Facebook, Libra, and the Long Game • Hacker News Board

Re: Facebook, Libra, and the Long Game

#71

Post by duguxu » Tue, Jun 25, 2019, 4:22 PM UTC

camgunz wrote: post #30

padobson wrote: post #9

I can't help but think that Facebook doomed this "distributed ledger" possibility by trying to be first to market with a tarnished brand. The developing world would hugely benefit from a scalable technology that can efficiently service digital transactions. The piece demonstrates this with how quickly WeChat Pay and Alipay penetrated China. I can't imagine the possibility for prosperity when 3 billion consumers enter…

> The developing world would hugely benefit from a scalable technology that can efficiently service digital transactions. The piece demonstrates this with how quickly WeChat Pay and Alipay penetrated China. I hear this a lot in cryptocurrency threads, and I vehemently disagree. There's no doubt that using "some other currency" (currency or cryptocurrency) is better than using a corrupt, authoritarian regime's currenc…

People living in these country here. Thank you for pointing out these concerns. Besides currency manipulation, another issue with cryptocurrency is about responsibility and accountability. For traditional central bank, before a greedy bad policy made, local governors must carefully think about the aftermath like unrest and they might be held for account and get punished. In the worst scenario, people keep the choice to overthrow old bureaucracy to change the policy by force. But this is not the case for cryptocurrency. There might be no one punished for terribly wrong decision, just because the public have no idea who the decision maker is, or he/she is in another country and escapes the rule of law. Just like 1997 financial crisis for southeast asian people.

Re: Facebook, Libra, and the Long Game

#72

Post by svd4anything » Tue, Jun 25, 2019, 4:23 PM UTC

gooseus wrote: post #45

> The largest leap will come last: Libra as a genuine currency, not simply a medium for transaction. This will be function of volume in the previous two use cases, and is understandably concerning to governments all over the world. Well that's certainly an understatement. This is literally the only mention of government through-out the entire article. The only mention of banks is in the previous paragraph stating the…

> They're also not going to partner with an international consortium to have them replaced with something they only partially control.

It seems that Libra is going to demonstrate exactly why only a decentralized design like Bitcoin’s or other similar cryptocurrencies has any chance of breaking that control. They will be much much harder to attack and shutdown once governments decide this competition in their monopoly of money is just not wanted.

Re: Facebook, Libra, and the Long Game

#73

Post by nickpsecurity » Tue, Jun 25, 2019, 4:24 PM UTC

gooseus wrote: post #45

> The largest leap will come last: Libra as a genuine currency, not simply a medium for transaction. This will be function of volume in the previous two use cases, and is understandably concerning to governments all over the world. Well that's certainly an understatement. This is literally the only mention of government through-out the entire article. The only mention of banks is in the previous paragraph stating the…

Anyone doubting you just needs to look at what happened in 2008. They got bailed out with criminal immunity to tune of around a trillion dollars. The government doesn't usually do that. Also, Wikileaks went down not by governments but by Mastercard, VISA, and PayPal. Assange threatened to leak on a big bank. Zap! They all cut him off simultaneously.

The mega banks and Goldman Sachs are the most powerful organizations in this country. Even Defense arguably served their interests in many cases.

Re: Facebook, Libra, and the Long Game

#74

Post by simias » Tue, Jun 25, 2019, 4:25 PM UTC

gooseus wrote: post #45

> The largest leap will come last: Libra as a genuine currency, not simply a medium for transaction. This will be function of volume in the previous two use cases, and is understandably concerning to governments all over the world. Well that's certainly an understatement. This is literally the only mention of government through-out the entire article. The only mention of banks is in the previous paragraph stating the…

>I really don't know why this isn't a larger part of this conversation.

That's been the elephant in the room ever since Satoshi published its paper more than a decade ago. When I discuss with cryptocurrency enthusiasts I often get the impression that they think that banks are this kind of useless parasite body that somehow appears like mosquitoes around a pond in summer. That they only serve to basically operate ATMs, send you your Visa card and crash the market every other decade or so.

This is of course a gross misunderstanding of what banks are, what they do, why they do it and where they come from. In particular the idea that "bitcoin is going to kill banks" (a very common sentiment in my experience in cryptocurrency circles) is about as meaningful as "this new type of snowboard is going to kill ski resorts!". No it won't, it might change some things about how they operate but after the transition period it'll be business as usual. Cryptocurrencies don't come even close to replacing most of the services offered by banks. Actually, they don't even come close to replacing most of the services offered by actual currency.

It's this weird cognitive dissonance that you encounter in conspiracy theory circles: the banking system is this hellish beast that steals money from the honest middle-class worker, operated from a global circle of elites acting from the shadows and that must be destroyed at all cost to save humanity. How do you do that? By replacing their currency by your own, they'll never see that coming, those idiots.

Re: Facebook, Libra, and the Long Game

#75

Post by chasing » Tue, Jun 25, 2019, 4:25 PM UTC

svd4anything wrote: post #72

gooseus wrote: post #45

> The largest leap will come last: Libra as a genuine currency, not simply a medium for transaction. This will be function of volume in the previous two use cases, and is understandably concerning to governments all over the world. Well that's certainly an understatement. This is literally the only mention of government through-out the entire article. The only mention of banks is in the previous paragraph stating the…

> They're also not going to partner with an international consortium to have them replaced with something they only partially control. It seems that Libra is going to demonstrate exactly why only a decentralized design like Bitcoin’s or other similar cryptocurrencies has any chance of breaking that control. They will be much much harder to attack and shutdown once governments decide this competition in their monopoly…

Government control over currency is a good thing.

Re: Facebook, Libra, and the Long Game

#76

Post by sonnyblarney » Tue, Jun 25, 2019, 4:26 PM UTC

gooseus wrote: post #45

> The largest leap will come last: Libra as a genuine currency, not simply a medium for transaction. This will be function of volume in the previous two use cases, and is understandably concerning to governments all over the world. Well that's certainly an understatement. This is literally the only mention of government through-out the entire article. The only mention of banks is in the previous paragraph stating the…

Actually, the US used to have any number of currencies in the 19th centuries and it was a mess.

Having a centralized currency is a reasonable thing, though the Fed is a private entity, it operates ultimately like other central banks.

The banks don't have any special power - if you want to open one, you can do that right now.

If they did have some special sauce, VC would be pouring it, and mostly, it's not.

Banks don't make their money or derive their power through the 'creation of money'.

FB's move into this arena is possibly more destabilizing than anything, hopefully, the opportunities will outweigh the risks.

Re: Facebook, Libra, and the Long Game

#77

Post by jmull » Tue, Jun 25, 2019, 4:28 PM UTC

Pretty interesting. It's good to see a deeper analysis of this.

This part though:

> ...while its members — who again, are the validators — do control the Libra protocol, Facebook does not control the validators. Which, by extension, means that Facebook will not control Libra.

That's true, but from my point of view, that distinction isn't too important.

In either case, there are a relatively very small number of individuals who control Libra in an opaque way.

By spreading the control out a little, I think it reduces short-sighted and single-perspective thinking, which is good, but it's still going to be run in a self-interested way for the handful of companies that control it and the executives that control those companies.

Re: Facebook, Libra, and the Long Game

#78

Post by nine_k » Tue, Jun 25, 2019, 4:28 PM UTC

buboard wrote: post #60

gooseus wrote: post #45

> The largest leap will come last: Libra as a genuine currency, not simply a medium for transaction. This will be function of volume in the previous two use cases, and is understandably concerning to governments all over the world. Well that's certainly an understatement. This is literally the only mention of government through-out the entire article. The only mention of banks is in the previous paragraph stating the…

Banking has existed for a few centuries, and state controlled money is something recent too, it used to be that multiple sources minted coins. And bitcoin which has existed for 10 years and is far more threatening to governments has not been extinguished.

Gold coins can be minted at multiple places, or admitted foreign, because their value is gold by weight.

Mass fiat money are no more than 2 centuries old, in most places less than 60 years (see Bretton-Woods). They have to be tightly controled by state.

Re: Facebook, Libra, and the Long Game

#79

Post by aserafini » Tue, Jun 25, 2019, 4:28 PM UTC

camgunz wrote: post #30

padobson wrote: post #9

I can't help but think that Facebook doomed this "distributed ledger" possibility by trying to be first to market with a tarnished brand. The developing world would hugely benefit from a scalable technology that can efficiently service digital transactions. The piece demonstrates this with how quickly WeChat Pay and Alipay penetrated China. I can't imagine the possibility for prosperity when 3 billion consumers enter…

> The developing world would hugely benefit from a scalable technology that can efficiently service digital transactions. The piece demonstrates this with how quickly WeChat Pay and Alipay penetrated China. I hear this a lot in cryptocurrency threads, and I vehemently disagree. There's no doubt that using "some other currency" (currency or cryptocurrency) is better than using a corrupt, authoritarian regime's currenc…

Regarding a country’s ability to manipulate their own currency or execute monetary policy which is mostly in the direction of printing more: the end game of crypto seems to take this option off the table for all governments in the long term.

Why? Because assuming all other things being equal (convenience as medium of exchange etc.), an individual is always going to prefer holding currency that isn’t subject to inflation.

An individual is never going to generously allow their government to erode X% of their liquid cash voluntarily.

This future doesn’t require any crypto ‘dictating’ its money supply policy, it just requires at least one fixed supply crypto to exist in your country that is as convenient as existing cash / online payment to make governmental monetary policy useless.

The problem for governments is: the genie is out of the bottle regarding fixed supply.

Note that I’m not saying it’s good or bad that countries cannot effectively control money supply anymore but it seems inevitable they can’t in the long term.

Re: Facebook, Libra, and the Long Game

#80

Post by tlb » Tue, Jun 25, 2019, 4:28 PM UTC

gooseus wrote: post #45

> The largest leap will come last: Libra as a genuine currency, not simply a medium for transaction. This will be function of volume in the previous two use cases, and is understandably concerning to governments all over the world. Well that's certainly an understatement. This is literally the only mention of government through-out the entire article. The only mention of banks is in the previous paragraph stating the…

Oligopolies do sometimes end when conditions change. People once thought that TV news, highly regulated by the government, would have an indefinite monopoly. Credit cards irritated incumbent banks in the 60s. It’s not inconceivable that banking’s control of money could end.