Paypal Withdraws from Facebook's Libra Cryptocurrency • Hacker News Board

Re: Paypal Withdraws from Facebook's Libra Cryptocurrency

#131

Post by vinniejames » Sat, Oct 05, 2019, 5:25 AM UTC

colechristensen wrote: post #24

csomar wrote: post #12

Here are some wild predictions I'm making + Many (or potentially all of the backers except Facebook) will withdraw from the alliance. + Facebook/Zuckerberg will defy the gov.s and launch Libra. + Libra might not dominate the world, but it'll be a success (at least a niche success) and it'll eat up some of the marketshare of these financial institutions. I think Zuckerberg has come (or already know) to the realization…

+1 for the first and second points, but I think it will play out much differently. Facebook will try to defy regulators, but I think the SEC will stomp on them, hard. It will end up a hybrid battle in the courts and Congress between libertarians, a few flavors of privacy advocates, US regulatory concerns, and ultimately land on US power projection concerns. I think the US will eventually shape the law and regulatory…

I tend to agree, the biggest concern here is the goverment will create overly broad legislation with the only purpose of leveraging it against truly decentralized cryptocurrencies

Re: Paypal Withdraws from Facebook's Libra Cryptocurrency

#132

Post by ineedasername » Sat, Oct 05, 2019, 5:30 AM UTC

greggman2 wrote: post #116

ineedasername wrote: post #90

Earlier quoted context omitted.

">If Libra ignored these rules..." This isn't like Uber silently encroaching on a city's taxi medallion laws with grey-area definitions of "taxi" and "employee". Facebook cannot do something like this without attracting scrutiny at every stage, and as we saw with Robinhood, the financial regulation systems are relatively quick to act. Especially if they "defy govs", then those government's will have every reason to c…

I don't know what Libra's plans are but couldn't Facebook make their own Paypal? What would really be the difference? I can hold a balance at Paypal. I can pay others and others can pay me. The "crypto" part seems like an implementation detail but otherwise irrelevant. Note: I'm not saying Facebook should be allowed to make their own Paypal. I'm just curious other than "Facebook scary because big" what other reason w…

Apple and Google are still dealing with merchant fees. So is PayPal for many transactions.

A PayPal style system might work, but it is only low-cost low-friction (the main appeal for crypto) for the transactions that occur completely within it's own ecosystem. And they don't call it a currency, so they dodge some issues there. Paypal also dodges issues of "being a bank" because funds equivalent to customer balances are actually held in real-world banks, so it's not in any way an independent currency. It doesn't "float" against anything. Libra's basket-of-currencies approach may be very stable, but automatically puts it in a very different class of financial instruments. They could abandon that and really stick to the paypal model though.

Even then, there are still many regulations for this that must be followed: It falls in a business class of "money transmitter" which requires a separate license in every state, as well as registration with the federal government. They also must follow laws like filing a CTR for transactions above $10,000, and SARs for suspicious activity. There's simply no getting around major regulations if you're providing any sort of financial services.

Re: Paypal Withdraws from Facebook's Libra Cryptocurrency

#133

Post by vinniejames » Sat, Oct 05, 2019, 5:30 AM UTC

travisoneill1 wrote: post #122

oceanplexian wrote: post #77

Earlier quoted context omitted.

Sure Crypto backed by a particular company might not happen, but I don’t see BTC and similar P2P blockchain currencies going anywhere. It’s about as easy to stop as digital piracy, which is to say in other words physically impossible to regulate.

You don't have to stop the blockchain. You just have to prevent the tokens from being exchanged for dollars which is a lot easier.

This would have the singular affect of forcing the entire cryptocurrency ecosystem into the black market, where it would thrive alive and well. Likely doing more harm than good in the process by fueling violent cartels to wreak havoc, as is still happening with the war on some drugs

Re: Paypal Withdraws from Facebook's Libra Cryptocurrency

#134

Post by pier25 » Sat, Oct 05, 2019, 5:33 AM UTC

democracy wrote: post #114

When Facebook needs to jump on the train of "cryptocurrency" something is wrong with the company and makes me really question their competence... Is it really Zuck behind this idea or just some top manager with ambitions? I still don't understand why they had to shut down "facebook credits" and come up with this crazy idea, when all they had to do to start "facebook credits v2" and that would draw zero attention.

I don't trust nor agree with Facebook but I can see the appeal.

I recently sold a synth on its Marketplace which I had never used before. Here in Mexico its extremely popular. If Facebook starts using Libra for payments and escrow without having to pay credit card or bank transfer fees it would make it much more popular than Bitcoin. At least for small transactions.

Re: Paypal Withdraws from Facebook's Libra Cryptocurrency

#135

Post by elyobo » Sat, Oct 05, 2019, 5:41 AM UTC

ineedasername wrote: post #132

greggman2 wrote: post #116

Earlier quoted context omitted.

I don't know what Libra's plans are but couldn't Facebook make their own Paypal? What would really be the difference? I can hold a balance at Paypal. I can pay others and others can pay me. The "crypto" part seems like an implementation detail but otherwise irrelevant. Note: I'm not saying Facebook should be allowed to make their own Paypal. I'm just curious other than "Facebook scary because big" what other reason w…

Apple and Google are still dealing with merchant fees. So is PayPal for many transactions. A PayPal style system might work, but it is only low-cost low-friction (the main appeal for crypto) for the transactions that occur completely within it's own ecosystem. And they don't call it a currency, so they dodge some issues there. Paypal also dodges issues of "being a bank" because funds equivalent to customer balances a…

Crypto seems like it's (at the moment) neither low cost nor low friction; did I misunderstand you?

Re: Paypal Withdraws from Facebook's Libra Cryptocurrency

#136

Post by vinniejames » Sat, Oct 05, 2019, 5:58 AM UTC

vertex-four wrote: post #27

krn wrote: post #23

Earlier quoted context omitted.

Wouldn't Facebook just get something like the UK's Electronic Money license? That's how TransferWise operates without being a bank.

Even if the regulators let them get away with that, nobody in Europe is particularly in need of a cryptocurrency for moving money around Europe, we have near-instant money transfers for free (or close to it) through our banks. I guess they could go for the remittances market, but that's really not where I see Facebook wanting to go.

This fact is only an effect of the EU, it's a single banking system. That's like saying we don't need a cryptocurrency system in the US because it's easy to move money from California to New York :/

Re: Paypal Withdraws from Facebook's Libra Cryptocurrency

#137

Post by seanhunter » Sat, Oct 05, 2019, 6:00 AM UTC

krn wrote: post #23

vertex-four wrote: post #20

If Facebook attempts to become a money transfer service or bank without the required licensing, they will have their offices raided and their doors locked on them. This is something Governments don't tend to mess around with.

Wouldn't Facebook just get something like the UK's Electronic Money license? That's how TransferWise operates without being a bank.

You don't "just get" an emoney license. When you apply for the license you sign up to a bunch of regulatory scrutiny most of which seems to be antithetical to this kind of project.[1]

The UK financial regulators are not dumb and have thought this through.

[1] Specifically here are details of the emoney regulations if you're interested https://www.fca.org.uk/firms/electronic-money-payment-instit...

Re: Paypal Withdraws from Facebook's Libra Cryptocurrency

#138

Post by vinniejames » Sat, Oct 05, 2019, 6:01 AM UTC

oneplane wrote: post #46

krn wrote: post #37

Earlier quoted context omitted.

Well, I still think that email is good enough medium for personal communication, but most of the people I know have replaced it with Messenger. The same might happen with money transfers, if Messenger becomes another WeChat, just outside of China. From the legal perspective, could Facebook be like Coinbase, but with a single currency?

Messenger isn't all that popular outside of north america. Doesn't matter how much money transfer options you add to a program if nobody is using it. I do wonder what happens if any non WeChat thing starts going for banking type functionality (legal or not).

Messenger, WhatsApp and Instagram are all owened bu Facebook. Facebook is already working on merging them into a single app, to be rebranded in the near future.

WhatsApp and Instagram have huge popularity outside of North America

Re: Paypal Withdraws from Facebook's Libra Cryptocurrency

#139

Post by vinniejames » Sat, Oct 05, 2019, 6:04 AM UTC

csomar wrote: post #51

not-satoshi wrote: post #50

Earlier quoted context omitted.

1. Where are Bitcoin's offices?

Bitcoin mining is actually quite centralized in a few players; and the exchanges have established offices. The gov.s could have done some serious damage. edit: nice try Satoshi!

They're only centralized because free markets tend to favor centralization. Should the big mining operations be shut down, it would become instantly profitable for smaller miners to switch on again

Re: Paypal Withdraws from Facebook's Libra Cryptocurrency

#140

Post by anonytrary » Sat, Oct 05, 2019, 6:13 AM UTC

xlc0212 wrote: post #111

tanilama wrote: post #80

Libra can be a good idea, but probably not from Facebook. What Facebook lacks among Big Techs the most, is public trust. In an era where anything from Big Techs are meticulously scrutinized, something that seems to aim to bypass government regulation is probably the last thing people want.

What I don’t understand is, the whole point of using blockchain technology is it doesn’t matter who creates it, as long as the code does what it intend to do, there are no trust needed. (Assuming Libra eventually actually become a decentralized network)

It's just a technology. There's nothing stopping a company from creating a private blockchain (using trusted nodes) and using it as a backend ledger for their website.

The fuss is that even if Facebook fully decentralizes Libra, they'll probably own an undisclosed amount of it. One entity starting with most of the wealth defeats the purpose of decentralization.