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

Re: Facebook, Libra, and the Long Game

#191

Post by yingw787 » Tue, Jun 25, 2019, 8:19 PM UTC

abecedarius wrote: post #167

yingw787 wrote: post #139

Earlier quoted context omitted.

...I really don’t agree with that counter. Many, and probably most, governments on this earth today have divergent understandings of money and power. You can be rich in Russia, but that money can be easily rendered worthless by somebody pointing a gun at you or your family. There is no comfort in being rich if you are not politically connected, and even then you have to be more connected than the other guy otherwise…

I don't understand how your point of view conflicts with the parent's. Are you saying that yes, power over money can be used to tyrannical ends, but real tyrants needn't bother?

What I'm getting at is in closed societies, power and money are different things. In open societies, money is power. Parent says government control over money incentivizes authoritarianism. I'm arguing authoritarians have no need to control money to exercise power, because they have multiple ways to do the latter. For instance, during the Cold War the Soviet ruble was not convertible to U.S. dollars or British pounds, because the Soviet government didn't exercise power through open trade/commerce/finance, but rather through organizations like COMECON (https://en.wikipedia.org/wiki/Comecon). Money's power is observable, decentralized, and fine-grained, everything an economic pact is not.

Re: Facebook, Libra, and the Long Game

#192

Post by bduerst » Tue, Jun 25, 2019, 8:23 PM UTC

mgraczyk wrote: post #133

boh wrote: post #120

Adding the words blockchain and cryptocurrency to this new Facebook initiative gives it an air of "innovation", the sort that reacts to criticism with "this is too new and innovative for you to understand", and "stogy governments don't like to innovate like we do, so they want to stop us with old timey regulation (and consumer protections)". Libra is essentially an ETF. It's a vehicle that will take deposits from cus…

When was the last time you used an ETF to pay for Uber Eats? Libra is not an ETF. Clearly it has different functionality and will be used differently by both Facebook and users. It would be more accurate to say that the risk profile should look to account holders like an ETF rather than a bank.

Never, because it's kind of absurd to create an ETF for user payments, which is kind of to GP's point.

Unless of course you stand to benefit from the transactional data, which I'm not convinced this Calibra isn't a trojan horse for Facebook to get the data from.

Re: Facebook, Libra, and the Long Game

#193

Post by sprafa » Tue, Jun 25, 2019, 8:26 PM UTC

Lordarminius wrote: post #166

sprafa wrote: post #107

Earlier quoted context omitted.

Governments can easily ban and pursue anti-crypto measures to prevent anything such as money they can't control. Yannis Varoufakis said it best: the idea of apolitical money is a fiction and a dream. Money has always been associated to and controlled by governments. Bitcoin currently is actually heavily manipulated/moved by Tether which is controlled by Bitfinex.

>Yannis Varoufakis said it best.... Any links to support your last two assertions ? I'm interested in checking them out.

I saw him in person in london and he was asked about Bitcoin. As the last sentence of his answer he said and I’m paraphrasing: “If you’re asking about the idea of apolitical money [in relation to Bitcoin] I think that’s a fantasy”. I’ll try and see if he ever said something similar in other settings but I remember connecting it to what I was reading around the same time which was David Graeber’s Debt: a History book where he presents a similar anthropological-historical argument.

Re: Facebook, Libra, and the Long Game

#194

Post by sprafa » Tue, Jun 25, 2019, 8:28 PM UTC

MichaelConlon wrote: post #158

sprafa wrote: post #148

Earlier quoted context omitted.

I would welcome a correction! My impression is if anyone has 51% of all bitcoin they can write whatever they’d like on the blockchain and validate it at will. Is this wrong?

Bitcoin uses proof of work [1] to verify transactions on the network. For someone to effectively rewrite the network they would need to control 51% of the total computing power (in hashes/sec) on the bitcoin network. [1] https://en.bitcoin.it/wiki/Proof_of_work

I see so I was mistaken about that. I still don’t understand why people don’t see that it would be trivial for a major bank (or now that Bitcoin has grown, a government) to look into making enough computational power they would destroy it.

Re: Facebook, Libra, and the Long Game

#195

Post by bduerst » Tue, Jun 25, 2019, 8:29 PM UTC

langitbiru wrote: post #93

rolltiide wrote: post #40

Earlier quoted context omitted.

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.

They didn't mention it because Lightning network is only brought up and pushed by people who have a stake in it. It only scales with transactions, not users, and is still pinned to Bitcoin.

Re: Facebook, Libra, and the Long Game

#196

Post by carleverett » Tue, Jun 25, 2019, 8:30 PM UTC

jpkiser wrote: post #138

carleverett wrote: post #112

Earlier quoted context omitted.

The white paper explicitly gives the Libra Association (i.e. Facebook and its partner validators) governance control over the cryptocurrency. Here's an easy scenario to imagine that shows how incentives would get misaligned: Facebook and the other validating nodes of Libra are financially compensated by interest from the collateral for Libra tokens. If Libra is successful in its mission, it will become a global curre…

> The white paper explicitly gives the Libra Association (i.e. Facebook and its partner validators) governance control over the cryptocurrency. > Here's an easy scenario to imagine that shows how incentives would get misaligned: Facebook and the other validating nodes of Libra are financially compensated by interest from the collateral for Libra tokens. If Libra is successful in its mission, it will become a global c…

I don't think Libra's collateralization is a hedge against fractional reserve monetary policy, I think it's just Facebook's way of ensuring consumer confidence that a Libra is actually worth something, and the most proven way to peg a stablecoin to a value.

I don't think this is necessary in a mature crypto economy where digital currencies are being used more than fiat currencies.

I agree though that crypto monetary policy will play a huge role in the future though, and in the case of Libra, policy will be decided by the Libra Association. All I'm saying is that the Libra Association is not necessarily the best group to be making those decisions because collateralization is how they're funded. The US Fed doesn't have that same conflict of interest... they're paid by US taxes regardless of how their decisions turn out.

Re: Facebook, Libra, and the Long Game

#197

Post by aserafini » Tue, Jun 25, 2019, 8:33 PM UTC

camgunz wrote: post #122

aserafini wrote: post #79

Earlier quoted context omitted.

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…

> 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. "All other things being equal" will never happen. Too many things change. For example, maybe the world economy is on the brink of depres…

> No serious economist advocates for a return to a fixed supply of currency.

I am not advocating for its return or extolling its virtues or claiming the world will be better or worse with fixed supply currency. I'm simply stating that a rational individual or business will avoid an X% tax on their stored wealth if they can legally do so.

I appreciate your anecdotal willingness to have your wealth devalued as a patriotic sentiment, but have to assume you are in a small global minority who would so if it can be avoided with the flick of a switch ('store my money in crypto') - consider countries where the tax is XX%, XXX%, XXXX% or even beyond (ie. Venezuela). Even X% is a rather large voluntary tax for US citizens with meagre savings.

> This is comically untrue. It may be true in cryptocurrency circles, but it's absolutely not true in economic circles.

It's true in the sense that fixed supply currencies exist today and usability will meet and eventually surpass 'traditional' currencies. The goodness or badness of the idea according to economists doesn't stop them existing today and won't stop them existing in the future.

> On the contrary, countries that cannot effectively control money supply will continue to be at a disadvantage with countries that can. It's precisely because of its usefulness that countries will continue to employ it. What could possibly make you think otherwise?

No government is going to voluntarily give up control of money supply but their mechanisms to do so are very limited in a world where every citizen and business stores their value in FixedSupplyCoin.

Re: Facebook, Libra, and the Long Game

#198

Post by carleverett » Tue, Jun 25, 2019, 8:35 PM UTC

bhupy wrote: post #177

carleverett wrote: post #112

Earlier quoted context omitted.

The white paper explicitly gives the Libra Association (i.e. Facebook and its partner validators) governance control over the cryptocurrency. Here's an easy scenario to imagine that shows how incentives would get misaligned: Facebook and the other validating nodes of Libra are financially compensated by interest from the collateral for Libra tokens. If Libra is successful in its mission, it will become a global curre…

Seems to be an excellent breakdown of how the Libra Association (of which Facebook is an equal among many) would control Libra, but not Facebook alone. I think the strongest argument towards the latter is the long-run aggregation theory one re: Calibra owning the most Libra users , and not having to own the underlying Libra system itself.

Correct, my issues with Libra's centralization has to do with the Association, not Facebook alone. I see what you're saying though where Calibra could itself be used used as leverage by Facebook.

Re: Facebook, Libra, and the Long Game

#199

Post by buboard » Tue, Jun 25, 2019, 8:45 PM UTC

bduerst wrote: post #190

buboard wrote: post #183

Earlier quoted context omitted.

Investment class is even more concerning for governments. The vast majority of USD is not used for buying coffee but stored in T bills

Nonsense. T-Bills have the lowest volatility because they're backed by the biggest guns on the planet. What is Bitcoin's volatility and how is that a threat again?

i m not saying that they feel threatened of course, but that investment class is even more of a reason to want to shut it down than it being used as a currency.

Re: Facebook, Libra, and the Long Game

#200

Post by svd4anything » Tue, Jun 25, 2019, 8:49 PM UTC

baq wrote: post #171

svd4anything wrote: post #98

Earlier quoted context omitted.

> 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,…

the goverment's role isn't to be a monopoly, it's to provide and enforce rules. otherwise the strongest player will coerce everyone to their own rules via force. it's naive to think that without governments everything will suddenly be better and cheaper - on the contrary, there will be a period of anarchy where no fair trade is possible because fraud won't have any consequences and after that the strongest players wi…

I’m confused. What rules will the government no longer be able to enforce?

There is such extremism in all cryptocurrency related discussions. Why in the world would there be anarchy if central bank monetary policy was no longer effective when private currencies are used or during a Free Banking period? Why does that follow at all, by what mechanism?