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Facebook Libra Is Architecturally Unsound

stephendiehl.com

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Re: Facebook Libra Is Architecturally Unsound

#121

Post by mtrycz2 »

westoque wrote: post #21

> 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.

One can build any amount of consumer protection required into most cryptocurrencies. In their bare form they don't have that, exactly like cash doesn't have that.

One can use the desired amount of third parties for fund protection.

The new thing about cryptocurrencies, is that some of these third-party services can be made non-custodial, so the third-party never has access to your funds. They arbiter, but not transmit.

Re: Facebook Libra Is Architecturally Unsound

#122

Post by AzzieElbab »

snarf21 wrote: post #6

There have been a lot of posts and responses about Libra. The core of it is that FB wants to be an unregulated bank. That is all this whole thing is about. Given the current (and post 2020 political realities?), it is no wonder all the established payment companies tapped out. This effort will be delayed until their is a government structure willing to look the other way. It will also be really interesting to see how…

that is not true. They want to be regulated. They want to compete with unregulated systems like alipay

Re: Facebook Libra Is Architecturally Unsound

#123

Post by osrec »

syllable_studio wrote: post #109
pron wrote: post #37

The answer to the question implied in the article -- why does Libra make such unjustified design decisions -- is simple. Some people have become enamored with blockchain despite it having almost no good use cases, and this certainly isn't one. It seems like a classic example of focusing on the technology rather than on the problem. -- Regardless of the other, far more important sections of this article, I find the se…

Regarding your claim that blockchain has almost no good use cases, I see news every week which disagrees. Here is the first article I could find from just today which shows a great use case. Coca Cola is expanding their blockchain trial project to a $21 billion-a-year supply chain because they found very significant savings. https://www.coindesk.com/coca-cola-supply-chain-firm-to-expa...

The "efficiency savings" are probably because they've rejigged their processes to make them cleaner as part of the new initiative - NOT because of blockchain. If you control and trust your data source, blockchain is a really silly choice for storing your data. And the fact that SAP is the provider says it all really - them and their like are purveyors of superfluous hokum, sold to corporate managers that don't know any better.

Re: Facebook Libra Is Architecturally Unsound

#124

Post by afiori »

EGreg wrote: post #100
pron wrote: post #37

The answer to the question implied in the article -- why does Libra make such unjustified design decisions -- is simple. Some people have become enamored with blockchain despite it having almost no good use cases, and this certainly isn't one. It seems like a classic example of focusing on the technology rather than on the problem. -- Regardless of the other, far more important sections of this article, I find the se…

I disagree that blockchain has almost no good use cases. All a blockchain is, is a Merkle tree with a third party that ensures there is only one “main line”. That’s the use case. All the other stuff — such as having all computers in the network watch every transaction — that’s the wasteful part. There are other ways to have a set of third party validators, that is a subset of the network watching a given merkle tree,…

I would go even more minimalist and claim that a blockchain is any distributed consensus on an immutable log

Re: Facebook Libra Is Architecturally Unsound

#125

Post by linuxftw »

arcticbull wrote: post #71
clarkmoody wrote: post #58

Earlier quoted context omitted.

The legacy monetary system may have nice consumer protections on the micro scale, but it fails on the macro scale: 1. Inflation eats 2-4% of everyone's purchasing power each year, disproportionately affecting the poor. This inflation is desired by the central planners. 2. The American system of banking regulations introduces systemic risk into the financial sector. Sure, if you can prove that your transaction was fra…

I’m consistently amazed by how many people here dont understand inflation at all and are confident they need to throw out the financial system before they figure it out. Inflation is an incentive to invest. If you invest in literally anything other than cash under your mattress inflation stops mattering completely to you, and all you have to think about is constant dollar returns. That’s why we have it. So long as yo…

Your understanding of inflation is misguided. Inflation as we have it under central banking today is theft.

A GSE creates money from nothing. Large banks are allowed to have this money at near-zero cost, and lend it to others and a higher cost. It's a free profit for large banks. It's 100% organized theft.

This is the scenario that create the 'too big to fail banks' that we had to give even more money to keep the system propped up.

Re: Facebook Libra Is Architecturally Unsound

#126

Post by ouid »

pron wrote: post #37

The answer to the question implied in the article -- why does Libra make such unjustified design decisions -- is simple. Some people have become enamored with blockchain despite it having almost no good use cases, and this certainly isn't one. It seems like a classic example of focusing on the technology rather than on the problem. -- Regardless of the other, far more important sections of this article, I find the se…

I disagree. You're making two different arguments. The first is that PLT does not study suitability, but then you switch course and say that math analagously can define suitability for specific tasks but suitability is not (and this is my own words) a normed space.

Programming language theory does not, in fact, make value judgments, but it does make statements upon which value judgments can be built given context, which contradicts your first statement.

Re: Facebook Libra Is Architecturally Unsound

#127

Post by rossdavidh »

m12k wrote: post #96

I've been thinking and it actually makes a lot of sense for new ways to be created to transfer money and pay for things (though I'm highly skeptical of having it operated by Facebook and of the ad-hoc pump-and-dump-prone and whitewashing-and-tax-avoidance-friendly properties of cryptocurrencies). But when you think about it, it's insane that transferring money is something credit cards and payment processors can regu…

The credit card companies' share of the entire economy is problematic, but few companies could handle the threats of fraud in e-commerce as well, for as little. There's a very harsh tradeoff between ease-of-use and fraud protection, and it's not an easy problem to solve. Doing it for 3% is beyond most companies' (or governments') capacity. It may provide the incumbents with a healthy profit, but few if any newcomers would be able to get their costs low enough to survive on that.

Re: Facebook Libra Is Architecturally Unsound

#128

Post by pjc50 »

tomp wrote: post #49
HashThis wrote: post #31

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, ...

Interest rates are lower than at almost any time in history. They're usually strongly linked to default risk, which is why mortgages are about 2% but credit cards in the 10-20% range. But none of that is applicable to cryptocurrency, which doesn't really have a credit infrastructure at all and instead is trying to replicate something closer to negotiable bearer instruments.

Transaction fees are a real thing, but essentially that covers keeping fraud out of the system. In cryptocurrency that's your problem, and many of the "solutions" are riskier and in the end more expensive.

Re: Facebook Libra Is Architecturally Unsound

#129

Post by aiCeivi9 »

__MatrixMan__ wrote: post #43
westoque wrote: post #21

> 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…

> 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.

Why would blockchain be required for that? In case of drugs and food there recalls are being done using batch number of day of production.

Re: Facebook Libra Is Architecturally Unsound

#130

Post by magnamerc »

As soon as blockchain is even mentioned on HN, everyone loses their freaking minds. For some people that tout themselves as intellectuals, they just seem to parrot that 'blockchains are useless' without even taking a cursory look into the technology. It seems to me that a lot of people here fall into the category of ultracrepidarianism.
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