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Facebook plans cryptocurrency debut

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Re: Facebook plans cryptocurrency debut

#261

Post by rafiki6 »

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…

You asked two different questions. I'm not going to answer the one about why Facebook is creating a pegged cryptocurrency (other commenters have done a good job of that).

As for the value of blockchain here, there is absolutely none. Facebook is creating a currency and labeling it a cryptocurrency which denotes the use of a blockchain, when in reality considering they're the central issuing authority of the currency and are the ones who determine it's value/inflation rate (i.e. pegging as you rightly described). Therefore using a blockchain for decentralized settlement and provenance here serves absolutely no real purpose and you are correct in pointing out that they can just keep everything in a database (which is likely what they will actually do).

Re: Facebook plans cryptocurrency debut

#262

Post by rafiki6 »

A2017U1 wrote: post #13
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…

Have you transferred money across borders to an individual lately? As much as I want to criticize this FB is probably in an excellent position to navigate the kyc minefields.

I can almost guarantee you that regulators will step in and regulate the living crap out of this system if it's found to be actively used for high rates of cross-border transfers and foreign exchange. Governments are a lot smarter than people give them credit for. Once the regulation kicks in, all of a sudden the value of this diminishes greatly.

Re: Facebook plans cryptocurrency debut

#263

Post by wbronitsky »

negamax wrote: post #118

I will revisit this thread in 2021 just to see how wrong everyone was. FB has billions of users that interact with its product everyday. People who make plans, attend events, split all sort of bills. A borderless stablecoin will be a gamechanger. It can fuel commerce but above that it will kill many middlemen and rightly so.

You might have a good point, but why present it in this way? It is needlessly condescending and makes people want to not believe you. You could have easily stated your case for how much utility and adoption you think this will have without looking down your nose at people who hold a different opinion.

Comments like this devalue the entire conversation being had here by pushing people either towards twitter style shitposting/flamewars, which are terrible ways to have conversations, or simply causing those who would like to comment to not engage. Either way, can you not?

Re: Facebook plans cryptocurrency debut

#264

Post by rafiki6 »

negamax wrote: post #118

I will revisit this thread in 2021 just to see how wrong everyone was. FB has billions of users that interact with its product everyday. People who make plans, attend events, split all sort of bills. A borderless stablecoin will be a gamechanger. It can fuel commerce but above that it will kill many middlemen and rightly so.

I don't understand why you're assuming "everyone" here will be wrong. I have yet to see a comment that has detracted from the value this brings to Facebook. What doesn't make any level of sense is why it's being labeled a cryptocurrency. It's a currency controlled by Facebook. That's no different than regular money issued by a central bank.

Re: Facebook plans cryptocurrency debut

#265

Post by stanleydrew »

Frondo wrote: post #190
rkagerer wrote: post #164

Earlier quoted context omitted.

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…

"prevents hostile monetary policy" -- except this isn't true. Crypto has just taken monetary policy decisions out of the hands of the electorate, however tenuous a chain of authority that is (voters -> president -> Fed chair), and placed it in the hands of either "the original developers" or "whoever has 51% of network computation". That is an absolutely horrible trade-off for anyone who wants a democratically run cu…

I'm not a crypto fan so don't take this the wrong way, but I think the crypto answer to "someone stole your private key and is stealing your money" is the same as the non-crypto answer to "someone stole your ATM PIN and is stealing your money." Namely, you ask police and prosecutors to track down the perpetrator to get your money back.

Re: Facebook plans cryptocurrency debut

#266

Post by rafiki6 »

zeroxfe wrote: post #154
fullshark wrote: post #126

Earlier quoted context omitted.

A payments system on Facebook makes a ton of sense and would be very useful. I just don't get why it has to be cryptocurrency.

Two things I can think of: - you can get transparency (the entire ledger must be public, so you reduce the risk of many kids of internal fraud and manipulation.) - you can use these coins outside the facebook ecosystem -- I can't think of immediate value here, but I can see a long play where Facebook can turn into a bank

This is the first and only comment I've read that actually gives credence to the idea of FB making it as a cryptocurrency, but it still falls short of a simple idea and gives FB too much credit for being an "open" player. FB is the issuer, why can't they just provide APIs to their ledger and APIs for settlement so it can be used outside of their direct ecosystem, but still allows them full control? FB wants to keep people in their ecosystem.

Re: Facebook plans cryptocurrency debut

#268

Post by devit »

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…

It prevents covert malicious behavior by the issuer (i.e. they can't just change a database entry and deny they did so).

Re: Facebook plans cryptocurrency debut

#270

Post by baby »

briodf wrote: post #145
A2017U1 wrote: post #13

Earlier quoted context omitted.

Have you transferred money across borders to an individual lately? As much as I want to criticize this FB is probably in an excellent position to navigate the kyc minefields.

Have you transferred money across borders with good recommendations lately? Sending money across borders is historically super complex and expensive, you're right. The WorldBank estimates that it costs an average of 8% in total fees (transfer fees + exchange rate mark-up) to transfer money internationally. For international transfers with banks and cash-based money transfers, this is still true. But, in the last 10 y…

Don't know about Monito but I've used TransferWise many times. First it's not straight forward, it takes time (several days), and it's freaking expensive. These numbers you quote are pretty far from what I spend when transferring money between France, the UK and the US.
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