Paypal Withdraws from Facebook's Libra Cryptocurrency(cnbc.com)
cnbc.com
Paypal Withdraws from Facebook's Libra Cryptocurrency
https://www.cnbc.com/2019/10/04/paypal-withdraws-from-facebooks-libra-cryptocurrency.html
292 comments
">If Libra ignored these rules..."
This isn't like Uber silently encroaching on a city's taxi medallion laws with grey-area definitions of "taxi" and "employee". Facebook cannot do something like this without attracting scrutiny at every stage, and as we saw with Robinhood, the financial regulation systems are relatively quick to act. Especially if they "defy govs", then those government's will have every reason to come down hard.
This is one area where Facebook will need to finesse their way through-- moving fast and breaking things is not a winning strategy.
This isn't like Uber silently encroaching on a city's taxi medallion laws with grey-area definitions of "taxi" and "employee". Facebook cannot do something like this without attracting scrutiny at every stage, and as we saw with Robinhood, the financial regulation systems are relatively quick to act. Especially if they "defy govs", then those government's will have every reason to come down hard.
This is one area where Facebook will need to finesse their way through-- moving fast and breaking things is not a winning strategy.
Honestly from an industrial / historical perspective, they are trying to enter a game of a whole other level than anything social-media or ad-related can ever touch. I don't know how they can win using the same strategy (disingenuosity, cheeky attitude, etc) than they used so far. It just won't fly in that space. Even bitcoin et al. look more serious by comparison, by a mile, and that's saying a lot.
Not sure if serious or delusional, actually. Over-hyped by their own kool-aid, you know. It tends to happen to surprisingly large groups in the Valley. Time will tell, but if they don't have a special sauce kinda joker to play, I just don't see it. Defying states never worked well unless said states are basically non-existent.
Not sure if serious or delusional, actually. Over-hyped by their own kool-aid, you know. It tends to happen to surprisingly large groups in the Valley. Time will tell, but if they don't have a special sauce kinda joker to play, I just don't see it. Defying states never worked well unless said states are basically non-existent.
I don't know what Libra's plans are but couldn't Facebook make their own Paypal? What would really be the difference?
I can hold a balance at Paypal. I can pay others and others can pay me. The "crypto" part seems like an implementation detail but otherwise irrelevant.
Note: I'm not saying Facebook should be allowed to make their own Paypal. I'm just curious other than "Facebook scary because big" what other reason would prevent Facebook from making a Paypal clone.
Google has Google Pay, Apple has Apple Pay, why can't Facebook have Facebook Pay. What would really be the difference? Just the part about currency conversion to their own units and back? Is that different from certain game virtual currencies?
I can hold a balance at Paypal. I can pay others and others can pay me. The "crypto" part seems like an implementation detail but otherwise irrelevant.
Note: I'm not saying Facebook should be allowed to make their own Paypal. I'm just curious other than "Facebook scary because big" what other reason would prevent Facebook from making a Paypal clone.
Google has Google Pay, Apple has Apple Pay, why can't Facebook have Facebook Pay. What would really be the difference? Just the part about currency conversion to their own units and back? Is that different from certain game virtual currencies?
Apple and Google are still dealing with merchant fees. So is PayPal for many transactions.
A PayPal style system might work, but it is only low-cost low-friction (the main appeal for crypto) for the transactions that occur completely within it's own ecosystem. And they don't call it a currency, so they dodge some issues there. Paypal also dodges issues of "being a bank" because funds equivalent to customer balances are actually held in real-world banks, so it's not in any way an independent currency. It doesn't "float" against anything. Libra's basket-of-currencies approach may be very stable, but automatically puts it in a very different class of financial instruments. They could abandon that and really stick to the paypal model though.
Even then, there are still many regulations for this that must be followed: It falls in a business class of "money transmitter" which requires a separate license in every state, as well as registration with the federal government. They also must follow laws like filing a CTR for transactions above $10,000, and SARs for suspicious activity. There's simply no getting around major regulations if you're providing any sort of financial services.
A PayPal style system might work, but it is only low-cost low-friction (the main appeal for crypto) for the transactions that occur completely within it's own ecosystem. And they don't call it a currency, so they dodge some issues there. Paypal also dodges issues of "being a bank" because funds equivalent to customer balances are actually held in real-world banks, so it's not in any way an independent currency. It doesn't "float" against anything. Libra's basket-of-currencies approach may be very stable, but automatically puts it in a very different class of financial instruments. They could abandon that and really stick to the paypal model though.
Even then, there are still many regulations for this that must be followed: It falls in a business class of "money transmitter" which requires a separate license in every state, as well as registration with the federal government. They also must follow laws like filing a CTR for transactions above $10,000, and SARs for suspicious activity. There's simply no getting around major regulations if you're providing any sort of financial services.
> Paypal also dodges issues of "being a bank" (...)
AFAIK Paypal is a bank in the EU.
AFAIK Paypal is a bank in the EU.
Oh, that's right. They got a banking license in one of the EU countries, which allows it to operate as such throughout the EU. If that move was necessary to operate as they do withing the EU, i.e., if they cannot simply be money stores without being a bank even if they're not using fractional reserve, then Facebook too would need to register as such.
Yes. Fully licensed Bank in Luxembourg. No branches though.
Crypto seems like it's (at the moment) neither low cost nor low friction; did I misunderstand you?
Nope, no misunderstanding, you're right! But the promise of crypto is cheap frictionless transactions. We're a long way off.
Understood. Yes, it will probably get there eventually.
Trasferring or requesting lumens on keybase is incredibly easy and very cheap. Turning the lumens into fiat and vice versa isn't so easy at present.
Actually, it's obvious to me that this is the future - we want to share money in the same way and with the same ease we share thoughts and images ie inside chat systems and on social media. You don't need crypto to do this, but it's the best way of making a system anyone can join and trust.
Libra is going to be big unless it's artificially stopped, and that's my view, even as someone who would much rather see one of the current cryptocurrency systems win rather than a new Facebook invented thing.
If we hadn't ceded chat and social media to walled Gardens we would have solved this years ago.
Actually, it's obvious to me that this is the future - we want to share money in the same way and with the same ease we share thoughts and images ie inside chat systems and on social media. You don't need crypto to do this, but it's the best way of making a system anyone can join and trust.
Libra is going to be big unless it's artificially stopped, and that's my view, even as someone who would much rather see one of the current cryptocurrency systems win rather than a new Facebook invented thing.
If we hadn't ceded chat and social media to walled Gardens we would have solved this years ago.
So, what stops Facebook from trying to push Libra everywhere and then bowing out in the countries it doesn't take hold in? I doubt that many developing countries would be able to shut the door on them. It might even be a boon for those developing countries, because it could enable trade between them without some heavy fees in converting currency.
Any developing country can do the same as the US: prohibit their own banks from processing transaction to/from Libra. If the US decided not to make such a move, then users in those other countries could probably find work arounds, but it would increase the barriers of entry & probably adoption rates. And the larger adoption rates became, the easier it would be to shutdown major on-ramps & off-ramps from the currency.
As US company deliberately violating financial laws of another country might still come under tremendous scrutiny from US regulators.
Regardless, it wouldn't be perfect, and hopefully would still provide an (albeit difficult) option to avoid massively unstable local currency fluctuations. It would, however, exacerbate those instabilities which may be a net harm for all involved. I don't know though, these are systems complex enough that no single human can hold all of it, and consequences of various actions, in their head.
As US company deliberately violating financial laws of another country might still come under tremendous scrutiny from US regulators.
Regardless, it wouldn't be perfect, and hopefully would still provide an (albeit difficult) option to avoid massively unstable local currency fluctuations. It would, however, exacerbate those instabilities which may be a net harm for all involved. I don't know though, these are systems complex enough that no single human can hold all of it, and consequences of various actions, in their head.
Nothing prevents them from building PayPal, except the regulatory regime they don't want to ascribe to. Also, the currency conversion to their own units and back relates to the taxability of said currency and the inability to use WoW gold to buy Starbucks. It is a matter of degrees - Facebook could seriously destabilize monetary policy for certain countries and subvert currency controls.
Well, they would have to do what PayPal did, which is build
1. A system that is acceptable by the regulations of any possible country they want to operate in.
2. Implemented by as many merchants as PayPal is.
This is feasible but not trivial.
Now, if you add in the "defy governments" part, it's clear that most merchants would not use it, which means users have a negative incentive to use libra over PayPal or whatever.
Even Amazon and Google failed to "just build a PayPal", and I don't see why Facebook would succeed easily.
This is feasible but not trivial.
Now, if you add in the "defy governments" part, it's clear that most merchants would not use it, which means users have a negative incentive to use libra over PayPal or whatever.
Even Amazon and Google failed to "just build a PayPal", and I don't see why Facebook would succeed easily.
> The "crypto" part seems like an implementation detail but otherwise irrelevant.
Nail on the head.
The innovation with cryptocurrencies is decentralized byzantine fault tolerance, using unknown actors. Libra is based on BFT where all parties are known, which has been a solved problem way before Bitcoin. The "crypto" part is irrelevant.
Nail on the head.
The innovation with cryptocurrencies is decentralized byzantine fault tolerance, using unknown actors. Libra is based on BFT where all parties are known, which has been a solved problem way before Bitcoin. The "crypto" part is irrelevant.
Yeah, there's no reason they need crypto to offer some type of scrip that is backed by a basket of currencies in the same way... what does crypto really add to this situation? Blockchain transparency? Frankly I don't want all of my transactions transparently available.
> This is one area where Facebook will need to finesse their way through
Governments and banks are hand in glove. FB does not have an army, nor more Lawyers than the US GovernMint (to name just one). Oh yeah, and if you don't believe almost every US news source is GovernMint controlled--I just have no words to describe your "optimism."
Governments and banks are hand in glove. FB does not have an army, nor more Lawyers than the US GovernMint (to name just one). Oh yeah, and if you don't believe almost every US news source is GovernMint controlled--I just have no words to describe your "optimism."
I'd need some expansion on the statement that media is government controlled. Yes, they are beholden to what the government is willing to tell them, but investigative reporting often digs up more. I have a hard time believing they're government controlled when at any given time, the government in power is faced with a large media segment that is biased against their political agenda.
If there is some level of control, it is at the complete opposite end of the spectrum from the strict authoritarian control of media in many other countries, so it's still much more "free" than many alternatives.
If there is some level of control, it is at the complete opposite end of the spectrum from the strict authoritarian control of media in many other countries, so it's still much more "free" than many alternatives.
> I have a hard time believing they're government controlled
I'm sure they [1] No longer have any ties ;). Hey, why would Bush lie about this?!?
[1] https://en.wikipedia.org/wiki/Operation_Mockingbird
I'm sure they [1] No longer have any ties ;). Hey, why would Bush lie about this?!?
[1] https://en.wikipedia.org/wiki/Operation_Mockingbird
it'll be a success
Imagine being unable to buy food because an algorithm determined that “you violated our community standards” and there’s no way to contact them. One or two stories like that will kill Libra stone dead.
If Libra ignored these rules, they'll put these guys (or at least a part of their offerings) out of business
This is called money laundering, people go to jail for it.
Imagine being unable to buy food because an algorithm determined that “you violated our community standards” and there’s no way to contact them. One or two stories like that will kill Libra stone dead.
If Libra ignored these rules, they'll put these guys (or at least a part of their offerings) out of business
This is called money laundering, people go to jail for it.
Ive had similar thoughts about paypal for a long time after they randomly shut down one of my accounts for unspecified suspicious activity and was doing everything possible to not deal with it and fix their mistake. And I know I wasn't the only one either. And yet it still survives to this day.
My favourite thing is how they wait for you to put money in and then lock your account for ID verification/adding a bank account. They know that 99% of people would just exit the site if they had to verify on registration, so they wait until you get paid, holding your money hostage so you have no choice but to verify or lose the money. Skrill is the worst, their ID verification is all automated, wonder if they deleted my $900 yet after 2 years because i just couldn't be bothered sending ID for a 5th time.
Likely because these types of anecdotal accounts get no press coverage.
What's more, I know plenty of people who hold unsavory views of PayPal... but still use Venmo.
I'm one of them.
I'm one of them.
> Imagine being unable to buy food because an algorithm determined that “you violated our community standards” and there’s no way to contact them. One or two stories like that will kill Libra stone
This already exists. If your bank's AML algorithm flags certain transactions, your account will be frozen, with no explanation (they legally can't tell you why they did it, it is an offense). You will be asked to produce some documents whilst they and potentially law enforcement investigate. Again, you won't be told why or how long it will take. Usually, if you haven't done anything wrong, you'll have no access to your money for 1-2 months.
Now, here's the kicker. Those flagging algorithms aren't very good. They don't work on any sophisticated social graphs.
They're based on a bunch of simple rules -- maybe you made a large cash deposit, or wired more money than usual, or received a bunch of small transactions (maybe you're selling drugs?). The flag is raised, the account is frozen and you're shit out of luck trying to get an explanation or buying things for a few months.
Given we still use banks, I'm sure "you violated our community standards" won't be the straw that broke the camel's back.
This already exists. If your bank's AML algorithm flags certain transactions, your account will be frozen, with no explanation (they legally can't tell you why they did it, it is an offense). You will be asked to produce some documents whilst they and potentially law enforcement investigate. Again, you won't be told why or how long it will take. Usually, if you haven't done anything wrong, you'll have no access to your money for 1-2 months.
Now, here's the kicker. Those flagging algorithms aren't very good. They don't work on any sophisticated social graphs.
They're based on a bunch of simple rules -- maybe you made a large cash deposit, or wired more money than usual, or received a bunch of small transactions (maybe you're selling drugs?). The flag is raised, the account is frozen and you're shit out of luck trying to get an explanation or buying things for a few months.
Given we still use banks, I'm sure "you violated our community standards" won't be the straw that broke the camel's back.
This isn't quite correct. At Monzo (and thus I assume other banks in the UK as well) you won't be sanctioned until a human being had reviewed your case history.
> Given we still use banks, I'm sure "you violated our community standards" won't be the straw that broke the camel's back.
That depends entirely on how much trust there is.
Lots of people don’t trust their governments, but most do; ditto corporations. A government can be arbitrary and capricious in ways that corporations cannot, but most of us live in democracies and even those of us that don’t most live in countries that follow the rule of law.
I assume all large corporations care about rule of law, but I also assume they outspend governments on lawyers looking for legal loopholes, and corporations are not normally democracies. I don’t trust Facebook basically at all, I wouldn’t trust Google with money, the only reason I trust Apple with money is they’ve outsourced it to an actual bank, and I am only grudgingly willing to trust PayPal for occasional small transactions.
The banks themselves? Well, since the financial crisis I assume any given one will go under so I have several and distribute my money between them.
Of course, I’m unusually cautious.
That depends entirely on how much trust there is.
Lots of people don’t trust their governments, but most do; ditto corporations. A government can be arbitrary and capricious in ways that corporations cannot, but most of us live in democracies and even those of us that don’t most live in countries that follow the rule of law.
I assume all large corporations care about rule of law, but I also assume they outspend governments on lawyers looking for legal loopholes, and corporations are not normally democracies. I don’t trust Facebook basically at all, I wouldn’t trust Google with money, the only reason I trust Apple with money is they’ve outsourced it to an actual bank, and I am only grudgingly willing to trust PayPal for occasional small transactions.
The banks themselves? Well, since the financial crisis I assume any given one will go under so I have several and distribute my money between them.
Of course, I’m unusually cautious.
>Imagine being unable to buy food because an algorithm determined that “you violated our community standards” and there’s no way to contact them
Not to defend Facebook in any way but, isn't that already the case with a bank system automatically blocking your card for no valid reason and no way to call them over the weekend for example? (happened to me a few times)
Not to defend Facebook in any way but, isn't that already the case with a bank system automatically blocking your card for no valid reason and no way to call them over the weekend for example? (happened to me a few times)
This is why I'm against a cacheless society as it becomes too easy to lock someone out of society, being it a bug, algorithm, network downtime, or abuse. And for the platform to automatically draw money for arbitrary reasons like fees or because you forgot to push some buttons in their web interface. And then you have to pay a percentage in all transactions and probably also a monthly fee. And the platform will keep drawing money putting your account into negative.
cashless doesn’t mean always online.
Prepaid wallets with offline/anonymous use are a thing, already used for over a decade in some countries. It’s not easy to build in any way, but it’s already a reality.
Prepaid wallets with offline/anonymous use are a thing, already used for over a decade in some countries. It’s not easy to build in any way, but it’s already a reality.
Your card isn't your account, just an avenue to getting at the money in your account, so it's not quite the same. I can go into a bank branch, or log into online banking and still access my money. I can also go into a branch or phone my bank and get my card unblocked.
In all cases where my bank has blocked my card, they've been contactable (24/7), though to be honest, they've always contacted me in less than a minute after my card has been blocked, so I've never had to do this. I'm in the UK for reference, as I know experience will vary from bank to bank and place to place, as you've already identified.
In the case of Libra, you have no recourse if Facebook decide to block your account. You just have to hope that someday your case will be reviewed. Paypal seem to be just as bad, so it's not only Facebook who would have this problem, but I also avoid Paypal for that same reason.
In all cases where my bank has blocked my card, they've been contactable (24/7), though to be honest, they've always contacted me in less than a minute after my card has been blocked, so I've never had to do this. I'm in the UK for reference, as I know experience will vary from bank to bank and place to place, as you've already identified.
In the case of Libra, you have no recourse if Facebook decide to block your account. You just have to hope that someday your case will be reviewed. Paypal seem to be just as bad, so it's not only Facebook who would have this problem, but I also avoid Paypal for that same reason.
Why would Facebook not have the same level of support as a bank, when they launch Libra? Doesnt seem to be a strong argument.
probably because we have precedent of social media companies not bothering with that level of support/intentionally avoiding having to provide proper support. There's no reason to assume Facebook will change that either.
Well in France I can tell you that bank services are a big joke, no one ever called me when my card was blocked, worst, most of the time they don't even know why the card doesn't work. Happened to me on multiple occasions with different banks in different regions in France.
And if you dare pointing out how incompetent they are they'll just close you account and leave you in the wild.
And if you dare pointing out how incompetent they are they'll just close you account and leave you in the wild.
Happened to me too, over weekend, when I shop online and my bank thinks there is something suspicious, they freeze the transaction (not block it), text me a Y/N question with the merchant&amount, and if I reply fast enough, it goes through. Otherwise the vendor cancels the request and I can 5mins later try again, and this time it goes through.
But that's my "main" bank. My secondary bank is not as user friendly and thus don't get an equal cut of my business.
But that's my "main" bank. My secondary bank is not as user friendly and thus don't get an equal cut of my business.
To be honest, I think the same people, who ignore how corrupt and criminal Facebook is and has been for a long time, will be the people, who don't give a damn about whether someone cannot buy food. They just don't want to see it and want to keep going on in their comfort zone and not care about the consequences for others. So I think I have to disagree here, that this would be the nail in the coffin for Libra. I kid you not, there are still people out there, who did not hear or read about all the data scandals Facebook had and who still think it is all well and good and Mr. Zuckerberg is an idol for these kind.
You made so many assumptions about other people. And seemingly are making yourself out to be vastly morally superior to the people you grouped together.
> Imagine being unable to buy food because an algorithm determined that “you violated our community standards” and there’s no way to contact them.
This seems very likely to happen.
> One or two stories like that will kill Libra stone dead.
This seems sadly very unlikely to follow. I doubt even a "juvenile starved to death"- or "kid stranded because bus ticket purchase was denied"-story would put a dent in this project.
Don't get me wrong, I think it should, I just don't think it very likely.
With 1 billion users, a serious bug/pattern that affects 0.1% of the users - harms a 100 000 people.
But their voices still drown in the crowd, as far as I can tell.
This seems very likely to happen.
> One or two stories like that will kill Libra stone dead.
This seems sadly very unlikely to follow. I doubt even a "juvenile starved to death"- or "kid stranded because bus ticket purchase was denied"-story would put a dent in this project.
Don't get me wrong, I think it should, I just don't think it very likely.
With 1 billion users, a serious bug/pattern that affects 0.1% of the users - harms a 100 000 people.
But their voices still drown in the crowd, as far as I can tell.
>Imagine being unable to buy food because an algorithm determined that “you violated our community standards” and there’s no way to contact them. One or two stories like that will kill Libra stone dead.
Imagine being unable to buy food because (an algorithm at) Visa or MasterCard decided that you violated their (community) standards. Oh wait, we don't have to imagine anything, because that's the world we already live in.
Not only do these corporations ban some individuals, some of them (Paypal, Square) seem to be taking aim at outright banning the sale of certain goods that are otherwise considered to be legal.
Imagine being unable to buy food because (an algorithm at) Visa or MasterCard decided that you violated their (community) standards. Oh wait, we don't have to imagine anything, because that's the world we already live in.
Not only do these corporations ban some individuals, some of them (Paypal, Square) seem to be taking aim at outright banning the sale of certain goods that are otherwise considered to be legal.
You're not in general paid in "visa". You either have a bank account and can withdraw cash, or you can get paid in cash.
Now,if you're paid into your libra account (or indeed PayPal account, Apple pay, Google whatever) - then you're indeed at the whim of those companies use policies.
Visa won't stop your card over a nude Pic on Facebook - but Facebook might suspend your account and your libra over it.
Note that for example in Norway (probably Europe?) every card transaction is run through a check for money laundering and criminal/suspicious activity in real-time.
You touch your card, central authority can decline the transaction. (I have a friend that used to work on this system, implementing rules).
But they don't check your tweet history (although, I'm sure the intelligence services do, and I assume they have a secret, quasi-legal "terrorist" watch list that probably is linked to this system somehow).
Visa won't stop your card over a nude Pic on Facebook - but Facebook might suspend your account and your libra over it.
Note that for example in Norway (probably Europe?) every card transaction is run through a check for money laundering and criminal/suspicious activity in real-time.
You touch your card, central authority can decline the transaction. (I have a friend that used to work on this system, implementing rules).
But they don't check your tweet history (although, I'm sure the intelligence services do, and I assume they have a secret, quasi-legal "terrorist" watch list that probably is linked to this system somehow).
> Visa won't stop your card over a nude Pic on Facebook
Member banks of VISA can. Remember that VISA is a limited-liability partnership founded by banks.
Member banks of VISA can. Remember that VISA is a limited-liability partnership founded by banks.
They don't have access to your not-world-public Facebook posts, or flagged posts?
So they literally cannot flag your bank details over such things?
Do you mean that visa employees can flag your account over personal reasons?
So they literally cannot flag your bank details over such things?
Do you mean that visa employees can flag your account over personal reasons?
> You're not in general paid in "visa". You either have a bank account and can withdraw cash, or you can get paid in cash.
But we've already seen that you can effectively be "banned" from the financial system in the United States. Just look at Alex Jones and what California is trying to do against the NRA.
Regardless of what you think of them, it is very obvious that they are canaries. It should be very obvious to everyone that there is a political movement trying to weaponize the financial system against their opposition under the guise of re-defining terrorism and hate speech.
But we've already seen that you can effectively be "banned" from the financial system in the United States. Just look at Alex Jones and what California is trying to do against the NRA.
Regardless of what you think of them, it is very obvious that they are canaries. It should be very obvious to everyone that there is a political movement trying to weaponize the financial system against their opposition under the guise of re-defining terrorism and hate speech.
Now, there are separate issues here - the limit of banking for "bad actors" (terrorists, hate speech, democracy activists...).
That is mostly happening through the proper channels, that is the police and the judicial system do the policing and the legislative system makes the rules.
That in itself isn't a safeguard against abuse - but the other aspect is the privatization of utilities, and self-moderation that these companies do.
In between is the credit rating system, which allows for pretty arbitrarily denying banking services to individuals.
Still, if you are paid in a regulated currency, you still have an option to use cash. An access to legal tender.
With something like Libra, a private corporation, with a horrible track record wrt complaints/customer service can vanish your money because a friend shared a picture on your "wall", or some other entirely arbitrary thing that leads to account suspension.
You don't have to go out of your way to purchase fertilizer, diesel and nails - you could do a million different completely innocent things and still be locked out of your money - with no real recourse - including a viable legal recourse.
That is mostly happening through the proper channels, that is the police and the judicial system do the policing and the legislative system makes the rules.
That in itself isn't a safeguard against abuse - but the other aspect is the privatization of utilities, and self-moderation that these companies do.
In between is the credit rating system, which allows for pretty arbitrarily denying banking services to individuals.
Still, if you are paid in a regulated currency, you still have an option to use cash. An access to legal tender.
With something like Libra, a private corporation, with a horrible track record wrt complaints/customer service can vanish your money because a friend shared a picture on your "wall", or some other entirely arbitrary thing that leads to account suspension.
You don't have to go out of your way to purchase fertilizer, diesel and nails - you could do a million different completely innocent things and still be locked out of your money - with no real recourse - including a viable legal recourse.
It’s all speculation but I wouldn’t be so sure about some negative press killing Libra. Thinking of another large platform where an algorithm determined a driver safe and then they perform a sexual assault on one of their passengers, it gets tons of press, still has millions of users...
Example: https://money.cnn.com/2018/04/30/technology/uber-driver-sexu...
Very correct, bad results or user experience would unfortunately not have any effect if it is not a systemic problem that the great mass of users experiences. Google services also are still successful and used by billions even though google has a track record of terminating accounts at random...
You're comparing oranges to apples here. I really don't see how Facebook potentially refusing access to their platforms for obscures reasons can be compared to an employee of a platform committing sexual assault.
PayPal has so many horror stories of locking thousands of dollars from its users for "violating terms of use" and no one seems to bat an eye. They are as big as ever.
> Imagine being unable to buy food because an algorithm determined that “you violated our community standards” and there’s no way to contact them. One or two stories like that will kill Libra stone dead.
This is basically what happens in real life too. There are people that cannot buy food because "they violated community standards". This Libra thing is totally aligned with the world!
This is basically what happens in real life too. There are people that cannot buy food because "they violated community standards". This Libra thing is totally aligned with the world!
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> One or two stories like that will kill Libra stone dead.
Unfortunately not. The problem is that only few people are affected by such problems. Privacy issues and unacceptable EULAs are similar, not enough people get actual problems with them, hence companies can get away with them.
Unfortunately not. The problem is that only few people are affected by such problems. Privacy issues and unacceptable EULAs are similar, not enough people get actual problems with them, hence companies can get away with them.
> Why would anybody use Western Union if they can send money through their Facebook for less or no fees?
Because Western Union accepts and delivers cash. Western Union exists for the much the same reason payday lenders exist--to service the cash economy.
Because Western Union accepts and delivers cash. Western Union exists for the much the same reason payday lenders exist--to service the cash economy.
>+ Facebook/Zuckerberg will defy the gov.s and launch Libra.
They could try but they'll be doing so in the face of laws designed to combat money laundering and funding of terrorist organisations. This isn't remotely on the same level as what AirBnB were doing when they decided to flout local laws around rental properties.
>I think Zuckerberg has come (or already know) to the realization that these institutions "added value" is navigating the regulations/laws of the different countries.
That's what will likely make Libra a non-starter in most countries. Financial institutions have already invested significantly to ensure their business practices are compliant with both local and international law. They won't allow Facebook to start undermining that.
They could try but they'll be doing so in the face of laws designed to combat money laundering and funding of terrorist organisations. This isn't remotely on the same level as what AirBnB were doing when they decided to flout local laws around rental properties.
>I think Zuckerberg has come (or already know) to the realization that these institutions "added value" is navigating the regulations/laws of the different countries.
That's what will likely make Libra a non-starter in most countries. Financial institutions have already invested significantly to ensure their business practices are compliant with both local and international law. They won't allow Facebook to start undermining that.
> Sending money across "borders" is hard only because governments made it so
On the contrary, it's much easier than it has ever been in human history to send money across borders, mostly due to government regulation of international finance.
For the absurdly wealthy, such regulation is a major pain of course. But the thing about the absurdly wealthy is... they can afford to deal with major pains.
For the rest of the human race, the real question to ask about these non-governmental currencies is: would you rather have your money be regulated by your local government and the governments of those you wish to trade with, or would you rather have your money be regulated by Facebook? I find this a very easy question to answer, personally.
On the contrary, it's much easier than it has ever been in human history to send money across borders, mostly due to government regulation of international finance.
For the absurdly wealthy, such regulation is a major pain of course. But the thing about the absurdly wealthy is... they can afford to deal with major pains.
For the rest of the human race, the real question to ask about these non-governmental currencies is: would you rather have your money be regulated by your local government and the governments of those you wish to trade with, or would you rather have your money be regulated by Facebook? I find this a very easy question to answer, personally.
> would you rather have your money be regulated by your local government and the governments of those you wish to trade with, or would you rather have your money be regulated by Facebook?
This is a false dichotomy: blockchain tech makes it clear that a third possibility is emerging - one which relies on no central authority at all, be it state or corporate.
This is a false dichotomy: blockchain tech makes it clear that a third possibility is emerging - one which relies on no central authority at all, be it state or corporate.
The third option, despite not having a "central authority" seems to have been widely hijacked.
What we know about economics seems to fly in the face of design decisions repeated again and again by cryptocurrency originators.
The popularity of deflationary economics (maximum coin counts, diminishing mining rewards) incentivizes economic rictus-- eternal hoarding and austerity-- when basically every central bank on Earth recognizes that a modest, predictable inflation rate helps to spur consumer demand and actual economic activity. This is not some conspiracy to undermine your gold sovereigns and silver dollars, it's a century of data in action.
Then you've got the tendency to stick to unsavoury communities. While some of this may be because they're the funding method of last resort for businesses that can't touch conventional payment systems (criminal or just radioactively controversial), there does seem to be an active prioritization of privacy, unreversibility, and immunity from regulation features, over features non-enthusiast consumers want like "easy cashin/out to fiat" and "fraud protection".
If you said "here's a shiny happy new tech product. It's not designed as a treatise on the gold standard, to spar with governments, or create some speculative investment. It's just about using 21st century technology to undercut the high margins of Visa, Mastercard, and Western Union", that would hit real needs. But it would be 1) hard to bootstrap because there would be no philosophically or investment motivated enthusiasts to evangelize for it and 2) likely very different in structure and operation than today's cryptocurrency products. It might not even be a blockchain-crypto product, and it might even be outright ran by a state agency.
What we know about economics seems to fly in the face of design decisions repeated again and again by cryptocurrency originators.
The popularity of deflationary economics (maximum coin counts, diminishing mining rewards) incentivizes economic rictus-- eternal hoarding and austerity-- when basically every central bank on Earth recognizes that a modest, predictable inflation rate helps to spur consumer demand and actual economic activity. This is not some conspiracy to undermine your gold sovereigns and silver dollars, it's a century of data in action.
Then you've got the tendency to stick to unsavoury communities. While some of this may be because they're the funding method of last resort for businesses that can't touch conventional payment systems (criminal or just radioactively controversial), there does seem to be an active prioritization of privacy, unreversibility, and immunity from regulation features, over features non-enthusiast consumers want like "easy cashin/out to fiat" and "fraud protection".
If you said "here's a shiny happy new tech product. It's not designed as a treatise on the gold standard, to spar with governments, or create some speculative investment. It's just about using 21st century technology to undercut the high margins of Visa, Mastercard, and Western Union", that would hit real needs. But it would be 1) hard to bootstrap because there would be no philosophically or investment motivated enthusiasts to evangelize for it and 2) likely very different in structure and operation than today's cryptocurrency products. It might not even be a blockchain-crypto product, and it might even be outright ran by a state agency.
Either Zuckberg has a geeky naive understanding of financial institutions to think this will go easily, or he is ready to use blackmail material.
Libra is something I wish we fight to the death.
Libra is something I wish we fight to the death.
What is so hateful about Libra when compared with the People Bank of China's digital currency project? When that is launched, any non-chinese can hold digital yuan without a bank account.
Wouldn't the west want something equivalent for geopolitical reasons?
Wouldn't the west want something equivalent for geopolitical reasons?
I don't think any of this is desirable. For me, it's similar to digital voting, I have strong technical concerns with crypto currencies. The cryptography behind them or the implementations will be broken. People claim that it's different now than it used to be. Every cryptographic system of the past has been broken, but now we have the computing power to make them future proof. There are no mathematical proofs for this assertion and there is no reason to believe it when you take into account the history of cryptography. Moreover, for some reasons the security margins in public cryptography tend to be far too low. I'd be surprised if many existing crypto currencies are even "quantum proof" yet - but attacks with quantum computers will likely be feasible in 10 - 20 years, if they aren't already for some state actors.
All it takes is one weakness in a protocol or one mathematical breakthrough in cryptanalysis, and the whole economy of a country could become vulnerable to attack and break down.
All it takes is one weakness in a protocol or one mathematical breakthrough in cryptanalysis, and the whole economy of a country could become vulnerable to attack and break down.
how is this different than getting a bank mainframe hacked?
It's a difference of scale. A single bank is less likely to drag down a whole economy and might even be insured against certain types of losses due to criminal activities. In contrast to this, if the value of a whole currency is destroyed over night, then the consequences are way more severe. Bear in mind that currency speculations and transactions can even get traditional currencies into trouble, see e.g. what happened in Argentinia.
As a "westerner" please explain me why I would want a private american company that has been known to neglect their responsibilities to wield geopolitical power?
I know what is the PCC's ideology. And it is socially more acceptable to dislike it than to boycott Facebook.
I don't even know what is Zuckberg's ideology. And I am actually more confident about the Chinese knowing what they are doing than about Zuck.
Yeah, I want something equivalent. I want digital euros. I get to vote for the guys who put that into place.
I don't care that a solution is "western" if it is not democratic.
I don't even know what is Zuckberg's ideology. And I am actually more confident about the Chinese knowing what they are doing than about Zuck.
Yeah, I want something equivalent. I want digital euros. I get to vote for the guys who put that into place.
I don't care that a solution is "western" if it is not democratic.
Bank of China is not a private company it's run by the Chinese government. Facebook is not the US government.
I don't trust Facebook, but the Chinese government aren't exactly a shining paragon of virtue either.
> Why would anybody use Western Union if they can send money through their Facebook for less or no fees? It's easier and more convenient too.
So if I'm in the United States, and want to send some of my paycheck back to my family in Sudan so they could buy stuff, how could I do that with Libra?
So if I'm in the United States, and want to send some of my paycheck back to my family in Sudan so they could buy stuff, how could I do that with Libra?
> So if I'm in the United States, and want to send some of my paycheck back to my family in Sudan so they could buy stuff, how could I do that with Libra?
Well, you can't. Sudan blocks access to Facebook (I was just there). A VPN mostly worked, but it was painful. Sudan is also cut off from the international money markets because they are on the list of 5 "bad" countries according to the US. No foreign bank cards function at all.
Extremely nice and welcoming people. Friendliest I have ever met on the entire planet, hands down.
Well, you can't. Sudan blocks access to Facebook (I was just there). A VPN mostly worked, but it was painful. Sudan is also cut off from the international money markets because they are on the list of 5 "bad" countries according to the US. No foreign bank cards function at all.
Extremely nice and welcoming people. Friendliest I have ever met on the entire planet, hands down.
I would assume that there will be a neighbor who offers a money service to the village. He will have a Libra account. No need to drive to the next big city. Your family can go to that person who they trust and he will hand out the money.
And if it is not Facebook, it will be WeChat. Then you first have to send your Libra coins to a suitable exchange that will wire it to that neighbor.
Actually, many African countries have mobile money, so you won't wire it to a WeChat exchange but to a mobile money exchange [1].
[1] https://en.wikipedia.org/wiki/African_MobileMoney
And if it is not Facebook, it will be WeChat. Then you first have to send your Libra coins to a suitable exchange that will wire it to that neighbor.
Actually, many African countries have mobile money, so you won't wire it to a WeChat exchange but to a mobile money exchange [1].
[1] https://en.wikipedia.org/wiki/African_MobileMoney
There's so many ways beyond Western Union already to avoid exorbitant fees, one example is TransferWise. While a very broad use case I'm not sold given the existing competition that FB has anything super unique or compelling when just restricted to the cross border money transfer space.
+1 for the first and second points, but I think it will play out much differently.
Facebook will try to defy regulators, but I think the SEC will stomp on them, hard. It will end up a hybrid battle in the courts and Congress between libertarians, a few flavors of privacy advocates, US regulatory concerns, and ultimately land on US power projection concerns.
I think the US will eventually shape the law and regulatory environment to prevent the existence of any cryptocurrency with its own valuation - distributed ledgers denominated in central bank currencies will be all that is allowed at the end.
The US financial system is a core pillar of US world power and Congress isn't going to give that power away to Facebook. It will be a complex road because the issues are difficult to grok.
Facebook will try to defy regulators, but I think the SEC will stomp on them, hard. It will end up a hybrid battle in the courts and Congress between libertarians, a few flavors of privacy advocates, US regulatory concerns, and ultimately land on US power projection concerns.
I think the US will eventually shape the law and regulatory environment to prevent the existence of any cryptocurrency with its own valuation - distributed ledgers denominated in central bank currencies will be all that is allowed at the end.
The US financial system is a core pillar of US world power and Congress isn't going to give that power away to Facebook. It will be a complex road because the issues are difficult to grok.
Sure Crypto backed by a particular company might not happen, but I don’t see BTC and similar P2P blockchain currencies going anywhere. It’s about as easy to stop as digital piracy, which is to say in other words physically impossible to regulate.
The US has a tremendous amount of power in the world financial system. If they want to inhibit crypto currencies, they can make it illegal to use credit cards to buy them, illegal for US banks to transfer to or from an exchange, and illegal for US banks to deal with any bank in any country that allows such activity, or any bank that deals with another bank that allows it.
It was illegal to privately own actual gold anywhere in the world as a US citizen between 1933 and 1975. That's absolutely an approach they could take.
Well, that depends. You could have gold teeth, and jewelry, so if you were really determined... though having all your teeth hollowed out and filled with gold doesn't strike me at scalable strategy, at least not unless you have a lot of kids. But all that was also only because we were on the gold standard. Which, contrary to gold-bug belief, wasn't immune from currency manipulation. The US government arbitrarily increased the value from about $20/ounce to about $30/ounce at on point, making the government suddenly richer in a way not much different than printing more money in today's fiat system.
They can't make it illegal to work for cryptocurrencies. Or to spend them for digital services like content, anonymous server hosting, or paying people for work. It's just not possible without destroying cryptography itself
Corroborating ineedausername, Wikileaks seemed like they were unstoppable defying governments and all. Then, they said they were about to humiliate one of the U.S.'s most powerful banks. Then, Mastercard, Visa, and Paypal cut off all donations to them. Then, Wikileaks started dying off.
The government and card networks might do something similar. They could get SWIFT in on it, too, since they cooperate with governments and mostly profit from traditional banks.
The government and card networks might do something similar. They could get SWIFT in on it, too, since they cooperate with governments and mostly profit from traditional banks.
Exactly. Imagine MasterCard and Visa blocking Facebook the merchant so advertisers can no longer pay Facebook. I'm sure Facebook will drop Libra like a hot potato.
I just checked and wikileaks.org is still alive and well. In fact a few years ago I donated crypto to them as a middle finger to the payment processors. Wikileaks is a perfect example of why banking regulations are ineffective when people can simply bypass said payment processors with crypto.
In short, governments are the real crooks.
You don't have to stop the blockchain. You just have to prevent the tokens from being exchanged for dollars which is a lot easier.
This would have the singular affect of forcing the entire cryptocurrency ecosystem into the black market, where it would thrive alive and well. Likely doing more harm than good in the process by fueling violent cartels to wreak havoc, as is still happening with the war on some drugs
That makes no sense, cryptocurrencies are already being used for illegal purposes.
It does make sense. There's a difference between say 50% of all crypto transactions being black market ones and 100% of them being so, and I don't think the 100 would be the same size as the 50 is now, in other words some of the legal trade would for sure move into the black market.
I don't get the point
Cryptocurrency ecosystem is already out of the regulations and mostly a black market
Cryptocurrency ecosystem is already out of the regulations and mostly a black market
Not really, Coinbase is pretty big and perfectly legal.
What about cash though? Isn't that stuff used for black market?
I think the US will eventually shape the law and regulatory environment to prevent the existence of any cryptocurrency with its own valuation - distributed ledgers denominated in central bank currencies will be all that is allowed at the end.
Existing SEC/CFTC/FinCen rulings seem to point in a very different direction. They've had many opportunities to shut down Bitcoin and have not done it.
Existing SEC/CFTC/FinCen rulings seem to point in a very different direction. They've had many opportunities to shut down Bitcoin and have not done it.
Nobody actually uses bitcoin in the US for anything besides investment speculation and really rare toy applications. It isn't being seen as a threat to anybody's central bank, because for all its enthusiasts and speculators, it hasn't developed into any sort of competition for the existing financial system unless you are doing something really illicit.
It's been a little over 10 years since the first bitcoins were mined and today's market cap is $147,490,754,701. Given that there are now bitcoin investment products like ETFs, some folks have a portion of their 401k's invested in bitcoin.
It certainly will be competition for central banks, especially in countries where the monetary policy is kinda wacky, like Venezuela, where bitcoin is breaking usage records.
Here's an article by a Venezuelan economist: "Bitcoin Has Saved My Family": https://www.nytimes.com/2019/02/23/opinion/sunday/venezuela-....
He was only able to feed his family because he kept his money in bitcoin and not in bolívars, which was experiencing daily inflation of 3.5%.
If I recall correctly, early on in the life of Bitcoin, the United States had to infuse $14 trillion into the economy to save the banks and keep the country from going into a depression.
There's only so long people are going to put up with near zero interest rates or negative interest rates in some countries and with a slow down seemingly around the corner, Bitcoin's algorithmic certainly will look pretty good compared to the somewhat irrational economic policies that have been implemented.
It certainly will be competition for central banks, especially in countries where the monetary policy is kinda wacky, like Venezuela, where bitcoin is breaking usage records.
Here's an article by a Venezuelan economist: "Bitcoin Has Saved My Family": https://www.nytimes.com/2019/02/23/opinion/sunday/venezuela-....
He was only able to feed his family because he kept his money in bitcoin and not in bolívars, which was experiencing daily inflation of 3.5%.
If I recall correctly, early on in the life of Bitcoin, the United States had to infuse $14 trillion into the economy to save the banks and keep the country from going into a depression.
There's only so long people are going to put up with near zero interest rates or negative interest rates in some countries and with a slow down seemingly around the corner, Bitcoin's algorithmic certainly will look pretty good compared to the somewhat irrational economic policies that have been implemented.
Bitcoins are valued 40 billion dollars right now, it's less that the net worth of Larry Page and less that the GDP of Myanmar, one of the poorest countries in the world.
If some folks risked their 401k on bitcoin it changes nothing.
If you own bitcoins in countries where inflation is double digit and you think they will save your family, think again: they would most probably get you killed or robbed.
If some folks risked their 401k on bitcoin it changes nothing.
If you own bitcoins in countries where inflation is double digit and you think they will save your family, think again: they would most probably get you killed or robbed.
> If you own bitcoins in countries where inflation is double digit and you think they will save your family, think again: they would most probably get you killed or robbed.
How so? It's not like correlating who owns which address is easy, and any smart person has their funds distributed across several wallets. So if you rob me of my bitcoins and I give you access to a wallet that doesn't contain all of my funds, how would you know any better?
How so? It's not like correlating who owns which address is easy, and any smart person has their funds distributed across several wallets. So if you rob me of my bitcoins and I give you access to a wallet that doesn't contain all of my funds, how would you know any better?
Also, most people who have considerable wealth in bitcoin has them in a multi signature wallet, like a 3 of 5—spending the money requires the use of 3 of the 5 authorized private keys.
You’re missing a digit—it’s $140+ billion, not $40 billion.
> It certainly will be competition for central banks, especially in countries where the monetary policy is kinda wacky, like Venezuela, where bitcoin is breaking usage records.
Zimbabwe also: https://qz.com/africa/1662753/bitcoin-crypto-soar-in-zimbabw...
There's really quite an opportunity here for Bitcoin to help people in these countries leap their financial markets forward a few stages in development: https://www.ifc.org/wps/wcm/connect/f12930a4-a78b-43c0-9fe1-...
Zimbabwe also: https://qz.com/africa/1662753/bitcoin-crypto-soar-in-zimbabw...
There's really quite an opportunity here for Bitcoin to help people in these countries leap their financial markets forward a few stages in development: https://www.ifc.org/wps/wcm/connect/f12930a4-a78b-43c0-9fe1-...
> unless you are doing something really illicit.
Actually I wonder if the intelligence agencies of the world like the cryptocurrencies because it lets them find illicit activity more easily.
Actually I wonder if the intelligence agencies of the world like the cryptocurrencies because it lets them find illicit activity more easily.
Nothing like an indestructible globally replicated register of your transactions to help make yourself discoverable
Wasabi and other modern bitcoin wallets run over Tor and have built-in features (like CoinJoin, coin control, etc.) to defeat blockchain analysis companies: https://docs.wasabiwallet.io/why-wasabi/
There are also decentralized, Tor-encrypted exchanges to buy and sell bitcoin like Bisq: https://bisq.network/.
There are also decentralized, Tor-encrypted exchanges to buy and sell bitcoin like Bisq: https://bisq.network/.
Either it works and you'll find it impossible to defend legalizing cryptocurrencies with money-laundering-as-a-service in front of Congress, or it doesn't work and prosecutors will slap money laundering charges on top of any crime that matters and you'll have a lot more difficult time defending yourself and your intent when you go to such lengths to hide your financial transactions.
> Either it works and you'll find it impossible to defend legalizing cryptocurrencies with money-laundering-as-a-service in front of Congress, or it doesn't work and prosecutors will slap money laundering charges on top of any crime that matters and you'll have a lot more difficult time defending yourself and your intent when you go to such lengths to hide your financial transactions.
Why? In most modern financial systems the ledger is not public. Why would I have to defend attempting to bring that level of privacy to bitcoin? It seems reasonable to want similar levels of privacy across instruments and doesn't seem illegal to use tumbler services, etc. I don't even see how that can be construed as money laundering. I imagine courts disagree but would love to read their reasoning.
Why? In most modern financial systems the ledger is not public. Why would I have to defend attempting to bring that level of privacy to bitcoin? It seems reasonable to want similar levels of privacy across instruments and doesn't seem illegal to use tumbler services, etc. I don't even see how that can be construed as money laundering. I imagine courts disagree but would love to read their reasoning.
> the SEC will stomp on them
The SEC is a civil agency. Launching something like this naked would garner state and federal prosecutors’ interests.
The SEC is a civil agency. Launching something like this naked would garner state and federal prosecutors’ interests.
A good number of countries will outright ban it for fear of the US governments control (warranted or not).
I tend to agree, the biggest concern here is the goverment will create overly broad legislation with the only purpose of leveraging it against truly decentralized cryptocurrencies
Cryptocurrency enthusiasts (and... Facebook) are actively inviting legislative overreaction with their actions.
Don't poke the bear.
Don't poke the bear.
Much.
Libra is meant to be the m-pesa of the world. It is funny that the US government and CIA haven’t figured out how much Libra will offer US hegemony. At some point Sandberg will explain it to the political dopes and Libra will happen. That day is not today.
I don’t have time to explain this comment, but I am probably missing something in my thinking.
I don’t have time to explain this comment, but I am probably missing something in my thinking.
The U.S. government will be very pleased that Facebook have circumvented all their anti-money laundering safeguards. So will entire nation states. Nothing could possibly go wrong.
I wonder why they chose to trumpet Libra with a big announcement and all this rhetoric implying it would be a major competitor to fiat currency.
Surely that wasn't necessary to popularize it. It could have been launched quietly and promoted in-app to the target audiences, and the furor from the press and various governments could have been largely avoided.
Was there a benefit gained that outweighed that cost? Or does Facebook drink its own kool aid so thoroughly that they simply didn't realize people would push back?
Surely that wasn't necessary to popularize it. It could have been launched quietly and promoted in-app to the target audiences, and the furor from the press and various governments could have been largely avoided.
Was there a benefit gained that outweighed that cost? Or does Facebook drink its own kool aid so thoroughly that they simply didn't realize people would push back?
Transferring money across borders has already been mostly disrupted by Tansferwise. Fees for that are about 10% of what WU charges. Granted there is still some room for improvement there since 1. Transferwise uses ACH so it takes a couple days and 2. Not everyone in poorer counties has easy access to a bank account or even a bank (with WU you can literally set up a stall on the side of the road and people can send and receive money).
I think 1 and 2 could still be solved with traditional fiat since there’s not a hard requirement that ACH needs to be used. The fees are low enough with Transferwise that it’s probably not too much of a blocker for people to pay them.
I think 1 and 2 could still be solved with traditional fiat since there’s not a hard requirement that ACH needs to be used. The fees are low enough with Transferwise that it’s probably not too much of a blocker for people to pay them.
If that happens, facebook will be attacked from all sides (including states) and loose.
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Normally I'd say that "[thing] but with no regard for the law" isn't a viable business model, but several startups have already proved me wrong.
Let me add:
+ Big act of terrorism found to be financed through siphoning funds via Libra, sidestepping worldwide regulatory frameworks. Bot Zuck Mark V walks into Congress, says he will look into it, nothing happens as said Congressmen used Libra to shift funds offshore to Panamá accounts...
Negative press hurt Facebook only slightly and mostly in the west. In Asia and Africa Facebook is still the internet.
One of the drivers for the regulation is simply that the government is concerned about getting their piece of the pie. The regulatory fight will be interesting to watch, but I'm more interested in how Libra is going to affect the field of cryptocurrencies as a whole.
I think the partners are all realizing the last thing they want to be involved in is a project with banking regulations / consequences and a partner that so far has thumbed its nose at government oversight.
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> Libra might not dominate the world, but it'll be a success (at least a niche success) and it'll eat up some of the marketshare of these financial institutions.
This relies on people consciously choosing to give money to libra rather than transferring directly. Why would anyone do this rather than use apple pay/cash/venmo/zelle with USD?
This relies on people consciously choosing to give money to libra rather than transferring directly. Why would anyone do this rather than use apple pay/cash/venmo/zelle with USD?
The goal of Libra was not really to compete with Western Union. It was more to compete with real cryptocurrencies like Bitcoin, Ethereum, Monero, etc. and it wasn't just Facebook's idea. PayPal, Visa etc. know that real cryptocurrencies are eventually going to put them out of business. That's why they joined in on this fake cryptocurrency.
The reason companies are pulling out is probably just because it looks like it's not going to succeed. Another theory is that it is just too obvious when you have those payment company's names attached. Too easy for people like me to say "why do you think Visa and MasterCard would back a 'cryptocurrency'"?
It's quite possible that the people with real power in government will figure out that this is not a real cryptocurrency and in fact is the best defense the government has against real cryptocurrency which they can't track or interfere with. Because Facebook will give them total access for surveillance and control over transactions.
The reason companies are pulling out is probably just because it looks like it's not going to succeed. Another theory is that it is just too obvious when you have those payment company's names attached. Too easy for people like me to say "why do you think Visa and MasterCard would back a 'cryptocurrency'"?
It's quite possible that the people with real power in government will figure out that this is not a real cryptocurrency and in fact is the best defense the government has against real cryptocurrency which they can't track or interfere with. Because Facebook will give them total access for surveillance and control over transactions.
It's way more complex than that. Pretty much everyone in government and the crypto space doesn't want Libra to succeed under it's current stewardship. The implications are very far reaching. Also, there isn't a single cryptocurrency today that can't be tracked, even ones like Monero.
>Also, there isn't a single cryptocurrency today that can't be tracked, even ones like Monero.
Sure, and the cost of doing so compared to some guy typing queries into their indexed list of every financial transaction in the United States (at minimum) is probably at least one or two orders of magnitude.
If you are someone or know someone to grant you some basic technical knowledge then certainly one or two orders of magnitude higher cost, unless you're a designated terrorist, or someone elected officials talk about executing.
Sure, and the cost of doing so compared to some guy typing queries into their indexed list of every financial transaction in the United States (at minimum) is probably at least one or two orders of magnitude.
If you are someone or know someone to grant you some basic technical knowledge then certainly one or two orders of magnitude higher cost, unless you're a designated terrorist, or someone elected officials talk about executing.
Also, there isn't a single cryptocurrency today that can't be tracked, even ones like Monero.
Really?
Really?
Can be, yes. Through combining network and non-network meta-data. If anyone actually has the desire to do so is another question entirely, but I wouldn't be surprised if certain state-level agencies have already begun to compile such data.
> Also, there isn't a single cryptocurrency today that can't be tracked, even ones like Monero.
Look up PirateChain.
Look up PirateChain.
Can still be tracked in the same way other zero knowledge proof cryptos can be.
> PayPal, Visa etc. know that real cryptocurrencies are eventually going to put them out of business.
Are we still pushing this? Last time I checked, once people saw beyond crypto as a get-rich-quick scheme, they lost interest very quickly.
Are we still pushing this? Last time I checked, once people saw beyond crypto as a get-rich-quick scheme, they lost interest very quickly.
If Facebook attempts to become a money transfer service or bank without the required licensing, they will have their offices raided and their doors locked on them. This is something Governments don't tend to mess around with.
FB is banking (pun unnintended) on the regulators and goverments being absolutely useless lately. Both AirBnB and Uber built empires on ”What if we just ignore the rules”
> Both AirBnB and Uber built empires on ”What if we just ignore the rules“
Municipal regulations. Not federal and state laws with criminal penalties.
Wilfully breaching AML statute is arson to Uber’s parking tickets.
Municipal regulations. Not federal and state laws with criminal penalties.
Wilfully breaching AML statute is arson to Uber’s parking tickets.
Exactly. Municipal regulators were unprepared for somebody with a billion dollars willfully breaking laws. And the laws were not a huge deal. For financial regulators, it's their bread and butter, and the laws are most definitely a big deal. Money laundering is a problem they are very serious about because it enables so much other crime.
I'm sure Facebook would not be dumb enough to step in front of that train, but if they did, it would run them flat.
There's also a sort of 9/11 effect going on here. The reason the 9/11 hijackers pulled it off was that nobody expected them to use the planes as giant suicide bombs. Previous hijackings generally ended peacefully, so everybody just stayed chill. But that window of opportunity expired before they managed to crash the 4th plane. Now nobody's just going to sit quietly through a hijacking.
Similarly, I think the reason Uber and Airbnb got away with so much lawbreaking is that it was novel to have nominally respectable companies blatantly committing a wide variety of crimes. But these days, tech companies get a lot of suspicion. Regulators are not interesting in getting caught flat-footed again. And that was true 5 years ago; SF vigorously shut down a bunch of entrepreneurs that wanted to sell public parking spaces back to the public: https://www.govtech.com/transportation/SF-Demands-MonkeyPark...
I'm sure Facebook would not be dumb enough to step in front of that train, but if they did, it would run them flat.
There's also a sort of 9/11 effect going on here. The reason the 9/11 hijackers pulled it off was that nobody expected them to use the planes as giant suicide bombs. Previous hijackings generally ended peacefully, so everybody just stayed chill. But that window of opportunity expired before they managed to crash the 4th plane. Now nobody's just going to sit quietly through a hijacking.
Similarly, I think the reason Uber and Airbnb got away with so much lawbreaking is that it was novel to have nominally respectable companies blatantly committing a wide variety of crimes. But these days, tech companies get a lot of suspicion. Regulators are not interesting in getting caught flat-footed again. And that was true 5 years ago; SF vigorously shut down a bunch of entrepreneurs that wanted to sell public parking spaces back to the public: https://www.govtech.com/transportation/SF-Demands-MonkeyPark...
The feds can come and shut down all of FB over money transmittal, they don't have to limit the shutdown to only the money parts. That's a huge risk to take. If Uber was shut down for violating taxi rules, they only had an unlicensed taxi business.
Could they? Wouldn't Facebook would only be an investor and Libra would be a separate company?
Seems hard to have any prominent integration without having libra related infrastructure on fb servers, and all infra with ”libra” on it is likely to get seized in a raid.
But sure, if libra is just an altcoin on unrelated hardware then fb won’t be affected.
But sure, if libra is just an altcoin on unrelated hardware then fb won’t be affected.
> Seems hard to have any prominent integration without having libra related infrastructure on fb servers, and all infra with ”libra” on it is likely to get seized in a raid.
> But sure, if libra is just an altcoin on unrelated hardware then fb won’t be affected.
A company as large as fb has the means to segregate application hardware. Hell, even smaller companies do this for liability reasons. If fb didn't it would be pretty lazy and ill conceived.
> But sure, if libra is just an altcoin on unrelated hardware then fb won’t be affected.
A company as large as fb has the means to segregate application hardware. Hell, even smaller companies do this for liability reasons. If fb didn't it would be pretty lazy and ill conceived.
Is this the same feds who all have Facebook accounts, including their families, children, relatives, bosses, and so on? Including everything they buy, everything they look at, their location, and complete profiles of their personality, photos, photos that were taken OF them by other people, likes and dislikes, dirty secrets, and so on?
It sure would be a shame if FBI directors in charge of such an investigation were cheating on their wives or were illegally getting kickbacks from contractors. Would be absolutely inconceivable that Facebook might even leak that information to their friends at the CIA or NSA and call in a favor.
It sure would be a shame if FBI directors in charge of such an investigation were cheating on their wives or were illegally getting kickbacks from contractors. Would be absolutely inconceivable that Facebook might even leak that information to their friends at the CIA or NSA and call in a favor.
AirBnB and Uber just kinda did it first and then asked permission. Facebook's only tiny hope of that strategy working was to announce Libra as being available first, not announcing the plan to governments first.
Plus, taxi and hotel regulations are a very different situation than laws intended to prevent international money laundering, tax evasion, sanction breaking, or black market economies.
Plus, taxi and hotel regulations are a very different situation than laws intended to prevent international money laundering, tax evasion, sanction breaking, or black market economies.
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Both AirBnB and Uber had the benefit of governments that generally wanted to try to work something out with them.
The difference is that Airbnb and Uber has a lot less to lose. If they got shut down by the govt they could just lose some VCs money. Facebook has a lot more on the line.
Further to that point, Airbnb and Uber are primarily dealing with issues related to local laws, for example in New York City or San Francisco.
New York City shutting down Airbnb doesn't shut them down in the thousands of other cities they're active in. If Boise Idaho restricts Uber, that doesn't suddenly restrict them in Chicago.
The US Government has an entirely different kind of power and when it comes to protecting the global reserve currency, the one guarantee is that they will use it.
New York City shutting down Airbnb doesn't shut them down in the thousands of other cities they're active in. If Boise Idaho restricts Uber, that doesn't suddenly restrict them in Chicago.
The US Government has an entirely different kind of power and when it comes to protecting the global reserve currency, the one guarantee is that they will use it.
Money is the fabric of our economic system for thousands of years. Taxis and accommodation are just tiny services build on that fabric.
Facebook is dealing with different powers here.
Facebook is dealing with different powers here.
This is not a smart position to hold. This administration hates big tech (perhaps fairly, lets not debate politics) and Warren isn't much friendlier.
But airbnb and uber were at a stage where they didn't have much to lose when they first challenged these regulations. Facebook is one of the most well known companies in the world.
FB is going to find useless regulators and governments though. FB is a global company. What's the chance that every country in the world is on top of their game?
The US cares about money laundering by US entities abroad as well and there's no get out of jail free card for "well, the other guys said it was okay". On top of that one of their selling points is how universal and frictionless it's supposed to be. If they can only operate in countries with useless regulation they're kind of doomed on that.
My understanding is that they are limiting the relationship between Facebook as a corporate entity and Libra, at least on paper. Whether regulators treat it this way is another matter.
But FB must be spending a lot on lobbying, and that should help them avoid any major surprises regarding enforcement actions.
But FB must be spending a lot on lobbying, and that should help them avoid any major surprises regarding enforcement actions.
> But FB must be spending a lot on lobbying
That only helps them in countries like the US where bribery is legal.
That only helps them in countries like the US where bribery is legal.
Why wouldn't it help in countries where bribery is illegal?
The insinuation is that lobbying is bribery (and on the more egregious end of the spectrum, it is). In countries where lobbying isn't legal, it would at least help much less.
I think the idea is that if lobbying is legal, then it is regulated and thus how much it can help is limited. In countries where lobbying is illegal, it can take a form of bribery and then you can (potentially) achieve a bit more in this 'unregulated-bribe-anyone' space...
That's an odd argument. If the goal is not to have your politicians be bought and paid for, then surely making it legal to buy them is arse backwards.
they are limiting the relationship between Facebook as a corporate entity and Libra, at least on paper.
On paper, by insistence of the regulators, as a condition of acquiring it, there is a limit on their relationships with Instagram too...
On paper, by insistence of the regulators, as a condition of acquiring it, there is a limit on their relationships with Instagram too...
Facebook is licensed as a Money Transmitter under their Facebook Payments entity.
Source: https://www.nmlsconsumeraccess.org/EntityDetails.aspx/COMPAN...
Wouldn't Facebook just get something like the UK's Electronic Money license? That's how TransferWise operates without being a bank.
Even if the regulators let them get away with that, nobody in Europe is particularly in need of a cryptocurrency for moving money around Europe, we have near-instant money transfers for free (or close to it) through our banks.
I guess they could go for the remittances market, but that's really not where I see Facebook wanting to go.
I guess they could go for the remittances market, but that's really not where I see Facebook wanting to go.
Well, I still think that email is good enough medium for personal communication, but most of the people I know have replaced it with Messenger.
The same might happen with money transfers, if Messenger becomes another WeChat, just outside of China.
From the legal perspective, could Facebook be like Coinbase, but with a single currency?
The same might happen with money transfers, if Messenger becomes another WeChat, just outside of China.
From the legal perspective, could Facebook be like Coinbase, but with a single currency?
Messenger isn't all that popular outside of north america. Doesn't matter how much money transfer options you add to a program if nobody is using it. I do wonder what happens if any non WeChat thing starts going for banking type functionality (legal or not).
Messenger, WhatsApp and Instagram are all owened bu Facebook. Facebook is already working on merging them into a single app, to be rebranded in the near future.
WhatsApp and Instagram have huge popularity outside of North America
WhatsApp and Instagram have huge popularity outside of North America
I get their desire to integrate Messenger and WhatsApp, but are they really trying to force Instagram into that mix too?
I’ve used WhatsApp since before FB acquired them but this is sounding like it’s going to get turned into a clusterfuck of stuff I have no interest in.
I’ve used WhatsApp since before FB acquired them but this is sounding like it’s going to get turned into a clusterfuck of stuff I have no interest in.
They are building a common protocol for messaging to be used interoperably, from what I have read. The apps themselves will likely remain separate from a user perspective, most likely
This is correct for EU & Latam
Multiple search results lead me to believe Facebook Messenger is the second most popular messaging app after WhatsApp.
Are you able to provide references supporting your claim?
Are you able to provide references supporting your claim?
Sure but you could plug that into google as well you know.
Here is the first hit: https://www.messengerpeople.com/global-messenger-usage-stati...
Edit: oddly enough, that hit wasn't the one where I read about it last week... But any page with sources works I suppose.
Edit: oddly enough, that hit wasn't the one where I read about it last week... But any page with sources works I suppose.
Doesn’t that link claim 1.3 billion Facebook Messenger users?
How does that support your claim?
How does that support your claim?
Ugh stop turning everything into an American lawyer singularity. I said FB Messenger isn't very popular outside of NA and it isn't. What more do you want from me.
Here is a picture, convince yourself: https://www.messengerpeople.com/wp-content/uploads/2019/07/w...
There is north america, a few african countries, france and a few eastern European countries and australia. The rest is practically WhatsApp except for china which is WeChat.
Here is a picture, convince yourself: https://www.messengerpeople.com/wp-content/uploads/2019/07/w...
There is north america, a few african countries, france and a few eastern European countries and australia. The rest is practically WhatsApp except for china which is WeChat.
I disagree with your interpretation of the evidence.
This fact is only an effect of the EU, it's a single banking system. That's like saying we don't need a cryptocurrency system in the US because it's easy to move money from California to New York :/
Oh, that's neat.
Is it easy for an individual to set up like, a program to automatically do money transfers that way, in a for-profit way?
Because if so, that's pretty cool.
I mean, I understand that most people don't particularly want to do that, but I still think it could be cool to have it as an option.
Is it easy for an individual to set up like, a program to automatically do money transfers that way, in a for-profit way?
Because if so, that's pretty cool.
I mean, I understand that most people don't particularly want to do that, but I still think it could be cool to have it as an option.
If your bank provides an API, sure.
Try opening a corporate bank account these days. Will take you 6-12 months easily
I opened one about 2 years ago and don’t think it took more than a few days (it was annoying though, several visits to bank branches to ink sign documents). Did something change since then?
You don't "just get" an emoney license. When you apply for the license you sign up to a bunch of regulatory scrutiny most of which seems to be antithetical to this kind of project.[1]
The UK financial regulators are not dumb and have thought this through.
[1] Specifically here are details of the emoney regulations if you're interested https://www.fca.org.uk/firms/electronic-money-payment-instit...
The UK financial regulators are not dumb and have thought this through.
[1] Specifically here are details of the emoney regulations if you're interested https://www.fca.org.uk/firms/electronic-money-payment-instit...
> The UK financial regulators are not dumb and have thought this through.
The UK financial regulators have already given the Electronic Money license to at least three crypto companies[1].
[1] https://cointelegraph.com/news/uk-watchdog-grants-third-e-mo...
The UK financial regulators have already given the Electronic Money license to at least three crypto companies[1].
[1] https://cointelegraph.com/news/uk-watchdog-grants-third-e-mo...
I'm not sure legally they'd be much different to Coinbase (YC S12) selling you bitcoins.
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The licensing is not the issue. It is the middleman charging fees for simple transactions that they will totally skip. Building that before was hard but the blockchain solved that
As far as I can see sending money with Libra would be quite similar to sending money with say Ethereum. Transfering ETH from one wallet to another is semi anonymous and cheap, like one US cent. However converting fiat to ETH or back at the other end costs in the tens of dollars and requires things like being videoed holding your passport for KYC and AML. It tends to take a few days to be approved. I think the KYC process costs companies like $40. So it's not a cheap or quick process if you include that stuff and fairly traceable compared to cash.
Facebook may have an advantage on KYC as it already knows it's clients through their facebook activity and so may be able to get the costs lower which could be a competitive advantage there.
Facebook may have an advantage on KYC as it already knows it's clients through their facebook activity and so may be able to get the costs lower which could be a competitive advantage there.
>Facebook may have an advantage on KYC as it already knows it's clients through their facebook activity and so may be able to get the costs lower which could be a competitive advantage there.
What Facebook might know about someone is completely worthless when it comes to KYC. In the country I live there are even some government issued identity documents that won't cut it.
What Facebook might know about someone is completely worthless when it comes to KYC. In the country I live there are even some government issued identity documents that won't cut it.
I think you're right on the money (no pun intended). The technology is there. If government doesn't get in the way (which they will), market forces would dictate that a company (Facebook or other) would use this technology (Blockchain) to make these sort of transactions more efficient and cost-effective for everyone willing to adopt them.
A distributed ledger is not more efficient than a centralized ledger. You give up efficiency in exchange for distributing the trust.
which is more the reason to support them in creating such currencies. a private currency provider would open up freedom to so many people that it is only natural for governments, read : politicians, to prosecute such attempts directly and indirectly. they lost control of the message so they damn well make sure they don't lose control of the purse strings by any means necessary.
(by message I mean the internet has foiled politicians pretty much using "trusted" organizations as mouth pieces and revealed many for who they are and also prevented scandals and whistle blower stories from being buried or turned)
(by message I mean the internet has foiled politicians pretty much using "trusted" organizations as mouth pieces and revealed many for who they are and also prevented scandals and whistle blower stories from being buried or turned)
I don’t think you should use “facebook” and “freedom” in the same sentence.. unless you mean “freedom to ban anyone for life for any reason without any oversight”
Except that
1. Same has been said of Bitcoin, and yet the government kinda embraced it.
2. Facebook is not making Libra. It is a non-profit based in Switzerland.
3. Libra is backed by USD-EUR-JPY and the related countries might turn a blind eye because of that.
1. Same has been said of Bitcoin, and yet the government kinda embraced it.
2. Facebook is not making Libra. It is a non-profit based in Switzerland.
3. Libra is backed by USD-EUR-JPY and the related countries might turn a blind eye because of that.
You don't seem to know much about gov financial regulation.
1. Gov didn't embrace bitcoin, they regulated it. The exchanges have to do KYC and AML monitoring and report activity.
2. If you think FB doesn't 100% control it, I have a bridge to sell you.
3. This doesn't really mean much at the end of the day. It's a tactical decision with low impact on regulations.
What you're failing to appreciate is how important it is for governments to control their financial operations. They don't make it hard just to make it hard. They make it hard because if they don't criminal activity will flourish.
1. Gov didn't embrace bitcoin, they regulated it. The exchanges have to do KYC and AML monitoring and report activity.
2. If you think FB doesn't 100% control it, I have a bridge to sell you.
3. This doesn't really mean much at the end of the day. It's a tactical decision with low impact on regulations.
What you're failing to appreciate is how important it is for governments to control their financial operations. They don't make it hard just to make it hard. They make it hard because if they don't criminal activity will flourish.
They tax your holdings.
The thing is, money is an iou from the government. If people start using other ious, the influence and power of the government will fade. Result is that libra will control a country.
The thing is, money is an iou from the government. If people start using other ious, the influence and power of the government will fade. Result is that libra will control a country.
Bitcoin does not have an "office" that governments can raid. Governments never embraced Bitcoin, they have no choice. It is not within reach of their usual methods of control (law enforcement, diplomacy, warfare).
It would be very easy for the government to shut down Bitcoin:
- Shut down all bitcoin exchanges hosted in the United States
- Make it illegal for banks, credit unions, and other commercial financial institutions to allow their clients to make transactions with a crypto exchange (regardless of the countries where the exchange is hosted), or a blockchain
- Shut down all bitcoin exchanges hosted in the United States
- Make it illegal for banks, credit unions, and other commercial financial institutions to allow their clients to make transactions with a crypto exchange (regardless of the countries where the exchange is hosted), or a blockchain
This would not shut down bitcoin.
If you can't convert your bitcoin into fiat, then your only option is to use your btcs to purchase goods and services directly, which would further disincentivize businesses from accepting bitcoin as a form of payment. And if you can't send fiat to an exchange, you can't increase your holdings.
You can always buy and sell them in person for cash. Like how you buy drugs.
The point is the government can severely hurt Bitcoin adoption by making it illegal, but it cannot completely shut it down.
The point is the government can severely hurt Bitcoin adoption by making it illegal, but it cannot completely shut it down.
You could simply convert bitcoin into fiat in the 200+ other countries that are not the United States.
This would require you to open a foreign bank account, which you must tell the U.S. government about. Not telling them is a serious crime. See the Foreign Account Tax Compliance Act
If that doesn't kill it, they could further make any bitcoin transactions illegal.
I am not sure this would work unless they ban incoming telegraphic transfers.
About #1 Bitcoin is decentralized, there is no "office to raid", so whoever said that doesn't know what they are talking about in the least bit.
1. Where are Bitcoin's offices?
Bitcoin mining is actually quite centralized in a few players; and the exchanges have established offices. The gov.s could have done some serious damage.
edit: nice try Satoshi!
edit: nice try Satoshi!
They're only centralized because free markets tend to favor centralization. Should the big mining operations be shut down, it would become instantly profitable for smaller miners to switch on again
So what you're saying is we will go raid unrelated folks? Where would you stop, would you also seize assets of people running non-mining nodes?
You forgot to add that many of us suspect Google and Facebook are outsourced DoD projects.
Big megacorps suck at innovation. Their internally developed product innovations are typically crap.
This comes as a surprise for companies like Facebook because they were once internet startups. They still see themselves as youthful and innovative. Wearing T-shirt or being casual may correlate with innovation, but there is no causality. The founder/CEO had success with one big idea that turned into success. What evidence there is that they can recognize and repeat the success multiple times?
They can successfully refine and expand their original idea and grow it, but their internally developed 'disruptions' are crap just like any random pitch.
Microsoft, Facebook, Apple, Google, Amazon buy new ideas, then use the economics of scale and network effects to make it success. Amazon has expanded the idea of internet retail from books to everything, including data centers. Apple finds success in design and branding competence. Google is still search and advertising company.
This comes as a surprise for companies like Facebook because they were once internet startups. They still see themselves as youthful and innovative. Wearing T-shirt or being casual may correlate with innovation, but there is no causality. The founder/CEO had success with one big idea that turned into success. What evidence there is that they can recognize and repeat the success multiple times?
They can successfully refine and expand their original idea and grow it, but their internally developed 'disruptions' are crap just like any random pitch.
Microsoft, Facebook, Apple, Google, Amazon buy new ideas, then use the economics of scale and network effects to make it success. Amazon has expanded the idea of internet retail from books to everything, including data centers. Apple finds success in design and branding competence. Google is still search and advertising company.
Agree with your general point but I think Apple and Amazon are clear examples of big corps that have continued to innovate. My hypothesis is that companies with CEOs able to stay close to the end users and keep a product focus are able to counterbalance the main problem with big companies - that their decision makers are no longer close to their customers. I think they’re exceptions though.
Can you mention biggest Apple or Amazon innovations in the last 10 years that:
1. Are not incremental, or just leveraging existing business to obvious directions.
2. originated internally
3. turned into big profitable business.
1. Are not incremental, or just leveraging existing business to obvious directions.
2. originated internally
3. turned into big profitable business.
I have no idea where your criteria come from.
But a few obvious massive innovations from both once established as large companies: Kindle, Alexa, AWS, iMac, iTunes, iPhone, iPad, Apple Watch. AWS alone is enough of a counterexample to make my point.
But a few obvious massive innovations from both once established as large companies: Kindle, Alexa, AWS, iMac, iTunes, iPhone, iPad, Apple Watch. AWS alone is enough of a counterexample to make my point.
Counter example:
>Xerox PARC has been in large part responsible for such developments as laser printing, Ethernet, the modern personal computer, graphical user interface (GUI) and desktop paradigm, object-oriented programming, ubiquitous computing, electronic paper, amorphous silicon (a-Si) applications, the mouse and advancing very-large-scale integration (VLSI) for semiconductors.
See also iPhones, Waymo cars etc. I think the trick is to have one or two smart and focused people in charge of the innovation left largely to do their thing rather than committees and bureaucracy.
>Xerox PARC has been in large part responsible for such developments as laser printing, Ethernet, the modern personal computer, graphical user interface (GUI) and desktop paradigm, object-oriented programming, ubiquitous computing, electronic paper, amorphous silicon (a-Si) applications, the mouse and advancing very-large-scale integration (VLSI) for semiconductors.
See also iPhones, Waymo cars etc. I think the trick is to have one or two smart and focused people in charge of the innovation left largely to do their thing rather than committees and bureaucracy.
Xerox was not able to monetize any of their innovations from the lab.
Waymo LLC is not profitable. R&D that loses money is very easy to accomplish.
Waymo LLC is not profitable. R&D that loses money is very easy to accomplish.
When Facebook needs to jump on the train of "cryptocurrency" something is wrong with the company and makes me really question their competence... Is it really Zuck behind this idea or just some top manager with ambitions? I still don't understand why they had to shut down "facebook credits" and come up with this crazy idea, when all they had to do to start "facebook credits v2" and that would draw zero attention.
I don't trust nor agree with Facebook but I can see the appeal.
I recently sold a synth on its Marketplace which I had never used before. Here in Mexico its extremely popular. If Facebook starts using Libra for payments and escrow without having to pay credit card or bank transfer fees it would make it much more popular than Bitcoin. At least for small transactions.
I recently sold a synth on its Marketplace which I had never used before. Here in Mexico its extremely popular. If Facebook starts using Libra for payments and escrow without having to pay credit card or bank transfer fees it would make it much more popular than Bitcoin. At least for small transactions.
Libra can be a good idea, but probably not from Facebook.
What Facebook lacks among Big Techs the most, is public trust.
In an era where anything from Big Techs are meticulously scrutinized, something that seems to aim to bypass government regulation is probably the last thing people want.
What Facebook lacks among Big Techs the most, is public trust.
In an era where anything from Big Techs are meticulously scrutinized, something that seems to aim to bypass government regulation is probably the last thing people want.
What I don’t understand is, the whole point of using blockchain technology is it doesn’t matter who creates it, as long as the code does what it intend to do, there are no trust needed. (Assuming Libra eventually actually become a decentralized network)
> the whole point of using blockchain technology is it doesn’t matter who creates it, as long as the code does what it intend to do, there are no trust needed
That may have been the original point of blockchain, but control over money is still a pretty political issue. Accordingly, anyone who creates or transacts currency, regardless if done by fiat or mathematics, will necessarily wade into local political and social restrictions.
Bitcoin is impressive technology and definitely brought a nice jab to government monetary control, but it does not seem to be able to deliver a knock-out. No government will give up control over monetary policy without a fight. If governments can't control bitcoin directly, they'll do so indirectly (making them difficult to cash-out, blocking IPs, straight-up making it illegal).
It's yet another example of tech's beautifully orchestrated high-minded ideals, that come crashing down when they meet real power and reality.
That may have been the original point of blockchain, but control over money is still a pretty political issue. Accordingly, anyone who creates or transacts currency, regardless if done by fiat or mathematics, will necessarily wade into local political and social restrictions.
Bitcoin is impressive technology and definitely brought a nice jab to government monetary control, but it does not seem to be able to deliver a knock-out. No government will give up control over monetary policy without a fight. If governments can't control bitcoin directly, they'll do so indirectly (making them difficult to cash-out, blocking IPs, straight-up making it illegal).
It's yet another example of tech's beautifully orchestrated high-minded ideals, that come crashing down when they meet real power and reality.
>It's yet another example of tech's beautifully orchestrated high-minded ideals, that come crashing down when they meet real power and reality.
My worry is that this teaches tech companies even more that they should get into politics, because that is the only way to enact their vision.
I like the idea that money transfers shouldn't cost essentially anything and should be instant. I think it's a shame that we don't already have that, but I'm just worried that this will give too much power to companies like FB.
My worry is that this teaches tech companies even more that they should get into politics, because that is the only way to enact their vision.
I like the idea that money transfers shouldn't cost essentially anything and should be instant. I think it's a shame that we don't already have that, but I'm just worried that this will give too much power to companies like FB.
That assumption is huge. The other problem is that this tech doesn't really solve a problem most people have, so there's no motivation against waiting for a different company to try this. Heck they could even use the same code and no one would care probably. But so long as the Facebook brand is on it, it will go nowhere today.
There is the time dimension to the adoption. So Facebook already having billions of users is in a position to monetize that relationship. In fact that’s the proclaimed goal of serving underbanked (India and Pakistan e.g.) that use Facebook but can’t be targeted with ads because they can’t buy online. Whether these people start using the new currency is probably less about algorithms and more about trust in the sense of ubiquity of acceptance.
Libra isn't designed to become decentralized.
It's a rent seeking scheme.
Libra is meant to hold an fiat backing balance by users putting money in. Facebook gets to reap 100% of the interest on said fiat with no money going to users, ever. They document it as such in their "whitepaper".
It's basically a scheme to create serfs.
Libra is meant to hold an fiat backing balance by users putting money in. Facebook gets to reap 100% of the interest on said fiat with no money going to users, ever. They document it as such in their "whitepaper".
It's basically a scheme to create serfs.
It's just a technology. There's nothing stopping a company from creating a private blockchain (using trusted nodes) and using it as a backend ledger for their website.
The fuss is that even if Facebook fully decentralizes Libra, they'll probably own an undisclosed amount of it. One entity starting with most of the wealth defeats the purpose of decentralization.
The fuss is that even if Facebook fully decentralizes Libra, they'll probably own an undisclosed amount of it. One entity starting with most of the wealth defeats the purpose of decentralization.
Interesting, but not surprising considering all the pressure from governments regarding Libra. I wonder if Facebook will ever back down from Libra considering how popular it is, or if they're going to adopt a "rain or shine" attitude and go forward with it regardless of what happens?
Facebook will never back down from Libra, they'll just release a "watered down" version of Libra that's essentially just store credit like "Amazon Bucks" and then sunset it after it's forgotten.
> considering how popular it is
Excuse me, popular with whom?
Excuse me, popular with whom?
Popular with people who are looking for another pyramid scheme to invest in, perhaps.
Libra is nothing like bitcoin - it doesn't have investment potential - it's 100% backed by basket of fiat money.
It does have some potential to act as a hedge against USD. It will probably produce some small amount of capital gains (or losses) for its users.
I don't think so, there is no way it would achieve mainstream adoption if there was a potential tax liability for users spending their after tax dollars.
So it's like Tether?
Second most popular currency in Menlo Park, California.
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Maybe it's not in use, but it's been getting a lot of press. It's on people's radar and that's valuable in and of itself.
The only press coverage I see about Libra is how governments are not gonna let this run and a bunch of other negative remarks (possibly drawn from the fact that this is a Facebok project which is seen as am evil company by many).
I don’t understand how is that valuable? If that’s valuable then all companies with bad press would increase their valuations. Unlike the popular saying there’s actually such thing as “bad press”.
I don’t understand how is that valuable? If that’s valuable then all companies with bad press would increase their valuations. Unlike the popular saying there’s actually such thing as “bad press”.
I think governments actually want Libra, what we're seeing is the role of Facebook in all of this being forcefully reshaped to better serve the needs of governments. Facebook will be compelled to give up some of the control and access over this new identity system in exchange for being allowed to operate it.
> I think governments actually want Libra
Which governments? Libra doesn’t benefit any government.
While Libra is a “real” cryptocurrency (distributed, any user can exchange, etc) as opposed to schemes like Beenz, it’s closer to company scrip than to Bitcoin’s model of “digital gold”.
Also - despite all the white-papers and hired evangelists - Facebook would still de-facto control Libra: not directly, of course - but they’d control the specification and the reference implementation - which means they’d control the consensus system that underpins distributed cryptocurrencies - so if they want to switch to adopting a proof-of-stake system (i.e. good for whales and hoarders) or intentionally introducing a backdoor’d cryptography scheme - or even adding address blacklisting.
That last part is probably the most important: I imagine most governments (especially western ones) really want address blacklisting: it provides a Libra with an equivalent of today’s bank account seizures - and it’s easy to ask for: you don’t want to be seen allowing terrorists, money-launderers and CP porn sellers to keep hold of their money.
Finally, Facebook does not have a substantial corporate presence in every country - which means that governments without the ability to sue or prosecute FB for malfeasance probably /don’t/ want to endorse anything FB does.
Which governments? Libra doesn’t benefit any government.
While Libra is a “real” cryptocurrency (distributed, any user can exchange, etc) as opposed to schemes like Beenz, it’s closer to company scrip than to Bitcoin’s model of “digital gold”.
Also - despite all the white-papers and hired evangelists - Facebook would still de-facto control Libra: not directly, of course - but they’d control the specification and the reference implementation - which means they’d control the consensus system that underpins distributed cryptocurrencies - so if they want to switch to adopting a proof-of-stake system (i.e. good for whales and hoarders) or intentionally introducing a backdoor’d cryptography scheme - or even adding address blacklisting.
That last part is probably the most important: I imagine most governments (especially western ones) really want address blacklisting: it provides a Libra with an equivalent of today’s bank account seizures - and it’s easy to ask for: you don’t want to be seen allowing terrorists, money-launderers and CP porn sellers to keep hold of their money.
Finally, Facebook does not have a substantial corporate presence in every country - which means that governments without the ability to sue or prosecute FB for malfeasance probably /don’t/ want to endorse anything FB does.
> address blacklisting
You need another human to make use of any kind of money. This human will be subject to some governments regulations, so it's entirely possible to implement some form of address blacklisting (in the form of some "due diligence" requirement when receiving money) without a technical solution. No cryptocurrency can escape government control.
You need another human to make use of any kind of money. This human will be subject to some governments regulations, so it's entirely possible to implement some form of address blacklisting (in the form of some "due diligence" requirement when receiving money) without a technical solution. No cryptocurrency can escape government control.
I personally hope key governments deep-six it. Facebook has shown itself to be untrustworthy for personal data - in what interesting ways will they abuse a custodial role on a currency?
Governments are as untrustworthy as Facebook but more scary as they have a monopoly on violence and can take away your life.
The best outcome here is that Libra doesn't launch at all in any capacity.
The best outcome here is that Libra doesn't launch at all in any capacity.
> Governments are as untrustworthy as Facebook but more scary as they have a monopoly on violence and can take away your life.
That’s an extreme and reductionist position - and I feel it’s an incorrect position.
The state does not have a monopoly on violence - certainly not in practice, and in most democracies today the state is expressly forbidden from using any kind of physical force (domestically, at least) excepting emergencies (e.g. police shootouts). Corporations /can/ be just as bad: look at brutal Fortune 500-sponsored union-suppression in South America happening today, for example.
That’s an extreme and reductionist position - and I feel it’s an incorrect position.
The state does not have a monopoly on violence - certainly not in practice, and in most democracies today the state is expressly forbidden from using any kind of physical force (domestically, at least) excepting emergencies (e.g. police shootouts). Corporations /can/ be just as bad: look at brutal Fortune 500-sponsored union-suppression in South America happening today, for example.
State has absolute monopoly on legal violence.
Expect for very few exceptions like defending your home , self defence etc, you are even not allowed even show force let alone act violently.
State does not need to use violence in stable democracies they just have make sure ppl know they can to get everyone in line.
Also violence is not always physical. Threatening incarceration/ social humiliation / jail time for parole violations/ job loss and other economic harm etc is common tactic law enforcement employ to get cooperation. Finally the state also offers the candy of lower jail time reduced charges and assorted other incentives for cooperation all of it beneficial because of the harm associated with the alternatives.
Expect for very few exceptions like defending your home , self defence etc, you are even not allowed even show force let alone act violently.
State does not need to use violence in stable democracies they just have make sure ppl know they can to get everyone in line.
Also violence is not always physical. Threatening incarceration/ social humiliation / jail time for parole violations/ job loss and other economic harm etc is common tactic law enforcement employ to get cooperation. Finally the state also offers the candy of lower jail time reduced charges and assorted other incentives for cooperation all of it beneficial because of the harm associated with the alternatives.
A monopoly on legal violence isn't about only the state legally being able to be violent, but it's also the state being able to outline who can legally become violent and in which circumstances. Which would include things like outlining that you can defend your home - so this isn't really an exception to the statement.
I don't find the phrase all that compelling. What is legal in a given place is based upon the strongest coalition of people that cares about that place. When speaking at this level of social organization its basically might makes right. A state with no police and no military has a monopoly on nothing.
I don't find the phrase all that compelling. What is legal in a given place is based upon the strongest coalition of people that cares about that place. When speaking at this level of social organization its basically might makes right. A state with no police and no military has a monopoly on nothing.
The difference is democracy.
I don't get to vote for president of Facebook.... in fact, no one does.
You can have your Jennifer Government, I'll keep the real thing.
You can have your Jennifer Government, I'll keep the real thing.
I'm sure they will launch it in a number of struggling countries.
Don't you think they would get muscled out of these failed states if they don't pay up (lobby)?
They'd need to pay more than the other robbers, sure. Shouldn't really be a problem for them, though.
Something funny happens when the monetary contribution from a company to a country/government moves from millions to billions. It changes from a potential bribe that people want to keep quiet about to an investment that people want to boast about. And yet it's trivial to siphon between 10-70% of that "investment" into private pockets depending on the country.
Something funny happens when the monetary contribution from a company to a country/government moves from millions to billions. It changes from a potential bribe that people want to keep quiet about to an investment that people want to boast about. And yet it's trivial to siphon between 10-70% of that "investment" into private pockets depending on the country.
Muscled out how? VPN’s are global...
Political problems can't be solved with tech. VPN won't help when someone decide to put you in prison for using illegal crypto.
Yet it occurs...globally...
Proxies too. Teenagers install proxy modules on their own phones and APs all the time across the globe. This “illegal crypto” is simple a series of mathematical algorithms.
You cannot truly “ban” math.
Proxies too. Teenagers install proxy modules on their own phones and APs all the time across the globe. This “illegal crypto” is simple a series of mathematical algorithms.
You cannot truly “ban” math.
Not surprised, when I saw the heavyweights all part of Libra, I think this was their intention all along. They hoped that it would fail, I wouldn't be surprised if behind the scenes they lobbied against it. They seem to have latched onto it so if it took off they won't be left behind. It was really order seeing companies like MasterCard & PayPal as part of it.
Maybe soon the headlines will be "Paypal one of the Trustline of Stellar" :)
Surprising since David Marcus, the head of Libra, was once the CEO of Paypal.
Is it in PayPal's interest that Libra succeeds? It seems that they would be competitors. They might just have backed it strategically to somehow have a stake in it if it takes off big time. Given the pushback they could now bank on the whole thing failing instead.
The point of the cryptocurrency was to decentralize Libra amongst several actors, such as Visa, Master Card, Paypal, etc
If done, Libra would have been the common interest of all those actors. That was the goal of the project.
If done, Libra would have been the common interest of all those actors. That was the goal of the project.
Next week: PayPal announces Pal, the cryptocurrency for friends.
I hope Libra goes through, even with the Cambridge Analytica scandal and everything.
It might lite a fire under goverments to take some action and create a proper crypto currency at the state or maybe even EU level for example, it's time.
Just try to run a business and take online payments via credit card, using something like Stripe for example. Literally near 8 to 10% of your transactions will FAIL, just like that.
Customers that want to pay you and their card fails a huge percentage of times, preventing you from gaining recurring customers.
The current credit card system is a mess, its a thing of the past sorely needing competition. It's ready to be disrupted by the next big thing and if its Facebook Libra, I'll take it.
It might lite a fire under goverments to take some action and create a proper crypto currency at the state or maybe even EU level for example, it's time.
Just try to run a business and take online payments via credit card, using something like Stripe for example. Literally near 8 to 10% of your transactions will FAIL, just like that.
Customers that want to pay you and their card fails a huge percentage of times, preventing you from gaining recurring customers.
The current credit card system is a mess, its a thing of the past sorely needing competition. It's ready to be disrupted by the next big thing and if its Facebook Libra, I'll take it.
Max Weber seems unfashionable in Menlo Park.
What do they want to achieve without military and police power anyway?
What do they want to achieve without military and police power anyway?
Federal Reserve Chairman Jerome Powell said this summer that libra raises “serious concerns regarding privacy, money laundering, consumer protection, financial stability” and the Fed had launched a working group to examine it.
It is now pretty clear that those financial institution joined Libra only because they saw it as a threatening competitor in the space. Now that they think that the project is unlikely to be implemented due to strong opposition from govt, they are leaving. I believe they are doing a big mistake, and that Libra will still be successful.
I suspect that fb is dialing back their ambitions with libra, to something that is more like a regular money transfer service. PayPal and other partners would naturally be less interested in that; it’s just more competition.
I suspect France, Germany, US and other govs are pressuring PayPal, Mastercard, VISA and others to withdraw, and that’s the main reason they’re getting cold feet.
So crappy payment company removes support for unsupported privacy theft company. Sounds like a win win. This is amazing win for tech.
Maybe they ll go with the chinese one instead
Zuckerberg is really ballsy to go up against the government like this. I hope he has some really good security cause I can't see the US government rolling over.
I can't see the US government rolling over either, but him having security or not is not an issue. The US government has means beyond those of the average opposing gang leader if they want to shut the business down.
Probably for the best.
Well, well, well suddenly it looks like everyone who is making money thanks to current status quo is withdrawing from initiative/opposing it. Probably it means that FB is doing something right... Question is if FB is strong/clever enough to keep moving forward.
Why were they in the initiative to start with then???
PR and to make it look bad by withdrawing, maybe.
Or that no one trusts Facebook and companies realize that, and no one really thinks they need Libra?
Who is this "no one"? HN commenters living within bubble? Of course "companies realize" - this idea is a game changer, it could make them partially obsolete or quite heavily decrease profits.
On the other side of equation there are over 2 billions [0] of users, users who WILL GLADLY USE this cryptocurrency if/when it becomes available.
[0]https://www.statista.com/statistics/264810/number-of-monthly...
[0]https://www.statista.com/statistics/264810/number-of-monthly...
> Who is this "no one"? HN commenters living within bubble?
The negative press cycle they got over the past year was quite public, not in a bubble.
> On the other side of equation there are over 2 billions [0] of users, users who WILL GLADLY USE this cryptocurrency if/when it becomes available.
In what world does a Facebook user = someone who wants crypto? Most people don't even know what it is, let alone trust it enough to put real money into it. Reminder, most Facebook users don't even have a payment method associated to their account because Facebook is free. That barrier alone is big. Then you have people that know crypto from last year and that it's a risky investment that doesn't make any sense and crashes. Again, what Facebook user thinks they need Libra?
The negative press cycle they got over the past year was quite public, not in a bubble.
> On the other side of equation there are over 2 billions [0] of users, users who WILL GLADLY USE this cryptocurrency if/when it becomes available.
In what world does a Facebook user = someone who wants crypto? Most people don't even know what it is, let alone trust it enough to put real money into it. Reminder, most Facebook users don't even have a payment method associated to their account because Facebook is free. That barrier alone is big. Then you have people that know crypto from last year and that it's a risky investment that doesn't make any sense and crashes. Again, what Facebook user thinks they need Libra?
+ Many (or potentially all of the backers except Facebook) will withdraw from the alliance.
+ Facebook/Zuckerberg will defy the gov.s and launch Libra.
+ Libra might not dominate the world, but it'll be a success (at least a niche success) and it'll eat up some of the marketshare of these financial institutions.
I think Zuckerberg has come (or already know) to the realization that these institutions "added value" is navigating the regulations/laws of the different countries. They are a kind of monopoly. Sending money across "borders" is hard only because governments made it so. If Libra ignored these rules, they'll put these guys (or at least a part of their offerings) out of business. Why would anybody use Western Union if they can send money through their Facebook for less or no fees? It's easier and more convenient too.