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Facebook Libra Is Architecturally Unsound

stephendiehl.com

41–50 of 347 posts

Re: Facebook Libra Is Architecturally Unsound

#41

> Libra has no capacity for consumer protection mechanisms. You can replace Libra quote above with your favorite cryptocurrency and that pretty much sums up what I feel on the crypto space.

In general the answer for consumer protection is to use any escrow service. Multi-signature schemes can even prevent you from a bad escrow, as long as no two parties are colluding. In general the need for consumer protection mechanisms is of course already a failing of the justice system. Virtually every case where consumer protection is useful is covered by existing laws and shouldn't require anything from the payme…

> In general the answer for consumer protection is to use any escrow service.

No, it's not, because the problem being addressed with consumer protection is power imbalance in the marketplace; mutually voluntary mechanisms cannot be the answer to it.

Also, escrow notionally solves exactly the same problem as cryptocurrency: providing the ability to rely on a transaction with an untrusted counterparty. If you need escrow for anything with cryptocurrency, the cryptocurrency is not doing the one thing that is it's defining purpose. So, why cryptocurrency at all?

Re: Facebook Libra Is Architecturally Unsound

#42
post #36

Aside from perhaps lack of developers / competency, I wonder why central banks don't issue digital currencies themselves? Mark Carney (current Bank of England governor) has been warming up to the idea - https://www.theguardian.com/business/2019/jun/20/mark-carney... Not sure if that because he is setting himself up for a new job at Libra after his BoE gig finishes in 2 months, or is there merit to the idea and appeti…

> Aside from the perhaps lack of developers / competency, I wonder why central banks don't issue digital currencies themselves?

Why would they though ? I can transfer money worldwide in a few hours for very little fees already. Normal currencies are good for 99.99% of use cases. Aren't most currencies already mostly digital, they're literally integers in databases around the world, most of it isn't backed by any physical currency.

Facebook wants its own currency because it would allow granular tracking and profiling like never before. What would banks gain from it ?

Re: Facebook Libra Is Architecturally Unsound

#43

> Libra has no capacity for consumer protection mechanisms. You can replace Libra quote above with your favorite cryptocurrency and that pretty much sums up what I feel on the crypto space.

What are you talking about? Fiat currency isn't reprogrammable--how would you implement a consumer protection mechanism on it?

Pick your favorite consumer protection mechanism, and I'll pick my favorite cryptocurrency and let's compare:

A) the up front implemention cost of the protection mechanism in fiat currency

B) the up front implemention cost of the protection mechanism in the crypto

C) the year-over-year cost in fiat

D) the year over year cost in crypto

I bet A and C are going to be in the hundreds of millions, if not billions, while B is going to be in the tens of millions and D is going to be in the thousands of dollars.

Here's an example of the kind of thing I'm talking about:

https://www.ccn.com/cardano-to-help-ethiopia-grow-coffee-usi...

Consider the recent news regarding contaminated black market vape cartridges--that's going to be insanely expensive to fix, because there's nothing about high schoolers passing around dollars after school that gives those students any insight into the supply chain of the cartridges they're buying. But if some vape company did with their supply chain what Cardano is trying to do with coffee, they could provide consumers (and authorities) a way to trace their products back to their origins, a capability that already would have saved several lives.

It's not surprising that Libra is a dumpster fire, but let's not throw the baby out with the bathwater.

Re: Facebook Libra Is Architecturally Unsound

#44

> Libra has no capacity for consumer protection mechanisms. You can replace Libra quote above with your favorite cryptocurrency and that pretty much sums up what I feel on the crypto space.

In general the answer for consumer protection is to use any escrow service. Multi-signature schemes can even prevent you from a bad escrow, as long as no two parties are colluding. In general the need for consumer protection mechanisms is of course already a failing of the justice system. Virtually every case where consumer protection is useful is covered by existing laws and shouldn't require anything from the payme…

I'm confused by your last paragraph. How does the existence of laws that protect consumers actually protect consumers if the payment systems we use don't allow reversals?

Re: Facebook Libra Is Architecturally Unsound

#45
post #16

Typical blockchain and Libra hatchet job, except this time under the veneer of someone with software skills. I will make some counterpoints. > Byzantine fault tolerance is a fairly niche area of distributed systems research that concerns the ability of a networked system to endure arbitrary failures of its components while taking corrective actions critical to the system’s operation. Networks that are byzantine toler…

What are some good websites for discussing technical aspects of blockchain?

Re: Facebook Libra Is Architecturally Unsound

#46
post #16

Typical blockchain and Libra hatchet job, except this time under the veneer of someone with software skills. I will make some counterpoints. > Byzantine fault tolerance is a fairly niche area of distributed systems research that concerns the ability of a networked system to endure arbitrary failures of its components while taking corrective actions critical to the system’s operation. Networks that are byzantine toler…

[deleted]

Re: Facebook Libra Is Architecturally Unsound

#47

> Libra has no capacity for consumer protection mechanisms. You can replace Libra quote above with your favorite cryptocurrency and that pretty much sums up what I feel on the crypto space.

What are you talking about? Fiat currency isn't reprogrammable--how would you implement a consumer protection mechanism on it? Pick your favorite consumer protection mechanism, and I'll pick my favorite cryptocurrency and let's compare: A) the up front implemention cost of the protection mechanism in fiat currency B) the up front implemention cost of the protection mechanism in the crypto C) the year-over-year cost i…

Yea, having third parties capable of reversing transactions has an associated cost. But, it’s Billions relative to fraud, so Billions ends up being cheap.

Re: Facebook Libra Is Architecturally Unsound

#48
post #16

Typical blockchain and Libra hatchet job, except this time under the veneer of someone with software skills. I will make some counterpoints. > Byzantine fault tolerance is a fairly niche area of distributed systems research that concerns the ability of a networked system to endure arbitrary failures of its components while taking corrective actions critical to the system’s operation. Networks that are byzantine toler…

Looks like the "guy with no software skills" and his team has created their own blockchain, and cryptographic implementations around bulletproofs, sonic zksnarks, pairing, etc.

https://github.com/adjoint-io/

Re: Facebook Libra Is Architecturally Unsound

#49

This ignores the big problems in Facebook's Libra: 1) It charges ECONOMIC RENTS. The ethical asset backed and currency backed stable coin needs to pass profits from revenue generating assets to the currency holder. The member companies should only take a tiny slice of the profits. This is the MASSIVE problem. 2) Libra is designed that ECONOMIC RENTS will be sharecropped and sent to the member companies. This will be…

I'm no fan of FB or Libra, but I don't get it, how is that any worse than existing system? Banks charge huge interest rents and pass only a tiny (or zero) on to customers, credit cards charge even bigger interest rates in addition to fees that make all our products more expensive, ...

Re: Facebook Libra Is Architecturally Unsound

#50

> Not many people who work on financial infrastructure speak publicly about their work... This was a bit of a throw away line, but I found it insightful. As someone who isn't in this space, my question is: why is this? Is it contractual, or is that just not part of the space's ethos? Feels like we need to overcome this some how to achieve progress?

I am not sure you would consider me directly in that space, even though the vast and distributed nature of that "space" seems unlikely to produce someone that can be considered equal part high level broadly knowledgeable enough, technical enough to make a statement about the work, in addition to muck around here to provide an answer. I think your answer is lost in the crevices of the nebula of dissimilar characteristics.

That being said though, take or leave by following boiled down opinion on the matter that it is essentially just a form of greed that drives this ethos you highlight. It's both negative greed of people not wanting to discuss their secret sauce that does or could make them rich and wealthy, especially if and when it comes as the expense of others (regardless of whether it is only their sub-conscience that acknowledges it), not wanting to expose things like the spaghetti code that makes up the core of a multi-trillion dollar enterprise of maybe even the literal fraud being perpetrated to achieve riches, some self-delusion that obfuscation quals security that hopefully will prevent nefarious actors gaining insights.

The very nature of the financial industry, a store of value, worth, and a huge closet of misdeeds and fraud that is chocked full and bursting at the seams to reveal the putrid innards; makes it a massively sensitive matter and domain. The behaviors and actions or ethos of the financial industry is not at all dissimilar to when you interact with other dishonest and nefarious and secretive types who have dirty secrets to hide and ill gotten gains to obscure and squirrel away. But there is also a layer of honesty that must be maintained. The notion of "disrupting" the financial sector with the trademark wonton recklessness of the Silicon Valley mentality gives me shivers, because when, e.g., the WeWork fraud

One may as well have asked why African government officials don't publicly speak about how their government work or ask the CCP how China really works. But one could also even ask that question closer to home like how massively lossy Silicone Valley unicorns can exist or one may also ask for an audit of the DoD (which, interestingly, the recent attempt to audit the Marines led to the Auditor refusing to sign the audit) or the Federal Reserve (a set of private bankers that control the money supply without any accountability, oversight, let alone limits or balance of powers). Those are ALL equally sketchy and nefarious deceptive and manipulative smoke and mirrors slight of hand operations that one could ask the same question of why does not one speak publicly about their work.

You may be one of those that realizes that there is a thread that runs between all of the above.

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