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Facebook reveals its cryptocurrency Libra

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Re: Facebook reveals its cryptocurrency Libra

#711

Post by ficklepickle »

otakucode wrote: post #468
tetrisgm wrote: post #22

It’s going to be interesting. “Unlike previous stablecoins, Libra will not be issued by a central party. Instead, Facebook has enlisted 27 fellow Silicon Valley titans—among them PayPal, Visa, Spotify, Mastercard, Uber, and eBay—to operate as preliminary “validator nodes” who will each share a transparent copy of a vast ledger of transactions reflecting all the activity on the network.” That sounds amazingly dystopia…

It's hilarious that they say they want to setup a payment network that omits rent-seeking middlemen.... and proceed to immediately recruit PayPal, Visa, and Mastercard, which are the biggest rent-seeking middlemen that exist. Seriously, those 3 companies alone have more control over the US economy than the US Federal Reserve does. I've just been waiting for the day when the Federal Reserve says 'we need more liquidit…

The corporate dystopia cometh. It won't be long before they are disrupting the inefficient legacy government.

You won't even need to vote, they will already know how you feel about the candidates.

Re: Facebook reveals its cryptocurrency Libra

#712

Post by obiefernandez »

I just had to pay my one of my staff members in Mexico a severance of approximately 50,000 pesos. She doesn't have documentation or a bank account, so I had to pay her out in cash. 1000 peso notes are not widely used, so I had to get 500 notes out of the bank. That's about 100 bills--pretty bulky. She's going to have to spend a few hours getting home on 3 different buses with that huge wad of cash somewhere on her person, and risk being robbed.

Having some sort of electronic payment system that worked for her would be amazing.

Re: Facebook reveals its cryptocurrency Libra

#713

Post by jackschultz »

hjk05 wrote: post #680
taurath wrote: post #652

Earlier quoted context omitted.

> I'm not 100% steeped in cryptocurrency theory, and so I don't understand why this is presented as if it's agreed on by everyone. What problems does the world have that would be solved by an online, independent [of any nation, presumably?] currency? Visa and Mastercard are taking a 3-4% cut of every single consumer payment made in much of the world. That ends up being a very, very big number. There are many people a…

> Visa and Mastercard are taking a 3-4% cut of every single consumer payment made in much of the world. That ends up being a very, very big number. In Denmark we solved this the lowtech way. Visa cards have to be Dual visa/dancard, where the dancard has extremely low cut limited by law(0,055$/transaction flat rate) It’s not hard, it just requires you have politicians capable of dodging the huge piles of cash MasterCa…

> It’s not hard, it just requires you have politicians capable of dodging the huge piles of cash MasterCard and Visa throw at them whenever talk of breaking the duopoly hits the table.

Ignoring the difficulty of avoiding lobbying money, yes, it'd be difficult. This is a large scale financial change and there are always, always loopholes that will come, not just from politicians who make those because of lobbying money. With how giant the economies are, and how often these cards are used, it isn't a simple move at all.

Look at credit card chip readers in the US. The amount of backend equipment change it took to get something "that simple" in action was a lot. I'm not defending them for it not being quicker, but a move like a duel card is absolutely difficult.

Re: Facebook reveals its cryptocurrency Libra

#714

Post by jpmattia »

ThrustVectoring wrote: post #703
andrewla wrote: post #672

Earlier quoted context omitted.

The thing that separates this from a bank database is a small thing, but important, and that's that even the bank cannot reduce your balance in secret without your authorization, since transactions are signed and the ledger is public. That's because of the cryptographic primitives used. I think in the end we have to accept that taxonomies are going to have rough edges because the map is not the territory. With Bitcoi…

>the bank cannot reduce your balance in secret without your authorization, since transactions are signed and the ledger is public This capability is pretty pointless when the bank can indefinitely suspend your ability to make transactions. The ability to block transactions is an essential part of compliance with anti-money-laundering and other banking regulations.

> This capability is pretty pointless when the bank can indefinitely suspend your ability to make transactions.

You beat me to it: Having cryptographically signed transactions simply does not matter when you have to submit the transaction to what Zuck calls a "validator". The validator will just refuse to validate if your address is on a blacklist.

The net effect is that the coins are frozen. And since this is a backed currency, the backing will then be reduced by the amount corresponding to the frozen coins. This has the exact effect of lessening a user's balance.

Naming it "Byzantine Consensus" in their white paper turns out to be surprisingly apropos.

Re: Facebook reveals its cryptocurrency Libra

#715

Post by gridlockd »

randomvectors wrote: post #406
gridlockd wrote: post #225

Earlier quoted context omitted.

> Conceptually this is a bank, but with no interest returned to users, no financial oversight from governments, controlled by Silicon Valley's top companies. I disagree that this is "conceptually" a bank. Facebook's business model isn't lending out the reserves. If it was, banking regulation would apply. Also, in a modern bank, reserves are maybe 10%, and you get less than zero percent interest after inflation for th…

> At this point, I think I'd honestly rather put my money with Facebook than many of those actual banks out there. This is so ridiculous that I don't even know how to argue with it.

That's probably because systematic bank failure to you is just a fairly tale and you don't understand the risk exposure you have at an actual bank. Open your history book!

To be clear, I wouldn't prefer to put my money with either. But if push comes to shove, would you prefer to have an account at a failed bank that holds 10% in reserves, or a private company that holds close to 100% of reserves, because it is not a bank?

Before you answer, please imagine for a second that you had a decent amount of money to retire on, not whatever FDIC and the already bankrupt state promises to reimburse you with.

Re: Facebook reveals its cryptocurrency Libra

#716

Post by Amygaz »

an_d_rew wrote: post #576
vivekd wrote: post #557

This is an interesting story and I would like to learn more about libra-coin. Unfortunately I think hackernews has a strong anti-facebook bias that is making the opinions here nearly universally one sided. I think we can say three things fairly uncontroversially in favor of this 1. The world could use an online independent currency 2. Adding stability to blockchain currencies and having that work on a large scale is…

Well, perhaps a deep exploration of the pros and cons are warranted, but... FB has been caught willfully and negligently lying multiple times. (And yes, I'm aware that many banks have done the same.) Nonetheless, why would I choose to trust them over any other payment system? What's Zuck's testimony to Congress going to be in five years? "We could have done better. We will do better. Who could have forseen this night…

My impression of what Libra is to FB is equivalent to that Silicon Valley episode where they did an ICO to found their business and get more users at the same time. I don’t believe FB’s altruistic intention for one second.

Re: Facebook reveals its cryptocurrency Libra

#717

Post by ls612 »

wuliwong wrote: post #428
DenisM wrote: post #234

Earlier quoted context omitted.

> We've all seen in the past on how well "financial oversight" worked It worked remarkably well - no consumer lost their deposits to a bank failure. The fact that banks lent out too much money had no impact on consumer deposits, thanks to oversight.

What if banks tend to lend out too much money because of the deposit insurance? This could have other, unintended consequences beyond the narrow scope of your comment.

It’s a nice theory, but unsupported by evidence. In the US since the FDIC was set up there have been far fewer bank failures than there were before then. In fact, having that oversight short-circuits the mechanism that makes bank runs happen, since getting your money back is no longer a function of your place in line.

Re: Facebook reveals its cryptocurrency Libra

#718

Post by clearfund »

What this truly mimics is a 'security' analogous to a basket of foreign currency traded as an ETF. Once you give them US $1 it is backed by a POOL of currency from multiple countries (i.e. the other people who have traded their currency for Libra).

Once you decide to take your US $1 you will get back a different amount based on the underlying value of the pool based on the fluctuating FX market. May be >=Given they are seeking to bring in "underbanked" people (i.e. the charitable patina on this operation) there will be a focused % of currency in the pool from countries with a high % of underbanked people. Logic says this will likely be less stable currency than say the US $, etc.

Thus, your US $ will be diluted by "lesser" or more "volatile" currencies and will diminish the purchase power of your US $1. Conversely it will increase the purchase power of the lesser currency.

Thoughts?

Re: Facebook reveals its cryptocurrency Libra

#719

Post by jeremyjh »

dannyw wrote: post #326
mwest217 wrote: post #297

I feel like the biggest losers here are open consensus-based cryptocurrencies like [Stellar]( https://stellar.org ) and [Ripple]( https://ripple.com ). Libra seems to have the same niche: a consensus-based blockchain protocol rather than proof of work. I fear that having the clout of a bunch of tech companies behind it will get consumer buy-in much faster than Stellar will (with IBM World Wire). A stablecoin backed b…

Neither Ripple and Stellar are open.

As of today, Libra is not open either. You need $27MM and your name on the short-list of 27 validators. Lots of coins have come along and made lots of promises, they need to be judged based on what they actually are today.

Re: Facebook reveals its cryptocurrency Libra

#720

Post by ei8htyfi5e »

I've lived in China and seen how this plays out. Facebook's new Libra Blockchain will be a centralized bank but way more dangerous. It will allow for a worldwide social credit system. If Facebook decides to remove you for wrong speak or wrong think, your money and many services will be inaccessible. Further, they have no mandate like the central bank does to increase employment. Their mandate is to make money for corporations. This will lead to global social unrest.

This will put some third-world countries in complete control by Facebook. I mean, whoever runs the currency, is the country. But in this case, it will be completely controlled, as it's also many of those countries main source of communication.

Therefore, if Facebook's Libra is a countries main currency and social network, that country will be owned by Facebook.

Finally, the regulations on crypto and blockchain are still new. This is in Facebook's advantage as they can start lobbying to have these laws in their favor. They can argue for less transparency, as they are a bank, and this fits with their new privacy marketing message.

This is extremely subversive and Europe is already rightly pushing back. America will be next. On one hand, I love seeing the existing financial system panic when new technology comes out. On the other hand, under no circumstances will I accept a world where Facebook started the one world currency.

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