Libra, 2 Weeks In

We have an app called mobile pay in Denmark, which I guess is similar to Apple Pay in that you link a credit card and it lets you send money to friends or pay for stuff. It’s owned by our banks and it works most places a credit card wouldn’t, like in small stores that can’t really afford to have a credit card terminal. That’s it’s main uses, sending money to friends or buying things. Only they also have an API for the web, so you can now pay for things you buy in more and more online stores.

I use it a lot. It’s never been easier to collect expenses from board game nights, and when I recently bought the first Harry Potter book (in Danish for my daughter) I didn’t have to enter my credit card information.

I think that’s what Libre will be, only global. I don’t like Facebook, but if they actually succeed at this, they’ll become the easiest way to pay for things on a global scale.

> Is this really a blockchain? It’s not open. It’s not decentralized! > While the initial mechanism by which organizations can run a node and become a member of the Libra Association, is definitely not as open as, say Bitcoin, where anyone can participate in the consensus algorithm, the Libra Blockchain is absolutely designed to be open.

They skip the first question: Libra is not a block chain. It uses Merkel tree accumulators for updating the state of the database, so it's definately not a block chain, it's just marketed as one.

I wanted to see if there's anything like- 'We are not doing this to see end conversions of our Ads i.e. whether one clicks the Ad and buys the same in the a physical store'.

Like Google did(doing?) with Visa/Master card data.

Closest related statements I could find in the blog,

>while Facebook, Inc. owns and controls Calibra, it won’t see financial data from Calibra

>More commerce means ads will be more effective, and advertisers will buy more of them to grow their businesses.

> What's your point?

You said that the U.S. president controls the Fed, and that is just objectively incorrect. My point is to correct that, so that you and anyone else reading will know better. I thought that was pretty clear.

> AFAIK he also technically has the power to fire him too.

No, he doesn't, so your knowledge doesn't go very far here.

And by the way, although the U.S. president nominates the Fed chair, he or she must be approved by the U.S. Senate. So the president can't pursue a specific monetary policy agenda via an appointee unless the Senate agrees.

> Can you use the dollar to buy food at a foodstand in Germany? No.

Sure, but the dollar is used for more international trade (e.g. oil) than any other currency, and is also a store of wealth probably more than any other currency.

For instance, many Germans hold dollars in the form of US Treasuries, because they actually pay a positive yield, unlike German government debt.

Anyway, if you are afraid of Libra, and I'm with you on that. The solution is decentralized currency like bitcoin, not fiat. The Fed is pursuing a long-term suicidal interest rate policy (too low) and the ECB is no better off. Plus, the U.S. government has started using dollar banking regulation as an international weapon (e.g. Iran sanctions), so there is a rising risk that eventually other countries will wise up and stop using the dollar, and that will destabilize it.

I'm pretty skeptical about Libra overall.

In the case where it succeeds massively as in some of Matt Levine's recent thought experiments, I'm not convinced that Facebook has captured enough of the US regulatory framework for them to turn a blind eye to a new global currency which eventually rivals or overtakes the dollar in usefulness. If we accept, for example, that needing to buy and sell oil in dollars allows for a much more effective sanctioning infrastructure then it seems unlikely they will let a corporate-controlled currency whose ideals don't align explicitly with those of the US get too powerful without a fight.

In the other case, where it just becomes a data-hoarding venmo, but initially for the unbanked global poor, I'm not convinced that a) those people are truly sitting around unable to transact while they wait for Facebook to provide the solution and b) that a payment token which is pegged to a basket of global currencies rather than their own is truly the solution that these people would be seeking.

Now, the (theoretical) implementation makes it look more like it's aimed towards the first scenario, some kind of global-corporatist dystopia which we as a society walk into blindly because it's conveniently available within WhatsApp.

And I don't doubt the value of convenience, nor that there are some very smart people behind this who may have estimated that with the right implementation and dark enough patterns, they can use their market share to break through the latter scenario and into the first. But these are interesting times - I don't expect governments to sit on their hands, and we're not exactly in the midst of a surge in the popularity of globalism right now.