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Facebook’s New Cryptocurrency Gets Big Backers

wsj.com

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Re: Facebook’s New Cryptocurrency Gets Big Backers

#11

Post by clarkmoody » 

  Facebook Inc. has signed up more than a dozen companies
  including Visa Inc., Mastercard Inc., PayPal Holdings Inc.
  and Uber Technologies Inc. to back a new cryptocurrency it
  plans to unveil next week and launch next year.
This means each of these companies will pay $$$ to run a "node" for this currency and have full visibility into the transactional behavior of the users of the coin.

The term "cryptocurrency" is applied a bit too liberally in the space, but what are the odds that Facebook's coin is censorship-resistant? Will Facebook help enforce US monetary imperialism, or will it thumb its nose at US sanctions? (e.g. allow a US Facebook user to send Libra to Iranian Facebook users)

Now, there could be a surprise plot twist in which these megacorps stand up for individual liberties. There have been stranger things.

Re: Facebook’s New Cryptocurrency Gets Big Backers

#14

Post by camjohnson26 »

If Facebook can pull this off they will have brought about the first universal internet currency, which would be a stunning achievement and could revolutionalize the web as we know it. Failed projects give us some idea of what their challenges will be.

Cryptocurrencies right now have a trade off between scalability and decentralization. Bitcoin is theoretically decentralized even though the reality is more complex. But theoretically anyone with a computer can randomly decide to mine the coin and participate in the network. This whole process is made possible by Proof of Work, which was the key brilliant idea that made bitcoin secure and possible. The problem right now is this algorithm doesn’t allow very many transactions per second.

Other currencies have experimented with something called Proof of Stake to solve the scaling problems but it’s not known if it can be as secure as proof of work. Facebook’s currency will probably use this method. The basic idea is that the holders of the currency vote for what happens on the network. It’s an interesting idea but it’s a very different direction than the key idea of bitcoin.

Another issue is that governments rely on setting interest rates to manage their economies. If an internet currency starts to take off that will limit their ability to do this. At that point you can expect major pushback.

And also, the cryptocurrency ecosystem is a huge target for hackers. Millions of dollars have been stolen over the last decade. Brilliant attacks have been created to exploit the tiniest flaws in code. The phone numbers of crypto enthusiasts have been hacked and their wallets drained. Hackers have even embedded malware on websites or servers to mine cryptocurrency on computers they don’t control. Facebook will need an iron clad security process if it wants to succeed.

Re: Facebook’s New Cryptocurrency Gets Big Backers

#15

Post by germanlee »

And just to think, facebook banned all cryptocurrency ads last year.

https://www.cbsnews.com/news/facebook-announces-a-ban-on-cry...

Clever girl.

Considering that facebook has an active userbase nearing 2.5 billion people, libra could be the most widely used transactional currency in the world if it lives up to its potential.

One has to wonder how decentralized libra will be. I doubt facebook would introduce a currency without having direct control over it. After all, facebook and most social media companies are anti-dencentralization in their nature. And if they have control over the currency and obviously they have control over facebook accounts, then they could easily track users, currency and transaction.

Considering Facebook, Google, Apple, Microsoft, etc are now in the "social engineering", "political engineering" and societal manipulation game, maybe it's time for the lazy politicians to regulate tech. It's not simply a matter of privacy anymore, it's a matter of power and influence.

And once again, it seems like HN's talk of facebook demise was a bit premature. But then again, HN is wrong about pretty much everything it seems.

Re: Facebook’s New Cryptocurrency Gets Big Backers

#16

Post by pfundstein »

clarkmoody wrote: post #11

Facebook Inc. has signed up more than a dozen companies including Visa Inc., Mastercard Inc., PayPal Holdings Inc. and Uber Technologies Inc. to back a new cryptocurrency it plans to unveil next week and launch next year. This means each of these companies will pay $$$ to run a "node" for this currency and have full visibility into the transactional behavior of the users of the coin. The term "cryptocurrency" is appl…

I'm interested to see the how existing crypto exchanges will handle this currency, if it can be traded on them at all. The market that develops in the cryptosphere around Libra will certainly liberate any attempted sanctions on the coin itself, unless Facebook can prevent free trading of the currency on exchanges.
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