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Facebook, Libra, and the Long Game

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Re: Facebook, Libra, and the Long Game

#291

Post by projektfu »

godson_drafty wrote: post #134
wan23 wrote: post #125

Earlier quoted context omitted.

> Banks don't make their money or derive their power through the 'creation of money'. A bank just opened and has $0 in the vault You give the bank $1000 The bank lends me $800 Your current bank balance = $1000 My current bank balance = $800 Total money in the bank = $1800 You might say that the money wasn't created because they can't afford to pay out $1800, but if for some reason at this point they need to pay back…

Not sure that's correct though. For banks, deposits are liabilities, while assets are loans and cash-on-hand, which they are required to hold fractionally against the total amount of their deposits. In this example, the bank is holding $200, has assets of $800, and liabilities of $1000. Adding it up, you have ($200 + $800) - $1000 == $0.

In reality the bank can take your $1,000 and write loans for $9,000 or more. It’ll have net assets of whatever capital was paid in plus loans minus deposits.

Re: Facebook, Libra, and the Long Game

#292

Post by [deleted] »

sprafa wrote: post #148
kitten_smuggler wrote: post #142

Earlier quoted context omitted.

> This is one of the reasons I dropped out of crypto for years, most of its supporters were completely delusional and tragically uninformed about actual banks. I don't think you understand bitcoin as well as you think you do. 51% attacks do not work like this.

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?

[deleted]

Re: Facebook, Libra, and the Long Game

#293

Post by epiphanitus »

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.

I'm speculating here, but I think this isn't about challenging the monetary oligopoly as much as it is about Amazon.

FB isn't funding this project because it's a libertarian thought experiment. FB is funding it because it makes business sense.

FB's business model is using data to sell ads. Amazon.com's dominance in ecommerce- and it's entry into the ad market - puts pressure on FB's business if advertisers move their buys to Amazon.com. But I imagine if FB is able to directy connect social interactions to purchasing decisions, that's something that retailers that compete with Amazon are going to be interested in.

Re: Facebook, Libra, and the Long Game

#294

Post by SkyMarshal »

sprafa wrote: post #151
tiluha wrote: post #144

Earlier quoted context omitted.

I think you are misinformed about how bitcoin works. Bitcoin doesn't care how much of it you have, as it uses Proof-of-Work not Proof-of-Stake. The only thing that matters is you computational power. Now it is true that large banks could just buy lots of ASICs and try to beat the network, but that would mean a continued investment: As soon as they stop mining, the network would return to normal. They can hurt bitcoin…

The transaction rate is deadly in my opinion, not just bad. A year or so ago the rates were running at ridiculous prices. It’s a black eye on the Bitcoin Core that they haven’t fixed this nor do they seem inclined to (the Bitcoin Cash Core seemed convinced they wanted nothing else but to control Bitcoin entirely).

No, it's a credit to Bitcoin Core that they understand the tradeoffs involved in increasing transaction rate via blocksize increase. Continuously growing resource usage is a centralizing force and thus an existential risk to Bitcoin. Core is rightly unwilling to trade a little short-term pain relief for increased long term risk of catastrophic failure. The difficulty is that just how much of a centralizing force is difficult to measure, so there's a lot of uncertainty around it, opening the door for the more reckless to complain about transaction prices.

Re: Facebook, Libra, and the Long Game

#295

Post by snarf21 »

creeble wrote: post #284
snarf21 wrote: post #251

Earlier quoted context omitted.

Libra intends to use Proof of Stake. This means that the initial members will "stake" some amount of Libra and now all transactions can only be validated by them. You as an individual can't validate any new transaction. The assumption is that because the PoS validator has a huge stake in this currency, they will behave rationally or otherwise they would devalue their own stake. The trust here is completely centralize…

Probably too late to keep this discussion going, but... I understand Proof of Stake vs. Proof of Work. But what Ben says about only "publishing the current state of the ledger" doesn't seem to relate to whether PoS is used. It's certainly not inherent to PoS that the entire blockchain isn't published. Maybe he's just confused about how PoS works (but I somehow doubt that). I understand how PoS makes things more effic…

Gotcha, I assumed that it was a little handwavy on the details to be more accessible to a wider audience. It is very possible that they don't let others download the complete ledger and only let you ask for a certain private key's current balance. I agree that this is even more concerning (if true) than regular PoS. I also didn't read the proposal deep enough to know if you can register to be a node that sees all proposed transactions even though you can't actually validate them. If there is on way for external monitoring or audit, this truly is not blockchain even in name only. Then it is simply a replicated database with restricted access.

Re: Facebook, Libra, and the Long Game

#296

Post by ddalex »

TuringNYC wrote: post #218
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…

>> No government is going to let FB and any coalition do an end run around their national currency and their banking institutions. 1. I can see the US government and perhaps the Five Eyes ( https://en.wikipedia.org/wiki/Five_Eyes ) wanting this because it effectively reveals lots of global transactions they are not currently privy to w/o tedious work. I find it difficult to believe that all the relevant FiveEyes agen…

1. is tinfoil hat domain and i'll ignore it

2. the finance watchdog verifies that balance sheet must close to 0 for everybody when everything is accounted for - i.e. I have 100 libra and I want to buy a printer, there has to be somebody to deliver that printer and take the 100 libra; the gadget shop can't account for the printer disappearing from inventory without accounting for 100 libra coming in, and the chain thus complete. the only thing you'd be able to buy are services and goods outside regulated economy, so sex and drugs?

Re: Facebook, Libra, and the Long Game

#297

Post by ddalex »

Sargos wrote: post #252
chasing wrote: post #75

Earlier quoted context omitted.

Government control over currency is a good thing.

Are you going to back up your argument or just state it like it's a fact? (It's not)

> It's not

Are you going to back up your argument or just state it like it's a fact?

Re: Facebook, Libra, and the Long Game

#298

Post by camgunz »

aserafini wrote: post #289
camgunz wrote: post #261

Earlier quoted context omitted.

> 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 a…

Your position is that 50% USD inflation overnight would cause 2 USD worth of EUR/GBP/milk/gold/anything bought yesterday to be worth 3 USD today but for some reason 2 USD worth of BTC bought yesterday would continue to be worth only 2 USD? This is wrong, assuming values of BTC hadn’t also changed overnight. It could only be true if BTC simultaneously dropped in value 33%, but that would be unrelated to USD inflation.

That is not my position. I do believe that BTC would also go for $3. But the only reason is that holders of BTC have so far managed to convince holders of other currencies that BTC has some intrinsic worth when, in fact, it has none (other than money laundering, frankly, which is no small thing, but not something people should be investing in). That's why I believe it doesn't belong in the same category as commodities or currencies. It's a huge bubble, and it will be very, very bad when it bursts.

Re: Facebook, Libra, and the Long Game

#299

Post by BlueTemplar »

camgunz wrote: post #298
aserafini wrote: post #289

Earlier quoted context omitted.

Your position is that 50% USD inflation overnight would cause 2 USD worth of EUR/GBP/milk/gold/anything bought yesterday to be worth 3 USD today but for some reason 2 USD worth of BTC bought yesterday would continue to be worth only 2 USD? This is wrong, assuming values of BTC hadn’t also changed overnight. It could only be true if BTC simultaneously dropped in value 33%, but that would be unrelated to USD inflation.

That is not my position. I do believe that BTC would also go for $3. But the only reason is that holders of BTC have so far managed to convince holders of other currencies that BTC has some intrinsic worth when, in fact, it has none (other than money laundering, frankly, which is no small thing, but not something people should be investing in). That's why I believe it doesn't belong in the same category as commoditie…

But there's no such thing as "intrinsic worth"... It's all about supply and demand!

Re: Facebook, Libra, and the Long Game

#300

Post by BlueTemplar »

Shaddox wrote: post #66
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…

I fully agree with you. I'd also like to add something that I consider the elephant in the room. Haven't tech companies already proven themselves that they're willing to bend to governments' will in order to do business? No authoritarian government will welcome Libra with open arms. If the currency won't bend to their will, then they will simply ban it and then it becomes (at best) a black market good. There's also a…

He'll just use 23.1 nanolibra? And why do you assume that there will be so few Libra around?
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