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Facebook Libra Is Architecturally Unsound

stephendiehl.com

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Re: Facebook Libra Is Architecturally Unsound

#151

Post by jayd16 »

kadoban wrote: post #105
harikb wrote: post #98

Earlier quoted context omitted.

There are generally 3 kinds of fraud 1. A scammer cheating someone out of their life savings through social engineering 2. A central bank "unjustly" inflating currency and giving the newly printed money to specific industry/people etc 3. A person paying for merchandise with a stolen credit card or refusing payment after services/good is delivered. Fiat solves 1 and 3 (recovery) does not think 2 is a problem. Crypto s…

Who says it is meant for solving case 1? I have literally never heard that as a selling point, and I hung around the crypto crowd for quite a while.

Maybe in the tech community but there was a lot of misunderstanding around concepts like "everything is secure and traceable" and what that implied.

Re: Facebook Libra Is Architecturally Unsound

#153

Post by semiotagonal »

__MatrixMan__ wrote: post #147
semiotagonal wrote: post #84

Earlier quoted context omitted.

The amounts to giving the advantage to fraudsters until something that doesn't exist is invented. Blockchains are irrevocable and unalterable, which removes two useful tools (reversing and changing transactions), and replaces them with nothing workable.

The initial question was whether cryptocurrencies have the capacity for consumer protection measures, not whether those measures are ready for prime time. I'm just arguing that when they're ready, they'll be more efficient than what we have, so we should encourage their development in the meantime (though maybe not in Libra's particular case). Also, there are limits on how old a transaction can be when a bank goes an…

Out of that entire list, the one thing that exists now is the Ethereum blockchain fix, and that basically required global agreement to respond to a single theft. That's not particularly scalable.

The rest of the things on the list aren't in significant use at the moment, and might never be. Measures that are not ready for prime-time are as good as nonexistent. We're talking about money here!

Re: Facebook Libra Is Architecturally Unsound

#154

Post by pron »

spir wrote: post #134
whatshisface wrote: post #114

Earlier quoted context omitted.

Why would Coca-Cola need to use a block chain? They can run their own code on their own servers.

Because while the core innovation of blockchain is a trusted database a context without trust, the core benefit of blockchain is reduced transaction costs. A blockchain is a singleton global computer of program code and data. It turns out this is sufficient to represent capital (money) on that computer. In practice this results in dramatically reduced transaction costs. For example you can transfer money with an API…

> the core benefit of blockchain is reduced transaction costs.

No, this is not true. It might incidentally currently be the case with, say, Bitcoin vs. $US, but there's nothing technical that inherently makes it so. In fact, as this article and countless others reiterate, from a technical perspective blockchain is almost always more costly.

Re: Facebook Libra Is Architecturally Unsound

#155

Post by scott_s »

wongarsu wrote: post #110
scott_s wrote: post #44

Earlier quoted context omitted.

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?

If an ebay seller delivers me a faulty product I can sue them for not delivering what I payed for and when I win the court orders them to pay the money back (plus my expenses). If they don't pay I can go after their assets. It's basically the same how a business would recover money from a bad supplier. With small claims court it's even somewhat efficient for small sums, but of course still orders of magnitude more wo…

That's an enormous burden. If we require lawsuits to enforce even minor cases of consumer protection, I argue that there is effectively no actual consumer protection.

Re: Facebook Libra Is Architecturally Unsound

#156

Post by acdha »

matthewdgreen wrote: post #56

I don't disagree with the article per se, but I think many technologists are missing the forest for the trees when it comes to the motivations here. Or perhaps they're being charitable and are evaluating Libra on purely on its stated motivations rather than the ulterior motive that Libra can't name out loud. For example, take this quote: "The possibility that a Libra node run by Mastercard or Andressen Horrowitz woul…

> The purpose here is simply to evade and arbitrage different regulatory regimes. The plan is to build a ledger that no single party (or coalition of parties in a single legal jurisdiction) has the capacity to edit or alter, and to make such alterations so technically challenging that it's beyond the capacity of any single court or legislature to do so.

If they respond to a legal demand saying “Our software won't let us comply”, do you really think that the answer will be “oh well, guess the law doesn't apply to you” and not “halt operations until you are in compliance with the law”?

Re: Facebook Libra Is Architecturally Unsound

#157

Post by matthewdgreen »

acdha wrote: post #156
matthewdgreen wrote: post #56

I don't disagree with the article per se, but I think many technologists are missing the forest for the trees when it comes to the motivations here. Or perhaps they're being charitable and are evaluating Libra on purely on its stated motivations rather than the ulterior motive that Libra can't name out loud. For example, take this quote: "The possibility that a Libra node run by Mastercard or Andressen Horrowitz woul…

> The purpose here is simply to evade and arbitrage different regulatory regimes. The plan is to build a ledger that no single party (or coalition of parties in a single legal jurisdiction) has the capacity to edit or alter, and to make such alterations so technically challenging that it's beyond the capacity of any single court or legislature to do so. If they respond to a legal demand saying “Our software won't let…

That is precisely what Libra is banking on. We'll see if they're right.

Re: Facebook Libra Is Architecturally Unsound

#158

Post by rimliu »

magnamerc wrote: post #130

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.

I'd argue that the usefulness of something is defined by what it can do, not the technologies used to implement it.

Re: Facebook Libra Is Architecturally Unsound

#159

Post by __MatrixMan__ »

aiCeivi9 wrote: post #129
__MatrixMan__ wrote: post #43

Earlier quoted context omitted.

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.

Suppose somebody named Mary wants to sell you a vape cartridge which has a serial number, and they also give your a website which accepts the serial number and tells you:

> Joe runs the factory and gave this cartridge to Bob. Bob have it to Mary.

The assumption is that if you buy it then the site will then say:

> And Mary gave it to aiCeivi9

What reason do you have to believe that the website contents are accurate or that people accepting vape cartridges from Joe Bob and Mary are still alive?

In the blockchain case, you can see that Joe Bob and Mary have sold thousands of these and that very few of the transactions are in dispute over authenticity. Also, rather than trusting some faceless 4.6 star rating you can see which of the people that supplied the rating are ones that you know, and which of those are ones that you trust. You can also see if you trust people who trust Joe Bob and Mary. This let's you make a more informed decision about the quality of the thing you're buying.

Re: Facebook Libra Is Architecturally Unsound

#160

Post by gerikson »

Jeff_Brown wrote: post #69
dadarepublic wrote: post #54

Earlier quoted context omitted.

Anyone saying blanket "we don't need consumer protection mechanisms" because it's a "failing" of something or the other must be taking the piss. As a parent of children, consumer protections are overall a "good thing" to help prevent bad actors from doing harm. It goes for any space that can do harm to you or your family in any way. It's why you have exchanges like Gemini in place that seek to be the "most regulated"…

I think it's weird how family gets invoked to change the moral gravity of an issue. It suggests orphaned children, for instance, should care less about humanity.

How does being an orphan make one care less about humanity?

Personally, I want orphans (as defined as minors with no living parents) to be well-cared for regardless, either by relatives or by an outside agency ("orphanage" or foster home).

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