Facebook Libra Is Architecturally Unsound

It's hard to speak about the infrastructure because:

1) it's complex and relies on a bunch of concepts that are niche/uncommon in tech field, so it's really hard to make a short answer that makes your point understandable without adding an essay-length explanation about why some assertion of fact is actually true, or how some aspect of the financial system works slightly differently than the common understanding and has serious implications that usually doesn't matter only because the system is carefully engineered to ensure that this never happens, but for a different system it would matter.

2) you can't have a purely technical discussion because pretty much every factor of infrastructure is part technical, part legal, part financial, and you can't really separate these aspects because they put serious constraints on each other.

3) it's a bit emotionally unpleasant because multiple important, relevant aspects have political connotations and invite passionate debate about things that I'd like to assume as axiomatic and offtopic to the main point. For example if we want to debate why technical payment systems are the way they are and what other technical payment systems are plausible in the short-term, aspects like the need for reversibility are pretty much an undisputable unavoidable constraint from the legal/economic side to the technical part; IMHO any productive technical debate is possible only about how to best design systems within these non-technical constraints (and what exactly are the actual constraints), but a lot of the discussion here is centered whether these constraints "should" be there - which is interesting but a completely different topic, to note the "is-vs-ought" distinction, debating whether reversibility (or, say, KYC/AML) ought to be a requirement has absolutely no relevance to the debate whether and when it is a requirement. But it's hard to make a technical description of how/why something works without getting sidetracked into a political discussion of whether some must-have requirement should have a right to exist.

There's not really an ethos of secrecy (at least for the main infrastructure side), all the technical and legal (but not financial) details are generally available to whoever is interested but they are large and details matter, and key details differ between countries. Seriously, when getting started in the industry when I had spent months reading on various details of e.g. card issuing/acquiring process, I thought I had a reasonable understanding.... and now I know how a bunch of that understanding was slightly but dangerously wrong.

For the case of "A transaction can of course be reversed simply by making the inverse transfer." the equivalence is broken by the technical authorisation required - in most systems if I'm able to make a transfer, I'm not able to simply make the inverse transfer, that other person is able to make the inverse transfer. So the question of reversals essentially is whether the inverse transfer can be made (and if so, under what conditions) against the wishes of the original recipient.

And when there's a good answer to that, the next question is what are the exact consequences to reversals (or attempted reversals) of money that's "not there anymore" - e.g. there's a valid transfer from A to B; followed by a transfer from B to C; followed by a need/decision to reverse the A to B transaction (which is a very, very common scenario in e.g. scam resolution). For systems that treat money as the conceptual equivalent of "stuff" (e.g. Bitcoin) that's a very hard question; most of our financial infrastructure (probably for millenia) treats money as the conceptual equivalent of "debt relationship" i.e. a metric of who owes whom how much, and then it's a bit easier but still not trivial.

You're asking way too much. It's not as if the current system actively prevents you from opting out of all the safety measures and, say, irreversibly handing cash (or something else of value) directly to a scammer; nor should it. Reversible transactions come with costs, especially when the other side of the transaction is not reversible. Chargeback fraud, for example, is a big problem for merchants, and can only occur in a system with reversible transactions. Contracting parties should be free to negotiate both the form of payment and the degree of risk each side is willing to take.

The main problem is simply the novelty of it all. Once reasonable and customary structures to handle disputes are in common use asking people to bypass those structures without a very good reason will be just as much of a red flag as it is under the current system.

Facebook is not a party to a transaction between any other two Libra users and should have no liability in the event of a dispute over payments beyond maintaining accurate records and providing a fair and above all neutral platform to conduct business.

It's a good point, about children and reversing transactions.

Even when everyone's an adult, consumer protections can be very important -- e.g. to prevent things like lending crises.

Invoking family to make an ethical point is something I see often, in many different circumstances.

There's a bunch of "should" in this argument. I won't debate whether it should have liability, but I'll point out that no matter how it ought to be, according the law of the land at least in EU any payment service provider inavoidably has liability in certain cases e.g. when your account has been hacked; if they are unable to reverse a transaction that wasn't authorised by me but by someone else, well, that's their problem, they still have to compensate the consumer above a self-risk of 50 Eur.

The original article mentions UK Consumer Credit Act which IMHO is not appropriate (its scope is limited to credit relations, and the protections of that act generally exclude both debit cards and most e-money systems including Libra), so the scope for potential payment service provider involvement in disputes between buyer and seller is narrower than that - and probably closer to your "should" statement than the arguments of the original article.

However, it can't be a fully neutral platform distancing itself from all liability. It is illegal to "simply" offer payment services without incurring any liability for misuse of them, breaching AML/KYC regulations, etc. Facebook has not yet (as far as I know) stated what exact legal structure they'll use for compliance with the legal requirements, so I can't comment on that, but they did make statements that Libracoin will comply with the EU regulations so I presume that some legal entity regarding Libracoin (possibly co-owned by the consortium members, or possibly multiple entities) will (have to) be a licensed payment service provider in EU, and similarly (it's usually done with separate legal entities) in other major jurisdictions.

Technical structures that "just happen" such as Bitcoin can ignore regulations but any person or organization that wants to offer services using these technical structures is fully liable for meeting all the legal requirements - and if the technical structure makes impossible to do something, they're still fully responsible for any consequences of not achieving the impossible thing; if they don't want the liability, they're free to not use that technical structure and not use/offer/advertise anything with it.