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Facebook, Libra, and the Long Game

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Re: Facebook, Libra, and the Long Game

#261

Post by camgunz »

aserafini wrote: post #219
camgunz wrote: post #214

Earlier quoted context omitted.

> Just because I pay taxes in USD/EUR doesn't mean I can't store my cash in a fixed supply currency, and anyone who does this avoids inflation. (Let's just use BTC and USD) Let's say yesterday milk was $2/gallon. But overnight, USD hyperinflated 50% and now it's $3/gallon. Yesterday, I invested 2 USD in BTC. Unless I can convince someone to give me 3 USD for my BTC, I can't buy a gallon of milk. No rational person wi…

> Unless I can convince someone to give me 3 USD for my BTC. This is exactly what would happen, no convincing required. Overnight 50% hyperinflation of the dollar would mean 2 USD worth of BTC/EUR/GBP/milk/anything bought yesterday could be sold for 3 USD today. > Why do you think this is a good thing? I’m not claiming it’s a good or bad idea. I’m claiming it’s an inevitable consequence of usable fixed supply currenc…

> Overnight 50% hyperinflation of the dollar would mean 2 USD worth of BTC/EUR/GBP/milk/anything bought yesterday could be sold for 3 USD today.

Ahh, but BTC doesn't belong in that list at all. The Euro and Sterling are backed by large, stable economies, used by each to value their exports. Milk is a commodity, which has intrinsic value (not to mention cost to produce, market, transport, regulate, and sell). BTC is an asset, but not anything like REIT or bonds, because it doesn't represent anything of actual worth. Or, skipping some steps, its only worth is that you can convince someone it will eventually have any value at all.

Cryptocurrencies are unique among all other assets in that, at the bottom of them, they are figuratively bankrupt and actually meaningless. There are no goods valued solely in BTC (even black market stuff is like "$100 / .0092 BTC") and no strong, stable economy backing it. At the end of the day, BTC basically says "someone will give you a lot of currency you actually care about for these zeroes and ones", and because those zeroes and ones have no additional value (i.e. it's not a cure for cancer or a TLS skeleton key), the proposition is literally worthless.

So yes. Normally that is what inflation means, but only for currencies that can actually purchase goods and services people want, or goods people actually want to consume, or services people actually want to use. Cryptocurrencies are none of those things.

Re: Facebook, Libra, and the Long Game

#262

Post by gomox »

headsoup wrote: post #259
sprafa wrote: post #149

Earlier quoted context omitted.

Yes true, this is why I “dropped out of it” then eventually came back to it. The fact that I have Venezuelan friends who started hoarding it to avoid capital controls in their country convinced me of its usefulness and long-term viability.

So long as someone is there willing to pay the same price for those coins. Do the grocery stores, butchers and other providers accept Bitcoin there? How do they value their goods against a 'currency' that is growing X00% weekly?

The mild fluctuations of the Bitcoin price can look like a walk in the park compared to the Venezuelan local currency.

Re: Facebook, Libra, and the Long Game

#263

Post by headsoup »

dandandaml wrote: post #161
Despegar wrote: post #123

Earlier quoted context omitted.

>That's the point of confusion. This is not an end around. Whether that's the intention or not doesn't matter, it has the potential to be and that is simply not acceptable. When a developing world country like India needs to use monetary policy to stimulate their economy but those transmission mechanisms aren't working because a significant part of the economy is using Libra, that's a major threat to their sovereignt…

>It's digital colonialism. Opposed to the European-originated paper trading system Libra isn't colonialism, it is competition.

What is the competition for? What outcome is Libra competing for?

Re: Facebook, Libra, and the Long Game

#264

Post by nybble41 »

woah wrote: post #178
nybble41 wrote: post #163

Earlier quoted context omitted.

There are also some technical barriers on the path to a permissionless network. The consensus algorithm Libra is using currently requires full connectivity between validators and is only robust so long as 2/3 of the validators can be trusted. Much has been made of the risk of a "51% attack" against Bitcoin, but one need only control 1/3 of the validator nodes to disrupt Libra, which is a far lower threshold than 51%…

The 1/3rd / 2/3rd pattern in a lot of blockchain BFT protocols is really elegant. If 1/3 of the voting power of a chain wants it to stop, then it probably shouldn't be running. It takes 2/3rds of the voting power for the validators to actually steal anyone's money or alter history. Your botnet example is a non-sequiter. Since power in BFT protocols does not stem from the wasting of electricity, botnets have nothing t…

On the contrary, botnets are far more of a problem in systems designed to make it cheap to run a validator node. This creates an obvious opportunity for a Sybil attack: spawn a few thousand nodes on other people's insecure IoT devices and you immediately control far more than the requisite 1/3 or 2/3 of the network. It's a lot harder to control 51% of the hash rate for a PoW design like Bitcoin which effectively requires specialized hardware to mine competitively.

I'm assuming they implement countermeasures against simply running a bunch of VMs or containers masquerading as a large number of independent nodes, for example by looking for multiple connections from the same IP addresses or subnet. Otherwise botnets would indeed be unnecessary to carry out the attack—anyone could do it from home with a modest PC.

Re: Facebook, Libra, and the Long Game

#265

Post by warp_factor »

scarface74 wrote: post #212
warp_factor wrote: post #180

Earlier quoted context omitted.

That's the way they marketed it. They know they had to do this little concession in order to get Libra to pick up so that people would repeat tirelessly that it's not controller by Facebook and therefore it's good. But it's controlled by Facebook and friends and the influence they would get over any decision is absolutely huge

Do you have any citations that contradict the article? The Validators Who, then, are the validators? Well, Facebook is one, but only one: currently there are 28 “Founding Members”, including merchants, venture capitalists, and payment networks, that meet two of the following three criteria: More than $1 billion USD in market value or more than $500 million USD in customer cash flow Reach more than 20 million people a…

They are the ones selecting the "members" and they will have a huge influence on any updates or any controversial topic or potential fork.

Don't fool yourself, this whole thing has been carefully orchestrated to look like if it was an open community but it is very tightly controlled by Facebook and friends.

I will not touch this with a 100 foot pole.

Re: Facebook, Libra, and the Long Game

#266

Post by freddie_mercury »

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…

I live in a developing country. I don't see any benefit whatsoever for using a cryptocurrency for digital transactions. I can transfer money instantly to someone else's bank account, they just need to give me their name & account number. I've used that to buy lots of things from places that don't accept credit cards.

For people who don't trust banks (my inlaws don't keep any money in a bank because they don't trust it, so they are unbanked) -- I don't see anything about Libra or Cryptocurrencies that is going to make them trust it. "There's some super-complicated math that proves you own this money and no one can take it from you" just isn't the kind of thing that is going to convince my inlaws to trust it.

Libra hasn't released any pricing on their processing fees so it is all vaporware & unfounded guessing right now.

Re: Facebook, Libra, and the Long Game

#267

Post by headsoup »

gomox wrote: post #262
headsoup wrote: post #259

Earlier quoted context omitted.

So long as someone is there willing to pay the same price for those coins. Do the grocery stores, butchers and other providers accept Bitcoin there? How do they value their goods against a 'currency' that is growing X00% weekly?

The mild fluctuations of the Bitcoin price can look like a walk in the park compared to the Venezuelan local currency.

I'm not familiar with the history, but is Venezuela's currency constantly volatile or are recent events an anomaly? How do you define Bitcoin's fluctuations as 'mild' - i.e what are you comparing it to other than the local currency to determine stability?

Re: Facebook, Libra, and the Long Game

#268

Post by Apocryphon »

anbop wrote: post #50
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…

Which consumer brand at this scale isn’t tarnished? Amazon? Google? Apple (not even applicable since they build only for their device users? Walmart? Bank of America?

Costco, Netflix, Chase. Microsoft appears to have a comeback by ducking out while the heat was on the other companies.

Re: Facebook, Libra, and the Long Game

#269

Post by Apocryphon »

kabwj wrote: post #44
JumpCrisscross wrote: post #37

Earlier quoted context omitted.

> The developing world doesn’t care about the reputation Facebook has on HN The developed world does: "based on an analysis of SimilarWeb Android data, Jefferies analyst Brent Thill found daily average users for core Facebook have declined in the U.S., U.K., Germany and France over the last 12 months—although he notes sequential user growth across geographies in April and May. In the U.S., time spent on core Facebook…

Libra is not for the developed world; I didn’t mention the developed world in my message. It remains to be seen what it will happen to it in the developing world, but the reputation of Facebook won’t be an obstacle.

Internet.org has had a mixed record there.

Re: Facebook, Libra, and the Long Game

#270

Post by scarface74 »

warp_factor wrote: post #265
scarface74 wrote: post #212

Earlier quoted context omitted.

Do you have any citations that contradict the article? The Validators Who, then, are the validators? Well, Facebook is one, but only one: currently there are 28 “Founding Members”, including merchants, venture capitalists, and payment networks, that meet two of the following three criteria: More than $1 billion USD in market value or more than $500 million USD in customer cash flow Reach more than 20 million people a…

They are the ones selecting the "members" and they will have a huge influence on any updates or any controversial topic or potential fork. Don't fool yourself, this whole thing has been carefully orchestrated to look like if it was an open community but it is very tightly controlled by Facebook and friends. I will not touch this with a 100 foot pole.

Again, that’s not what the article says. They have clear list for what the membership requirements are and all of those requirements are administered by a third party.
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