Facebook’s Cryptocurrency: Stop It Before It Starts • Hacker News Board

Re: Facebook’s Cryptocurrency: Stop It Before It Starts

#31

Post by solveit » Thu, Jun 20, 2019, 12:00 AM UTC

fnord77 wrote: post #12

> Fortunately for the rest of the world, Libra may well fail. People prefer assets that hold their value relative to either the local currency or, in an unstable situation, dollars or euros. Nobody wants to receive $10 from a friend only to have it turn into $9.80. But since Libra pegged is to a basket of currencies, it is not actually stable. Like other cryptocurrencies, every Libra transaction thus involves exchang…

>the only way Libra can succeed is if Facebook makes a concerted effort to force its adoption.

But... Facebook obviously will?

Re: Facebook’s Cryptocurrency: Stop It Before It Starts

#32

Post by SomeOldThrow » Thu, Jun 20, 2019, 12:00 AM UTC

ThrustVectoring wrote: post #25

Solvitieg wrote: post #18

Earlier quoted context omitted.

It's a problem only for the government and existing financial institutions. Looks no further than China.

Not really. Money laundering, extortion, and other financial crimes have negative externalities. It's absolutely a problem if we invent the technology that allows me to pay a crypto-ransom, since that pretty directly creates a bunch of ransomers. Also, the principals involved in "disrupting" governments and existing financial institutions also face the problem of government reprisal. Liberty Reserve got seized and th…

The government already has these problems: look at the use of real estate to launder money. Eg https://www.washingtonpost.com/news/politics/wp/2018/01/04/h...

Re: Facebook’s Cryptocurrency: Stop It Before It Starts

#33

Post by Mengkudulangsat » Thu, Jun 20, 2019, 12:01 AM UTC

camjohnson26 wrote: post #10

People who think the government should have the technological power to decide who pays who in the world need to ask themselves this. Do you think that there should be a hardware filter on all internet fiber cables that allows the government to filter that traffic? Banning cryptocurrencies because they physically allow money laundering is as logically indefensible as banning internet fibers because they physically all…

I foresee money laundering eventually getting decriminalized, much like drugs are right now. The pretext of the offence always felt strange to me.

If I robbed a bank, did a getaway drive but got caught afterwards, I expect to be charged with robbery, not driving.

Re: Facebook’s Cryptocurrency: Stop It Before It Starts

#34

Post by camjohnson26 » Thu, Jun 20, 2019, 12:20 AM UTC

55555 wrote: post #15

You all need to read the following excerpt from Matt Levine's thoughts on Libra: > So, first, Libra will be a “stablecoin,” in the sense that its value will be pinned to conventional financial assets. Unlike most stablecoins, though, it will be pinned to a basket “of low-volatility assets, including bank deposits and government securities” in different currencies, so it won’t consistently be worth one dollar or one e…

Every currency fluctuates in value, we’re just used to talking in dollar terms. Every libra will always be worth one libra.

Re: Facebook’s Cryptocurrency: Stop It Before It Starts

#35

Post by treis » Thu, Jun 20, 2019, 12:24 AM UTC

55555 wrote: post #15

You all need to read the following excerpt from Matt Levine's thoughts on Libra: > So, first, Libra will be a “stablecoin,” in the sense that its value will be pinned to conventional financial assets. Unlike most stablecoins, though, it will be pinned to a basket “of low-volatility assets, including bank deposits and government securities” in different currencies, so it won’t consistently be worth one dollar or one e…

>The dollar will start to seem unstable and useless. If you buy most things online, and if everything online is priced in Libras, then you’ll end up living your life denominated in Libras, and only converting your Libras into dollars on your occasional touristic visits to the physical world.[4]

This is so off the mark. Governments require taxes to be paid in their currency. So at minimum 30-50%, depending on the country, of all economic activity is guaranteed to take place in the local currency. Second, if the Libra fluctuates wildly with the local currency little will be priced in it. You don't want to sign a contract that could befome 20% more expensive because of a currency swing.

Re: Facebook’s Cryptocurrency: Stop It Before It Starts

#36

Post by cujic9 » Thu, Jun 20, 2019, 12:25 AM UTC

treis wrote: post #35

55555 wrote: post #15

You all need to read the following excerpt from Matt Levine's thoughts on Libra: > So, first, Libra will be a “stablecoin,” in the sense that its value will be pinned to conventional financial assets. Unlike most stablecoins, though, it will be pinned to a basket “of low-volatility assets, including bank deposits and government securities” in different currencies, so it won’t consistently be worth one dollar or one e…

>The dollar will start to seem unstable and useless. If you buy most things online, and if everything online is priced in Libras, then you’ll end up living your life denominated in Libras, and only converting your Libras into dollars on your occasional touristic visits to the physical world.[4] This is so off the mark. Governments require taxes to be paid in their currency. So at minimum 30-50%, depending on the coun…

Ohio Becomes First US State to Allow Taxes to Be Paid in Bitcoin

https://www.coindesk.com/ohio-becomes-first-us-state-to-allo...

Re: Facebook’s Cryptocurrency: Stop It Before It Starts

#37

Post by weddpros » Thu, Jun 20, 2019, 12:27 AM UTC

ThrustVectoring wrote: post #21

darawk wrote: post #13

Earlier quoted context omitted.

You could equally say "Speech, but without US government oversight, is exactly what the pedophiles and terrorists want to have".

True. I'm not making a moral judgement here - merely stating that flouting anti-money-laundering laws and facilitating financial crimes has severe legal risks. I'm honestly not even worried that Facebook is going to flout AML laws. I'm more worried that they'll use the fact that they're using newfangled technology and the political and economic weight of their crypto consortium to get favorable legislation passed. An…

"undermining laws that fight money laundering and other financial crimes": do these actually work? 5% of the time? 95%?

Re: Facebook’s Cryptocurrency: Stop It Before It Starts

#38

Post by treis » Thu, Jun 20, 2019, 12:31 AM UTC

cujic9 wrote: post #36

treis wrote: post #35

Earlier quoted context omitted.

>The dollar will start to seem unstable and useless. If you buy most things online, and if everything online is priced in Libras, then you’ll end up living your life denominated in Libras, and only converting your Libras into dollars on your occasional touristic visits to the physical world.[4] This is so off the mark. Governments require taxes to be paid in their currency. So at minimum 30-50%, depending on the coun…

Ohio Becomes First US State to Allow Taxes to Be Paid in Bitcoin https://www.coindesk.com/ohio-becomes-first-us-state-to-allo...

>which will convert bitcoins to dollars for the Treasurer’s office

Re: Facebook’s Cryptocurrency: Stop It Before It Starts

#39

Post by aaronharnly » Thu, Jun 20, 2019, 12:33 AM UTC

berns wrote: post #17

jameslevy wrote: post #8

"But since Libra pegged is to a basket of currencies, it is not actually stable." A weighted basket of the top 5 currencies by market capitalization should be more stable than the dollar. The point about taxable income is true, although if I would rather pay tax on income I made from Libra than not had earned the income at all. Unless the dollar crashes hard I wouldn't expect this to be a meaningful amount of income.

> Nobody wants to receive $10 from a friend only to have it turn into $9.80. The author thinks that the USD is the unmovable absolute and it's everything else that changes in relation to it.

I think the point is more profound than that — for all the reasons that local currencies are useful (and the flowering of many cryptocurrencies has happened), one’s local national currency is itself an incredibly useful thing to have. If your friend is in the same country or currency zone as you, which statistically they are very likely to be, a national stablecoin is more useful than one that drifts.

(Conversely, for international remittances, an international basket stablecoin might indeed be a useful thing to have!)

Re: Facebook’s Cryptocurrency: Stop It Before It Starts

#40

Post by erentz » Thu, Jun 20, 2019, 12:35 AM UTC

55555 wrote: post #15

You all need to read the following excerpt from Matt Levine's thoughts on Libra: > So, first, Libra will be a “stablecoin,” in the sense that its value will be pinned to conventional financial assets. Unlike most stablecoins, though, it will be pinned to a basket “of low-volatility assets, including bank deposits and government securities” in different currencies, so it won’t consistently be worth one dollar or one e…

So it won’t be 1:1 redeemable? That’s pretty critical - since the US IRS requires you to report all purchases you make with a cryptocurrency in its USD equivalent value at the time. This starts to mount very high if you are making every day purchases as presumably FB hope.

So how are Facebook going to get around this? Or are they just going to ignore this problem and leave it to users to either get flagged by the IRS or for the IRS to be forced to change its rules for FBs benefit?