Facebook plans cryptocurrency debut • Hacker News Board

Re: Facebook plans cryptocurrency debut

#161

Post by r00fus » Fri, Jun 07, 2019, 4:37 PM UTC

will_brown wrote: post #99

wz1000 wrote: post #6

Can anyone explain what the point of a pegged cryptocurrency is? Since you are dependent on the issuing entity to honour the stated peg, why not just have your balance be an entry in a regular database maintained by that entity? What exactly does the blockchain gain you here? One thing it does _not_ get you is censorship resistance. If the central authority wants to take away coins from a wallet, all it needs to do i…

>Can anyone explain what the point of a pegged cryptocurrency is? What was the point of arcades taking your quarters and issuing you tokens for the machines? Why not just allow the machines to take your quarters? The idea is for the issuer to take real money from you and issue you Monopoly money which the issuer can track and control. In a worst case scenario the issuer can make up new rules (change their terms and c…

Then why doesn't Facebook just go the Microsoft route and have "points"? (FB already has a credits system).

Re: Facebook plans cryptocurrency debut

#162

Post by espadrine » Fri, Jun 07, 2019, 4:38 PM UTC

InvisibleCities wrote: post #156

will_brown wrote: post #99

Earlier quoted context omitted.

>Can anyone explain what the point of a pegged cryptocurrency is? What was the point of arcades taking your quarters and issuing you tokens for the machines? Why not just allow the machines to take your quarters? The idea is for the issuer to take real money from you and issue you Monopoly money which the issuer can track and control. In a worst case scenario the issuer can make up new rules (change their terms and c…

But that doesn't really answer the question being asked. If the cryptocurrency is completely controlled by a centralized authority who has absolute rights over the system, why bother with the technical and cognitive hurdles of using a blockchain? A standard ledger in a centralized database is more than adequate for that task, and much easier to maintain.

The main gain is in acting as a trusted clearing system.

Clearing takes less time than FedWire or ACH.

Settlement, on the other hand, still has to go through the Federal Reserve.

Re: Facebook plans cryptocurrency debut

#163

Post by ausbah » Fri, Jun 07, 2019, 4:39 PM UTC

I have long been skeptical of cryptocurrencies, but I think that such beliefs are rooted more in crappy misapplications and hype then reality. Can anyone link some sources that may be able to change my mind?

Re: Facebook plans cryptocurrency debut

#164

Post by rkagerer » Fri, Jun 07, 2019, 4:40 PM UTC

acdha wrote: post #150

bitreality wrote: post #142

Earlier quoted context omitted.

For users, the advantage would be an easy to use stable-coin, that is more accessible to the average person. Right now, most crypto currency has plenty of complexity to it. FacebookCoin will probably work more similarly to CashApp vs. Bitcoin. It means most people using it won't even realize it's a Blockchain token. It'll be like "Facebook Bucks". But then it also offers the flexibility of a blockchain token to more…

This is the same reason why cryptocurrencies haven’t seen general adoption: none of that has any inherent value to someone who isn’t already a convert. Things which would matter are “can transfer real money to a friend with less markup than Apple/Google/PayPal”, “can sell things online at better terms than PayPal”, “can make transactions at a low enough rate that a business model requiring micro-payments is viable”,…

I agree, but [more general] cryptocurrencies do already check a few boxes:

  - is cash you can email
  - prevents hostile monetary policy from stealing your wealth (inflation, negative interest rates, haircuts, etc)
  - keeps working when you travel (unlike Paypal / credit cards which often get frozen)
  - uncensorable transactions that ignore borders
  - can send large $ amounts anywhere for ridiculously cheap
  - more vertigo than a theme park

If none of those excite you, crypto isn't for you today (just like the internet wasn't for you back in the 90's) and you should wait another 10 years until it's mainstream.

Re: Facebook plans cryptocurrency debut

#165

Post by tim333 » Fri, Jun 07, 2019, 4:41 PM UTC

no1youknowz wrote: post #137

Who knew back in 1988 that what the Economist predicted would come true? https://i.imgur.com/mWj0d3f.png

Though I think they were predicting a currency that would replace national currencies in the manner of the Euro which I can't see Facebook's doing.

Re: Facebook plans cryptocurrency debut

#166

Post by badfrog » Fri, Jun 07, 2019, 4:41 PM UTC

awrence wrote: post #77

wz1000 wrote: post #6

Can anyone explain what the point of a pegged cryptocurrency is? Since you are dependent on the issuing entity to honour the stated peg, why not just have your balance be an entry in a regular database maintained by that entity? What exactly does the blockchain gain you here? One thing it does _not_ get you is censorship resistance. If the central authority wants to take away coins from a wallet, all it needs to do i…

On paper, you're basically entirely right. Stablecoins including FB are all smokescreens to sell managing fiat on an internal database for you with "blockchain" wrapped around it. This project and stablecoins in general have nothing to do with cryptocurrencies. With that said i can tell you at least one solid reason why any issuer would do it. At a bare minimum they can earn overnight on the holdings since stablecoin…

> But to take an example, at this point tether is generating 75mm a year for free for it owners at 0 risk. It's the crypto equivalent of a "free" checking account that doesn't pay interest.

It sounds more like an ETF than a checking account since the coins are directly tied to a "basket". If the SEC agrees, they'll likely eventually require that the dividends and interest from the basket go to the coin owners.

Re: Facebook plans cryptocurrency debut

#167

Post by cygaril » Fri, Jun 07, 2019, 4:43 PM UTC

Lxr wrote: post #138

What is the best way to profit from all this crypto hype, as a rational person who’s convinced all coins will eventually go to zero?

Getting involved is risky - even if you are right (and I think you are), the price could still increase by a large amount for a long time before sense reasserts itself.

As Keynes apparently did not say: "The market can stay irrational a lot longer than you can stay solvent."

If you hit your trading / credit limits you could lose a lot of money despite being right in the long run.

And as Keynes definitely did say, "In the long run, we are all dead."

Re: Facebook plans cryptocurrency debut

#168

Post by will_brown » Fri, Jun 07, 2019, 4:45 PM UTC

InvisibleCities wrote: post #156

will_brown wrote: post #99

Earlier quoted context omitted.

>Can anyone explain what the point of a pegged cryptocurrency is? What was the point of arcades taking your quarters and issuing you tokens for the machines? Why not just allow the machines to take your quarters? The idea is for the issuer to take real money from you and issue you Monopoly money which the issuer can track and control. In a worst case scenario the issuer can make up new rules (change their terms and c…

But that doesn't really answer the question being asked. If the cryptocurrency is completely controlled by a centralized authority who has absolute rights over the system, why bother with the technical and cognitive hurdles of using a blockchain? A standard ledger in a centralized database is more than adequate for that task, and much easier to maintain.

I responded to a few comments in kind, and I’d say it’s impossible to answer in a vacuum without knowing the actual token use case/function.

Generically, we have seen instances where centralized ledgers/databases are manipulated and permit double spend. Even in the case of multi billion dollar publicly traded companies going Private, during due diligence we have seen upward of double the issued shares of stock than actually exist. In such a case we have the corporation with a centralized stock ledger, stock trusts with their own centralized ledgers, etc... but the mistake of double spend still happened. In those cases Blockchain would have never allowed those errors, one such case cost the buyer $150M personally post acquisition. Not to say that is in anyway applicable here, but without even knowing the token function we can’t say, but it just goes to show Blockchain does have some use cases and benefits where centralized ledgers have failed costing hundreds of millions.

Re: Facebook plans cryptocurrency debut

#169

Post by tveita » Fri, Jun 07, 2019, 4:46 PM UTC

omarchowdhury wrote: post #82

koolba wrote: post #15

I think the angle here is international blockchain Venmo with a goal to convince the non-destitute Facebook holdouts to finally sign up so that they can commerce. For the record I doubt that will work. The early adopters will be scammers and people duped into thinking this is their get rich quick opportunity.

> The early adopters will be scammers and people duped into thinking this is their get rich quick opportunity. It's a stablecoin. There's no get rich opportunity.

If it really is pegged to a basket of multiple currencies that makes it a bit of a forex instrument, not just a 1:1 exchange. Someone, somewhere could probably make a bit of money on mispricing or market movements.

Re: Facebook plans cryptocurrency debut

#170

Post by thefounder » Fri, Jun 07, 2019, 4:46 PM UTC

wz1000 wrote: post #6

Can anyone explain what the point of a pegged cryptocurrency is? Since you are dependent on the issuing entity to honour the stated peg, why not just have your balance be an entry in a regular database maintained by that entity? What exactly does the blockchain gain you here? One thing it does _not_ get you is censorship resistance. If the central authority wants to take away coins from a wallet, all it needs to do i…

Well, one good reason to use cryptocurrencies is that you don't have to deal with visa/mastercard crap. You can send and accept payments without all kind of requirements(i.e pci).

Stable coins are really what bitcoin should have been: digital money! Now bitcoin is just a big casino owned and run by dubious entities/exchangers/trading platforms with no oversight.