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Facebook, Libra, and the Long Game

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Re: Facebook, Libra, and the Long Game

#91

Post by radicalbyte »

sonnyblarney wrote: post #76
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'…

There's a really good Planet Money episode on the subject:

https://www.npr.org/sections/money/2012/12/07/166747693/epis...

Re: Facebook, Libra, and the Long Game

#92

Post by unknownsavage »

filereaper wrote: post #82

Tangential, but has Facebook done anything to reduce the power-consumption in Libra? I'm not enthused about supporting anything that worsens the global climate crisis and its irresponsible of large companies to support cryptocurrencies with its terrible power usage right now.

It doesn't use mining, so requires negligible power to run.

Re: Facebook, Libra, and the Long Game

#93

Post by langitbiru »

rolltiide wrote: post #40
quattrofan wrote: post #34

And no mention of Lightning Network...

Why would this article mention that?

Probably because the author mentioned that Bitcoin is not efficient (7 tx per second). But Lightning Network can make Bitcoin more efficient. I haven't looked into Lightning Network thouroughly so I can not make any comment whether it is up to its words.

Re: Facebook, Libra, and the Long Game

#94

Post by yingw787 »

tlb wrote: post #80
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.

When you're talking about using a different currency, you're not replacing Bank of America or JPMorgan Chase. You're replacing the Federal Reserve, Bretton Woods, and the U.S. government. Government's grasp on what money should mean is one of the primary ways democratic governments exercise power.

Re: Facebook, Libra, and the Long Game

#95

Post by RobertoG »

aserafini wrote: post #79
camgunz wrote: post #30

Earlier quoted context omitted.

> 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 inflat…

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

And why should they spend a so wonderful asset? And what is the point of a currency that is always appreciating and nobody want to spend?

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

Central banks don't target the quantity of money, they target the interest rate. The quantity of money is a function of the economic activity, as it should.

The idea that people is going to change to private currencies is a joke. The only thing a government have to do, in order to create demand for its currency, is accept only its currency as payment for taxes.

Re: Facebook, Libra, and the Long Game

#96

Post by [deleted] »

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…

[deleted]

Re: Facebook, Libra, and the Long Game

#97

Post by dwighttk »

RobertoG wrote: post #85
nine_k wrote: post #78

Earlier quoted context omitted.

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.

>>"Gold coins can be minted at multiple places, or admitted foreign, because their value is gold by weight." If the value of the coin come from the gold in it, why mint them instead of using the gold directly?

(imperfect) stamp of quality and amount

Re: Facebook, Libra, and the Long Game

#98

Post by svd4anything »

xxpor wrote: post #90
svd4anything wrote: post #83

Earlier quoted context omitted.

Is that really truly settled by economists? Objectively. I mean there have sure been a lot of currency crisis and hyperinflation events in modern world history.

I don't think pure economics are the only thing to worry about here. Anti-money laundering/sanctions/stopping terrorist financing efforts are generally a good thing that not ideal from an economic perspective.

> Anti-money laundering/sanctions/stopping terrorist financing efforts

That looks like a pretty questionable line of logic, because, say for sake of argument, that it can be demonstrated from an economics objective that competitive private currencies produce higher levels of growth. Now the terrorists also have us hostage economically as we need to use monopoly government money as the only way to stop them!

Come on, it’s lazy thinking to believe that only centralized authoritarian control of currency is how to keep everyone safe from various bad actors, terrorists, criminals and rogue nations. My intuition says that just can’t be correct, otherwise let’s also just put cameras in everyone’s homes ... just in case.

Re: Facebook, Libra, and the Long Game

#99

Post by archenary »

bhupy wrote: post #67
simias wrote: post #57

Earlier quoted context omitted.

The incentives don't seem to align in that direction. What would be the point for Facebook to create a promote such a currency if they can't control it at some level? I fully expect that even if the core of the cryptocurrency might actually be decentralized and not directly controlled by Facebook (and I don't believe that either, for the record) the practical implementation of this will give Facebook more than enough…

But given the system laid out in the white paper, what specifically gives Facebook the ability to exert this kind of control, even in the long run? I think we all agree that Facebook is incentivized to behave in certain ways, but if self-limitation is baked into the system, how does that matter? This is a genuine question for which I would love an answer.

The author explained this (quoted below). Even though FB doesn't control Libra (protocol), they do own Calibra (digital wallet). If Libra takes off, Calibra stands a good chance of becoming the default way of transacting in Libra. FB then becomes the de facto leader and holds outsized influence over the direction of the project/industry, much like Gmail/email, Chrome/web and Google/web search.

> And this is when this bet would pay off for Facebook (and the second point I missed in my earlier analysis): the implication that digital currencies will do for money what the Internet did for information is that the very long-term trend will be towards centralization around Aggregators. When there is no friction, control shifts from gatekeepers controlling supply to Aggregators controlling demand. To that end, by pioneering Libra, building what will almost certainly be the first wallet for the currency, and bringing to bear its unmatched network for facilitating payments, Facebook is betting it will offer the best experience for digital currency flows, giving it power not by controlling Libra but rather by controlling the most users of Libra.

Re: Facebook, Libra, and the Long Game

#100

Post by ilaksh »

filereaper wrote: post #82

Tangential, but has Facebook done anything to reduce the power-consumption in Libra? I'm not enthused about supporting anything that worsens the global climate crisis and its irresponsible of large companies to support cryptocurrencies with its terrible power usage right now.

Its not a real cryptocurrency. It doesn't need to be robust or use a lot of power.
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