself or others.
You can't trust any single party with such power. Governments are the closest thing people can trust today, often because they have no choice, and sometimes because there's ton and ton of scrutiny, checks and guards in place around them.
And still, when currency is physical, it is also slightly harder to make more for yourself without trail.
Now if currency was digital, it be so easy to abuse, so anyone who had single central control could easily cheat everyone else. You'd not just be in control of the currency like the government is, you'd also become in control of the ledger. That means, that single central entity does not only control the digital currency (how much of it and who it gives it too), but it also controls the exchange of it (keeps track of who has how much of it and who transfer it to who else). That's incredible power, they could just seize your money without scrupule for example.
Blockchain is about solving this issue. If the currency and ledger is controlled by a distributed blockchain, then you don't have a single central entity with all this power. Instead the power is distributed to whoever wants to participate in it.
Now this is still an area of research in some way. Proof of work was one way, and it suffers from the fact that compute majority wins, and the compute majority could actually be owned by a single entity (which owns a ton of compute resources making up the majority).
Proof of stake is the new idea, it says that everyone who wants to be a part of controlling the currency and ledger has to put a deposit amount of their own money. If they are found to have cheated or acted wrongly, they never get that money back, otherwise they get it back and a little bonus for their effort.
In this scheme, you could still have a single actor taking full control, but they'd need to have a ton of money, more money then everyone else's combined stake. So it's much harder to do so.
> Is there a reason this would be tied to a company, instead of being run by e.g. a charity?
To some extent, it doesn't matter who starts it, if it ends up being a distributed open source piece of software, that is run by people from all around the world on different machines not all controlled by one entity, then it has become something out of the hand of whoever started it. Charity or Company, neither in my opinion could be trusted with a single central solution, but they can both try to kickstart an open source distributed blockchain ledger and currency, as long as it does in fact distribute control in a way that single or minority can't control it fully.
> I'm sure there are many issues with fraud/reversible transactions/KYC/anti-terrorism/anti-money-laundering that would need to be resolved somehow
This is probably one of the biggest issue currently, in a weird way, trying to solve the problem of no single central authority also makes it difficult for the government of any country to enforce rules and regulations over it.
Same thing with crypto. Yes, currently a lot of people buy and sell crypto with government-backed currency. However, the whole point is to have currency that you can use in place of normal currency. Currency that you are paid in, that you shop in, that you pay your bills in, that you pay back your friends with. At the start, there is a lot of fiat <-> crypto. But the goal is to make it so that people can use crypto for everything, and therefore never need to sell it for any major currency.
If you use crypto, every year you will need to "drop out" into fiat less and less. Just like every year your electric car gets greener.
Ironically the analogy extends even better to your parting shot:
> this stuff is just cumbersome currency that roasts the planet.
Again, short-term thinking. As a purely digital currency, cryptocurrency gets greener every year as the grid gets greener. If you want to save the planet, the first step is to electrify everything. Step 2 is to make your electricity production as green as possible (preferably with nuclear).
I like that the currency I use is managed by my government. Why should I want to switch?
There are billions of people who are abused by their government, who cannot trust their government, who's local money is debased by their government at a whim. You are privileged (there's that word) to have a government that you feel you can trust to control the value of your savings and your purchasing power. You do not see the value proposition because there is not much of one for you. Cryptocurrency doesn't exist for you. It exists for the people who do need it. And again, there are billions of people who need it, as much as half the world's population, possibly more.
The United States inflated the money supply by many trillions of dollars in the past year, which decreases the buying power of the dollar. With savings accounts paying close to 0% interest, due to inflation, savers are losing money in these accounts each year.
And while the goal of the Fed is to manage the economy to have about 2% inflation, in reality, the things that people care about—higher education, medical care, real estate in many cities—has inflated much more than 2% annually.
The dollar is being debased gradually; one day it could be sudden.
But leave that aside, you said you like government-managed currency and I believe you. Venezuelans don't. The way I see it, what's stopping the EUR and USD from going down that spiral is momentum, rather than some law of nature.
I'm not convince the issuing schedule for BTC is ideal either. Grin, to pick a cybercoin which has some interesting technical innovations, issues one coin per minute, forever, and since coins are lost, this might be better.
But I like the idea of a transnational currency, where no one government is in a position to change the rate of issue, and I think Bitcoin has real potential as a refuge for value to flee to, in the event that the increasingly reckless experiments which Western governments and their central banks are making with their currencies come back to bite us.
Don't think it would spell the end of sovereign currencies, either. It would force them to be more honest, though, and that would be a good thing.
Say what? Coins were intrinsically valued and not used like currency as it is today. It wasn't until about the 1500s we even really see currency being used and it was hand waves a bunch of stuff thanks to the Dutch merchant class. In Rome people didn't spend money, they hoarded it, because the pile itself was a sign of wealth. Spending it was looked down upon. They instead purchased primarily through bartering of goods and resources. There was no middle class either to spend money, you were nobility, a solider, or a slave.
A lot of folks want to apply modern economics to historical contexts where it cannot be. There's too much missing when taking in only from the lens of Economics to evaluate or judge things accurately.
This happened fairly often, and it's called debasement:
With a 60 Grin block reward and 1 minute block interval, it's actually 1 Grin per second, forever.
Obviously this is a huuuuge question, but it's such a good one.
The simplest compact answer, at least to me (and it may in fact be an oversimplification) goes something like this:
* Nearly invariably (and with a decreasing number of exceptions as technology advances), states which have control over both sides of the economic equation (ie, monetary concerns as well as national finance) find themselves unable to resist devolving into empire, and a specific type of empire called a "welfare-warfare" state, where the money supply is carefully controlled in such a way as to produce just enough support (often through pseudoscientific 'macro-economic' analysis and 'unemployment' prevention) to preclude revolution, while also projecting military power on poorer parts of the world in order to capture resources in a misguided effort to service the never-ending debt that accompanies the fiat money system.
In this view (and to be clear, it's one I hold), states with these powers (a clear conflict of interest, IMO) will continue to plunder the earth and attempt to enslave its people indefinitely, and can only be practically stopped by the economic adjustment that comes from the introduction of a hard currency (which causes the cycle of debt service to become impossibly onerous, even for an empire state).
* For a less oversimplified version, I might recommend Ron Paul's book "End the Fed", which is an introduction to the history of hard-money economics and can be read in a day or two.
* For an even less oversimplified version, you'll need to delve into the "Chicago School" and / or "Austrian School" of economics. Milton Friedman and Ludwig Von Mises are probably the best known scholars of each.
* The cycle of debt needs to be bootstrapped. You need some initial borrowing well beyond current (expected) repayment capacity. This implies both some overspending and lack of due diligence by lenders willing to extend the rope.
* The debt is denominated in a currency the borrower doesn't control. If you're American borrowing dollars, or Russia borrowing roubles, you can always deflate the currency to moot the debt.
* The state has no legal leverage against lenders. A continuation of the tactics above-- I could imagine a desperate nation simply refusing to redeem its bonds, or even prosecuting people attempting to claim then.
There may be incentives and default-approaches that encourage the growth of empire to feed a debt addiction, but it's far from the only way. In the worst case, you end up with a default and limited to dealing with lenders who are legally required to deal with you (i.e. requiring pension plans or state-owned enterprises to sponge up government bonds) until someone else is willing to take a punt.
The reverse argument actually works much better: throughout millenia of metallic standards countries regularly fought wars to plunder gold reserves from weaker states to repay their debts or boost their economy. And didn't even make enough from doing so to be able to afford welfare. Now they don't have to acquire shiny metal every time things are bad, they very seldom fight wars and even relinquished control over the empires they'd built under the gold standard. If there is a causal relationship between monetary systems and empire building, it's quite clear that it works the opposite way round and fiat money reduces the tendency to use military power in service of economic growth.
Or, not quite at hyperinflation, but your government is enacting policies based on MMT or similar and you are worried that this could hurt you (as a holder of the currency) in the long-run.
Or, maybe you're worried about governments being able to dictate what you are allowed to purchase with "their" money.
Or, maybe you want to send your money somewhere your government doesn't want you to send it (or their government doesn't want the other party to get it).
Obviously there is a lot more to cryptocurrency than just "not being issued by a government" as well though. There is general privacy benefits (Monero) or the promise of innovation if you have programmable money / contracts (Ethereum).
The typical counterargument is something like "well what about Saudi Arabia", but I think it's pretty easy for an oppressive regime to just say "you can't use cryptocurrency" and punish you severely for it--to the degree you won't.
Anyway, I just don't think cryptocurrency is a solution to this, and even if it is it's antidemocratic.
People make mistakes, some of them are greedy, powerful people want to keep their power, etc..
You can't fix people with a currency.
And humans are creative, if you switch over to crypto, they'll find a new way of doing the same old things..
My government not wanting me to send money somewhere: Well, this might be a clichè, but apart from slightly limiting my freedom this prevents bad guys doing nasty stuff aswell.
At least with fiat currency, you have a central bank that can TRY to take steps to fix those conditions.
Using a cryptocurrency is kind of like a technological band-aid to a political problem. Viewed through the lens as a form of peaceful protest against the government, it makes sense. Otherwise, it's completely your call if you want to make transactions where the receiver has no obligation to provide the product or service you paid for.
And those people are probably screwed anyway, unfortunately for them. If a big government hates your guts... you're not going to make it.
Might be safer for them to buy gold and just bolt.
having an optional liquid payment system outside of their control solves that
and the existence of that optional liquid payment system has the possibility of making their controlled one redundant
The Trusty Libertarian Neighborhood Watch?
I'm happy to pause all cryptocurrency mining and transactions until humanity is carbon free. I doubt long BTCs will be though.
- Cryptocurrency uses tons of electricity
- Climate change is real and super bad
I would (obviously) rather have a livable Earth than cryptocurrency, and I don't think that's weird.
Just because you buy and sell gold with major currencies doesn't mean gold is regulated. Crypto isn't much different. If you can get it anonymously, you can move it anywhere you want as long as you stay on the blockchain. Once you leave the blockchain, you aren't dealing with crypto anymore. Once you sell gold you aren't dealing with gold anymore.
I don't know about Diem in particular, but a state or corporate issued currency is not a general indictment of cryptocurrency.
The difference between cryptocurrencies and other commodities is that other commodities have intrinsic worth. You can drink milk, you can eat wheat. You can't do anything with cryptocurrency, it's just a long, meaningless number.
What distinguishes one fiat from another is "do important people believe in it". There may come a day when that's true for cryptocurrencies, but that day is not today.
Further, I doubt it ever will come, because cryptocurrency's core scarcity hamstrings monetary policy. No competent government would ever accept such restrictions. This is a feature for cryptocurrency enthusiasts (digital gold bugs) but a huge shortcoming for everyone else.
https://seekingalpha.com/article/145722-what-really-backs-th...
a lot of people like that crypto isn't backed by a gov, but i'd like to believe that most people would agree that the government has some intrinsic worth.
FWIW, you're saying that while cryptocurrency stays on the blockchain it's not regulated. That's definitely not true in the US--people have gone to jail for not complying with financial regulation and reporting laws [1]--and is likely soon to be even less true [2].
[1]: https://digitalcommons.nyls.edu/cgi/viewcontent.cgi?article=...
Q: Is this fundamentally different to having a suitcase full of cash?
... other than https://xkcd.com/538/ ?
Yes, government can't print bitcoin. If you store cash - in the long term you will lose buying power. If bitcoin gets adopted as a store of value - nobody will be able to print it at will.
Depends on the border.
As long as you declare the cash to the authorities, there are many borders you can cross with great flipping wads of cash. Some industries operate mostly on cash (restaurants, for example), and "suitcases full of cash" isn't just for mobsters and movie villains.
Maybe if we could use the inherent incalculability of the three-body problem as the basis for a cryptocurrency. You'd need to observe the universe to "find" astrocoins.
It would be Astrology on steroids.
Of course that leaves out verifiability, encryption, anonymous identity yet ownership.
What if you (somehow) knew both parts of the quantum uncertainty portions of a particle because you initiated the system. Then you could demonstrate ownership by being able to predict the location or the momentum at any time based on that.
But it would be fun to hold cryptocoins called Heisenbergs
But that is an actual physical particle.
...no? Diem/Libra is built on Cosmos, which is a proof-of-stake system, not a proof-of-work system. Validator nodes in a proof-of-stake system do not compete to work ever harder to mine the same resources.
There are a rather large number of such validator nodes (100+ at minimum), but that's also true of banks when you translate their Highly-Available mainframe stacks into equivalent Highly-Available commodity-PC stacks. (I.e. they're not spending any more electricity per tx than the ACH system is.)
Depends on the regulation type we're talking about. Yes, state may require KYC, AML, and taxes, but in case of bitcoin they can't regulate the inflation.
Seems like a viable reason to create a cryptocurrency that isn't intended to bypass state regulations.
An eco friendly Cryptocurrency mining use case is that gives electricity generation a baseline price regardless of where it is generated.
I think... it's a little tenuous because the price would based on like, math, algorithms and ASICs more than scarcity of fuel (or pollution, or what have you), but definitely an interesting idea.
It’s pretty obvious — the price spikes with the rise of certain internet grifts and wanes as they settle down.
Facebook is trying to create yet another world bank
As for international money transfers: TransferWise and the like are already providing better solutions in that space without forcing you to use Facebook Coins. Now you might say that mostly caters to the rich world, and that's true, but the people who can't use TransferWise are probably not going to be able to use Libra/Diem either for the same reasons they can't use TransferWise: ID documents, KYC/AML, plus capital controls and sanction regimes which aren't magically going to disappear for this new currency.
It won't provide one of the few benefits of Bitcoin etc either, namely the ability to make illegal transactions more easily.
But Diem doesn't have any advantages over any of these entities: it's a foreign foundation with no local infrastructure to help people spend their cash and no local knowledge talking about immutable ledgers and cash equivalent reserves, as if the reason the unbanked were unbanked is because the local banks don't write whitepapers rather than because exchanging cash in developing world villages is a very expensive problem to solve relative to the size of the transactions they unbanked might like to make
> as if the reason the unbanked were unbanked is because the local banks don't write whitepapers
Made me chuckle.
Who says the countries this will be used in have KYC/AML? The unbanked people this would be for aren't in countries that have those laws.
> As for international money transfers: TransferWise and the like are already providing better solutions in that space without forcing you to use Facebook Coins. Now you might say that mostly caters to the rich world, and that's true, but the people who can't use TransferWise are probably not going to be able to use Libra/Diem either for the same reasons they can't use TransferWise: ID documents, KYC/AML, plus capital controls and sanction regimes which aren't magically going to disappear for this new currency.
Can't use transferwise, so can't use something else.
This isn't aimed at people who can use banking where KYC or AML apply. It's for people who are curently using other unbanking payment methods.
You mean like Somalia? Even Somalia has KYC/AML laws: https://frc.gov.so/aml-cft-law/ (Customer due diligence is Art. 5)
Are there any countries that don't have similar laws?
Also, lots of drug deals are settled in US dollars, they don't have that. So your point that anything settled in dollars will have those laws is way off the mark and easily disproven.
This is something that's been widely advocated. But imagine a private company creating one, particularly one with Facebook's track record.
Imagine having to use Facebook to access any money - not just Diem Dollars.
(my book on Facebook's Libra/Diem plan goes into this, particularly ch 8 on privacy)
I don't think this can happen in practice. For any such system to work at all, the vast majority of the entire society needs to be using it and be satisfied with it, and then there'll always be cash anyway for which there can't be access control enforced by any one entity.
I will NEVER use a currency that requires a connection to my facebook account.
I don't agree, my step parents (in Romania) are unbanked and they have ID documents. A lot of people are in a similar situation there. Yet they all have smart phones.
Over the months, their ambition has been cut a lot by regulators. No more basket of currencies, now just US Dollar. At this point I'm not sure there's any benefit to it being on the blockchain either.
I don't see how this is a surprise. Facebook basically wanted to take monetary sovereignty away from states and give control to private companies. What did they expect? Especially when right now people are noticing the reach Facebook has into our lives and how irresponsibly they're acting with it. Why would any sane person give Facebook any more control over their lives?
So in that regard I wouldn't immediately dismiss a usage of a blockchain as pointless. Given that PoA chains are usually pretty efficient, there also doesn't seem to be an immediate downside to it.
Secondly, it's definitely not secure in the sense that is advertised. Aside from regular social engineering and old-school hacks to get people's tokens, governments have been successful in tracing transections in investigations. That's how SilkRoad got got, and recently Japan did it as well.
Tracing transactions on the BTC public ledger did not lead to the downfall of the Silk Road.
Indeed, that was their most unique feature.
A stablecoin pegged to a basket of fiat (say just USD, CAD, EUR, GBP, JPY, SGD), using traditional crypto tools (burning, pegging) definitely has a place and a bright future ahead.
However, there's no need for facebook - defi may be able to do that with smart contracts over wrapped stablecoins (say USDC for the USD, etc.)
Hell, even USD, EUR, JPY would still be EXTREMELY valuable and useful.
Is that no longer true? I'm not sure if the website is up to date.
I think It was mostly interesting, because It had a potential of going real mainstream if FB really pushed it to it's millions of users that are not technical in one way or the other.
Technically, there is so many ambitious projects going on in crypto space anyways.
Are you kidding? This is the country that avoids the Metric system remember. https://en.wikipedia.org/wiki/A_Metric_America oops.
*EDIT Avalanche was not the first proof of state crypto currency.
I don't find cryptocurrency interesting at all for a free society. I don't see any purpose of it, if you live in a free society. And I do live in one.
Have faith and trust in our cryptocurrency!"
- the prospect of large corporations making thousand percent ROI is very real, while the common person using this does not get any of that.
My opinion of this is that we should be concerned - what are the possible upsides of corporations having outsized returns that can't be touched by governments at all (at least with current day laws)
This would only serve to make the wealth gap more extreme.
I urge everyone to read more here: https://www.coindesk.com/billion-dollar-returns-the-upside-o...
With Google/Apple/Microsoft it's quite straightforward, everything they make is clearly their style, their brand. This is not the case with Facebook's properties, they don't have a unified design language or branding. So adding a unified splash is a step in "marking it's territory", I just hate the feeling of that.
"Your honor, we can't possibly spin off Instagram, it's now part of the core Facebook product!"
Also, since they didn't bother to s/Libra/Diem that white paper is this just the same scheme with a different name? It's somewhat unclear.
"The Libra Association announces the adoption of a new name and the recruitment of key executives, reinforcing its organizational independence. Now transitioning to the name “Diem”, which denotes a new day for the project, the Diem Association will continue to pursue a mission of building a safe, secure and compliant payment system that empowers people and businesses around the world."
I think for the time being it's meaningful to think of cryptocurrency transactions as stock purchases / fees to the stock exchange.
Edit: Monero. It's currently 15th on Coin Gecko by market cap at $2.3 billion. It's 3rd in the number of most developers behind Bitcoin and Ethereum.
It's a gameable metric. How do you track it anyway- by github contributors? By number of people submitting patches?
Also, not all contributors are equal...
And roll-up transactions are currently sitting at less than a penny.
1. Speculation on highly manipulated markets.
2. Illegal transactions.
3. Ransomware.
4. Innovative new kinds of fraud using smart contracts.
My question. What is the "benefit" of using Libra when you can just as easily transact with xrp ? Dictatorship by Facebook first, tracking of spending for MOAR ADS.
Who benefits from Libra ? Not the end user at least. Oh and fees. If there are no fees on Libra,why is PayPal investing money in this model ?
And of course in typical FB fashion, the website will be garbage, if you don't allow all their abusive scripts.
Maybe they’re hoping Diem25 will embrace the collision and ride on their platform?
If you look at the members section, at the bottom of this page, facebook is not there.
Popular currencies need to be regulated by the people, even if indirectly. Otherwise in times of crisis these currencies will be harmful to most.
They have a point.
Would you want your national currency to be controlled by a Chinese private company?
The problem has always been that it's an attempt to create an extra-governmental monetary system spearheaded by one of the largest tech companies in the world, in particular one that has a low level of social trust within both the political sphere and the libertarian-privacy-maximalist sphere that represents a cornerstone of crypto support.
For my own opinion, it doesn't matter how independent the oversight group may be from Facebook, it is still a Facebook initiative. Web standards, ostensibly independent, can be subverted by corporate interests. I have no trust that something as foundational to the world economy as a global monetary system would not also be subject to such interests at a fundamental level. Give the ACLU a seat, give the EFF a seat, find a dozen other non-corporate NGO's with a tangential interest in such a project, and I will still not be convinced that the system wouldn't be coopted a plutocratic oligarchy, if not outright kleptocracy. There would simply be too much power and money that would acrue to the "winners".
Whatever the future of crypto may be, it should be shoved forcefully away from such a direction, as well as any direction that makes it easy to facilitate criminal enterprise/money laundering. I freely admit that I don't have a solution that solves that range of problems though.
- it's compatible with existing tax systems.
- it doesn't get in the way of the banking system.
- it doesn't get in the way of existing power structures, e.g.: people that depend on an impoverished populace.
Combined with the ability to mine user data for 'insights' and you’ve got the greatest panopticon.
Hello corporate dystopia.
Diem stems from the famous latin phrase 'Carpe Diem' translating to 'Enjoy the present, make the most of today', a common mistranslation is 'Seize the Day' (via Wiktionary)
Carpe is the second-person singular present active imperative of carpō "pick or pluck" used by Horace to mean "enjoy, seize, use, make use of". Diem is the accusative of dies "day". A more literal translation of carpe diem would thus be "pluck the day as it is ripe" - that is, enjoy the moment. It has been argued by various authors that this interpretation is closer to Horace's original meaning (via Carpe diem @ Wikipedia)
/s
> Diem - A rebrand of Facebook Libra
Understanding who is behind this is extremely relevant.
> Facebook Diem (Facebook's Libra has rebranded)
I'm wondering if all involvement in Diem at Facebook goes through Novi, and with that the members section is "truthful" (though still obfuscating the involvement), and/or if they will cherry-pick which companies appear on the list of members based on how good/bad their image is.
Diem is deeply and fundamentally a Facebook project.