Facebook’s Libra cryptocurrency: Privacy and stability concerns(bloomberg.com)

137 pointsby headalgorithm7년 전257 comments

Facebook’s Libra cryptocurrency: Privacy and stability concerns

https://www.bloomberg.com/opinion/articles/2019-06-17/facebook-libra-crypto-currency-is-another-zuckerberg-threat

261 comments

The reason for Bitcoin’s design is precisely because a centralized/pegged alternative was tried and failed: https://en.m.wikipedia.org/wiki/Ecash

Facebook’s currency is not a successor of Bitcoin, it’s an inferior reincarnation of a failed predecessor.

nostrademons7년 전

The surrounding context around an idea is always changing. Facebook itself was tried many times with various degrees of success (MySpace; Friendster; LiveJournal; Classmates.com; Xanga; EZBoards; AOL; Usenet; fingerd; BBSes; etc.), but it took a new and relatively trusting generation getting online and being packed onto dense college campuses to make it take off.

I personally think that Facebook's cryptocurrency will fail because today's climate is anything but trusting, but just because an idea failed in 1983 doesn't mean it'd fail today. There's also a strong possibility of it succeeding in the developing world and failing in the developed world.

tomc19857년 전

Facebook's original success was because the platform was somewhat pure (no arbitrary CSS decorating profiles) and exclusive. They reached the critical mass they needed at that phase then opened it to the public

jbverschoor7년 전

Indeed.. fast, Microsoft-like, pure css, complete profiles.

Then it copied/pivoted to twitter’s timeline. And finally took off with a proper mobile app, and social apis for gaming. All while copying/buying - stories from Snapchat/Instagram, Whatsapp/messenger, live/ig to/twitch

panarky7년 전

> strong possibility of it succeeding in the developing world and failing in the developed world

It could work pretty well in the developed world, too, if transactions are instant and cheaper than credit cards or PayPal.

But whether it succeeds or fails as a payment system has nothing to do with any blockchain tech, or whether they call it a cryptocurrency.

This is not a competitor to Bitcoin, because it cannot be what Bitcoin is -- open, borderless, neutral, censorship-resistant, and public.

Maybe it will be better at buying coffee than Bitcoin. I couldn't care less, because buying coffee isn't the purpose of Bitcoin.

dwild7년 전

It can still be "open, borderless" though.

I can't use Venmo. Even if I would like to, I simply can't.

I can have a Libra wallet though and even if Visa, Mastercard, Paypal and Stripe decide that my market isn't big enough to sell me some Libra directly, I can still have that wallet and find others means to fill it.

That fit both the open and borderless nature of it.

I'm not saying it will be cheap, and surely filling it would require an intermediary (like in every single others cases), but at least that intermediary can be anyone that have a Libra wallet. That person could simply be someone that does wire transfer to someone that can purchase Libra, don't care, but it's now possible.

Sure having them behind make it not possible to be "neutral, censorship-resistant, and public", but at the end of the day, does it matters to me that just want to pay? Nope. Would it matter to me if I want to give money to Wikileak, sure most probably, but that's not why I want it. Like you said, that's not its purpose.

dexterous7년 전

I'm always surprised people don't mention Orkut more often in such arguments.

joeyrideout7년 전

Not to mention that pegs always fail in the land of financial markets anyhow [1]. Interest rate pegs, currency pegs, pegs to commodities e.g. gold tend to collapse in the long run because they create a "perfect trade". When the value of two separate things eventually diverge due to external market forces, you can take advantage of the peg by trading the less valuable item for the more valuable item at the historical peg.

In the context of Facebook being pegged to a basket of international currencies, the peg to each will need to be reevaluated frequently as the currencies fluctuate and arbitrage opportunities increasingly cost the peg-guarantor money to uphold the peg. These fluctuation can be cancelled by derivative contracts e.g. currency swaps, but those cost premiums to maintain and periods of volatility can get very expensive.

[1] https://www.google.com/search?q=site%3Aarmstrongeconomics.co...

nickles7년 전

> Not to mention that pegs always fail in the land of financial markets anyhow... In the context of Facebook being pegged to a basket of international currencies, the peg to each will need to be reevaluated frequently as the currencies fluctuate and arbitrage opportunities increasingly cost the peg-guarantor money to uphold the peg.

Assuming that Facebook is the sole issuer and redeemer of the coin, this is a nonissue. By backing the issued coin 1:1 with reserves according to the composition of the basket, Facebook can redeem any coins at face value. Hong Kong, for example, maintains a currency pegged to USD backed entirely with USD holdings.

As an aside, your source, armstrongeconomics.com, may not have the best credibility:

"In 1999, Japanese fraud investigators accused Armstrong of collecting money from Japanese investors, improperly commingling these funds with funds from other investors, and using the fresh money to cover losses he had incurred while trading. United States prosecutors called it a three-billion-dollar Ponzi scheme... Armstrong admitted to deceiving corporate investors and improperly commingling client funds—actions that according to prosecutors resulted in commodities losses of more than seven hundred million dollars—and was sentenced to five years in prison."

[0] https://en.wikipedia.org/wiki/Martin_A._Armstrong

joeyrideout7년 전

I am aware of his past and still believe that he is the best in the world at what he does. His historical and financial insight is unmatched.

pault7년 전

I spent a few years in Belize, and their currency is pegged 2:1 to the USD. Given the size, capability, and general competency of the Belizean government I always felt it was a major catastrophe just waiting to happen. Worse, nobody there seems to be remotely aware that this is a very risky way to manage your currency. If it were to collapse it would be a terrible blow to an already struggling country. Like diaspora terrible.

[deleted]7년 전

ForHackernews7년 전

All they have to do is make it expensive and/or inconvenient to arbitrage against them. Some minimal transaction fees would probably kill the ability to make money exploiting small tracking errors.

spir7년 전

The Libra whitepaper is supposed to debut this month, so I guess we'll see to what extent it's a true cryptocurrency.

I wish Libra was building on an Ethereum scaling technology, like Plasma, but most likely it's a new standalone proof-of-authority blockchain where the validators are the hundred companies investing $10M each.

In terms of the sliding scale between centralized and decentralized, Ethereum v1 and Bitcoin are considered to be "pretty much impossible to change history"; Ethereum v2 is expected to be "extremely impossible to change history"; but Libra would require only that the hundred companies agree to a process by which history can be changed: Libra will be very centralized in practice and while it might and I hope help take crypto mainstream, Libra is not a substitute for Ethereum's secure base layer.

clarkmoody7년 전

It's not only about changing history, it's about getting transactions mined in the first place: censorship-resistance.

In Bitcoin, as long as you pay the fee, some miner will probably mine your transaction, based on purely economic incentive. Miners that refuse to serve certain customers based on "tainted" coins or illegal activity simply forego that revenue to miners who don't.

I'm going to go out on a limb here and conjecture that Facebook at the 100 entrenched industry players who are part of this new system will probably not consider censorship-resistance as a high-priority goal for the system. They will probably have a law-enforcement login portal that calls up Facebook's data profile of participants in a suspect transaction. There will probably be blacklists and fund freezes. There will probably be State Department liaisons to help comply with sanctions.

ilaksh7년 전

https://github.com/libra/libra/issues/41

wmf7년 전

In practice the Bitcoin and Ethereum hashrate is controlled by far fewer than 100 mining pools.

sflanagan7년 전

Do you think there's a way to prevent this gradual centralisation of mining that we see in so many PoW chains?

wmf7년 전

There's p2pool and various proposals to let miners (not pools) produce blocks so that pools would just handle payouts. But once you fix pools you might discover that there are still less than 100 data centers doing the mining which is probably due to geographical electricity costs and economy of scale, neither of which can really be fixed.

Farther afield you have stuff like Chia's proof of empty disk space or of course PoS.

ShorsHammer7년 전

Algos with asic resistance is a recurring theme even outside of cryptocurrency. All modern password hashing optimises for it.

Monero is currently pushing back with randomx which performs well on cpu's and not much else: https://github.com/tevador/RandomX

throwawaylolx7년 전

How is it inferior to Ecash? FB's coin is not meant to provide anonymity features like Ecash did, but that's just a design choice. Other than that, Ecash is often suspected to have died due to the lack of reach and partnerships, which is not something FB lacks.

So far, FB's coin looks very interesting.

>Facebook’s currency is not a successor of Bitcoin

Yeah the title is just low-quality clickbait; it's got nothing to do with Bitcoin.

polyomino7년 전

What makes this a cryptocurrency? It should be called facebook giftcard.

Anon847년 전

cryptocurrency is more SEO/Marketing friendly than giftcard. /s

Seriously, though... the whitepaper isn't out yet so we don't really know how this is supposed to work. It'm sure it will use some type of permissioned blockchain for convenience/ensure trust between all the partners and dissolve responsibility for all decisions the consortium takes.

bitxbitxbitcoin7년 전

It isn't a cryptocurrency. It's just a digital currency.

gesman7년 전

russdpale7년 전

I don't think its clickbait, a lot of projects in the crypto space claim to be like bitcoin but better, bitcoin is the foundation upon which a lot of projects showcase themselves to potential users, usually in the first few paragraphs of the white paper.

This coin might look interesting, but for all of the wrong reasons.

Bombthecat7년 전

I doubt it will fail. Facebook is too big to not gain traction from users... Also, they are big enough to push ads every where..

ilaksh7년 전

David Marcus is a Sith Lord. https://github.com/libra/libra/issues/41

root_axis7년 전

I think Facebook's reputation will be enough to relegate this thing to the ash heap. The only people who are going to be interested in Facebook coins are some subset of cryptocurrency enthusiast who can find value in moving their cryptocurrency into a coin that will have more onramps to spendable money. For everyone else, it's going to be viewed as yet another digital money app you have to hook up to your bank account and there will be little incentive to do so since everyone is already comfortable with their cryptocurrency/venmo/paypal/cashapp of choice. When you mix in Facebook's horrible reputation, particularly with regard to tracking and privacy abuse I think we're going to find that people mostly just ignore this offering.

buboard7년 전

Facebook is trusted by billions of people every day. I would trust them with a crypto wallet more than any of the crypto exchanges that have been hacked in the past.

kerng7년 전

Given Facebook's security history, I would assume the private key being stored in cleartext in log files and so on... I'm not sure why one would trust Facebook more?

root_axis7년 전

Well, Facebook has a pretty poor history with regard to security, so I'm not so sure either way.

buboard7년 전

Do they ?

jazzyjackson7년 전

I keep coming back to this blog when it comes to Facebook's handling of PII -- they didn't lose it accidentally, but they gave access to it in exchange for developing popular / viral apps for facebook as a platform,

"What the f* was facebook thinking" https://medium.com/@jamesallworth/what-the-f-was-facebook-th...

They gave out users' unique global ID with the export API so it was trivial to merge PII from multiple sources. They didn't have to be hacked, they left the door open. Facebook was full of dumb 'which x-movie-character are you' because every one of those grabbed a few more profiles and at one point, private inbox messages, all to be merged back into somebody's data trove.

buboard7년 전

this is about privacy not security though. and all of these sensationalized articles fail to mention that users consented to share that data with the apps when they first used it through a dialog that's pretty much unambiguous. Even their table says so: "permissions", plus i m pretty sure at that time facebook was already sharing an app-scoped, not the global user id. Regardless , it was sloppy privacy practices, which were fine at the time and nobody cared because Trump had not happened. It's not a security breach, though.

root_axis7년 전

Yes.

https://arstechnica.com/information-technology/2018/09/50-mi...

buboard7년 전

Well no, facebook has pretty good security. 50 Mil stolen credentials in 15 years out of what is probably more than ten billion accounts is nothing.

root_axis7년 전

https://www.cbsnews.com/news/millions-facebook-user-records-...

I'm guessing your response will be that it wasn't Facebook's fault.

I would also note that there aren't even 10 billion people living on earth, so it sounds like you're just making stuff up.

buboard7년 전

you 'll notice in that article that it wasn't facebook's servers that were breached. Also facebook has probably way more accounts than humans, i think just recently they deleted 3 billion fake ones. Regardless, imho from many years working with their platform, they do take security seriously and they ve helped to popularize methods for securing accounts and passwords.

root_axis7년 전

> you 'll notice in that article that it wasn't facebook's servers that were breached

A distinction without a difference. If Facebook's security policy permits PII to be moved into insecure systems then Facebook itself is insecure.

Here's another:

https://www.businessinsider.com/facebook-uploaded-1-5-millio...

Yeah. 1.5 million, who cares right? No big deal. This is clearly a pattern, not an isolated incident.

buboard7년 전

this is a privacy issue, but their security is still pretty good, relative to the staggering size of the users and data they hold.

root_axis7년 전

> still pretty good, relative to the staggering size of the users and data they hold.

Hundreds of millions of exposed users is not "pretty good", it's objectively horrible.

> this is a privacy issue

It is a privacy issue but primarily a security issue since the scandal is that the data was unintentionally leaked, not that it was shared with a 3rd party.

grey-area7년 전

Regardless, imho from many years working with their platform

It is difficult to get a man to understand something, when his salary depends on his not understanding it.

Upton Sinclair

buboard7년 전

nah i wish that was the case

kerng7년 전

Normalization of Deviance at its finest- 50 million (and over time and aggregated its been way more) is not something to be proud of, rather the opposite CSO, maybe even CEO should have resigned for how frequent they have breaches and "bugs".

leppr7년 전

You are severely over estimating the integrity of cryptocurrency enthusiasts. Some of the most highly valued "cryptocurrencies" today are centralized tokens handled by companies with worst reputations than Facebook (XRP, EOS, Tron, ...), yet people do buy and use them. If anything the communities from these tokens might flock en masse to Facebook coin.

And if Facebook actually manages to pull off a system where they can't be compelled to freeze accounts, it might also steal the user base from those traditional payment apps.

root_axis7년 전

> yet people do buy and use them.

I mean some people do, but they're a very small niche.

> communities from these tokens might flock en masse to Facebook coin

Yes, I agree, that's what I said in my OP, but this is a relatively small group of people, and they will likely only use it as an onramp into spendable money and continue to favor their preferred token.

buboard7년 전

and even bitcoin, between its drugdealing beginnings , and cartel behavior of miners is not much more trustworthy. What actualy matters is that all facebook users will learn what a digital wallet is and will become a potential cryptocurrency user.

jrvxo7년 전

Facebook's reputation outside HN is not bad. In fact I'd argue that in undeveloped countries it's pretty, pretty good.

okmokmz7년 전

>Facebook's reputation outside HN is not bad

It depends who you talk to. The only people I know who still use, or don't hold a negative view of, Facebook are my parents, grandparents, and other old people who certainly won't be purchasing Facebook's "cryptocurrency". The vast majority of the young people I talk to, as well as other engineers, have a negative view of Facebook and don't use their services (aside from maybe Instagram). The latter is the group that would potentially be interested in crypto, but they won't be buying it from Facebook. Personally, I hope Facebook fails spectacularly

kerng7년 전

I'm not sure about that... 3 of my friends have quit Facebook last few months because of the company's reputation.

Bombthecat7년 전

That too! This coin could be the second naira..

grey-area7년 전

This appears to be:

1. Pegged to USD 2. Controlled by a central entity 3. Tied to a social media account

So it has very little to do with currencies like bitcoin (it certainly violates the spirit of them, even if it chooses to reproduce some of the morphology), but they are IMO associating it with cryptocurrencies for publicity and more importantly in the hope of avoiding regulation by confounding regulators for long enough to become established de-facto amongst consumers.

Banks and payment networks like Visa/Mastercard/Paypal should be most worried by this, as it will be designed to cut them out of transactions between users, advertisers, readers of media/news entirely - load up your account with Facebook coins (have they really called it 'Libra coin'?!?), and merchants will not have to pay mastercard, but they'll have to pay Facebook fees to accept your payment.

rafiki67년 전

When it comes to the financial system, the thing that gets most companies is regulation. As much as these tech companies want to play bank, they just don't have the right skillset to navigate the complexity of regulations across multiple regions. Finance's problem isn't tech. People assume the issue with a banks payment system is the fact that it runs on some mainframe running Cobol. False. The main problem is that the payment and settlements network is established and works well enough that there's really little actual value in investing any further to upgrade it. Many banks did jump on the bandwagon of blockchain, hoping it might solve some of the challenges of inter-bank settlements, but it hasn't panned out the way they thought (basically think back-office employees who do much of the settlement verification being replaced or automated away). Facebook has less than a percentage point of a chance of upending current payment networks. Even starting from today it would take them at least 20 years to effectively build up the competence to navigate the politics and regulation of our current financial system. Do you remember the hype surrounding Zucks day infront of congress? Guess what...that happens almost annually for a bank and it never makes the news. Forget the well established lobby banks have that FB and other tech companies don't even come close to achieving.

Visa is doing the smart thing and investing in this as it will probably find some traction given FB's reach, but poses almost no real threat to Visa in anyway. Personal and Commercial banks' main business isn't really payments, but rather loans. They offer payments since they already have a well established settlements network and serve as gatekeepers to the financial system.

I'd love to see where this goes, but I have a really hard time believing that this will grow beyond anything but another FB digital currency. There's a fundamental aspect of currency where it's tied to a government as well as a country and it's world dominance. There's a reason the USD is the reserve currency of the world, and yet another reason the government is the owner of the USD. Bitcoin at least tried to challenge this dominance. FB isn't even thinking like that clearly. They have another play in mind, and frankly it's not entirely clear what it is.

grey-area7년 전

I agree with some of what you say here, but do think payments is ripe for transformation and the software companies will do so, as they have so many other industries.

The goal is quite simple, to own global payments (a trillion dollar market currently owned by a cosy duopoly).

The intended method is to do an end run around regulation as they have done with privacy regulation (hence the bitcoinish cover).

I disagree it is smart for visa to invest unless they have a majority interest.

throwawaylolx7년 전

>payment networks like Visa/Mastercard/Paypal should be most worried by this

I don't think they're worried seeing that they're some of the biggest investors in the project https://www.wsj.com/articles/facebooks-new-cryptocurrency-ge...

grey-area7년 전

I’d be concerned if dealing with Zuckerberg.

If it fails they lose lots of money, if it succeeds FB has huge leverage over them which it didn’t have before. Can’t really see an upside for these companies to this.

gervase7년 전

If it fails, they lose their investment, which I believe was only on the order of double-digit millions, which is nothing to Visa. If it succeeds with their investment, they have a tiny amount of leverage. If it succeeds without their investment, they have no leverage at all.

A $10MM investment as a hedge against that outcome makes a lot of business sense, from a risk mitigation standpoint. The size of the investment is also indicative of their relative confidence that it will succeed - if they were sure that it would succeed and supplant their core business, they'd probably be investing a lot more.

russdpale7년 전

The point is that its "trustless", they don't have to trust zuckerberg, they can see the code themselves and where the payments fee's break way to, he isn't the only one running nodes from what I understand, I believe the partners are as well, which I imagine is the only way they agreed to this.

grey-area7년 전

We'll see, I suspect FB will retain sufficient control for it to require trusting FB.

rdiddly7년 전

I can grasp the idea that Facebook would want to capture more payments like WeChat does; what I can't figure is how having their own cryptocurrency would add anything. Whom does it appeal to? I doubt Facebook wants the drug dealer/money launderer market segment for example. (I also doubt it'll be secure or anonymous enough to satisfy those people.) And it's no good for speculators, if it's pegged. Seems like at best it's just a novelty or gimmick that maybe gets a few more people to try it out for giggles.

Using the term "innovation" might be a bit too generous here. Not that combining two things that already exist can't be innovative. When the boomers combined "white music" with "black music" they got rock and roll. But this is Facebook + crypto, two things that suck. (Apologies.)

thecupisblue7년 전

They're using cryptocurrency because - off the top of my head in no particular order:

1. Hype

2. It gives "credibility" to their currency

3. they can be regulated as a crypto-currency that way.

4. It enables faster transactions and reactions to the transaction states than regular currency.

5. It locks the users in to their partners because it's more friction to get money.

6. Easier to obtain the data on how users spend their money.

7. Easier to introduce new models based upon transactions/currency.

8. It can be given away for free easily.

dralley7년 전

>It enables faster transactions and reactions to the transaction states than regular currency.

This is only true in the US, where the inter-bank financial system runs on mainframes and 40 year old code.

The British banking system decided a while ago that they were going to update their bank communication system, and now they can send sums between bank accounts at different banks within 10 seconds.

EthanHeilman7년 전

10 seconds is still an two orders of magnitude too slow given many use cases and the technology which is currently available. I should be able to tap my card on a subway turnstile and have it open immediately such that the subway faces zero fraud risk.

A centralized system should be limited only by RTT and there are ways to overcome even that via caching layers or cryptographic techniques. You want something sub 250ms.

desc7년 전

It doesn't need to be centralised, and it doesn't even need to be limited by RTT.

'Zero fraud risk': you cannot prevent people from finding loopholes. Every system breaks. Instead, you use the same techniques that have been used for centuries in finance: keep audit logs, make it possible to fix things later, and maybe try to catch the majority of possible attacks by adding more rules.

If you're processing tens of millions of transactions a second, you do not have a single point of truth. You have at least a cluster, ie. a distributed system. Fortunately finance grew up before automatic computing and telecoms even existed, so its algorithms and systems run just fine (FSpecificVO) at less than 1 FLOP/S with communication latencies measured in weeks.

So you might as well just collect transactions locally, then sort them out as a batch job in the evening, with a percent or two price hike to cover liabilities due to fraud.

Last time I went anywhere near London, they had the instant payment system working down there in the Tube.

It's not centralised and none of the important stuff is necessarily low-latency, but it seems to work fine anyway.

TazeTSchnitzel7년 전

It's usually much faster, but it depends on the particular banks. With my particular pair of banks, I get the notification from the destination bank before I see the confirmation from the origin bank!

russdpale7년 전

This is what I have been saying, its not enough to be a payment system anymore, banks are catching up and people will always sacrifice security for convenience, it is simply human nature.

I think where is messing up is by not allowing more nodes. The brave project is dispensing enough money for people in third world countries to pay for their internet connection.

The true value of crypto currencies is exchanging computational abilities into social mobility, and I don't see where facebook coin does that. Telegram's coin won't, either, but payment/messaging system is big business right now.

thecupisblue7년 전

Also in the EU. Transactions halt at 3 or 5 PM between different banks and don't happen on the weekends AFAIK. At least from what I know from using regular banks.

thefounder7년 전

Depends by the bank you use. https://www.ecb.europa.eu/press/pr/date/2018/html/ecb.pr1811...

thefounder7년 전

I believe there is a similar pan-european system so instant payments are a reality in Europe/EU.

https://www.ecb.europa.eu/press/pr/date/2018/html/ecb.pr1811...

driverdan7년 전

All of those things except #1 can be accomplished with a standard virtual currency and a DB. There's no reason to use a blockchain.

hackinthebochs7년 전

I'd much rather buy a virtual currency (pegged or not) than values in Facebook's database. A cryptocurrency gives you a certain baseline level of reliability over value and function that values in a centrally controlled database do not. It remains to be seen how much control Facebook will ultimately have over their cryptocurrency, so this point may be moot.

tomc19857년 전

So... values in a decentralized database are worth more or something? You don't actually hold anything with cryptocurrency, it's all still line-items in a DB. E.g. the bitcoin you hold is only as good as the decentralized ledger says it is

EthanHeilman7년 전

There is a big difference between your money sitting in a single file under the control of a single party and your money sitting in three files under the control of three parties.

tomc19857년 전

I'm not so sure. Sure you can prevent one party changing the data in the DB but the decentralized model seems to carry a lot more risk. I can't wait for the day when todays encryption can be cracked by tomorrow's commodity hardware...

EthanHeilman7년 전

>Sure you can prevent one party changing the data in the DB but the decentralized model seems to carry a lot more risk.

Lets say you have 7 permissioned nodes that are running a BFT protocol to establish a shared DB. I'd be interested to hear why?

tomc19857년 전

While I was originally thinking about the finance space and not the technicals of shared DBs themselves, I feel like N nodes introduces a weakest-link problem where one trusted actor subverts the rest. A hypothetically perfect BFT protocol would prevent this, I suppose, but I know nothing about them or their current state today.

Are the resources guarding those seven nodes equally proportioned? How hard is it for a bad actor to potentially subvert one and cause it to pass bad-but-trusted data? Can these nodes be switched with other, potentially less-secure or hostile nodes? How are additional nodes added to the network; is there a credentialing process that could potentially be attacked? Who maintains each node, what is their level of sophistication, resourcing, and control?

EthanHeilman7년 전

BFT protocols are typically secure if 2/3 of the nodes are honest.

>Are the resources guarding those seven nodes equally proportioned? How hard is it for a bad actor to potentially subvert one and cause it to pass bad-but-trusted data? Can these nodes be switched with other, potentially less-secure or hostile nodes? How are additional nodes added to the network; is there a credentialing process that could potentially be attacked?

These are good questions. I believe in Libra human beings decide which organizations are allowed to run a node and they build a fixed list of say 100 or so nodes one from each organization.

>Who maintains each node, what is their level of sophistication, resourcing, and control?

You don't want amateurs running nodes. This is normally where such proposals fail because if you don't have enough clout early on you won't get good node operators and this poisons the security argument. From my perspective Libra is the first team which has overcome this hurdle.

Then again hopefully everyone doesn't just run these nodes on AWS.

polyomino7년 전

Cryptocurrency only gives you more reliability if you actually run a full node. That's impossible at facebook scale, so facebook's giftcard is what they're stuck with.

xmly7년 전

They use the crypocurrency term to avoid existing regulations and license requirements.

notahacker7년 전

Novelty or gimmicks are appealing when your payments business is only 2% of revenue and yet lots of people are discovering products and wasting money on pay-to-win-games through your platform. Their assumption is probably that Facebook gamers (and especially the "whales") are more likely to be the sort of people excited by breathless hype about cryptocurrency being the future without really understanding much about it, and less likely to be the sort of person that says "but you could do that with a centralised ledger".

buboard7년 전

They had facebook credits before and they curbed it, so i doubt the social gamers are their target market. But a payment system a-la apple and google pay could be a safeguard for them once their social media stop being so lucrative.

pessimizer7년 전

> When the boomers combined "white music" with "black music" they got rock and roll.

Irrelevant, but this is not a thing that happened. More accurately, when white people started playing black rock and roll, they also continued to develop rock and roll, alongside and in combination with black people (and other people.) Also, this is pre-boomer.

rdiddly7년 전

Well yeah, obviously it didn't literally happen. I knew someone would object. When you play something you heard someone else play, it is going to sound partly like their work, and partly like you, unavoidably being you. That is what I meant; it was a shorthand meant to save us this tedious excursion. Chuck Berry tried to sound like Pat Boone. The Beatles tried to sound like Chuck Berry. And so on unto infinity.

How about this: Two races whose artists had theretofore not collaborated much artistically due to an artificial separation (segregation), started to come into closer contact, in the context of the civil rights movement, new sound recording/reproduction technology, and a burgeoning youth population, and began to influence and imitate each other; and like a boulder rolling down from an unstable perch, managed to release a lot of energy. I know I know... no such thing happened!

buboard7년 전

i doubt any drug dealer would use Libra directly. BUT, if it can be exchanged for Monero ...

DINKDINK7년 전

"Can't wait for a cryptocurrency with the ethics of Uber, the censorship resistance of Paypal, and the centralization of Visa, all tied together under the proven privacy of Facebook."

https://twitter.com/SarahJamieLewis/status/11394299139229573...

gemjam7년 전

Bloomberg did a nice video about the real implications; Chinese app style payments would deprive banks of their cut of transaction processing.[1]

Isn't it strange that the Chinese copied facebook, but now facebook copys WeChat

"U.S. Banks Are Terrified of Chinese Payment Apps" https://www.youtube.com/watch?v=SJh_Uir5EMI

https://www.nytimes.com/2019/03/07/technology/facebook-zucke...

dngray7년 전

> Isn't it strange that the Chinese copied facebook, but now facebook copys WeChat

Not really, Facebook is lacking in originality and sees how much money can be made (Wechat is doing it).

They also see how they can harvest huge amounts of data on what people buy with a high degree of preciseness.

duxup7년 전

Every company of a certain size eventually starts picking up other companies / ideas.

Heck plenty of start ups pivot to existing ideas.

And in Japan pay with your phone has been around for ages.

Barrin927년 전

Facebook has been called 'the most Chinese' of the American software giants for a reason, the 'move fast and break things' attitude and the attitude towards privacy and capturing people's personal lives has been well documented for a long time.

thablackbull7년 전

> Isn't it strange that the Chinese copied facebook, but now facebook copys WeChat

You've clearly never used WeChat if you're under the impression they copied Facebook. This "___ of the West" is just a simplified trope to help readers make a comparison. Western companies/apps fail in the East and Eastern apps often fail in the West as the market is completely different that you can't just port something over and hope to replicate its success.

https://hbr.org/2018/08/why-western-digital-firms-have-faile...

buboard7년 전

facebook copied chinese / korean / japanese social media in many ways over the years. And their games ecosystem (zynga era) were mostly copies of chinese games.

toomuchequate7년 전

If it is pegged to USD, there is no investment potential. It is just as bad as cash.

The idea behind bitcoin is that you don't need to rely on the US government for storing value. There are 21,000,000 BTC ever ever, you can't print more.

That article did not address this at all. This is the most compelling reason to buy bitcoin.

nosuchthing7년 전

No one should have to buy Bitcoin when you can mine it, oh wait it's all being printed in warehouses owned by wealthy capital holders.

Surely this is Satoshi's design goal.

Also don't worry about the exchanges operating out of obscure off shore islands, they probably arn't operating fractional reserves.

AgentME7년 전

Bitcoin mining wasn't invented just to be an egalitarian "everyone can earn money from their computer" sort of thing. The decentralized design that Bitcoin uses needs people to do lots of processing work, the people doing this work need to be incentivized somehow to keep doing that, and then somehow the units of the new currency need to be distributed out, presumably in a way fairer than just starting Satoshi out with a large balance. Mining solves these issues.

nas7년 전

I hate the term "mining" for that reason. It is not like mining gold. I would have preferred if they called it "digital notary service". That's what the miners are doing. They are notarizing transactions so people can agree on the ledger and so that double-spends cannot happen. Early in the life of the system, the notary service is subsidized by inflation. Later (after many halving of rewards), they will be compensated with transaction fees.

If someone can devise a way to perform the notary service without proof-of-work, I'm pretty sure Bitcoin will move to it. Right now, no other system has been shown to actually work. Proof-of-stake systems are in the works but, as far as I know, none of them are considered trustworthy at this point.

Edit: I would like to also say that I'm sympathetic to the opinion that Bitcoin mining is too wasteful of resources (i.e. electricity). I think the system is perhaps flawed in terms of the connection between Bitcoin price and the economic drivers of difficulty. When the price is high, the mining rewards are such that there is huge pressure to increase mining costs. Do we actually need that level of security? OTOH, hard to blame Satoshi for the design since it is hard to foresee how quickly the system gets adopted.

nosuchthing7년 전

  "The decentralized design that Bitcoin uses needs people to do lots of processing work"

You should try reading Satoshi's white paper which explains what that processing work is. (hint: there's not really any processing outside of generating a bunch of random worthless nonces in the hope that one nonce will be accepted as a winning lottery number)

The Proof of Work "algorithm" is completely unnecessary for processing transactions, and it's actually quite simple. To the point, PoW simply asks for a random number for the purpose of creating a lottery. If you want Bitcoins, you need to waste more real world energy and capital on hardware to print more lottery tickets (nonces).

The Bitcoin network and all the transactions on the network could easily be run on cheap hardware, a raspberry pi even. The PoW filter is a psychological tool for "governance" (write access) to the database, granted now exclusively to wealthy capital holders. Effectively granting the Bitcoin / PoW network to the wealthiest speculators who can devote resources to be sacrificed in return for digital lottery printers, which in turn give a chance to generate numbers in the cryptocoin database.

Curious why someone would design a currency system in objection to the financial plutocracy, when the design inevitably restricts control of the entire network only to existing capital?

It's no mistake Satoshi owns at least 1,148,800 BTC.

DINKDINK7년 전

>The Proof of Work "algorithm" is completely unnecessary for processing transactions

The Distributed Systems community awaits your proposal for a solution to Byzantine Fault Tolerance in open, decentralized, adversarial networks. Why would you withhold an alternative solution to PoW?

>The PoW filter is a psychological tool for "governance" (write access) to the database, granted now exclusively to wealthy capital holders.

No amount of PoW allows a block producer to write data to a node that a node operator hasn't consented to accept by their choice of consensus rules. Your argument is "capital holders" can force consumers to purchase whatever they produce. Consumers induce producers. Producers cannot induce consumers. Producers can /speculate/ that latent consumption may exist but without purchasing consumers, production will eventually end.

>why someone would design a currency system in objection to banks, that inevitably restricts control of the entire network only to existing capital?

Money warehouses and credit creators (banks) are not capital. Capital is the product of work / R&D / creation.

beaner7년 전

Miners have to sell their coin to remain profitable. This distributes the coin well, and ensures a highly liquid market.

The largest brokerage is US-based (coinbase) and the largest exchange is Binance, which has most of its funds auditable on various blockchains.

Also just hold your own keys if you're worried about it. The ability to opt-out of custodianship is kind of the point.

gamblor9567년 전

Miners have to sell their coin to remain profitable.

No, they don't. They just have to sell a notation in their database that a coin is owed to someone. This is what MtGox did, and it's what Coinbase still does. The trick is to maintain just enough coin to be able to transfer out coins on request (as MtGox tried to do), or to just claim that it will take a few days to process the transaction (as Coinbase does).

Binance, which has most of its funds auditable on various blockchains.

A company owned by Binance audited Binance's books. And posted the results of the audit online...but not the underlying data. This is useful from the POV of conducting a third-party audit...

beaner7년 전

You're conflating miners and brokerages and they don't operate nearly anything like each other.

Miners do not custody funds. Large miners that control a farm can't run on empty, they need to pay for space, hardware, and electricity - they need to sell through crypto through a brokerage to end users to make a profit. The brokerage (e.g. Coinbase) may then custody those funds on behalf of brokerage users, but the miner no longer has it.

Mining pools directly pay out the pool contributors in crypto who then themselves decide to either save or spend.

There are some "cloud mining" services but they don't account for a lot of power and most end users play with them at a loss.

A brokerage does not own or generate new coin, it simply holds it on behalf of users and enables exchanges between users via the market.

"[Coinbase] claim that it will take a few days to process the transaction" -> This is very vague. When you withdraw crypto it generally happens near instantly. If you're talking about a purchase which involves processing a fiat withdrawal from a bank, that's not the same thing.

Re: Binance, you can audit it yourself at addresses like this: https://www.blockchain.com/btc/address/34xp4vRoCGJym3xR7yCVP...

kinghajj7년 전

For the blockchain to be as secure as possible, a large amount of capital must be invested into mining it, far more than the average individual possesses.

There are plenty of exchanges in reliable jurisdictions (Coinbase, Bitstamp, etc.), why do a few shady ones matter?

drexlspivey7년 전

You can rent their hardware via Nicehash etc and mine it yourself if that's your thing.

root_axis7년 전

> There are 21,000,000 BTC ever ever, you can't print more

Untrue. More could easily be printed if that is what the leadership/community wanted.

jbusma7년 전

Let's take a vote!

Who votes to increase the 21M cap, devaluing your own holdings?

Sir, it appears the nays have it..

nosuchthing7년 전

It only takes one veto (bug) to nullify the entire network, CVE-2018-17144 for example.

https://en.bitcoin.it/wiki/Common_Vulnerabilities_and_Exposu...

jbusma7년 전

this is actually really cool!

thank you for sharing I didn't know something this critical had been found in recent years

root_axis7년 전

Unforeseen future circumstances could make people more amenable to any kind of changes imaginable. Either way, saying that it's impossible to print more is just not true.

bduerst7년 전

Unforeseen future circumstances could make people less amenable. Saying "we just don't know what the future may hold" in support of a claim is an argument from ignorance.

root_axis7년 전

> Unforeseen future circumstances could make people less amenable

True, but irrelevant. It doesn't matter either way. The point is that it can be done if that is what conventionial wisdom dictates is desirable at the time.

bduerst7년 전

Conventional wisdom also dictates that it is desirable for Bitcoin to handle more than 7 transactions a second - and yet that problem isn't possible for Bitcoin to solve either.

Again, it's an argument from ignorance and gross oversimplification to claim "the future wisdom of the community" will solve problems for bitcoin.

root_axis7년 전

You can equivocate all you like, but accusing me of ignorance doesn't make it so. It's an undeniable fact that it is possible for any of these properties to change and the poster that claimed it was impossible for them to change is wrong. There is no debate here, it's just reality.

bduerst7년 전

I'm not accusing you of ignorance - An argument from ignorance (i.e. argumentum ad ignorantiam) is the name of a known fallacy, which you're making with your claims: https://en.wikipedia.org/wiki/Argument_from_ignorance

root_axis7년 전

You're engaged in the fallacy known as "straw-man", where you argue against a point I'm not making. I'm going to state my argument clearly so you can't continue to weasel around it.

The technical properties of bitcoin can be modified, saying that it is impossible to change them is wrong.

bduerst7년 전

This is part of the argument from ignorance - the attempt to push a burden of proof when the claim you made was "Unforeseen future circumstances could make people more amenable to any kind of changes imaginable". I didn't say anything about impossibilities, maybe you're confusing me for someone else?

pojzon7년 전

I dont think anyone with such possibility would put it to vote. They would just do it because they can.

jbusma7년 전

You would essentially "vote" with which fork you were choosing to acknowledge with your own node, should you be running one.

Also I'm fairly certain a majority of hashpower, not just users would need to be on board with the change.

You could argue that as the primary beneficiaries of such a change (increase cap => increased distribution to miners) they would be for it, but I think most rational actors see the catch 22 of trying to profit by removing one of the core attributes that makes bitcoin valuable (it's scarcity)

plokiju7년 전

Bitcoin works by consensus though. Nobody can be in that position. the best you can do is make a fork. Those who don't agree with the rule change will keep mining with the old rules in place

h1d7년 전

That is no longer Bitcoin, just a forked alt coin. See how well they did in the past. Unless there's some serious flaws preventing further adoption, why bend the rule everyone has been agreeing on?

GenerocUsername7년 전

That would result in a fork, split adoption, and is not nearly as easy as you imply.

empath757년 전

There have been multiple forks.

bduerst7년 전

Many of which are considered failures, which is the point.

russdpale7년 전

Yeh and they all fuckin suck. I wonder why? Its because they compromise on the quixotic properties that make bitcoin valuable.

root_axis7년 전

What is the substantive meaning behind "fuckn suck"? As an example, most exchanges and processors have both BTC and BCH so if you're not a speculator there isn't much functional difference. (I know there are technical differences, but those differences don't change the fact that they are fungible blockchain tokens)

russdpale7년 전

There isn't that much difference from a functional perspective. However, they will never achieve the value of bitcoin because many of them have forsaken the properties that give bitcoin its value.

There is too much argument over which chain will win, imo, its like asking which nation will win- it doesn't have an answer. We are humans, we excel at patchworked cooperation, which is why we have so many nation states and governing systems. There will be more than enough room for users to have many choices when it comes to blockchains for the foreseeable future.

root_axis7년 전

> However, they will never achieve the value of bitcoin because many of them have forsaken the properties that give bitcoin its value.

A subjective opinion that is also irrelevant to the point. It doesn't matter how likely you think a fork is to succeed, the argument that computer software is impossible to change because "nobody would ever agree to those changes" is incorrect.

polyomino7년 전

the functional difference is that BCH doesn't have a meaningful portion of the SHA256 hashrate, so it's vulnerable to 51% attack all the time. But, it's basically worthless so nobody cares.

root_axis7년 전

That's not a functional difference since it doesn't affect how the coin functions for users. BCH is certainly more at risk for a 51% attack but the risk is an abstract threat, not something that changes the fundamental nature of BCH. Your own logic actually demonstrates this because if some future event caused BCH to have a higher share of the hashrate then your own reasoning would demand that BTC be considered illegitimate without any technical qualities of BTC having to change.

BinaryResult7년 전

BCH usage is laughable. See for yourself.

https://txhighway.com/

root_axis7년 전

I don't disagree that the usage is laughable, but that doesn't really matter if you're trying to use BCH as a currency instead of a speculation vehicle. BCH converts to cash just as easily as BTC does once its in an exchange.

root_axis7년 전

It is as easy as I imply since I specifically said if the leadership/community desire such a change. Saying "you can't print more" is 100% wrong.

bduerst7년 전

Oh well if it's that simple then why has it been so hard just to do something as simple as increase the block size?

root_axis7년 전

Is it possible to increase the block size?

bduerst7년 전

Anything is Possible with Bitcoin ᵗᵐ

Except something as simple as increasing the block size to allow Bitcoin to process more than 7 transactions a second (Visa handles 42,000 tx/s comparatively). Theoretically it is possible, but the way Bitcoin is designed puts changes in control of people who stand to profit from preventing certain changes (i.e. Tragedy of the commons) like block size increases - and they are blocking it. The point is that Bitcoin isn't some piece of software that you can magically push any necessary changes to.

root_axis7년 전

So is that a "yes, it's possible" or "no, it's impossible"? "Theoretically it's possible" sounds like it's possible. Saying "here are some examples of things that didn't happen" doesn't prove that they, or anything else, can't happen.

bduerst7년 전

It's as possible as a number of rational actors collectively acting irrational. It's economics, not technology - so it's theoretically not impossible, just very highly improbable.

onion-soup7년 전

Yes it is possible and it is already done on Bitcoin SV (original bitcoin). Recently 128 MB block were mined as a proof that bitcoin can scale to hundreds of thousands of transactions per second

bduerst7년 전

> Anything is Possible with Bitcoin ᵗᵐ

Just that the network known as Bitcoin can't do that. The block mined just 10 minutes ago was capped at 0.904 MB.

Anyone can mine a gigabyte sized block on their own computer, but that doesn't make it Bitcoin (even when branded as Bitcoin SV).

onion-soup7년 전

>Anyone can mine a gigabyte sized block on their own computer, but that doesn't make it Bitcoin

So you just pulling facts out of your ass? Read the white paper then come back

bduerst7년 전

>Anyone can mine a gigabyte sized block on their own computer, but that doesn't make it Bitcoin (even when branded as Bitcoin SV).

Is the full context.

Cherry picking the sentence to be patronizing doesn't work very well when the context is actually your own example...

onion-soup7년 전

Mining is done in data centers. Get over with your 'everybody is a miner' mantra. It was never meant to be that. Check satoshi's early posts. Do you own research before spreading bullcrap

cdiddy27년 전

if the commons actually wanted larger blocks there was an opportunity with the bitcoin cash hardfork, but that chain has less value and less hashrate now. So when given the opportunity people didn't move to the chain with more transaction space, so it seems the votes are in.

polyomino7년 전

Go back and read the whitepaper that's not how this works.

Blackthorn7년 전

There's lots of things in Bitcoin that aren't in the whitepaper. The BTC chain is just what most people are agreeing on at the time. It is extremely mutable. The BTC mining limit is as mutable as anything else in the network.

thefounder7년 전

>> It is just as bad as cash.

You mean that it is as good as cash. Bitcoin become a failed project, a big internet casino. Some people want to use digital money to make payments and get paid, you know?

The success of the facebook coins depends by the ways to redeem the tokens(i.e do other shops accept it, can they be cashed out at atm, can you use it with 3rd party wallets etc)

maxlybbert7년 전

Quoting the animated Dilbert TV show when Dilbert buys his mom a gift card: “you’ve exchanged your money for something like money, but less useful.”

maxlybbert7년 전

I finally found a real source, and as usual, my memory leaves much to be desired (ultimately Dilbert gets a gift certificate):

Alice: A gift certificate is completely different from cash.

Dilbert: No, it's not. They're both pieces of paper you can exchange for goods and services.

Alice: You're missing the point.

Dilbert: Actually, a gift certificate is worse than cash, because you can only use it in one place.

Wally: And it expires.

Alice: At least it shows some thought.

Dilbert: It shows defective thought. You're trading perfectly good money for something that does the same thing, only not as well.

Facebook’s currency may not expire or be limited to one place, but it does seem to me that “it does the same thing [as money], only not as well.”

dwild7년 전

> Facebook’s currency may not expire or be limited to one place, but it does seem to me that “it does the same thing [as money], only not as well.”

I don't know but each time I try to show my cash into the computer... nothing happen.

Libra does the same thing as "Paypal" would be more fitting, but then you forget that not everyone can use Paypal and that's where your logic fail.

Venmo is always my best example for that, because I do have a Visa card, I do have a Paypal account. I'm in a developed country, thus I don't have issues to do transactions online. I still wouldn't be able to use Venmo though. If you were to only accept my transaction from Venmo, because you didn't like Visa and Paypal (yeah I know Venmo is owned by Paypal but you understands the point). Now imagine this world, but without any of theses.

- Anyone can own a Libra wallet, me, you, someone in the middle of a third world country.

- Anyone can transfer from a Libra wallet, to another, me, you, someone in the middle of a third world country included.

That means that anyone can arbitrage values of Libra, anywhere in the world, whether Visa, Mastercard or Paypal decide that market worth it or not.

Thus, anyone can pay using Libra, which make Paypal, "the same thing [as Libra], only not as well."

thefounder7년 전

Well, you can't send physical money over optical/copper cables, can you?

maxlybbert7년 전

Personally, I believe PayPal, Western Union, banks, etc. have come up with decent ways to send money electronically.

dwild7년 전

> Personally

That's the whole issue. You forget about everyone else that don't have access to Paypal or Western Union, or even wire transfer.

jrvxo7년 전

That series was brilliant. I don't know what happened to it :(

russian_bot7년 전

No, it's worse than cash. Cash has the ability to be anonymous, be used for regulation arbitrage, and is untraceable.

This "facebook coin" likely has none of these properties.

hanniabu7년 전

Bitcoin has not failed. I know several people personally that are paid in it. They can also use it to buy things.

cycrutchfield7년 전

And when they buy things, are those things denominated in fiat currency or in bitcoin?

VRay7년 전

I guess Bitcoin is turning out to be the Esperanto of money

CaptainZapp7년 전

Somehow I don't think that you mean that as a compliment.

Lordarminius7년 전

> are those things denominated in fiat currency or in bitcoin

By your logic if I exchange dollars for euros to spend on a vacation somewhere that means the dollar has failed ?

thefounder7년 전

Bitcoin is volatile. That's the main issue. You can't say that about the dollar or euro.

Now imagine you get paid in bitcoin, save every month for a holiday or a high value purchase. When the time comes to make the purchase you find out that your savings are worth less than 10%. How does it feel using bitcoin?

I tried to use bitcoin(as a merchant) but due its volatility it makes no sense to use it(as merchant or buyer).

Lordarminius7년 전

Its volatile because it is relatively new and not backed by a government. Market forces are having their way.It will stabilize

411mrc7년 전

At this point, it's a feature to have things denominated in $. I'm likely going to buy a Purism laptop with bitcoin, but of course denominated in $. I spent a couple hundred on BTC years ago, which has generated a nice return. This will be my first purchase, and I'll have plenty of BTC left over. Holding a deflationary currency while the world operates on an inflationary one is fine by me.

hanniabu7년 전

Both

thefounder7년 전

I guess they have the shopping list ready by the time they get paid otherwise chances are they end-up with less(or more, it becomes a gable) value by the next day. Not to mention the exchange rate(i.e the employer uses a rate, the merchant a different one...). In the real life people don't like to gamble their wages every single day. They want and need a stable currency and low fees. Bitcoin failed to offer any.

nutjob27년 전

The bar for success in your mind is suspiciously low.

hanniabu7년 전

What would your bar for success be? I was merely responding in a way that met the parents comments.

hanniabu7년 전

Would love to know why I was downvoted

ivalm7년 전

Because to claim that bitcoin succeeded as a payment/salary method is ridiculous. Vast majority of bitcoin volume is just speculation on exchanges. The massive price volatility is a testament to why it cannot be used as a currency -- who would want to make a services/job contract that in a matter of a year could change its value by an order of magnitude. The whole point of these contracts is to hedge against future volatility. Remember, if bitcoin goes up then the employer gets screwed, if bitcoin goes down then the employee gets screwed; there is no direction that is good for everyone, only stability is good.

Furthermore, good currency should encourage investment (into things) which means it needs to be (slightly) deflationary (to introduce a cost to not investing into production). Otherwise you get into a paradoxical/toxic situation where NOT producing useful things becomes financially advantageous.

411mrc7년 전

You're arguing for a demurrage currency, not a fiat, debt- leveraged fractional reserve one.

ivalm7년 전

I am arguing against bitcoin, not for something. I definitely am not arguing for fiat.

travisjungroth7년 전

> There are 21,000,000 BTC ever ever, you can't print more.

This is not true. Forks exist, and anyone can make 21 million bitcoin at a time. It’s still a question of if people will accept the forks, but it is an option

hanniabu7년 전

If it's a fork then it's not BTC

travisjungroth7년 전

But what is “BTC”? It’s the version of bitcoin code that people generally accept. Every update to the code is a fork.

hanniabu7년 전

That's correct, so anything that isn't generally accepted doesn't have the same support or value. To date there have not been any legitimate forks that I'm aware of.

travisjungroth7년 전

Whether you consider it legitimate or not, Bitcoin Cash has about 4% of the value of BTC.

Here’s my point. Is it theoretically possible for some group of people in the physical world to take actions so that what we generally call Bitcoin has 1 more coin? I strongly believe yes. So the world isn’t as black and white as some people like to say it is.

hanniabu7년 전

Just as the stock market can only have 1 AAPL ticker, there can only be 1 BTC. Is it possible that in the future that BTC can have a change in emission and cap? Yes. I don't agree with that part of the parents statement. But there is in no way for there to be more than 1 BTC chain.

travisjungroth7년 전

There’s only one AAPL because we all agree there is. What if the NYSE and NASDAQ disagreed? It all comes down to people.

This is the bait-and-switch of crypto. People act like it’s all code and messy humans aren’t involved and this just isn’t true.

The original comment I replied to said there will only ever ever be 21,000,000 Bitcoin. I believe this is not fundamentally true because “Bitcoin” is whatever people say it is. If we all agreed to accept a fork with 22mil and call it Bitcoin, then that’s what it is. Sure, that old fork only has 21mil, but who cares? Old forks get dropped all the time.

This all isn’t entirely theoretical. This already happened with the other major part of cryptocurrencies, the immutable blockchain. What we all call ETH has a rollback in it!

No, this hasn’t happened with BTC but there’s no reason it can’t. Every second that the Bitcoin blockchain doesn’t get rolled back, every second that there are only 21 mil possible Bitcoin is because we all collectively agree that’s the case.

root_axis7년 전

Stocks and cryptocurrency are not at all the same thing, I assume people think this way only because they can both be summarized as a number that moves up and down over time. Apple is a company located in the physical world that owns raw materials and a business process that transforms raw materials into value. It makes no sense to have another Apple ticker because the point of a stock is to track the value of that physical company. Cryptocurrency is totally different in the sense that it isn't a thing that exists in the physical world, instead it is a collective abstraction over a distributed database that the users agree to call "bitcoin". It is a purely political designation.

travisjungroth7년 전

It’s an interesting argument that a cryptocurrency designation is more political than a corporation!

I argue that they’re about the same. A corporation is largely numbers in computers and how people feel about them. A cryptocurrency is numbers in computers and how people feel about therm.

Typing this out makes me appreciate gold a bit more. Gold is gold, whether we give it a different name or not. It’s not pure thought-stuff like a corporation. The problem is it only has whatever value we give it, so I’m certainly not arguing it has inherent value or is a better currency.

root_axis7년 전

A corporation is not "pure thought-stuff"; it is a legal designation for a physical business process facilitated by people and machines in the real world. The legal entity "corporation" is purely political, but the thing we really care about (a business process) is ultimately pegged to physical reality. The legal corporate entity is the map, the business-process-in-action is the territory.

travisjungroth7년 전

I totally agree with your map/territory analogy. When I’m referring to a corporation I’m not talking about all the physical things in the world (the company) but what you’re calling a legal entity.

I would also bet good money that most corporations in the world do not map directly to a business-process-in-action. Most corporations are a layer of abstraction of ownership. There are many more of these than real businesses in the physical world.

gamblor9567년 전

Stock market tickers are exchange dependent, especially across geographic boundaries, so to avoid confusion as to which stock is referred to, many finance sites include the exchange as a prefix to the ticker, i.e., NYSE:AAPL.

However, at least in the US, a company is not allowed to choose a stock ticker already in use by a company publicly traded on a US exchange.

empath757년 전

Who decides what's a legitimate fork? There have already been several forks, some of which maintain trading value.

hanniabu7년 전

The first part is consensus. The most supported one maintains the original name. The second part is support and use. Even though other forks have a cost, does not mean they are legitimate. I'm not sure if you've heard of Craig Wright, Calvin Ayre, and Roger Ver, but they are majority holders of these forks and control supply and therefore price. I will not go into a huge lengthy discussion about this here, if you Google this there are others that can provide more information and explain this much better than me.

empath757년 전

Where exactly is any of this defined in the bitcoin protocol? The real bitcoin isn’t made by particular people that you don’t like? I thought all that mattered was the code and now we have unelected random people deciding which code is good for me to use and which is bad?

spookthesunset7년 전

All those forks are legitimate. Who are you to decide which is legit?

Blackthorn7년 전

BTC forks all the time. Almost every new version of the code is technically a fork. It's just the forks usually have a single branch.

drexlspivey7년 전

That is not what a fork means

Blackthorn7년 전

Yes it is.

root_axis7년 전

By that definition ETH doesn't exist. Yet, clearly when someone says "ETH" we all know what they're talking about.

hanniabu7년 전

If it is known as ETH then it is the main chain, not the fork.

root_axis7년 전

Right. That's my point. Even though ETH hard forked to undo transaction history, the fork is still considered "ETH" because that is what the leaders decided (and the community agreed to that decision). If Vitalik had made a different decision then the "ETC" chain would still be called "ETH" today.

cdiddy27년 전

whats missing here I think is the value of social consensus. None of these coins have any staying power without the social consensus that makes them the main chain. Its why there can't be clones with the same value popping up every day, there is clout that the dominant chains maintain

spookthesunset7년 전

Which fork is the real bitcoin?

hanniabu7년 전

If it's a fork then it's not BTC

spookthesunset7년 전

Sure but that doesn’t mean it isn’t “bitcoin”. Which bitcoin is the real bitcoin? Bitcoin Satoshi’s Vision? Bitcoin Cash? Bitcoin Classic? The fork I just made?

Shish2k7년 전

> there is no investment potential. It is just as bad as cash

I don't want to invest in money. I want to exchange my money for goods and / or services. It seems that bitcoin is great for the former and not so great at the latter :P

ForHackernews7년 전

> There are 21,000,000 BTC ever ever, you can't print more.

I see you're unfamiliar with Bitcoin SV, Bitcoin Cash, Bitcoin 2, Bitcoin Segwit...

beaner7년 전

This is a really stupid thing to say. SV coins are SV coins, not BTC coins. Their chains don't interact and can't inflate each other, so pointing out that there are multiple blockchains doesn't make any sense.

ForHackernews7년 전

The point is that all of these random tokens are functionally identical from the perspective of most users. If you're claiming there's a hard limit on the number of limited edition funko pop action figures produced, you'd better be able to explain what makes them any different than these other identical clones.

It'd be like if counterfeit designer clothes were actually indistinguishable from the "real" ones, and arguably better made in some cases.

easymodex7년 전

Yeah but they are not functionally identical as Bitcoin's value comes from it being immutable, decentralized and failure-proof.

Also a better analogy would be that you can make 1000 copies of the Mona Lisa in whatever way you want, they will still be just copies and they will be worthless.

ForHackernews7년 전

Bitcoin is just a shitcoin that happens to be popular right now. All the other altcoins make the same "immutable, decentralized and failure-proof" claims.

easymodex7년 전

Bitcoin is the only one with a track record to prove it.

beaner7년 전

The utility is not just in it's function but since it's money, also in it's purchasing power and it's network.

Your analogy is more like getting the Facebook database and spinning up 100 clones of it, all with 3 billion users. Now "Facebook" has 300 billion users. It could have a trillion or a quintillion right? Or an infinite amount. But what does that even mean if the actual 3 billion people only use the original network? It means Facebook is still Facebook, and forking it, in terms of how it affects the network it its value, is relatively pointless.

You're not making a real point.

DINKDINK7년 전

>all of these random tokens are functionally identical from the perspective of most users.

If a clone of Bitcoin is identical to Bitcoin then why does Bitcoin trade 25x the price of a clone? Your argument would cary weight if the protocol and price facets were similar. The market says otherwise.

ForHackernews7년 전

"why does Bitcoin trade 25x the price of a clone?"

Because humans are stupid, faddish creatures.

The market can remain irrational longer than you can remain solvent.

DINKDINK7년 전

The point was, in fact the bitcoin and bitcoin clones are not "functionally the same thing". If they were, there wouldn't be discrepancies between the two. Clearly the market punished the clone.

h1d7년 전

You're only looking into quick money but for you there are plenty of alts for that.

[deleted]7년 전

oarabbus_7년 전

You have it completely wrong. Bitcoin is intended to be a cryptoCURRENCY meaning in a proper liquid market there should not be any investment potential at all.

An appreciating asset is the exact opposite of a currency. You want your currency to be stable, or slight inflation/devaluation over time, or the consequences are it will never be used to transact.

stcredzero7년 전

If it is pegged to USD, there is no investment potential. It is just as bad as cash.

Tether became (at least for a time) a favored method for cryptocurrency investors to shift their positions to USD. I think Facebook has a good chance of doing the job better with Libra than Tether has done. This might put Facebook into an advantaged position in future payments services and cryptocurrency.

(One thing that just occurred to me: would it be possible to alter the operation of a stablecoin, such that parties who are trying to corner the market will automatically expose themselves to other parties who would exploit them?)

What if Facebook also came out with a stablecoin to the Yuan, the Pound, and the Euro, as well as their own non-stablecoin cryptocurrency? I suspect that this would give Facebook the same kind of information advantage currently enjoyed by petroleum multinationals in the petroleum market.

(EDIT: Euro)

cycrutchfield7년 전

The German Mark? Do they have a time machine too?

stcredzero7년 전

I'm showing my age. Euro.

justforyou7년 전

This is the thing that will ultimately get facebook as we know it regulated out of existance -- unless politicians get hooked on social media micro-donations.

https://www.banking.senate.gov/imo/media/doc/5.9.19%20Facebo...

lowdose7년 전

Is this a new narrative pushed by old banks that do not innovate enough to keep up with Zuckerberg et al?

hello_12347년 전

I really wish they succeed. It takes 3 to 5 business days to transfer money using ACH in the US if you don't want to shell out 25$ for wire transfer. Transferring money is just about transferring a few bytes of data. Why does it take 3 business days? Why are customers still forced to shell out 25$ for instant transfers?

nutjob27년 전

The US is the US, but in places like the EU and Australia, consumer level inter-bank transfers are now taking a few hours, minutes or seconds, at a price between free and less than $1.

It's sort of a constructive proof that you don't need crypto currency, if that's the justification for its existence.

easymodex7년 전

"I can get from A to B on foot. I can even ride a horse and be there 10x faster. It's sort of a constructive proof that you don't need cars."

buboard7년 전

it's really mind boggling to me they take $1 at all. Why? Banks have a myriad ways to make money instead of taxing consumers (and overwhelmingly the small fish). It's 2019 and cash has 0 cost to transfer.

ForHackernews7년 전

In the UK, the Faster Payments Service enables near-instant transfers (usually a few minutes) that are typically free to the consumer. This network has been operating for more than a decade.

[0] https://en.wikipedia.org/wiki/Faster_Payments_Service

buboard7년 전

yet it costs me $10 to send $500 to the UK and $39 to send to the US. And even more to receive.

ForHackernews7년 전

Try http://transferwise.com/, that's what I usually use.

buboard7년 전

not available for the kind of businesss payments i want

[deleted]7년 전

jiveturkey7년 전

You appear to have a fundamental misunderstanding of ACH vs wire. They aren't the same thing, with one of them having a fee just for the speed of it.

3-5 days is actually a feature of ACH. This delay includes the ability to reverse a transaction, a built-in risk management. For example, here is a quote from an article on the front page of HN right now (#5, SIM swap horror story):

> After a couple of days, our bank reversed the $25,000 charge and told us that the fraud department caught the ACH withdrawal before it was fully processed so that neither my family nor the bank lost this money forever.

Google will give you lots of good information on the difference between wire and ACH.

hello_12347년 전

Here's a great podcast on NPR's planet money if you want to learn more - https://www.npr.org/sections/money/2018/01/10/576879734/epis... You cannot just give me two anecdotes to defend one of the most inefficient systems in the US.

ForHackernews7년 전

How is ACH "inefficient"? It's certainly slow, but speed and efficiency are not the same thing. It's far more efficient than bitcoin.

It's a mainframe batch-processing system built in the 1970s, and it's mostly worked just fine for 40 years. That's pretty efficient!

hello_12347년 전

The mainframe batch-processing computers might be efficient. I have no idea. I am taking about the "ACH system". It's supposedly automated but it shuts down during the weekends. There is no way to tell how long it will take for transaction will take to complete. If you listen to the NPR podcast, it took one of their transactions 8 days to complete. And why is "speed" not a measure of efficiency when it comes to transferring something?

ForHackernews7년 전

We transfer most freight by slow container ships instead of fast airplanes because it's much more efficient: It's less expensive, requires less energy-per-kilo, and amortizes the cost of the vehicle over a larger volume of cargo.

snarf217년 전

Exactly this. Extra hoops to transfer your wealth are like most things in life. Do you want security or convenience? Maybe you don't care about security for a $5.00 coffee. What about a $5K contribution to your IRA? What about a $50K downpayment on a house? All risks have models and it is silly to pretend they are all the same.

duxup7년 전

I think it remains to be seen how many Facebook users WANT to use Facebook (or whatever they call it) to buy things.

I'm not sure that's an automatic yes from most users.

shiado7년 전

Could this whole project be a tax play? Many jurisdictions don't tax cryptocurrency until sale where capital gains applies, some don't tax at all. It is very convenient for tax purposes for a corporation to have a currency that exists on a global network where you don't need to transfer anything between countries and all that matters is where you cash out.

nopinsight7년 전

Facebook's Libra coin looks like its version of WeChat Pay or AliPay rather than a competitor of Bitcoin. It is a stablecoin meant for facilitating transactions, not an asset to be invested in.

jonlucc7년 전

I don't really understand the upside to an FB stablecoin, but maybe I'm missing something. Why would I want FB to be the store of my money instead of FDIC-backed banks if the value and purchasing power is going to be identical?

TACIXAT7년 전

If they can move your money cheaper than credit and debit card networks. That is the only part I'm interested in. Given they are partnered with PayPal though, I'm not hopeful on it being low fee.

bduerst7년 전

Those fees with credit and debit card networks aren't arbitrary - they usually cover dispute support, insurance, anti-fraud, and other financial services that consumers have come to expect.

If Facebook has fees that are less than industry standard I would be highly suspect of that payment method.

gervase7년 전

They're not arbitrary, but they're not razor-thin, either. If we take a quick look at profit margins (net income over revenue) for 2017 as a proxy for fees relative to service costs, Visa was something like 36%, which is pretty good (for context, Google's is ~22%, Apple's is also ~22%, Citigroup is ~25%, Mastercard ~31%, Paypal ~13%, Facebook is just under 40%).

It would definitely be a big shift from the "support" they offer now, admittedly, but if they can break the Visa/MC duopoly at scale, I think you could make a business case for it.

bduerst7년 전

What these financial conglomerate accountants report on their SEC filings are not the same margins that they have on payment processing. For example, much of that margin could be on interest for credit debt or Adwords CPC. It's a massive stretch to compare the two.

Again, I would be highly suspect of Facebook if they charged less than the industry standard, especially if they don't explain how they cut costs for risk management.

TACIXAT7년 전

I think risk management could be a lot cheaper. Phones are data rich compared to mag stripe cards. No card can provide GPS history.

bduerst7년 전

I agree - I think some startups like SoFi have been challenging that space, but they address that in their value proposition. I don't see anything leading me to believe that anything Facebook is doing is innovating risk management overhead, which is why I would be suspect of their fees.

jonlucc7년 전

That makes sense, but when buying things, the price of those networks is opaque to the consumer and things won't get cheaper for consumers if a business is selling to both "traditional" purchasers and FBcoin purchasers.

TACIXAT7년 전

Yea, agreed. My dream for it would be changing the way the internet is funded. If you could send 1 or 2 cents digitally, you could bill people for social media use rather than showing them ads. You could tip content creators and not have a payment network take 30%, same for in app purchases. The kill ads feature doesn't align with FB's interest though.

We'll see what their fee structure looks like.

drexlspivey7년 전

You don't have to store your whole net worth in it, just use it as a hot wallet. In China you go buy some noodles and you pay via WeChat (a chat app). Facebook wants to do the same, you'll be able to split bills/send money via FB/Whatsapp with a couple of clicks.

catacombs7년 전

With the number of data leaks, PR disasters and the federal probes looming over Facebook, the last thing I want is the company handling any kind of financial transactions, especially if it's with cryptocurrency.

duxup7년 전

I suspect though this is just crypto currency ... in tech and name, but generally will just be controlled by facebook in a way that isn't as susceptible to the usual hacking / non reversible transactions as "real" crypto currency.

I think this is really just Facebook payments that will be controlled by Facebook.

catacombs7년 전

Sounds like it. I'm interested to see how this plays out ... from the sidelines. I haven't had a Facebook account in years. I deleted it a while ago and haven't looked back.

DrJosiah7년 전

Here's the best reason not to involve yourself: it gives Facebook more power. Haven't we seen how Facebook uses that power? Yeah? So maybe we don't get on board with what Facebook wants.

[deleted]7년 전

antpls7년 전

2 things about a virtual currency :

- people may finally be able to "sell" their personal data

- it may help to remunerate artists and content creators on Instagram

kerng7년 전

Even though this has nothing todo with cryptocurrency, the naming confusion will benefit Bitcoin and Co I assume.

xmly7년 전

It is just called cryptocurrency and actually, it is not.

Any stable coins are just payment network without a license.

cdiddy27년 전

Not Dai

nvk7년 전

Apples and Oranges. One is just a fiat pegged shitcoin the other an independent monetary system.

buboard7년 전

Will it be in any crypto exchanges, e.g. coinbase, binance?

(nobody from facebook here?)

GrumpyNl7년 전

I bet you, to get some, you have to buy them with dollars.

cribbles7년 전

I think it's not a coincidence that one of Facebook's flagship partners is MercadoLibre, the Argentine ecommerce giant. Argentina's YOY inflation rate will "slow" to 34 percent this year - if all goes well.[1] The Argentines I know making monthly salaries are used to saving money in foreign currencies anyway. (HN Argentines, feel free to correct me on that point.)

Many of us live in places where we can rely on our regional currencies to remain stable. Maybe the pound will flounder under Brexit, the Euro under the debt crisis or the dollar under whatever the trade war is supposed to be doing, but there's little or no public will to divest from national currencies, and the main reason anyone would dip into cryptocurrencies is speculation. Also we're hackers and distrust Facebook. Fine - we're not the target demographic.

I think the general population of Argentina, India, Venezuela, etc etc, _are_ the target demographic. The idea would be to make savings, payments, and digital purchases for people in developing or unstable economies reliable, inflation resistant, and low-fee - particularly vs forex. As a bonus for us hackers, I'm sure every Orwellian data scraping fever dream you can imagine is rolled in too - but most people aren't hackers, so whether this is a showstopper remains to be seen.

I'm not just spitballing here - Facebook claim this to be so.[2] Thiel and Altman's Reserve Currency works basically the same way, with the same ambitions[3]. The implications are _much_ bigger than Johnny-come-latelies from Menlo Park stumbling into the blockchain hype - which seems to be the prevailing take here. What we're seeing is tech giants betting big on having total ownership over banking and purchases in much of the world's population.

[1] https://www.reuters.com/article/us-argentina-economy-oecd/ar...

[2] https://www.theverge.com/2019/6/6/18655366/facebook-cryptocu...

[3] https://reserve.org/about. Pedantic technical note: Reserve is moving in a three phase sequence from USD collateralization (like Tether / Coinbase's token) to algorithmic stabilization against a basket of goods (not currencies), whereas Facebook is skipping to phase three and using a basket of currencies as the peg. (It's an open question how this will be accomplished, since Libra's whitepaper won't be released until tomorrow.)

dngray7년 전

douche marks (one of the names people were calling them) https://news.ycombinator.com/item?id=20181639

Yeah now it's called Libra. I can totally see my daughter wanting to think about her girl products every time she uses this coin.

They better consider how their marketing will look if they want to enter the Australian market. Especially with this day and age of memes. Usually what the teens find "cool" is what the older generations adopt.

pdpi7년 전

> Yeah now it's called Libra. I can totally see my daughter wanting to think about her girl products every time she uses this coin.

The iPad didn't really suffer much from the same naming "problem".

Libra is pretty much just the latin name for "Pound". It's a pretty damn good name for the currency.

dngray7년 전

> The iPad didn't really suffer much from the same naming "problem".

It's not really the same thing. Pad can often refer to things like "pads of paper", or be a slang name for an apartment.

> Libra is pretty much just the latin name for "Pound". It's a pretty damn good name for the currency.

A lot of teenagers probably aren't going to know that.

Whereas there is literally a brand called "Libra" that makes tampons, pads and those sorts of products. That is what people think of here when they hear that, either that or the star sign.

supakeen7년 전

The Libra name is only used in Australia and New Zealand [0], it's unlikely that two things carrying the same name will influence the brand of Facebook's currency a whole lot.

https://en.wikipedia.org/wiki/Libresse#International_brandin...

stcredzero7년 전

The first thing I thought about was Libranet Linux.

dngray7년 전

> The first thing I thought about was Libranet Linux.

Yes and you're on HN like me. This site caters for a certain audience.