Diem – A rebrand of Facebook’s Libra(diem.com)
diem.com
Diem – A rebrand of Facebook’s Libra
https://www.diem.com
420 comments
In the UK, I have low-cost, fast, reliable, accessible money transfers. Basic bank accounts are free, and come with reliable free instant transfers to any other UK bank. That may not be reality in all countries, but it is in many.
That's quite a high bar for rival payment methods to clear, but I think the main problem for corporate currencies like this will be rivalry from government issuers. Governments jealously guard the right to issue currency, as they rightly perceive it as one of their biggest holds over citizens. Any sufficiently powerful currency would attract their scrutiny.
I do think payments are ripe for disruption though - when money is sent over a free global network between pre-vetted partners (i.e. bank customers) there is no reason the transaction fees should be high, even internationally. I'm not clear how a blockchain based currency is going to help facilitate that, but would love to see a revolution in payments which made them simpler and not tied to archaic concepts like sort codes and account numbers, and reduced the fees charged to customers and merchants for payment networks or card issuers which don't do the hard KYC work (banks and payment processors do that).
The problems here are in verified identity tied to real people, not how to perform transactions quickly, or things like anonymous trust-free transactions which nobody actually wants.
That's quite a high bar for rival payment methods to clear, but I think the main problem for corporate currencies like this will be rivalry from government issuers. Governments jealously guard the right to issue currency, as they rightly perceive it as one of their biggest holds over citizens. Any sufficiently powerful currency would attract their scrutiny.
I do think payments are ripe for disruption though - when money is sent over a free global network between pre-vetted partners (i.e. bank customers) there is no reason the transaction fees should be high, even internationally. I'm not clear how a blockchain based currency is going to help facilitate that, but would love to see a revolution in payments which made them simpler and not tied to archaic concepts like sort codes and account numbers, and reduced the fees charged to customers and merchants for payment networks or card issuers which don't do the hard KYC work (banks and payment processors do that).
The problems here are in verified identity tied to real people, not how to perform transactions quickly, or things like anonymous trust-free transactions which nobody actually wants.
> In the UK, I have low-cost, fast, reliable, accessible money transfers. Basic bank accounts are free, and come with reliable free instant transfers to any other UK bank. That may not be reality in all countries, but it is in many.
It is also a reality in Brazil. Last month the government and the banks released a standard money transfer protocol (PIX) which superseeds the other protocols (similar to ACH in USA). Cheap, instant payments 24h a day regardless of the bank are a reality here today.
Hence I don't see FB having much success in Brazil with this product.
It is also a reality in Brazil. Last month the government and the banks released a standard money transfer protocol (PIX) which superseeds the other protocols (similar to ACH in USA). Cheap, instant payments 24h a day regardless of the bank are a reality here today.
Hence I don't see FB having much success in Brazil with this product.
> I don't see FB having much success in Brazil with this product.
Really?! They just need to tie whatsapp payments with a novi wallet, perhaps offer a few bucks as bait and suddenly they get millions of users.
Never underestimate the power of a monopoly position.
Really?! They just need to tie whatsapp payments with a novi wallet, perhaps offer a few bucks as bait and suddenly they get millions of users.
Never underestimate the power of a monopoly position.
What about sending money out of Brazil, and non-permanent residents of Brazil?
Any person with a CPF, our individual taxpayer registry identification, can use PIX. Non-permanent residents of Brazil are included in this category.
As for international transfers, the Central Bank is looking at simplifying existing regulations in order to allow international transfers as late as 2023
As for international transfers, the Central Bank is looking at simplifying existing regulations in order to allow international transfers as late as 2023
> In the UK, I have low-cost, fast, reliable, accessible money transfers. Basic bank accounts are free, and come with reliable free instant transfers to any other UK bank.
As an EU citizen living in the UK, it boggles my mind that "EU Faster Payments" was not implemented as part of the eurozone, if not the EU as a whole.
As far as I know there's nothing technically preventing this, anyone has an insight into why it isn't a thing?
As an EU citizen living in the UK, it boggles my mind that "EU Faster Payments" was not implemented as part of the eurozone, if not the EU as a whole.
As far as I know there's nothing technically preventing this, anyone has an insight into why it isn't a thing?
It does exist, but it’s just taking a while for all banks to adopt it.
Most/all Dutch banks have adopted it already.
https://www.europeanpaymentscouncil.eu/what-we-do/sepa-insta...
Most/all Dutch banks have adopted it already.
https://www.europeanpaymentscouncil.eu/what-we-do/sepa-insta...
In France banks charge a small fee for instant transfers (around €1). Some banks include free instant transfers in some of their offers, but usually not for their free accounts. I think it’s just a matter of time for it to become free and universal. Just like some banks use to make you pay to use their app or website (!).
That's great, thanks for the pointer.
I regularly transfer money between three European countries with instant payments, it works just fine but not all banks have implemented it.
Cybersecurity/trust issues? Can’t imagine a region wide inter bank network to be more technologically better protected than even Gmail.
> not tied to archaic concepts like sort codes and account numbers
What are the problems with sort codes and account numbers? Are you after binding the account to your identity like Australian PayID?
What are the problems with sort codes and account numbers? Are you after binding the account to your identity like Australian PayID?
I quite like the inversion of account control in systems like bitcoin to put the user in charge, though this is not without problems. It would be nice if uk banking systems were not stuck in this odd world of accounts tied to physical branches by a sort code, or indeed if we just moved to global identifiers that were portable between banks and owned by a person, not a gov or bank.
Odd thing given the UK context - the major banks and many smaller let you pay someone with just their mobile number (it’s called PayM). Although given its bank payments, account numbers are far from archaic, and new things like confirmation payee help make the whole system more secure.
Now it you want to talk about archaic, how about MT103 and friends?
even in the countries where you do have this, what about cross-border transactions...those usually again become messy. Even between two countries which each have a good internal system as you describe.
> Is there a reason this is tied to the blockchain?
The only legitimate reason I can think of would be cynically drafting on the hype cycle. But I've been reading David Gerard's book Libra Shrugged [1] and it looks like the actual answer is that "blockchain" has a quasi-religious belief system built up around it, and the people involved are members of the faith.
One of the stunning things for me about "blockchain" revolutionary hype is how long it has gone on without significant accomplishment. It started only a bit after the iPhone, which has had a huge impact on things, including payments. It's hard now to imagine a world without the internet in one's pocket. But if every blockchain stopped working tomorrow, few would notice. Contrast this with M-Pesa [2], a different approach to digital money. It started at around the same time but has had huge uptake. A recent report in Kenya [3] says M-Pesa has 30 million accounts, which is approximately the number of people in Kenya age 15 or over. To me, that's what successful digital money looks like.
[1] https://www.amazon.com/dp/B08M8DGKY4/ [2] https://en.wikipedia.org/wiki/M-Pesa [3] https://ca.go.ke/wp-content/uploads/2020/07/Sector-Statistic...
The only legitimate reason I can think of would be cynically drafting on the hype cycle. But I've been reading David Gerard's book Libra Shrugged [1] and it looks like the actual answer is that "blockchain" has a quasi-religious belief system built up around it, and the people involved are members of the faith.
One of the stunning things for me about "blockchain" revolutionary hype is how long it has gone on without significant accomplishment. It started only a bit after the iPhone, which has had a huge impact on things, including payments. It's hard now to imagine a world without the internet in one's pocket. But if every blockchain stopped working tomorrow, few would notice. Contrast this with M-Pesa [2], a different approach to digital money. It started at around the same time but has had huge uptake. A recent report in Kenya [3] says M-Pesa has 30 million accounts, which is approximately the number of people in Kenya age 15 or over. To me, that's what successful digital money looks like.
[1] https://www.amazon.com/dp/B08M8DGKY4/ [2] https://en.wikipedia.org/wiki/M-Pesa [3] https://ca.go.ke/wp-content/uploads/2020/07/Sector-Statistic...
> One of the stunning things for me about "blockchain" revolutionary hype is how long it has gone on without significant accomplishment.
I think that there is a lot more money in the world right now than 20 years ago and definitely than 400 years ago.
A lot of it is just dumb (people inheriting money or getting it for other reasons than intelligence or financial acumen: singers, athletes, etc.) and some it is exploratory/inherently risky (VC) or both. So a bubble can last much, much longer and be much, much bigger.
We're probably going to see more of these.
I guess at this point I should probably just say that I regret not being smart/connected enough to be at the collecting end of one of these hype trains :-)))
I think that there is a lot more money in the world right now than 20 years ago and definitely than 400 years ago.
A lot of it is just dumb (people inheriting money or getting it for other reasons than intelligence or financial acumen: singers, athletes, etc.) and some it is exploratory/inherently risky (VC) or both. So a bubble can last much, much longer and be much, much bigger.
We're probably going to see more of these.
I guess at this point I should probably just say that I regret not being smart/connected enough to be at the collecting end of one of these hype trains :-)))
Could just be thanks to technology office politicking. Some senior engineer or manager says "I want to work on blockchain projects", invents a reason to do that within Facebook, or maybe their boss really wants to keep them there, and somehow they get enough buy-in to create Libra. Now they have a blockchain project.
This seems more likely to me than someone at Facebook saying "We need a our own money system," evaluating blockchain against a centralized design, and deciding for technical reasons that Facebook Money should be a blockchain project.
This seems more likely to me than someone at Facebook saying "We need a our own money system," evaluating blockchain against a centralized design, and deciding for technical reasons that Facebook Money should be a blockchain project.
> Some senior engineer or manager says "I want to work on blockchain projects", invents a reason to do that within Facebook, or maybe their boss really wants to keep them there, and somehow they get enough buy-in to create Libra. Now they have a blockchain project.
This is pretty much how it happened. A Bitcoin fan started at Facebook, started from "how do we use a blockchain here" then came up with something to use a blockchain for, and recruited some executives who thought similarly.
Most of what's weird and dumb about Libra/Diem is because it was started by four bitcoiners, from bitcoin ideas. It turns out that ideas from a cryptocurrency that was started in order to evade government control don't play well in the heavily regulated environment of Other People's Money.
This is pretty much how it happened. A Bitcoin fan started at Facebook, started from "how do we use a blockchain here" then came up with something to use a blockchain for, and recruited some executives who thought similarly.
Most of what's weird and dumb about Libra/Diem is because it was started by four bitcoiners, from bitcoin ideas. It turns out that ideas from a cryptocurrency that was started in order to evade government control don't play well in the heavily regulated environment of Other People's Money.
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I think Zuck's mission wasn't really about empowering the unbanked, but it's: fight WeChat. WeChat already has an effective digital payment system, with the tasty tasty analytics and surveillance capabilities (which yeah, Zuck also probably wants).
As to blockchains, that's because this is the hype of the last few years, is it not?
As to currencies, IMO the vision of the people hyping bitcoin was that your pizza place would accept BTC (and not after converting their USD price to BTC) because their supplies would be happy to do as well. A single currency for the world would be interesting, but as economists have pointed out, devaluing your currency is a way to escape economic crises, but e.g. Euro countries can't do this any more, hence the problems the PIIGS countries had.
As to blockchains, that's because this is the hype of the last few years, is it not?
As to currencies, IMO the vision of the people hyping bitcoin was that your pizza place would accept BTC (and not after converting their USD price to BTC) because their supplies would be happy to do as well. A single currency for the world would be interesting, but as economists have pointed out, devaluing your currency is a way to escape economic crises, but e.g. Euro countries can't do this any more, hence the problems the PIIGS countries had.
Facebook Messenger can already transfer money between people. They could just expand that into a fully featured digital wallet to compete with WeChat, Apple Pay, Google Pay, Samsung Pay, Cash App, PayPal, etc. It's actually astonishing they didn't do this a decade ago.
I get the VC appeal of blockchain, but Facebook already has the money to fund it. Outside tech circles I don't think slapping a blockchain label on a product will make it more appealing.
I get the VC appeal of blockchain, but Facebook already has the money to fund it. Outside tech circles I don't think slapping a blockchain label on a product will make it more appealing.
I agree. I don't quite understand what overall benefit something like Diem brings. It seems like an extraneous amount of technical overhead and yak shaving just to do something other companies have been doing for years. It just strikes me as some convoluted marketing ploy to attract VCs. All Facebook needs to do now is figure out how to throw AI into the mix and they'll win tech buzzword bingo.
> Outside tech circles I don't think slapping a blockchain label on a product will make it more appealing.
I kind of hope the word "blockchain" should soon make it less appealing especially in tech circles.
I kind of hope the word "blockchain" should soon make it less appealing especially in tech circles.
Blockchain or not blockchain is perhaps the least interesting part of all the so called "blockchain" projects.
It's a term without an accepted definition. A lot of useless branding is expected. Just you wait until IBM gets their hands on .. oh, they already did.
Both the Bitcoin-like zero trust ledger and the m-of-n trusted notaries model have useful use cases. While more descriptive terms would have been great, arguing definitions only goes so far.
It's a term without an accepted definition. A lot of useless branding is expected. Just you wait until IBM gets their hands on .. oh, they already did.
Both the Bitcoin-like zero trust ledger and the m-of-n trusted notaries model have useful use cases. While more descriptive terms would have been great, arguing definitions only goes so far.
No part of the Libra/Diem plan required or requires a blockchain.
The reason for the blockchain: Libra was founded by four bitcoiners (Morgan Beller, David Marcus, Kevin Weil, Christian Catalini) who wanted something like bitcoin, but not volatile, and run by sensible people, i.e. them.
The reason for the blockchain: Libra was founded by four bitcoiners (Morgan Beller, David Marcus, Kevin Weil, Christian Catalini) who wanted something like bitcoin, but not volatile, and run by sensible people, i.e. them.
1) think of it as a centralized database that needs replication, you’d be a bit worried if this central place got attacked, so then you need some gossip-based protocol in place to allow some users to police the system. Consensus is a simple one because it allows most users to trust that consensus was agreed on correctly, as opposed to systems like transparency protocols that require users to more willingly engage in policing.
2) it is tied to non profits as well! The whole point is to fund this project by companies, no a company
3) we will support single currencies (a USD coin, for example)
4) that’s what we’re working on!
2) it is tied to non profits as well! The whole point is to fund this project by companies, no a company
3) we will support single currencies (a USD coin, for example)
4) that’s what we’re working on!
If a sufficiently large nation state orders the companies involved to deny or override a transaction, is the gossip protocol/blockchain useful at all in denying this? Or is this one of those mechanisms only used for keeping out low level/underfunded attackers?
The system is governed by an entity in Switzerland that must follow regulations, so such a scenario would not be an attack on the system (and thus not be in scope for consensus). That being said, I don't know much about laws and regulations so that's the extent of my understanding :)
Since one of the major audiences is emerging economies, what happens if one of them goes to war with another? Can one side get their superpower patrons to order Diem to freeze the accounts of the other?
I think that's a problem not just for Diem, but for current banks too. I remember reading about HSBC having to shut down Carrie Lam's accounts due to the US putting her a bunch of other government people in HK on some sanctioned list. I think HSBC actually did not freeze the accounts due to the consequences this would lead to for them and the Chinese market? It's unclear to me what happened and what will be the consequences.
2) Does Facebook (or any other for-profit company) get access to the data (now or ever in the future)?
3) So if I want to send money (from say GBP) to someone in Japan, what would happen? Is the FX exchange seamless or will I need to use some intermediary coin?
3) So if I want to send money (from say GBP) to someone in Japan, what would happen? Is the FX exchange seamless or will I need to use some intermediary coin?
2) It's a transparent payment network, so everybody (even you) gets access to the data on the network
3) That's a complicated answer that involves more than just the blockchain (as you need to convert fiat from/to digital currency) so it depends on the VASPs (the wallets) not on DIEM.
3) That's a complicated answer that involves more than just the blockchain (as you need to convert fiat from/to digital currency) so it depends on the VASPs (the wallets) not on DIEM.
2) I don't believe so.
3) The hope is you don't have to use an intermediary coin.
They have declared that they will not access the data.
However, Facebook makes extensive use of shadow profiles of people who aren't even Facebook customers. They could certainly add Diem blockchain data to those, as they will have access to said blockchain via Novi, their Diem wallet.
David Marcus and Mark Zuckerberg have both stated that data from Novi will not go to the Facebook advertising engine. However, Zuckerberg and Facebook's track record on such promises is that they consistently do this anyway. Then Zuckerberg apologises, then he does it again.
Just by looking at Facebook's past behaviour, you can assume that an important purpose for Diem is to collect personal information. Because everything they do is to collect personal information.
However, Facebook makes extensive use of shadow profiles of people who aren't even Facebook customers. They could certainly add Diem blockchain data to those, as they will have access to said blockchain via Novi, their Diem wallet.
David Marcus and Mark Zuckerberg have both stated that data from Novi will not go to the Facebook advertising engine. However, Zuckerberg and Facebook's track record on such promises is that they consistently do this anyway. Then Zuckerberg apologises, then he does it again.
Just by looking at Facebook's past behaviour, you can assume that an important purpose for Diem is to collect personal information. Because everything they do is to collect personal information.
As I said elsewhere this is not related to Novi. Novi is just a wallet using DIEM, and will have its own users (like any wallet or bank or trading platform has).
That being said, there is a lot of work being put in making sure that FB doesn't have access to Novi user data. Of course, sometimes one employee's mistake can lead to infringement of a claim, so to avoid that good frameworks have to be put into place.
That being said, there is a lot of work being put in making sure that FB doesn't have access to Novi user data. Of course, sometimes one employee's mistake can lead to infringement of a claim, so to avoid that good frameworks have to be put into place.
What other Diem Association members have even announced plans to issue a wallet?
As I understand, that number is presently zero. (Please correct me if I'm wrong on this.) And unhosted wallets won't be allowed - all consumers will need to transact via a Diem Association member. So Diem usage really is 100% Novi for the known future.
As I understand, that number is presently zero. (Please correct me if I'm wrong on this.) And unhosted wallets won't be allowed - all consumers will need to transact via a Diem Association member. So Diem usage really is 100% Novi for the known future.
Hey David! I'm actually unsure about these so I'd rather not comment besides the fact that Diem being 100% Novi would be bad (or useless) yes.
> Because everything they do is to collect personal information.
Are you really really sure that some of the things Facebook (and Google) does aren't done just to spite us ;-)?
Are you really really sure that some of the things Facebook (and Google) does aren't done just to spite us ;-)?
> low-cost, fast, reliable, accessible money transfers - clearly something missing right now in this world
Missing in the US.
At least Europe has had those for a long time already, using normal banks.
Missing in the US.
At least Europe has had those for a long time already, using normal banks.
I'm not sure I agree. First of all, it's not "Europe" but rather "Euro-accounts" (so no cross-currency transfers). Also not that fast - don't work overnight, on the weekends, payments might take a day to arrive.
I just checked - paying 10EUR from my UK account to the EUR area takes 2-4 days (I'd need to pay 15GBP for an "urgent" next-business-day transfer) (same rate as TransferWise) whereas if I want to send 10kEUR I'd pay 250 GBP (!) for a "no-fee" (!!) transfer than with TransferWise (a.k.a. scam). Paying from EUR to EUR account (cross-border) costs about 0.1% (0.38 EUR fee to send 350EUR) which isn't too bad.
Suffice to say, room for improvement.
I just checked - paying 10EUR from my UK account to the EUR area takes 2-4 days (I'd need to pay 15GBP for an "urgent" next-business-day transfer) (same rate as TransferWise) whereas if I want to send 10kEUR I'd pay 250 GBP (!) for a "no-fee" (!!) transfer than with TransferWise (a.k.a. scam). Paying from EUR to EUR account (cross-border) costs about 0.1% (0.38 EUR fee to send 350EUR) which isn't too bad.
Suffice to say, room for improvement.
The 250 GBP must be the exchange fee? If your account is in GBP and the destination is in EUR, the bank gets to charge you for the exchange. 2.5% is a typical rate. That's unfortunate, but is unrelated to the cost of transfer.
Euro transfers have become instant and 24/7 thanks to the SEPA Instant Credit architecture:
https://www.europeanpaymentscouncil.eu/what-we-do/sepa-insta...
You can transfer up to 100k EUR in less than ten seconds; works overnight and during weekends and holidays.
In the UK, at least Revolut supports this already:
https://blog.revolut.com/sepa-instant-euro-transfers-now-ava...
Euro transfers have become instant and 24/7 thanks to the SEPA Instant Credit architecture:
https://www.europeanpaymentscouncil.eu/what-we-do/sepa-insta...
You can transfer up to 100k EUR in less than ten seconds; works overnight and during weekends and holidays.
In the UK, at least Revolut supports this already:
https://blog.revolut.com/sepa-instant-euro-transfers-now-ava...
> "If your account is in GBP and the destination is in EUR, the bank gets to charge you for the exchange. 2.5% is a typical rate."
2.5% is a rather expensive fee for a GBP-EUR transfer, especially on £10,000! Some banks offer as low as 0.4% (on top of the real mid-market rate), probably even less on large transfers.
2.5% is a rather expensive fee for a GBP-EUR transfer, especially on £10,000! Some banks offer as low as 0.4% (on top of the real mid-market rate), probably even less on large transfers.
My Revolut account is moving to Lithuania though. Are UK customers keeping their UK ones?
From experience with bank accounts from 4 different European countries those instant transfers definitely don't work everywhere and are often accompanied by an extra fee.
Edit: And this is 2020. I highly welcome some innovation in this field - five years ago..
From experience with bank accounts from 4 different European countries those instant transfers definitely don't work everywhere and are often accompanied by an extra fee.
Edit: And this is 2020. I highly welcome some innovation in this field - five years ago..
Maybe it is typical with 2.5% in the UK but here in Sweden the typical is 0.5% so I feel like you are being robbed.
I don't mind the fee per se I just object to obfuscating it (which I term "fraud" thought that might not be the legal definition).
NatWest app says £0.00 fee and some FX rate but when I compare with TransferWise, the difference is £250, which means that the "FX rate" implicitly contains the fee.
Maybe not "fraud" legally but I don't want to support such non-transparent business practices.
NatWest app says £0.00 fee and some FX rate but when I compare with TransferWise, the difference is £250, which means that the "FX rate" implicitly contains the fee.
Maybe not "fraud" legally but I don't want to support such non-transparent business practices.
If it's a fixed cost, it's a fee
Yes banks charge commission (where TW usualy has a cost advantage but anyway, it's a money maker for banks and calculation of the fx rate to be used at a given moment is not something simple)
Yes banks charge commission (where TW usualy has a cost advantage but anyway, it's a money maker for banks and calculation of the fx rate to be used at a given moment is not something simple)
TransferWise also supports instant SEPA payments. The first time I transferred money to my bank in a different country and I received immediate confirmation I was mindblown.
That's from UK to SEPA, which has a delay. SEPA transfers themselves are mostly instant since about 2018.
There's sometimes a nominal fee across countries (mandated to be "no more than a local transfer"), but in many cases they are free.
There's sometimes a nominal fee across countries (mandated to be "no more than a local transfer"), but in many cases they are free.
I’m hearing about mostly instant SEPA payments but I’ve never seen them personally. DBank to DKB takes a few days, DKB to ING, the same, to bunq or N26... First direct in the UK to a EUR account. My limited anecdotal experience is “mostly delayed by at least a day.” am I really an outlier?
I've used them a few times for personal transfers. Each took less than 30 seconds until the money was booked out of my account and booked into the receivers account.
SEPA in my experience has never taken longer than 1 day unless it's SOFORT-related, which in my experience takes a bit to confirm (but the merchant knows you issued a transfer so they can rely on that).
SEPA in my experience has never taken longer than 1 day unless it's SOFORT-related, which in my experience takes a bit to confirm (but the merchant knows you issued a transfer so they can rely on that).
I think that is mainly UK banks bring bad. Here in Sweden which is also not a euro country the exchange fee is roughly 0.5% at my bank and they charge 3 euro for non-SEPA transactions and 0.15 EUR for SEPA transactions. So I would need to pay 50 EUR to transfer 10k EUR from my SEK account and just 0.15 EUR to transfer from my EUR account.
Here in Canada we have e-transfers securely from bank account to bank account, in minutes/hours.
and they are a LOT more expensive than their crypto counterparts
No, they are cheaper, by quite a bit.
Unless you count cryptocurrencies nobody actually uses.
Unless you count cryptocurrencies nobody actually uses.
These are great questions. Here are my thoughts / answers:
> 1. Is there a reason this is tied to the blockchain
For FB, you're 100% right. FB could have likely just used a relational DB in the short term. However, if you don't want to tie this to a single company (your second question), then a blockchain does make it easier for multiple entities to agree on the state of the db. I would argue that modern Proof of Stake protocols are starting to be competitive with Proof of Work in terms of security, in large part because unlike Proof of Work, they allow for both positive _and_ negative incentives for incentivizing behavior. For example, we've yet to see the types of double spend attacks on newer PoS chains (e.g. Cosmos) like the ones we saw on Ethereum Classic a few years ago.
> 2. Is there a reason this would be tied to a company
No, and in fact, this is what makes most permissionless blockchains so valuable. The problem is that most of them are not useable enough for what Facebook wants to accomplish. I say most because, in my view, Celo (https://celo.org and https://valoraapp.com) does. It's permissionless, programable, highly scalable, has a built in stablecoin and identity protocol, and most importantly, uses new zk-SNARK cryptography to let mobile apps sync trustlessly and near instantly. It also offsets 100% of its carbon emissions by buying carbon credits using block rewards.
> 3. Why a "new currency" ("stablecoin")?
I agree 100% and already the market is starting to tell us that USD pegged stablecoins are the most interesting of stablecoins.
> 4. I'm sure there are many issues with fraud/reversible transactions/KYC/anti-terrorism/anti-money-laundering that would need to be resolved somehow
Yes! This is an interesting read on the topic: https://www.coincenter.org/how-i-learned-to-stop-worrying-an...
> 1. Is there a reason this is tied to the blockchain
For FB, you're 100% right. FB could have likely just used a relational DB in the short term. However, if you don't want to tie this to a single company (your second question), then a blockchain does make it easier for multiple entities to agree on the state of the db. I would argue that modern Proof of Stake protocols are starting to be competitive with Proof of Work in terms of security, in large part because unlike Proof of Work, they allow for both positive _and_ negative incentives for incentivizing behavior. For example, we've yet to see the types of double spend attacks on newer PoS chains (e.g. Cosmos) like the ones we saw on Ethereum Classic a few years ago.
> 2. Is there a reason this would be tied to a company
No, and in fact, this is what makes most permissionless blockchains so valuable. The problem is that most of them are not useable enough for what Facebook wants to accomplish. I say most because, in my view, Celo (https://celo.org and https://valoraapp.com) does. It's permissionless, programable, highly scalable, has a built in stablecoin and identity protocol, and most importantly, uses new zk-SNARK cryptography to let mobile apps sync trustlessly and near instantly. It also offsets 100% of its carbon emissions by buying carbon credits using block rewards.
> 3. Why a "new currency" ("stablecoin")?
I agree 100% and already the market is starting to tell us that USD pegged stablecoins are the most interesting of stablecoins.
> 4. I'm sure there are many issues with fraud/reversible transactions/KYC/anti-terrorism/anti-money-laundering that would need to be resolved somehow
Yes! This is an interesting read on the topic: https://www.coincenter.org/how-i-learned-to-stop-worrying-an...
Thanks! Celo looks very interesting, I gotta try it next time I'm transferring money!
The answer is: even if any of the above held, Facebook are doing it to:
(1) build a giant sucking data-miner atop all consumer commerce;
(2) print their own money in such quantities that governments can't tell them what to do any more;
(3) establish themselves as providers of the digital identity standard for the world, so that you need to go through Facebook to use money at all.
There are those who have proposed Libra-like basket currencies seriously; Yanis Varoufakis seriously proposed that the Libra 1.0 plan would be a great idea - if done by a public institution such as the IMF, and not by a private company. https://archive.is/YKgQ9
(1) build a giant sucking data-miner atop all consumer commerce;
(2) print their own money in such quantities that governments can't tell them what to do any more;
(3) establish themselves as providers of the digital identity standard for the world, so that you need to go through Facebook to use money at all.
There are those who have proposed Libra-like basket currencies seriously; Yanis Varoufakis seriously proposed that the Libra 1.0 plan would be a great idea - if done by a public institution such as the IMF, and not by a private company. https://archive.is/YKgQ9
For those unfamiliar, davidgerard wrote a great book on blockchain hype: https://davidgerard.co.uk/blockchain/book/
And has recently come out with a book on Libra. I haven't finished it yet, but it's great so far: https://davidgerard.co.uk/blockchain/libra/
And has recently come out with a book on Libra. I haven't finished it yet, but it's great so far: https://davidgerard.co.uk/blockchain/libra/
You pretty much just described Stellar. Take a few minutes and watch Coinbase’s intro materials on it: https://www.coinbase.com/earn/stellar/lesson/1
Quite different. Stellar facilitates pinning to foreign currencies, a different problem from moving money between countries.
I like your thoughtful breakdown. Thanks for that.
The video shots of small merchants and everyday people, with voiceover "what if everyone is invited to global economy" was bothersome to watch. I don't like their underlying characterization that the lack of frictionless banking and payment systems are what's holding back Africa and poorer parts of the world. It's just not true.
The video shots of small merchants and everyday people, with voiceover "what if everyone is invited to global economy" was bothersome to watch. I don't like their underlying characterization that the lack of frictionless banking and payment systems are what's holding back Africa and poorer parts of the world. It's just not true.
> Basically, I think the underlying idea is valuable - low-cost, fast, reliable, accessible money transfers - clearly something missing right now in this world, even for the "global rich" (citizens of first-world countries), let alone for the "unbanked".
For most of the "banked" in the US, doesn't Zelle cover all that for transfers within the US?
For most of the "banked" in the US, doesn't Zelle cover all that for transfers within the US?
Zelle, Venmo, PayPal, Square, Apple Pay - there are a ton of companies that all do this same thing in the US because the bank software is terrible and expensive.
I thought stellar was similar to what the parent comment describes, but it’s also not proof of work (which makes need for blockchain unclear).
https://www.stellar.org/
I thought stellar was similar to what the parent comment describes, but it’s also not proof of work (which makes need for blockchain unclear).
https://www.stellar.org/
> Zelle, Venmo, PayPal, Square, Apple Pay - there are a ton of companies that all do this same thing in the US because the bank software is terrible and expensive.
For all intents and purposes, Zelle is the bank software, and it’s free. Zelle is backed by a bunch of banks - the majority of US checking accounts have access to use it at no cost.
For all intents and purposes, Zelle is the bank software, and it’s free. Zelle is backed by a bunch of banks - the majority of US checking accounts have access to use it at no cost.
I just checked out Stellar... sounds really interesting actually, very much in line with what I described (except blockchain - I can't see if it's public (not good) or private (not much point in it then) but I'm open to being convinced otherwise), there's just one problem... how do I even use it?? There's no app, no nothing. Ideally, I'd like something like TransferWise "I'd like to send money to X" just non-profit.
fwiw, Stellar integrates directly with Keybase.¹ I remember they did an airdrop when they launched and deposited ~100$ worth of XLM into every Keybase users' wallet.
Not sure how interesting Keybase is now, but it does allow sending money to other Keybase users directly through chat.²
[1] https://keybase.io/blog/keybase-stellar-launch
[2] https://book.keybase.io/wallet#chat
Not sure how interesting Keybase is now, but it does allow sending money to other Keybase users directly through chat.²
[1] https://keybase.io/blog/keybase-stellar-launch
[2] https://book.keybase.io/wallet#chat
It's still absurd that you need additional services just to do transfers. I can't understand why an IBAN-like system can't seem to get off the ground in the US.
Zelle is owned by several major banks, and partnered with many other banks and credit unions. It is incorporated into most of their mobile apps and online banking websites.
From a user point of view, it doesn't look like an additional service.
From a user point of view, it doesn't look like an additional service.
I moved from Europe to US via UK, so I’ve experienced banking systems in Eurozone and GBP.
Zelle doesn’t feel as convenient as regular bank transfers in Europe or UK. Some problems I experienced:
- You have to sign up separately. There’s no guarantee a recipient has enabled it.
- It’s tied to an email address for some reason. (Euro/UK bank transfers just use the regular IBAN.)
- There was a long delay in receiving and sending money when one of the Zelle accounts was new. (My transaction was stuck for at least 24h in a “pending” state.)
- The daily transaction limits are very low. My NYC rent doesn’t fit even in two Zelle payments! (In Europe, the standard limit for an instant SEPA bank transfer is 100k, and it costs nearly nothing.)
For these reasons Zelle feels very unbaked, and doesn’t replace a proper interbank fast payment system like SEPA in Eurozone.
Zelle doesn’t feel as convenient as regular bank transfers in Europe or UK. Some problems I experienced:
- You have to sign up separately. There’s no guarantee a recipient has enabled it.
- It’s tied to an email address for some reason. (Euro/UK bank transfers just use the regular IBAN.)
- There was a long delay in receiving and sending money when one of the Zelle accounts was new. (My transaction was stuck for at least 24h in a “pending” state.)
- The daily transaction limits are very low. My NYC rent doesn’t fit even in two Zelle payments! (In Europe, the standard limit for an instant SEPA bank transfer is 100k, and it costs nearly nothing.)
For these reasons Zelle feels very unbaked, and doesn’t replace a proper interbank fast payment system like SEPA in Eurozone.
I guess there's no/little money on these when you can sell higher cost alternative solutions.
I don't understand why people just can't use Ethereum for this with a little more polishing on the UI end from the devs. It has the added benefit of being decentralized, something Facebook or any other company or charity will never be. It even recently implemented proof of stake rollout so it isn't using massive environmental resources for proof of work in the future.
Of course Bitcoin was ideal for this but it went off the rails for the banking the unbanked dream when it refused to scale from a blistering 7 transactions per second and the associated high fees. Ethereum fees aren't great either, but my understanding is that massive increases in throughput are coming with sharding etc. in Ethereum 2.0. Monero would be perfect for this, but I don't know if the world is ready for true privacy and fungibility in their e-coin.
https://bitinfocharts.com/comparison/transactionfees-btc-eth...
Of course Bitcoin was ideal for this but it went off the rails for the banking the unbanked dream when it refused to scale from a blistering 7 transactions per second and the associated high fees. Ethereum fees aren't great either, but my understanding is that massive increases in throughput are coming with sharding etc. in Ethereum 2.0. Monero would be perfect for this, but I don't know if the world is ready for true privacy and fungibility in their e-coin.
https://bitinfocharts.com/comparison/transactionfees-btc-eth...
Of course Bitcoin was ideal for this but it went off the rails for the banking the unbanked dream when it refused to scale from a blistering 7 transactions per second and the associated high fees.
You can check any bitcoin dashboard (such as https://bitbo.io); the current transaction fee is 1 satoshi/vByte for a transaction. The average bitcoin transaction is ~250 bytes. 1 satoshi = $0.00019273. A transaction that can wait an hour costs about $0.05.
The "bitcoin doesn't scale" thing really isn't a thing. Lyn Alden addresses this in her "7 Misconceptions about Bitcoin" article [1]:
"In other words, suppose that the Bitcoin network is limited to 250 transactions per minute, which is low. Those transactions could average $100 or $1 million, or any number. If they average $100 each, it means only $25,000 in transaction value is performed per minute. If they average $1 million each, it means $250 million in transaction value is performed per minute. If Bitcoin grows in use as a store of value, the transaction fees and inherent limitations prioritize the largest and most important transactions; the major settlement transactions.
Additional layers built on top of Bitcoin can do an arbitrary number of transactions per minute, and settle them with batches on the actual Bitcoin blockchain. This is similar to how consumer layers like Visa or Paypal can process an arbitrary number of transactions per minute, while the banks behind the scenes settle with larger transactions less frequently."
Lightning Network is a layer 2 protocol on top of bitcoin; transactions settle in seconds and the fees are tiny—about 1 satoshi—(a fraction of a penny) per hop. Not only are they cheap, they're private as Lightning runs over Tor.
The UI/UX of the current crop of Bitcoin/lightning wallets for iOS and Android, such as BlueWallet (https://bluewallet.io) is quite good.
[1]: https://www.lynalden.com/misconceptions-about-bitcoin/
You can check any bitcoin dashboard (such as https://bitbo.io); the current transaction fee is 1 satoshi/vByte for a transaction. The average bitcoin transaction is ~250 bytes. 1 satoshi = $0.00019273. A transaction that can wait an hour costs about $0.05.
The "bitcoin doesn't scale" thing really isn't a thing. Lyn Alden addresses this in her "7 Misconceptions about Bitcoin" article [1]:
"In other words, suppose that the Bitcoin network is limited to 250 transactions per minute, which is low. Those transactions could average $100 or $1 million, or any number. If they average $100 each, it means only $25,000 in transaction value is performed per minute. If they average $1 million each, it means $250 million in transaction value is performed per minute. If Bitcoin grows in use as a store of value, the transaction fees and inherent limitations prioritize the largest and most important transactions; the major settlement transactions.
Additional layers built on top of Bitcoin can do an arbitrary number of transactions per minute, and settle them with batches on the actual Bitcoin blockchain. This is similar to how consumer layers like Visa or Paypal can process an arbitrary number of transactions per minute, while the banks behind the scenes settle with larger transactions less frequently."
Lightning Network is a layer 2 protocol on top of bitcoin; transactions settle in seconds and the fees are tiny—about 1 satoshi—(a fraction of a penny) per hop. Not only are they cheap, they're private as Lightning runs over Tor.
The UI/UX of the current crop of Bitcoin/lightning wallets for iOS and Android, such as BlueWallet (https://bluewallet.io) is quite good.
[1]: https://www.lynalden.com/misconceptions-about-bitcoin/
Not to put too fine a point on this, but here's a tweet about a $165,000,000 bitcoin transaction; the fee was $1.20: https://twitter.com/coinbeastmedia/status/133612299565221888...
I don't understand why people don't revisit DigiCash (https://en.wikipedia.org/wiki/DigiCash) for this kind of usecase. It seems like a really good fit for this type of usecase where you are giving up on the proof-of-work aspect of bitcoin, but want all the other cool properties of cryptocurrency, and has better anonymity properties.
They do. It's called Taler ( https://taler.net/ )
GNU Taler seems to not let people receiving payments be anonymous, which to me seems like a rather random design choice that has nothing to do with the underlying technology and severely limits Taler.
> Basically, I think the underlying idea is valuable - low-cost, fast, reliable, accessible money transfers - clearly something missing right now in this world, even for the "global rich" (citizens of first-world countries), let alone for the "unbanked".
I can send money to friends via PayPal or Venmo completely free. What’s missing?
I can send money to friends via PayPal or Venmo completely free. What’s missing?
Its not too fast (from bank account to bank account takes 1-3 days or so). Venmo is also arguably not free, since it contains ads now.
> low-cost, fast, reliable, accessible money transfers - clearly something missing right now in this world
The reason it isn't free is that there are loads of anti-money laundering laws that require paperwork on both ends. Sure Cryptos avoid this problem, but just means it'll get regulated or banned.
The reason it isn't free is that there are loads of anti-money laundering laws that require paperwork on both ends. Sure Cryptos avoid this problem, but just means it'll get regulated or banned.
> For most purposes, blockchain without proof of work is just a glorified git repository
Could you expand on that?
> and I'm pretty sure that not even the most law-abiding citizens want all their transactions to be public.
I believe some blockchain provide anonymous transactions (based on zero-knowledge proofs for instance).
Could you expand on that?
> and I'm pretty sure that not even the most law-abiding citizens want all their transactions to be public.
I believe some blockchain provide anonymous transactions (based on zero-knowledge proofs for instance).
> Is there a reason this is tied to the blockchain?
Yes: so that Facebook can do as it wishes and not have to follow government financial regulation.
Yes: so that Facebook can do as it wishes and not have to follow government financial regulation.
> low-cost, fast, reliable, accessible money transfers
Yes, this could help us to faster get rid of ads as a monetization model.
Yes, this could help us to faster get rid of ads as a monetization model.
I doubt that. The main issue you're trying to solve is, that the current payers of ads, corporations, have much more money available than consumers (the payers of ads in the "microtransactions" concept).
But in any case, that's at most the "next" step. First one is, literally replicate what banks do right now (possibly including minimum transaction fee on small transactions - depends on local banks / regulations) except with non-backwards tech.
But in any case, that's at most the "next" step. First one is, literally replicate what banks do right now (possibly including minimum transaction fee on small transactions - depends on local banks / regulations) except with non-backwards tech.
If Facebook thought that a global payments network was going to make them more money than advertising, then they would have invested in this ten years ago, and we would now all be heartily sick of FBcoin and all the unexpected consequences it engendered.
check out my comment on this thread, or this article:
https://www.coindesk.com/billion-dollar-returns-the-upside-o...
https://www.coindesk.com/billion-dollar-returns-the-upside-o...
[deleted]
nobody will fund a technology like Libra, owned by Facebook, in fact they already failed before
the main point is that Bitcoin is decentralized, there are many nodes in China, Iran, etc. that is why it has so much value
the main point is that Bitcoin is decentralized, there are many nodes in China, Iran, etc. that is why it has so much value
> Why a "new currency"?
You need an all digital currency to keep transaction fees cheap, and to speed up transactions especially accross countries.
Just think about it, today's currencies are backed by physical paper. At some point, if A paid B, B should receive the physical paper money for the exchange. This is known as liquidity, and it's the major reason why money transfers over the internet today are expansive and slow.
> Is there a reason this is tied to the blockchain?
Yes, blockchain is key. Look at what all modern currencies in use have in common? They are backed by a very powerful entity, mostly governments with real power (weapon and authority on actual land and people). This isn't a coincidence, whoever controls the currency has huge power, imagine being able to make money as you please and give it to yourself or others.
You can't trust any single party with such power. Governments are the closest thing people can trust today, often because they have no choice, and sometimes because there's ton and ton of scrutiny, checks and guards in place around them.
And still, when currency is physical, it is also slightly harder to make more for yourself without trail.
Now if currency was digital, it be so easy to abuse, so anyone who had single central control could easily cheat everyone else. You'd not just be in control of the currency like the government is, you'd also become in control of the ledger. That means, that single central entity does not only control the digital currency (how much of it and who it gives it too), but it also controls the exchange of it (keeps track of who has how much of it and who transfer it to who else). That's incredible power, they could just seize your money without scrupule for example.
Blockchain is about solving this issue. If the currency and ledger is controlled by a distributed blockchain, then you don't have a single central entity with all this power. Instead the power is distributed to whoever wants to participate in it.
Now this is still an area of research in some way. Proof of work was one way, and it suffers from the fact that compute majority wins, and the compute majority could actually be owned by a single entity (which owns a ton of compute resources making up the majority).
Proof of stake is the new idea, it says that everyone who wants to be a part of controlling the currency and ledger has to put a deposit amount of their own money. If they are found to have cheated or acted wrongly, they never get that money back, otherwise they get it back and a little bonus for their effort.
In this scheme, you could still have a single actor taking full control, but they'd need to have a ton of money, more money then everyone else's combined stake. So it's much harder to do so.
> Is there a reason this would be tied to a company, instead of being run by e.g. a charity?
To some extent, it doesn't matter who starts it, if it ends up being a distributed open source piece of software, that is run by people from all around the world on different machines not all controlled by one entity, then it has become something out of the hand of whoever started it. Charity or Company, neither in my opinion could be trusted with a single central solution, but they can both try to kickstart an open source distributed blockchain ledger and currency, as long as it does in fact distribute control in a way that single or minority can't control it fully.
> I'm sure there are many issues with fraud/reversible transactions/KYC/anti-terrorism/anti-money-laundering that would need to be resolved somehow
This is probably one of the biggest issue currently, in a weird way, trying to solve the problem of no single central authority also makes it difficult for the government of any country to enforce rules and regulations over it.
You need an all digital currency to keep transaction fees cheap, and to speed up transactions especially accross countries.
Just think about it, today's currencies are backed by physical paper. At some point, if A paid B, B should receive the physical paper money for the exchange. This is known as liquidity, and it's the major reason why money transfers over the internet today are expansive and slow.
> Is there a reason this is tied to the blockchain?
Yes, blockchain is key. Look at what all modern currencies in use have in common? They are backed by a very powerful entity, mostly governments with real power (weapon and authority on actual land and people). This isn't a coincidence, whoever controls the currency has huge power, imagine being able to make money as you please and give it to yourself or others.
You can't trust any single party with such power. Governments are the closest thing people can trust today, often because they have no choice, and sometimes because there's ton and ton of scrutiny, checks and guards in place around them.
And still, when currency is physical, it is also slightly harder to make more for yourself without trail.
Now if currency was digital, it be so easy to abuse, so anyone who had single central control could easily cheat everyone else. You'd not just be in control of the currency like the government is, you'd also become in control of the ledger. That means, that single central entity does not only control the digital currency (how much of it and who it gives it too), but it also controls the exchange of it (keeps track of who has how much of it and who transfer it to who else). That's incredible power, they could just seize your money without scrupule for example.
Blockchain is about solving this issue. If the currency and ledger is controlled by a distributed blockchain, then you don't have a single central entity with all this power. Instead the power is distributed to whoever wants to participate in it.
Now this is still an area of research in some way. Proof of work was one way, and it suffers from the fact that compute majority wins, and the compute majority could actually be owned by a single entity (which owns a ton of compute resources making up the majority).
Proof of stake is the new idea, it says that everyone who wants to be a part of controlling the currency and ledger has to put a deposit amount of their own money. If they are found to have cheated or acted wrongly, they never get that money back, otherwise they get it back and a little bonus for their effort.
In this scheme, you could still have a single actor taking full control, but they'd need to have a ton of money, more money then everyone else's combined stake. So it's much harder to do so.
> Is there a reason this would be tied to a company, instead of being run by e.g. a charity?
To some extent, it doesn't matter who starts it, if it ends up being a distributed open source piece of software, that is run by people from all around the world on different machines not all controlled by one entity, then it has become something out of the hand of whoever started it. Charity or Company, neither in my opinion could be trusted with a single central solution, but they can both try to kickstart an open source distributed blockchain ledger and currency, as long as it does in fact distribute control in a way that single or minority can't control it fully.
> I'm sure there are many issues with fraud/reversible transactions/KYC/anti-terrorism/anti-money-laundering that would need to be resolved somehow
This is probably one of the biggest issue currently, in a weird way, trying to solve the problem of no single central authority also makes it difficult for the government of any country to enforce rules and regulations over it.
The core feature of any cryptocurrency is "money w/o state regulation", but when you're talking about selling it for any major currency (Dollars, Euros, Sterling, Yen, RMB) guess what, you're regulated. There is no way around this, regulators are wise (more than wise, hypervigilant) to it. As a result, this stuff is just cumbersome currency that roasts the planet. No thank you.
This is exactly like the argument that electric cars aren't actually any better because grid electricity is not currently very green in most parts of the world. The response of course being that as the grid gets greener (which it does every year), your car becomes greener also. If you have a gasoline car, it will be just as dirty in 20 years as it is today.
Same thing with crypto. Yes, currently a lot of people buy and sell crypto with government-backed currency. However, the whole point is to have currency that you can use in place of normal currency. Currency that you are paid in, that you shop in, that you pay your bills in, that you pay back your friends with. At the start, there is a lot of fiat <-> crypto. But the goal is to make it so that people can use crypto for everything, and therefore never need to sell it for any major currency.
If you use crypto, every year you will need to "drop out" into fiat less and less. Just like every year your electric car gets greener.
Ironically the analogy extends even better to your parting shot:
> this stuff is just cumbersome currency that roasts the planet.
Again, short-term thinking. As a purely digital currency, cryptocurrency gets greener every year as the grid gets greener. If you want to save the planet, the first step is to electrify everything. Step 2 is to make your electricity production as green as possible (preferably with nuclear).
Same thing with crypto. Yes, currently a lot of people buy and sell crypto with government-backed currency. However, the whole point is to have currency that you can use in place of normal currency. Currency that you are paid in, that you shop in, that you pay your bills in, that you pay back your friends with. At the start, there is a lot of fiat <-> crypto. But the goal is to make it so that people can use crypto for everything, and therefore never need to sell it for any major currency.
If you use crypto, every year you will need to "drop out" into fiat less and less. Just like every year your electric car gets greener.
Ironically the analogy extends even better to your parting shot:
> this stuff is just cumbersome currency that roasts the planet.
Again, short-term thinking. As a purely digital currency, cryptocurrency gets greener every year as the grid gets greener. If you want to save the planet, the first step is to electrify everything. Step 2 is to make your electricity production as green as possible (preferably with nuclear).
Why would it be good to free currency from government regulation? This is something I often see crypto advocates blow right past as if it's self explanatory, but I don't think it is.
I like that the currency I use is managed by my government. Why should I want to switch?
I like that the currency I use is managed by my government. Why should I want to switch?
So I hate to use the word I'm about to use, because of the modern connotations associated with it, but it does apply here.
There are billions of people who are abused by their government, who cannot trust their government, who's local money is debased by their government at a whim. You are privileged (there's that word) to have a government that you feel you can trust to control the value of your savings and your purchasing power. You do not see the value proposition because there is not much of one for you. Cryptocurrency doesn't exist for you. It exists for the people who do need it. And again, there are billions of people who need it, as much as half the world's population, possibly more.
There are billions of people who are abused by their government, who cannot trust their government, who's local money is debased by their government at a whim. You are privileged (there's that word) to have a government that you feel you can trust to control the value of your savings and your purchasing power. You do not see the value proposition because there is not much of one for you. Cryptocurrency doesn't exist for you. It exists for the people who do need it. And again, there are billions of people who need it, as much as half the world's population, possibly more.
There are billions of people who are abused by their government, who cannot trust their government, who's local money is debased by their government at a whim.
The United States inflated the money supply by many trillions of dollars in the past year, which decreases the buying power of the dollar. With savings accounts paying close to 0% interest, due to inflation, savers are losing money in these accounts each year.
And while the goal of the Fed is to manage the economy to have about 2% inflation, in reality, the things that people care about—higher education, medical care, real estate in many cities—has inflated much more than 2% annually.
The dollar is being debased gradually; one day it could be sudden.
The United States inflated the money supply by many trillions of dollars in the past year, which decreases the buying power of the dollar. With savings accounts paying close to 0% interest, due to inflation, savers are losing money in these accounts each year.
And while the goal of the Fed is to manage the economy to have about 2% inflation, in reality, the things that people care about—higher education, medical care, real estate in many cities—has inflated much more than 2% annually.
The dollar is being debased gradually; one day it could be sudden.
People don't realize that at that target rate of 2% yearly, your savings lose half their purchasing power over a 10 year timespan. The number looks small, so people see that and say "oh, no big deal" but they don't realize how big of an impact it has on their net worth if their assets are mostly fiat currency. Additionally, most people don't notice how this affects their behavior and encourages people to save less and spend more, but from a macroeconomic perspective the effect is plain as day, most people have less than 1k in savings.
The 2% annual debasement rate of modern state currencies would have been a massive crisis in the era of metals. Imagine a king putting 2% less silver in the coin, year over year. We're just used to it.
But leave that aside, you said you like government-managed currency and I believe you. Venezuelans don't. The way I see it, what's stopping the EUR and USD from going down that spiral is momentum, rather than some law of nature.
I'm not convince the issuing schedule for BTC is ideal either. Grin, to pick a cybercoin which has some interesting technical innovations, issues one coin per minute, forever, and since coins are lost, this might be better.
But I like the idea of a transnational currency, where no one government is in a position to change the rate of issue, and I think Bitcoin has real potential as a refuge for value to flee to, in the event that the increasingly reckless experiments which Western governments and their central banks are making with their currencies come back to bite us.
Don't think it would spell the end of sovereign currencies, either. It would force them to be more honest, though, and that would be a good thing.
But leave that aside, you said you like government-managed currency and I believe you. Venezuelans don't. The way I see it, what's stopping the EUR and USD from going down that spiral is momentum, rather than some law of nature.
I'm not convince the issuing schedule for BTC is ideal either. Grin, to pick a cybercoin which has some interesting technical innovations, issues one coin per minute, forever, and since coins are lost, this might be better.
But I like the idea of a transnational currency, where no one government is in a position to change the rate of issue, and I think Bitcoin has real potential as a refuge for value to flee to, in the event that the increasingly reckless experiments which Western governments and their central banks are making with their currencies come back to bite us.
Don't think it would spell the end of sovereign currencies, either. It would force them to be more honest, though, and that would be a good thing.
Having some inflation is important, though, to prime the economy for growth. Low level, consistent, inflation is a good thing.
Fucking true. Zero inflation for couple decades? Absolutely destroys a nation.
Fucking false, stop spreading misinformation. The US experienced continued deflation from ~1870 to ~1890 and still saw a growth rate of around 4%.
So first, you of course picked one of the very few deflationary growth periods in history.
Second, that deflationary period was caused by a huge increase in productivity... it is known as "the second industrial revolution", and global production efficiency took off during that period.
Third, the fact that there was only 4% actually shows that growth was artificially constrained by a limited money supply; productive efficiency increased so much, we should have had better growth than we did. We would have, if we were able to grow the money supply with the economy.
In fact, the only thing that kept the money supply from completely stopping economic growth is that there actually WAS a huge increase in the money supply caused by massive gold and silver mining.
Second, that deflationary period was caused by a huge increase in productivity... it is known as "the second industrial revolution", and global production efficiency took off during that period.
Third, the fact that there was only 4% actually shows that growth was artificially constrained by a limited money supply; productive efficiency increased so much, we should have had better growth than we did. We would have, if we were able to grow the money supply with the economy.
In fact, the only thing that kept the money supply from completely stopping economic growth is that there actually WAS a huge increase in the money supply caused by massive gold and silver mining.
Not OP, but they were bringing up a counterpoint to the "absolutely" destroys a nation. The counter example did not destroy the US, proving the original statement false.
Your third point also sounds like story-telling, or fitting a story to the evidence. Does that mean it is the only possible explanation for what occurred? If not, how can we determine which explanation is correct?
Your third point also sounds like story-telling, or fitting a story to the evidence. Does that mean it is the only possible explanation for what occurred? If not, how can we determine which explanation is correct?
Yeah, you are right... it is a vast oversimplification and is not the only possible explanation.
I guess my point is that time period is clearly an outlier in a number of ways, which is why it is one of the only examples of high growth + deflation periods in history... it doesn't change the conclusion that you should aim for a small amount of inflation if you want economic growth. A single counter-example doesn't change the conclusion; just because we know there are people who have won huge jackpots in the lottery doesn't mean we stop suggesting saving money for retirement.
I guess my point is that time period is clearly an outlier in a number of ways, which is why it is one of the only examples of high growth + deflation periods in history... it doesn't change the conclusion that you should aim for a small amount of inflation if you want economic growth. A single counter-example doesn't change the conclusion; just because we know there are people who have won huge jackpots in the lottery doesn't mean we stop suggesting saving money for retirement.
Depends on the use-case. Bitcoin's current zeitgeist is digital gold/store of value and from that point of view deflation is a strength that complements inflationary currencies.
Inflation is good for an economy (assuming it's growing). It's not good for an individual.
Opinions differ substantially on this point.
No, they really don't. Uninformed opinions will argue this because they're just that... uninformed. I'm sorry but no one who has studied economics will believe this there's zero evidence to support the idea a low-level of inflation is bad. There's only crackpots and idiots who don't have economics degrees, or even enough math to understand the fucking equations (which aren't hard but also don't always provide intuitive results).
In general, without some form of inflation, you end up with a deflationary spiral because people stop spending and the economy seizes up. No one will spend money if just holding it makes it more valuable. It then becomes a race to horde as much as you can for as long as you can. It's also, quite uhhh... perplexing for me, to not increase the money supply when populations are increasing; because, they're increasing the value of the money by increasing demand for it.
Central banks are the result and answer to reckless unregulated financial markets crashing, being manipulated, and destroying lives... Oh shit, kind of sounds like bitcoin, doesn't it? Everyone does this "central bank boogeyman" and thinks it should go away but they all absolutely ignore why they exist in the first place.
There's a ton of quality stuff to be debated in regards to economics-- this is not one of them.
In general, without some form of inflation, you end up with a deflationary spiral because people stop spending and the economy seizes up. No one will spend money if just holding it makes it more valuable. It then becomes a race to horde as much as you can for as long as you can. It's also, quite uhhh... perplexing for me, to not increase the money supply when populations are increasing; because, they're increasing the value of the money by increasing demand for it.
Central banks are the result and answer to reckless unregulated financial markets crashing, being manipulated, and destroying lives... Oh shit, kind of sounds like bitcoin, doesn't it? Everyone does this "central bank boogeyman" and thinks it should go away but they all absolutely ignore why they exist in the first place.
There's a ton of quality stuff to be debated in regards to economics-- this is not one of them.
Not true at all.
People, and state economists, have confused inflation and deflation so much for their propaganda that right now is almost imposible to have a discussion around it primarily because different people don't mean the same things when they use those words.
Is the inflation you talk about consumer price inflation? is it assets price inflation? or is it money supply inflation? is the deflation caused by increases in productivity or is it caused by decrease in demand? Is inflation a product of regulations? of corruption? or was it caused by central banks and politicians' stupidity?
Those are all very different situations that require very different approaches, but because the "inflation-good deflation-bad" mantra has been repeated for so long (without any actual proof!) idiots now can't see past it, and think it's fine because they call themselves economists.
People, and state economists, have confused inflation and deflation so much for their propaganda that right now is almost imposible to have a discussion around it primarily because different people don't mean the same things when they use those words.
Is the inflation you talk about consumer price inflation? is it assets price inflation? or is it money supply inflation? is the deflation caused by increases in productivity or is it caused by decrease in demand? Is inflation a product of regulations? of corruption? or was it caused by central banks and politicians' stupidity?
Those are all very different situations that require very different approaches, but because the "inflation-good deflation-bad" mantra has been repeated for so long (without any actual proof!) idiots now can't see past it, and think it's fine because they call themselves economists.
> no one who has studied economics will believe this there's zero evidence to support the idea a low-level of inflation is bad.
That's quite the number of negations you've got there. I assume you want to say that a mild inflation make economic sense, but I think you're actually saying the opposite due to the 3 negations (no one, zero evidence, bad).
That's quite the number of negations you've got there. I assume you want to say that a mild inflation make economic sense, but I think you're actually saying the opposite due to the 3 negations (no one, zero evidence, bad).
I think it is two separate thoughts.
> no one who has studied economics will believe this - there's zero evidence to support the idea a low-level of inflation is bad.
This is like saying: "Opinions differ substantially as to whether man-made climate change is real". Yes, opinions differ, but when all mainstream scientists agree that deflation is bad, saying that "opinions differ" is quite misleading.
Economists aren't scientists.
> Economists aren't scientists.
How do you define scientist, and who else isn't included?
Like, micro-economists do a lot of interesting experimental work that certainly seems like science.
Macro-economics is pretty much entrail-reading because we fundamentally don't understand how the modern economy functions, and is massively political and hijacked by a variety of interests, but that's a subfield that even economists agree is problematic.
How do you define scientist, and who else isn't included?
Like, micro-economists do a lot of interesting experimental work that certainly seems like science.
Macro-economics is pretty much entrail-reading because we fundamentally don't understand how the modern economy functions, and is massively political and hijacked by a variety of interests, but that's a subfield that even economists agree is problematic.
Scientists should have falsifiable theories, for starters.
Actually to my mind that is all you need for science: observe, make a falsifiable hypothesis, try to falsify your own hypothesis.
That is... not most economics.
Actually to my mind that is all you need for science: observe, make a falsifiable hypothesis, try to falsify your own hypothesis.
That is... not most economics.
Is geology a science?
They have most of the same issues as economics (modulo the political stuff), but everyone seems OK with it.
Also, Popper's falsification is a pretty unrealistic account of how science actually works, and it only really works as advertised where you can run effective experimental designs (which economics and geology, amongst other disciplines) have a problem with.
They have most of the same issues as economics (modulo the political stuff), but everyone seems OK with it.
Also, Popper's falsification is a pretty unrealistic account of how science actually works, and it only really works as advertised where you can run effective experimental designs (which economics and geology, amongst other disciplines) have a problem with.
Geology definitely has more experimental falsification attempts going on than economics.
If you have a theory that is impossible to falsify experimentally, we're no longer talking about science (at least if your idea of science is the pursuit of objective truth). Modern "science" running amok with people more concerned with attempting to prove themselves correct than find the truth doesn't change that.
> Popper's falsification is a pretty unrealistic account of how science actually works
That's the rub though. A pretty strong argument can be made that "science" is not working and that "scientists" have lost their way, if you look at things like the reproducibility crisis.
If you have a theory that is impossible to falsify experimentally, we're no longer talking about science (at least if your idea of science is the pursuit of objective truth). Modern "science" running amok with people more concerned with attempting to prove themselves correct than find the truth doesn't change that.
> Popper's falsification is a pretty unrealistic account of how science actually works
That's the rub though. A pretty strong argument can be made that "science" is not working and that "scientists" have lost their way, if you look at things like the reproducibility crisis.
> Imagine a king putting 2% less silver in the coin, year over year.
This happened fairly often, and it's called debasement:
https://en.wikipedia.org/wiki/Debasement
https://www.economics.utoronto.ca/munro5/MONEYLEC.htm
This happened fairly often, and it's called debasement:
https://en.wikipedia.org/wiki/Debasement
https://www.economics.utoronto.ca/munro5/MONEYLEC.htm
A word I specifically used, yes.
A fun quote from the Wikipedia page:
> If done too frequently, debasement may lead to a new coin being adopted as a standard currency
Indeed a risk!
A fun quote from the Wikipedia page:
> If done too frequently, debasement may lead to a new coin being adopted as a standard currency
Indeed a risk!
> The 2% annual debasement rate of modern state currencies would have been a massive crisis in the era of metals. Imagine a king putting 2% less silver in the coin, year over year. We're just used to it.
Say what? Coins were intrinsically valued and not used like currency as it is today. It wasn't until about the 1500s we even really see currency being used and it was hand waves a bunch of stuff thanks to the Dutch merchant class. In Rome people didn't spend money, they hoarded it, because the pile itself was a sign of wealth. Spending it was looked down upon. They instead purchased primarily through bartering of goods and resources. There was no middle class either to spend money, you were nobility, a solider, or a slave.
A lot of folks want to apply modern economics to historical contexts where it cannot be. There's too much missing when taking in only from the lens of Economics to evaluate or judge things accurately.
Say what? Coins were intrinsically valued and not used like currency as it is today. It wasn't until about the 1500s we even really see currency being used and it was hand waves a bunch of stuff thanks to the Dutch merchant class. In Rome people didn't spend money, they hoarded it, because the pile itself was a sign of wealth. Spending it was looked down upon. They instead purchased primarily through bartering of goods and resources. There was no middle class either to spend money, you were nobility, a solider, or a slave.
A lot of folks want to apply modern economics to historical contexts where it cannot be. There's too much missing when taking in only from the lens of Economics to evaluate or judge things accurately.
> Grin, to pick a cybercoin which has some interesting technical innovations, issues one coin per minute, forever.
With a 60 Grin block reward and 1 minute block interval, it's actually 1 Grin per second, forever.
With a 60 Grin block reward and 1 minute block interval, it's actually 1 Grin per second, forever.
> Why would it be good to free currency from government regulation?
Obviously this is a huuuuge question, but it's such a good one.
The simplest compact answer, at least to me (and it may in fact be an oversimplification) goes something like this:
* Nearly invariably (and with a decreasing number of exceptions as technology advances), states which have control over both sides of the economic equation (ie, monetary concerns as well as national finance) find themselves unable to resist devolving into empire, and a specific type of empire called a "welfare-warfare" state, where the money supply is carefully controlled in such a way as to produce just enough support (often through pseudoscientific 'macro-economic' analysis and 'unemployment' prevention) to preclude revolution, while also projecting military power on poorer parts of the world in order to capture resources in a misguided effort to service the never-ending debt that accompanies the fiat money system.
In this view (and to be clear, it's one I hold), states with these powers (a clear conflict of interest, IMO) will continue to plunder the earth and attempt to enslave its people indefinitely, and can only be practically stopped by the economic adjustment that comes from the introduction of a hard currency (which causes the cycle of debt service to become impossibly onerous, even for an empire state).
* For a less oversimplified version, I might recommend Ron Paul's book "End the Fed", which is an introduction to the history of hard-money economics and can be read in a day or two.
* For an even less oversimplified version, you'll need to delve into the "Chicago School" and / or "Austrian School" of economics. Milton Friedman and Ludwig Von Mises are probably the best known scholars of each.
Obviously this is a huuuuge question, but it's such a good one.
The simplest compact answer, at least to me (and it may in fact be an oversimplification) goes something like this:
* Nearly invariably (and with a decreasing number of exceptions as technology advances), states which have control over both sides of the economic equation (ie, monetary concerns as well as national finance) find themselves unable to resist devolving into empire, and a specific type of empire called a "welfare-warfare" state, where the money supply is carefully controlled in such a way as to produce just enough support (often through pseudoscientific 'macro-economic' analysis and 'unemployment' prevention) to preclude revolution, while also projecting military power on poorer parts of the world in order to capture resources in a misguided effort to service the never-ending debt that accompanies the fiat money system.
In this view (and to be clear, it's one I hold), states with these powers (a clear conflict of interest, IMO) will continue to plunder the earth and attempt to enslave its people indefinitely, and can only be practically stopped by the economic adjustment that comes from the introduction of a hard currency (which causes the cycle of debt service to become impossibly onerous, even for an empire state).
* For a less oversimplified version, I might recommend Ron Paul's book "End the Fed", which is an introduction to the history of hard-money economics and can be read in a day or two.
* For an even less oversimplified version, you'll need to delve into the "Chicago School" and / or "Austrian School" of economics. Milton Friedman and Ludwig Von Mises are probably the best known scholars of each.
I'm not sure I understand the welfare-warfare model. It seems like it requires a bunch of preconditions:
* The cycle of debt needs to be bootstrapped. You need some initial borrowing well beyond current (expected) repayment capacity. This implies both some overspending and lack of due diligence by lenders willing to extend the rope.
* The debt is denominated in a currency the borrower doesn't control. If you're American borrowing dollars, or Russia borrowing roubles, you can always deflate the currency to moot the debt.
* The state has no legal leverage against lenders. A continuation of the tactics above-- I could imagine a desperate nation simply refusing to redeem its bonds, or even prosecuting people attempting to claim then.
There may be incentives and default-approaches that encourage the growth of empire to feed a debt addiction, but it's far from the only way. In the worst case, you end up with a default and limited to dealing with lenders who are legally required to deal with you (i.e. requiring pension plans or state-owned enterprises to sponge up government bonds) until someone else is willing to take a punt.
* The cycle of debt needs to be bootstrapped. You need some initial borrowing well beyond current (expected) repayment capacity. This implies both some overspending and lack of due diligence by lenders willing to extend the rope.
* The debt is denominated in a currency the borrower doesn't control. If you're American borrowing dollars, or Russia borrowing roubles, you can always deflate the currency to moot the debt.
* The state has no legal leverage against lenders. A continuation of the tactics above-- I could imagine a desperate nation simply refusing to redeem its bonds, or even prosecuting people attempting to claim then.
There may be incentives and default-approaches that encourage the growth of empire to feed a debt addiction, but it's far from the only way. In the worst case, you end up with a default and limited to dealing with lenders who are legally required to deal with you (i.e. requiring pension plans or state-owned enterprises to sponge up government bonds) until someone else is willing to take a punt.
The problem with an argument that welfare states 'nearly invariably' devolve into empire is that even the most cursory examination of the world's welfare states makes it clear they nearly invariably don't.
The reverse argument actually works much better: throughout millenia of metallic standards countries regularly fought wars to plunder gold reserves from weaker states to repay their debts or boost their economy. And didn't even make enough from doing so to be able to afford welfare. Now they don't have to acquire shiny metal every time things are bad, they very seldom fight wars and even relinquished control over the empires they'd built under the gold standard. If there is a causal relationship between monetary systems and empire building, it's quite clear that it works the opposite way round and fiat money reduces the tendency to use military power in service of economic growth.
The reverse argument actually works much better: throughout millenia of metallic standards countries regularly fought wars to plunder gold reserves from weaker states to repay their debts or boost their economy. And didn't even make enough from doing so to be able to afford welfare. Now they don't have to acquire shiny metal every time things are bad, they very seldom fight wars and even relinquished control over the empires they'd built under the gold standard. If there is a causal relationship between monetary systems and empire building, it's quite clear that it works the opposite way round and fiat money reduces the tendency to use military power in service of economic growth.
Obviously the biggest one is concern over things like hyperinflation, which has happened in the real-world many times.
Or, not quite at hyperinflation, but your government is enacting policies based on MMT or similar and you are worried that this could hurt you (as a holder of the currency) in the long-run.
Or, maybe you're worried about governments being able to dictate what you are allowed to purchase with "their" money.
Or, maybe you want to send your money somewhere your government doesn't want you to send it (or their government doesn't want the other party to get it).
Obviously there is a lot more to cryptocurrency than just "not being issued by a government" as well though. There is general privacy benefits (Monero) or the promise of innovation if you have programmable money / contracts (Ethereum).
Or, not quite at hyperinflation, but your government is enacting policies based on MMT or similar and you are worried that this could hurt you (as a holder of the currency) in the long-run.
Or, maybe you're worried about governments being able to dictate what you are allowed to purchase with "their" money.
Or, maybe you want to send your money somewhere your government doesn't want you to send it (or their government doesn't want the other party to get it).
Obviously there is a lot more to cryptocurrency than just "not being issued by a government" as well though. There is general privacy benefits (Monero) or the promise of innovation if you have programmable money / contracts (Ethereum).
I don't always agree w/ my government here in the US, but I do like that--while it's not a perfect process--as a democracy I can influence it. The reason it's illegal to buy certain things in the US (people, organs, drugs, assassinations) is that we all got together and thought people shouldn't do that. Many people disagree but, that's what voting is for. Subverting the will of a democratic people is... immoral?
The typical counterargument is something like "well what about Saudi Arabia", but I think it's pretty easy for an oppressive regime to just say "you can't use cryptocurrency" and punish you severely for it--to the degree you won't.
Anyway, I just don't think cryptocurrency is a solution to this, and even if it is it's antidemocratic.
The typical counterargument is something like "well what about Saudi Arabia", but I think it's pretty easy for an oppressive regime to just say "you can't use cryptocurrency" and punish you severely for it--to the degree you won't.
Anyway, I just don't think cryptocurrency is a solution to this, and even if it is it's antidemocratic.
You assume that government is good and prohibited uses are bad.
But your gov banned wikileaks bank accounts in the past and that is the perfect example of the case when the gov is definitely is a malicious actor (while their behaviour perfectly rational from their side of things).
Govs do war crimes, mass espionage and human rights violations. That should be addressed as well.
But your gov banned wikileaks bank accounts in the past and that is the perfect example of the case when the gov is definitely is a malicious actor (while their behaviour perfectly rational from their side of things).
Govs do war crimes, mass espionage and human rights violations. That should be addressed as well.
Yes, but it should be addressed democratically - protests, lobbying your representatives, even voting. Inventing a new currency that is, for a little while, hard to track by the government isn't a real solution, it's just pretending the problem doesn't exist.
The government is persecuting WikiLeaks financially because that is easy to do. Even if a cryptocurrency were to take off as a currency and still be untraceable, the government would just move on to some other form of persecution. The real problem to be addressed is the persecution of a useful legitimate organization by an ostensibly democratic government. The form that persecution takes is secondary.
The government is persecuting WikiLeaks financially because that is easy to do. Even if a cryptocurrency were to take off as a currency and still be untraceable, the government would just move on to some other form of persecution. The real problem to be addressed is the persecution of a useful legitimate organization by an ostensibly democratic government. The form that persecution takes is secondary.
> it should be addressed democratically - protests, lobbying your representatives, even voting.
That hasn't worked yet for Wikileaks. If this worked and/or was the best way to deal with the types of problems Wikileaks is exposing, there would be no need for Wikileaks to exist.
The reason Wikileaks does exist is because, typically, when we attempt to address atrocities "democratically" we get nowhere.
On the other hand...
> Inventing a new currency that is, for a little while, hard to track by the government
This _has_ worked for Wikileaks in the past. When the US persecuted Wikileaks, Bitcoin helped to heavily negate the immediate impact of this action.
> The form that persecution takes is secondary.
In that case, why can't the form that Wikileaks' solutions take be secondary as well? If we are in agreement that Wikileaks is an important organization, then when addressing atrocities "democratically" fails, what would be wrong with short-term innovation?
That hasn't worked yet for Wikileaks. If this worked and/or was the best way to deal with the types of problems Wikileaks is exposing, there would be no need for Wikileaks to exist.
The reason Wikileaks does exist is because, typically, when we attempt to address atrocities "democratically" we get nowhere.
On the other hand...
> Inventing a new currency that is, for a little while, hard to track by the government
This _has_ worked for Wikileaks in the past. When the US persecuted Wikileaks, Bitcoin helped to heavily negate the immediate impact of this action.
> The form that persecution takes is secondary.
In that case, why can't the form that Wikileaks' solutions take be secondary as well? If we are in agreement that Wikileaks is an important organization, then when addressing atrocities "democratically" fails, what would be wrong with short-term innovation?
If you're assuming that you can work around an imperfect government, which you don't think can be fixed democratically, through cryptocurrency, especially for a core statehood domain, I have a bridge in Brooklyn to sell you :-)
> You assume that government is good and prohibited uses are bad.
Not quite. We assume that government is controlled by the people and thus I have some influence in its operation. The state often does truly horrible things, but so do plenty of organizations that I cannot control at all. I'll take the one that I have some degree of influence on.
Not quite. We assume that government is controlled by the people and thus I have some influence in its operation. The state often does truly horrible things, but so do plenty of organizations that I cannot control at all. I'll take the one that I have some degree of influence on.
All getting together and deciding on something is the rosy version of how our democracys laws come to be or how we decide to go to war, for instance. It feels like people "all got together" if you accept that the apparent consensus of the public you perceive through news and other media is a real reflection of their sentiments rather than a rudder on the boat of public opinion. See Chomsky's manufacturing consent. The "public discourse" is really always a mix of propaganda and real ground truth, and they're hard to separate, but there are certainly strong influences exerted by organized groups.
I'm not a finance expert, but I don't think those issues are caused by the kind of money used.
People make mistakes, some of them are greedy, powerful people want to keep their power, etc..
You can't fix people with a currency.
And humans are creative, if you switch over to crypto, they'll find a new way of doing the same old things..
My government not wanting me to send money somewhere: Well, this might be a clichè, but apart from slightly limiting my freedom this prevents bad guys doing nasty stuff aswell.
People make mistakes, some of them are greedy, powerful people want to keep their power, etc..
You can't fix people with a currency.
And humans are creative, if you switch over to crypto, they'll find a new way of doing the same old things..
My government not wanting me to send money somewhere: Well, this might be a clichè, but apart from slightly limiting my freedom this prevents bad guys doing nasty stuff aswell.
The end of the gold standard in the 70s meant the US could "afford" to fight infinite wars by just printing dollars and passing the real cost to the rest of the world, that is why the US is now the world's biggest borrower nation when it used to be the world's biggest creditor nation. The current state of endless military interventions is only possible because of the huge deficits in the US that are not possible with hard money.
>"...My government not wanting me to send money somewhere: Well, this might be a clichè, but apart from slightly limiting my freedom this prevents bad guys doing nasty stuff aswell..."
Bad guys get around it one or the other way. You do not.
Bad guys get around it one or the other way. You do not.
Yeah, but both hyperinflation and hyperdeflation have occurred with Bitcoin.
At least with fiat currency, you have a central bank that can TRY to take steps to fix those conditions.
At least with fiat currency, you have a central bank that can TRY to take steps to fix those conditions.
I agree with you, but there are some people around the world that don't trust their governments. A use-case most people here would agree with is in the yellow economic circle in Hong Kong: https://en.wikipedia.org/wiki/Yellow_economic_circle
Using a cryptocurrency is kind of like a technological band-aid to a political problem. Viewed through the lens as a form of peaceful protest against the government, it makes sense. Otherwise, it's completely your call if you want to make transactions where the receiver has no obligation to provide the product or service you paid for.
Using a cryptocurrency is kind of like a technological band-aid to a political problem. Viewed through the lens as a form of peaceful protest against the government, it makes sense. Otherwise, it's completely your call if you want to make transactions where the receiver has no obligation to provide the product or service you paid for.
It's a very niche use case, though. Especially for creating a new global currency, used by everyone.
And those people are probably screwed anyway, unfortunately for them. If a big government hates your guts... you're not going to make it.
Might be safer for them to buy gold and just bolt.
And those people are probably screwed anyway, unfortunately for them. If a big government hates your guts... you're not going to make it.
Might be safer for them to buy gold and just bolt.
It is easier to carry cryptocurrency than gold while fleeing from armed men.
Agreed.
How about the first point, that it solves a problem most people don't have? Why would this be a mass market product? What's the benefit for J. Random?
How about the first point, that it solves a problem most people don't have? Why would this be a mass market product? What's the benefit for J. Random?
I'm copying a comment I made earlier that answers this question:
So I hate to use the word I'm about to use, because of the modern connotations associated with it, but it does apply here. There are billions of people who are abused by their government, who cannot trust their government, who's local money is debased by their government at a whim. You are privileged (there's that word) to have a government that you feel you can trust to control the value of your savings and your purchasing power. You do not see the value proposition because there is not much of one for you. Cryptocurrency doesn't exist for you. It exists for the people who do need it. And again, there are billions of people who need it, as much as half the world's population, possibly more.
So I hate to use the word I'm about to use, because of the modern connotations associated with it, but it does apply here. There are billions of people who are abused by their government, who cannot trust their government, who's local money is debased by their government at a whim. You are privileged (there's that word) to have a government that you feel you can trust to control the value of your savings and your purchasing power. You do not see the value proposition because there is not much of one for you. Cryptocurrency doesn't exist for you. It exists for the people who do need it. And again, there are billions of people who need it, as much as half the world's population, possibly more.
Oh, I forgot something.
> whose local money is debased by their government at a whim
How do you reconcile this with the wild speculation happening for Bitcoin, the only widely adopted cryptocurrency? It would definitely not be a solid investment vehicle. I mean, I understand the desire to use it out of desperation, but it's still not a solid alternative. You're just at the whims of the world's miners and speculators.
> whose local money is debased by their government at a whim
How do you reconcile this with the wild speculation happening for Bitcoin, the only widely adopted cryptocurrency? It would definitely not be a solid investment vehicle. I mean, I understand the desire to use it out of desperation, but it's still not a solid alternative. You're just at the whims of the world's miners and speculators.
Well, if you look at the volatility of bitcoin in particular, you'll see that it is decreasing pretty steadily. The first big bull run was very significant, 1000x, whereas the last bull market was only about 100x. The current one who knows, but it's looking like it will be about 10x. This volatility is a part of the price discovery process for any new asset class.
Fiat currency may appear stable, but it is not. It appears stable because it is used as the unit of account for all other assets in a country. In the long run, any freely floating asset will be more stable than any fiat currency managed the way modern ones are managed, via a central bank, provided that the supply change of that freely floating asset is predictable. Gold, for example, has a supply increase that is predictable. Central bank controlled fiat currencies are by definition not predictable in their supply, and this makes assets that are more suited to saving/investment, regardless of short term volatility. Nobody can empty your savings into their own pocket by printing gold or bitcoin.
Fiat currency may appear stable, but it is not. It appears stable because it is used as the unit of account for all other assets in a country. In the long run, any freely floating asset will be more stable than any fiat currency managed the way modern ones are managed, via a central bank, provided that the supply change of that freely floating asset is predictable. Gold, for example, has a supply increase that is predictable. Central bank controlled fiat currencies are by definition not predictable in their supply, and this makes assets that are more suited to saving/investment, regardless of short term volatility. Nobody can empty your savings into their own pocket by printing gold or bitcoin.
I'm doubtful that it will be adopted in developing and underdeveloped countries, but it's something we will only be able to check in a few decades.
governments or their people try to tie prosperity and access to morality, in arbitrary ways outside of their constitutional framework in arbitrary conditions that change over time, and are different across borders
having an optional liquid payment system outside of their control solves that
and the existence of that optional liquid payment system has the possibility of making their controlled one redundant
having an optional liquid payment system outside of their control solves that
and the existence of that optional liquid payment system has the possibility of making their controlled one redundant
Because the government will not always be on your side, as 2020 demonstrated so well what many peoples outside the US have know from experience for decades.
Who do you resort to if you get defrauded through blockchain currencies... ?
The Trusty Libertarian Neighborhood Watch?
The Trusty Libertarian Neighborhood Watch?
This is a valid concern, but what do you say to the current system that does not prevent all kinds of fraud. Perhaps even rampant with it. An easy search will show you that large regulated institutions participate and engage in fraud at all levels of their institution. Why is it that crypto must bear a larger burden of scrutiny against the status quo?
I believe that fraud is easier to identify and financially punish on public blockchains. Exchanges and other entities already have the ability to blacklist an address's assets and prevent them from off-ramping into fiat ms being used in future transfers. Businesses exist today to prevent payments of blacklisted assets. Compared to cash, blockchain based cryptoassets have more choice in enforcement against fraud. Also, crypto assets can be seen by all publicly on chain. It fairly easy to trace the work of cryptoasset fraudsters
I believe that fraud is easier to identify and financially punish on public blockchains. Exchanges and other entities already have the ability to blacklist an address's assets and prevent them from off-ramping into fiat ms being used in future transfers. Businesses exist today to prevent payments of blacklisted assets. Compared to cash, blockchain based cryptoassets have more choice in enforcement against fraud. Also, crypto assets can be seen by all publicly on chain. It fairly easy to trace the work of cryptoasset fraudsters
> Why is it that crypto must bear a larger burden of scrutiny against the status quo?
Because the status quo is here and change is costly and risky. Because we know about the limitations and failure modes of the status quo.
Because the status quo is here and change is costly and risky. Because we know about the limitations and failure modes of the status quo.
The police, just like when you use cash for commerce and someone scams you.
Yeah, but then what's the point?
If the whole point of cryptocurrencies is to work around the government and cryptocurrencies are going to strip them of various tools they use (control over inflation and monetary mass, monetary controls in the sense of taking money outside of a country, etc), governments will most likely not allow that, for pretty solid reasons.
It's an interesting experiment, I'll grant it that. But I don't think it can have its cake and eat it, too. I guess we'll have to wait and see.
If the whole point of cryptocurrencies is to work around the government and cryptocurrencies are going to strip them of various tools they use (control over inflation and monetary mass, monetary controls in the sense of taking money outside of a country, etc), governments will most likely not allow that, for pretty solid reasons.
It's an interesting experiment, I'll grant it that. But I don't think it can have its cake and eat it, too. I guess we'll have to wait and see.
Why do you feel so much the need to blame someone else?
So the solution is "caveat emptor"?
> Again, short-term thinking. As a purely digital currency, cryptocurrency gets greener every year as the grid gets greener.
I'm happy to pause all cryptocurrency mining and transactions until humanity is carbon free. I doubt long BTCs will be though.
I'm happy to pause all cryptocurrency mining and transactions until humanity is carbon free. I doubt long BTCs will be though.
Ah yes, the luddite approach, an age-old classic.
You can dismiss it as such, but can you really deny that:
- Cryptocurrency uses tons of electricity
- Climate change is real and super bad
I would (obviously) rather have a livable Earth than cryptocurrency, and I don't think that's weird.
- Cryptocurrency uses tons of electricity
- Climate change is real and super bad
I would (obviously) rather have a livable Earth than cryptocurrency, and I don't think that's weird.
Las Vegas also has a shitton of electric waste, how about we start suddenly going green with that? How is it that people only care about green earth when the target is the smallest slice of the pie?
Oh I care about that too, and I also care about the draining of aquifers in the US Southwest, etc. etc. But this is a cryptocurrency thread so, here we are.
Bitcoin is not that small a slice nowadays, though. Estimates put it higher than Las Vegas.
- Yes, but a significant portion of that is coming from renewables / excess generation. Additionally, work is constantly being done to improve the energy efficiency of crypto.
- Climate change is real, but I think it would need to be much worse than it is in order to justify halting human progress. In fact, continued human progress is our best bet for halting climate change.
- False dichotomy.
- Climate change is real, but I think it would need to be much worse than it is in order to justify halting human progress. In fact, continued human progress is our best bet for halting climate change.
- False dichotomy.
That might work, until you need to pay your tax bill. Or sell to the public sector. These are large parts of the economy! And for most people (I know mot everyone or everywhere), do you really want to manage accounts and deal with tax returns for multiple currencies when one already is accepted everywhere in town?
How is there still so much of ignorance over cryptocurrency this far along after its inception?
Just because you buy and sell gold with major currencies doesn't mean gold is regulated. Crypto isn't much different. If you can get it anonymously, you can move it anywhere you want as long as you stay on the blockchain. Once you leave the blockchain, you aren't dealing with crypto anymore. Once you sell gold you aren't dealing with gold anymore.
I don't know about Diem in particular, but a state or corporate issued currency is not a general indictment of cryptocurrency.
Just because you buy and sell gold with major currencies doesn't mean gold is regulated. Crypto isn't much different. If you can get it anonymously, you can move it anywhere you want as long as you stay on the blockchain. Once you leave the blockchain, you aren't dealing with crypto anymore. Once you sell gold you aren't dealing with gold anymore.
I don't know about Diem in particular, but a state or corporate issued currency is not a general indictment of cryptocurrency.
You're talking about a commodity, not a currency. No one walks around with gold nuggets (or jugs of milk, or bales of wheat) in their pocket because our economy doesn't use the barter system.
The difference between cryptocurrencies and other commodities is that other commodities have intrinsic worth. You can drink milk, you can eat wheat. You can't do anything with cryptocurrency, it's just a long, meaningless number.
The difference between cryptocurrencies and other commodities is that other commodities have intrinsic worth. You can drink milk, you can eat wheat. You can't do anything with cryptocurrency, it's just a long, meaningless number.
Well, its a long number that satisfies a simple predicate, set by fiat, that makes this class of numbers rare. It is the ultimate "artificial scarcity"! It's too bad there can't be a better way to add new values into the system that scales better with, say, how much the system is used, or how much utility it gives to people, instead of how much oil you can afford to burn to get one.
It’s just a long number with no intrinsic worth. Like money.
Money is backed by a central bank that is accountable to a government body. Crypto is backed by speculation and tech bros (shorthand for the hyper technocratic libertarian).
Accountable to a government body with opaque motives and capture over its citizens. Crypto has inspectable source code and miners and coin holders can jump ship if shenanigans are perceived
How’d that Ethereum DAO attack go? Some folks just decided to hard fork the chain. Much trust, such governance.
I’d elect for a suboptimal government over such mechanisms any day, which seems to be a global consensus when you observe the lack of volatility in reserve currency values.
I’d elect for a suboptimal government over such mechanisms any day, which seems to be a global consensus when you observe the lack of volatility in reserve currency values.
Crypto is nascent and I would expect finger burning as part of the path to long term stability. I'm not personally wedded to any of the current implementations in their current versions, but long term the concept of crypto currency supplants governmental fiat money
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Then the market decided that the new chain was more valuable than the original. Still decentralized. Forks are fair game.
Hence why crypto can't be taken seriously as a currency. Imagine explaining to a non tech family member or friend why their dollars have zero value now because they’re on the wrong chain.
That's not how forks work.
If they had sold some items for Eth just before the fork, they will never recover the Eth, and they may be unable to recover the items either. So yes, in a fork people lose money.
forks set their genesis state as a snapshot of a block on the original chain. if anything you now have twice as much money since your account has funds on the old chain and the new one
Crypto is backed by immense amounts of power (electricity), and more specifically, computing power (which is scarce)
Money (at least in the US) is backed by the "full faith of the US Government" for whatever that is worth.
https://seekingalpha.com/article/145722-what-really-backs-th...
a lot of people like that crypto isn't backed by a gov, but i'd like to believe that most people would agree that the government has some intrinsic worth.
https://seekingalpha.com/article/145722-what-really-backs-th...
a lot of people like that crypto isn't backed by a gov, but i'd like to believe that most people would agree that the government has some intrinsic worth.
It is literally worth trillions ($27t)! The credit-worthiness of the USD is so good we've sold trillions of them. It's just such an inarguable stat haha.
If the US or EU (etc.) valued their goods and services in BTC, banked in BTC, built monetary and foreign policy around BTC then you would be correct. It is all meaningless, and that's the definition of fiat.
What distinguishes one fiat from another is "do important people believe in it". There may come a day when that's true for cryptocurrencies, but that day is not today.
Further, I doubt it ever will come, because cryptocurrency's core scarcity hamstrings monetary policy. No competent government would ever accept such restrictions. This is a feature for cryptocurrency enthusiasts (digital gold bugs) but a huge shortcoming for everyone else.
What distinguishes one fiat from another is "do important people believe in it". There may come a day when that's true for cryptocurrencies, but that day is not today.
Further, I doubt it ever will come, because cryptocurrency's core scarcity hamstrings monetary policy. No competent government would ever accept such restrictions. This is a feature for cryptocurrency enthusiasts (digital gold bugs) but a huge shortcoming for everyone else.
I agree with the argument that it doesn’t make sense for the United States. Other countries using USD already don’t have control over monetary policy.
Oh yeah, totally fair and an interesting difference between Diem and other cryptocurrencies. I still think volatility and transaction latency/costs are an issue, but assuming we fix those (and stipulating they can be fixed) it doesn't seem unwise for smaller countries to use cryptocurrencies. It would more or less be gold standard monetary policy in a box, and while that system has drawbacks, a nice thing about it is it's pretty hard to corrupt. It would be harder (not impossible, but meaningfully harder) to manipulate currency and politically choose winners and losers via monetary policy, which is a big deal especially for growing or newly stable countries.
But for those countries, it really seems like choosing Diem is the worst of both worlds. You're still pinned to the Dollar, you're still at the whim of unaccountable controlling stakeholders, and you have all the downsides of cryptocurrency on top of it. I struggle to think of a group outside of Facebook that Diem is at all good for, honestly.
But for those countries, it really seems like choosing Diem is the worst of both worlds. You're still pinned to the Dollar, you're still at the whim of unaccountable controlling stakeholders, and you have all the downsides of cryptocurrency on top of it. I struggle to think of a group outside of Facebook that Diem is at all good for, honestly.
Also agreed on Diem. My best guess is it’s a way to legally get around the legacy financial system to some end. Which end I don’t know yet.
You changed the subject completely. What does your comment have to do with it being regulated or not?
You're trying to make a semantic argument and say that cryptocurrencies aren't regulated until you sell them for other currencies that are. My counterargument--where admittedly I skipped some steps and didn't explain very well--is that that turns cryptocurrencies into a commodity, not a currency, and that cryptocurrencies are particularly valueless commodities.
FWIW, you're saying that while cryptocurrency stays on the blockchain it's not regulated. That's definitely not true in the US--people have gone to jail for not complying with financial regulation and reporting laws [1]--and is likely soon to be even less true [2].
[1]: https://digitalcommons.nyls.edu/cgi/viewcontent.cgi?article=...
[2]: https://news.bitcoin.com/cryptocurrency-act-of-2020/
FWIW, you're saying that while cryptocurrency stays on the blockchain it's not regulated. That's definitely not true in the US--people have gone to jail for not complying with financial regulation and reporting laws [1]--and is likely soon to be even less true [2].
[1]: https://digitalcommons.nyls.edu/cgi/viewcontent.cgi?article=...
[2]: https://news.bitcoin.com/cryptocurrency-act-of-2020/
Gold and crypto are hardly comparable. Start by factoring in all the crime & scams being done via crypto and you've got a general public practically begging for government intervention for cryptocurrencies.
compared with all the crime and scams done with fiat currencies
Well, one is a new phenonenom and other is established.
10 years of debatable so-called-crimes with crypto VS at least 5000 years of wars, crimes and corruption with gold and government money...which side are we supposed to be on?
You have to remember 99% of the general public do not think in this manner. Same dilemma as alcohol vs weed/psychedelics.
Ok, but that doesn't alter my point.
If you ever try to cross any border custom with more than a certain amount of gold, you'd realize that it's more regulated than you think it is.
That is obvious, but that is not something especially unique to gold - pretty much everything physical is regulated at the border. Yours is more of a statement about border security than gold. To bring it back to crypto, you can easily cross a border without your crypto being touched.
> If you can get it anonymously, you can move it anywhere you want as long as you stay on the blockchain
Q: Is this fundamentally different to having a suitcase full of cash?
Q: Is this fundamentally different to having a suitcase full of cash?
No, but only if your suitcase will only open if unlocked by a cryptographically secure key and no one can open it through other methods. They can't steal the suitcase itself either. And you can instantly teleport the contents of your suitcase to an equivalent suitcase held by any other individual on the planet. And third parties can't arbitrarily devalue the contents of your suitcase by printing more of it.
The last part of this almost certainly doesn't apply to "Diem".
I'd argue none of the above apply to Diem actually. I'm definitely referring to traditional, actual blockchains
> [..] no one can open it through other methods
... other than https://xkcd.com/538/ ?
... other than https://xkcd.com/538/ ?
That still counts as using the key to open it :)
A suitcase full of cash is much more difficult to transport risk-free compared to bitcoin.
yet infinitely easier to spend.
> Q: Is this fundamentally different to having a suitcase full of cash?
Yes, government can't print bitcoin. If you store cash - in the long term you will lose buying power. If bitcoin gets adopted as a store of value - nobody will be able to print it at will.
Yes, government can't print bitcoin. If you store cash - in the long term you will lose buying power. If bitcoin gets adopted as a store of value - nobody will be able to print it at will.
Not really, and that is precisely one of the point for crypto advocates. To be used as "virtual" (just non physical) cash, easier to manage.
I’ve heard it’s easier to travel conspicuously and less risky than traveling with suitcases of cash.
It's very hard to take a suitcase full of cash across a border. It's very easy to take a private key for a wallet-account full of cryptocurrency across a border.
It's very hard to take a suitcase full of cash across a border.
Depends on the border.
As long as you declare the cash to the authorities, there are many borders you can cross with great flipping wads of cash. Some industries operate mostly on cash (restaurants, for example), and "suitcases full of cash" isn't just for mobsters and movie villains.
Depends on the border.
As long as you declare the cash to the authorities, there are many borders you can cross with great flipping wads of cash. Some industries operate mostly on cash (restaurants, for example), and "suitcases full of cash" isn't just for mobsters and movie villains.
Where is that? In most of the west it's roughly $10k US (+/- 30%).
He's right about roasting the planet though. Scarcity without computational (and literal) power is necessary.
Maybe if we could use the inherent incalculability of the three-body problem as the basis for a cryptocurrency. You'd need to observe the universe to "find" astrocoins.
It would be Astrology on steroids.
Of course that leaves out verifiability, encryption, anonymous identity yet ownership.
What if you (somehow) knew both parts of the quantum uncertainty portions of a particle because you initiated the system. Then you could demonstrate ownership by being able to predict the location or the momentum at any time based on that.
But it would be fun to hold cryptocoins called Heisenbergs
But that is an actual physical particle.
Maybe if we could use the inherent incalculability of the three-body problem as the basis for a cryptocurrency. You'd need to observe the universe to "find" astrocoins.
It would be Astrology on steroids.
Of course that leaves out verifiability, encryption, anonymous identity yet ownership.
What if you (somehow) knew both parts of the quantum uncertainty portions of a particle because you initiated the system. Then you could demonstrate ownership by being able to predict the location or the momentum at any time based on that.
But it would be fun to hold cryptocoins called Heisenbergs
But that is an actual physical particle.
> He's right about roasting the planet though.
...no? Diem/Libra is built on Cosmos, which is a proof-of-stake system, not a proof-of-work system. Validator nodes in a proof-of-stake system do not compete to work ever harder to mine the same resources.
There are a rather large number of such validator nodes (100+ at minimum), but that's also true of banks when you translate their Highly-Available mainframe stacks into equivalent Highly-Available commodity-PC stacks. (I.e. they're not spending any more electricity per tx than the ACH system is.)
...no? Diem/Libra is built on Cosmos, which is a proof-of-stake system, not a proof-of-work system. Validator nodes in a proof-of-stake system do not compete to work ever harder to mine the same resources.
There are a rather large number of such validator nodes (100+ at minimum), but that's also true of banks when you translate their Highly-Available mainframe stacks into equivalent Highly-Available commodity-PC stacks. (I.e. they're not spending any more electricity per tx than the ACH system is.)
I'll cop to hand-waving and painting cryptocurrencies w/ a broad brush here. But it seems like Diem hasn't really figured out what its system is gonna be: https://en.wikipedia.org/wiki/Diem_(digital_currency)#Implem.... Looking at their docs and such, it seems like it'll be centralized under the stakeholders until they implement proof of stake, which IMO makes it just another reserve bank.
https://primecoin.io/ to compute Prime Numbers
Gold markets are most definitely regulated, especially if you’re doing any meaningful FX volume. And since we’re talking about crypto, it’s worth adding the gold mining tends to be too, perhaps more so.
> The core feature of any cryptocurrency is "money w/o state regulation", but when you're talking about selling it for any major currency (Dollars, Euros, Sterling, Yen, RMB) guess what, you're regulated.
Depends on the regulation type we're talking about. Yes, state may require KYC, AML, and taxes, but in case of bitcoin they can't regulate the inflation.
Depends on the regulation type we're talking about. Yes, state may require KYC, AML, and taxes, but in case of bitcoin they can't regulate the inflation.
I could be wrong, but isn't the point of Diem to create a jointly managed payment network that's auditable to its stakeholders?
Seems like a viable reason to create a cryptocurrency that isn't intended to bypass state regulations.
Seems like a viable reason to create a cryptocurrency that isn't intended to bypass state regulations.
https://www.upstreamdata.ca/post/natural-gas-venting-how-bit...
An eco friendly Cryptocurrency mining use case is that gives electricity generation a baseline price regardless of where it is generated.
An eco friendly Cryptocurrency mining use case is that gives electricity generation a baseline price regardless of where it is generated.
Oh that's interesting, like an energy economy.
I think... it's a little tenuous because the price would based on like, math, algorithms and ASICs more than scarcity of fuel (or pollution, or what have you), but definitely an interesting idea.
I think... it's a little tenuous because the price would based on like, math, algorithms and ASICs more than scarcity of fuel (or pollution, or what have you), but definitely an interesting idea.
It functions like diamonds, real estate and some other commodities used to... medium of exchange for illegal transactions.
It’s pretty obvious — the price spikes with the rise of certain internet grifts and wanes as they settle down.
It’s pretty obvious — the price spikes with the rise of certain internet grifts and wanes as they settle down.
Yep, you're right, people are definitely only using cryptocurrency for illegal transactions.
the main feature it is not de-regulation but de-centralization, anyone could run a Bitcoin node and unless you own 51% of the network you cannot control it
Facebook is trying to create yet another world bank
Facebook is trying to create yet another world bank
The whole “unbanked” thing is really unconvincing, because there's no way Libra/Diem will be usable for people who don't have identity documents and the evidence needed for KYC/AML forms, and that excludes most unbanked people.
As for international money transfers: TransferWise and the like are already providing better solutions in that space without forcing you to use Facebook Coins. Now you might say that mostly caters to the rich world, and that's true, but the people who can't use TransferWise are probably not going to be able to use Libra/Diem either for the same reasons they can't use TransferWise: ID documents, KYC/AML, plus capital controls and sanction regimes which aren't magically going to disappear for this new currency.
It won't provide one of the few benefits of Bitcoin etc either, namely the ability to make illegal transactions more easily.
As for international money transfers: TransferWise and the like are already providing better solutions in that space without forcing you to use Facebook Coins. Now you might say that mostly caters to the rich world, and that's true, but the people who can't use TransferWise are probably not going to be able to use Libra/Diem either for the same reasons they can't use TransferWise: ID documents, KYC/AML, plus capital controls and sanction regimes which aren't magically going to disappear for this new currency.
It won't provide one of the few benefits of Bitcoin etc either, namely the ability to make illegal transactions more easily.
Even if those hurdles could be crossed, there's the hurdle of actually converting the unbanked to use their service. Unbanked people are unbanked because it's not profitable for local banks to convert them to customers, generally because they live in cash economies and don't have very much of it, and WU/Moneygram or the hawala service is difficult to beat on the last mile of remittances. M-PESA filled some gaps because it used a existing network of mobile phone stores and people's confidence in the value of their dumbphone credit in local currency. All rely heavily on shops in villages to attract and serve customers.
But Diem doesn't have any advantages over any of these entities: it's a foreign foundation with no local infrastructure to help people spend their cash and no local knowledge talking about immutable ledgers and cash equivalent reserves, as if the reason the unbanked were unbanked is because the local banks don't write whitepapers rather than because exchanging cash in developing world villages is a very expensive problem to solve relative to the size of the transactions they unbanked might like to make
But Diem doesn't have any advantages over any of these entities: it's a foreign foundation with no local infrastructure to help people spend their cash and no local knowledge talking about immutable ledgers and cash equivalent reserves, as if the reason the unbanked were unbanked is because the local banks don't write whitepapers rather than because exchanging cash in developing world villages is a very expensive problem to solve relative to the size of the transactions they unbanked might like to make
I know it's a bit frowned up but just wanted to say this is a great comment.
> as if the reason the unbanked were unbanked is because the local banks don't write whitepapers
Made me chuckle.
> as if the reason the unbanked were unbanked is because the local banks don't write whitepapers
Made me chuckle.
> The whole “unbanked” thing is really unconvincing, because there's no way Libra/Diem will be usable for people who don't have identity documents and the evidence needed for KYC/AML forms, and that excludes most unbanked people.
Who says the countries this will be used in have KYC/AML? The unbanked people this would be for aren't in countries that have those laws.
> As for international money transfers: TransferWise and the like are already providing better solutions in that space without forcing you to use Facebook Coins. Now you might say that mostly caters to the rich world, and that's true, but the people who can't use TransferWise are probably not going to be able to use Libra/Diem either for the same reasons they can't use TransferWise: ID documents, KYC/AML, plus capital controls and sanction regimes which aren't magically going to disappear for this new currency.
Can't use transferwise, so can't use something else.
This isn't aimed at people who can use banking where KYC or AML apply. It's for people who are curently using other unbanking payment methods.
Who says the countries this will be used in have KYC/AML? The unbanked people this would be for aren't in countries that have those laws.
> As for international money transfers: TransferWise and the like are already providing better solutions in that space without forcing you to use Facebook Coins. Now you might say that mostly caters to the rich world, and that's true, but the people who can't use TransferWise are probably not going to be able to use Libra/Diem either for the same reasons they can't use TransferWise: ID documents, KYC/AML, plus capital controls and sanction regimes which aren't magically going to disappear for this new currency.
Can't use transferwise, so can't use something else.
This isn't aimed at people who can use banking where KYC or AML apply. It's for people who are curently using other unbanking payment methods.
> Who says the countries this will be used in have KYC/AML? The unbanked people this would be for aren't in countries that have those laws.
You mean like Somalia? Even Somalia has KYC/AML laws: https://frc.gov.so/aml-cft-law/ (Customer due diligence is Art. 5)
Are there any countries that don't have similar laws?
You mean like Somalia? Even Somalia has KYC/AML laws: https://frc.gov.so/aml-cft-law/ (Customer due diligence is Art. 5)
Are there any countries that don't have similar laws?
Anything that’s settled in dollars or dollar-like synthetic instruments will have KYC/AML.
This is a global project, so it will be used in countries where this just isn't accurate.
Like, for example? Micronesia?
You may want to update your world view for the 21st century - there is no “wild west” left, every country where this matters will have financial regulations.
You may want to update your world view for the 21st century - there is no “wild west” left, every country where this matters will have financial regulations.
It's simply wrong to state every country that "matters" has KYC/AML regulations similar to those required in the US.
so again, which countries?
Many, many countries don't have KYC/AML laws as strict as the US. If you want specifics, I encourage you to look into it.
Countries like...? You must have a source or some knowledge backing that statement?
Says who? Who is going to enforce some random African country that is in the middle of a civil war to have those?
Also, lots of drug deals are settled in US dollars, they don't have that. So your point that anything settled in dollars will have those laws is way off the mark and easily disproven.
Also, lots of drug deals are settled in US dollars, they don't have that. So your point that anything settled in dollars will have those laws is way off the mark and easily disproven.
That's not how finance works. If you don't follow the rules, you get cut off from the rest of the ecosystem which is tightly controlled by the US. So if diem wants to operate at all, they must adhere to the rules regardless of which countries they are operating in.
This is meant to be a completely different ecosystem, no? An ecosystem not controlled with the US. This isn't a normal financal service, it's not banking, it's outside of banking hence why it's aimed and people without banks.
And other companies are already in this space providing basically the same service.
It seems to me, people applying how companies 1st world countries + the US operate to how companies in 3rd world countries (except the US) have to operate.
And other companies are already in this space providing basically the same service.
It seems to me, people applying how companies 1st world countries + the US operate to how companies in 3rd world countries (except the US) have to operate.
That might be workable only if you specifically don't interface with the outside financial world.
If for example you require a third party exchange to sell to fiat currency, that should work.
But that exchange has to do the KYC stuff and the unbanked are still cut out.
Now if it's a local exchange for a local currency, not USD then is fine.
If for example you require a third party exchange to sell to fiat currency, that should work.
But that exchange has to do the KYC stuff and the unbanked are still cut out.
Now if it's a local exchange for a local currency, not USD then is fine.
> Now if it's a local exchange for a local currency, not USD then is fine.
They can exchange in physical currency which would be acceptable in most third world countries and with the amount physical currency floating around they wouldn't need to get any from the US, no?
They can exchange in physical currency which would be acceptable in most third world countries and with the amount physical currency floating around they wouldn't need to get any from the US, no?
I don't think you could do that at any scale and escape the wrath of the US.
That runs afoul of most money laundering regulations, so if you have any presence in the US they'll go after you, and they'll prosecute anyone with any serious connection to it and extradite those people to the US where possible.
Moving money across international borders is not a problem you can just engineer around. You have to play by the rules.
That runs afoul of most money laundering regulations, so if you have any presence in the US they'll go after you, and they'll prosecute anyone with any serious connection to it and extradite those people to the US where possible.
Moving money across international borders is not a problem you can just engineer around. You have to play by the rules.
If you don't play by the US's rules you can't withdraw in USD.
Which is the only fiat currency Diem supports conversion into right now.
Which is the only fiat currency Diem supports conversion into right now.
> If you don't play by the US's rules you can't withdraw in USD.
The dollar is traded so much that I don't think they need to actually get dollars from the US to be able to use the dollar. If it's going into banks, yea, but if you're just giving people the notes, you're good to go.
The dollar is traded so much that I don't think they need to actually get dollars from the US to be able to use the dollar. If it's going into banks, yea, but if you're just giving people the notes, you're good to go.
It's extremely difficult to facilitate USD money movement if you're blacklisted by the US treasury. Just ask Iran. I suppose technically possible (again: ask Iran) but somehow I doubt Facebook is playing that game.
>>> Says who? Who is going to enforce some random African country that is in the middle of a civil war to have those?
> This is meant to be a completely different ecosystem, no? An ecosystem not controlled with the US. This isn't a normal financal service, it's not banking, it's outside of banking hence why it's aimed and people without banks.
Last I checked, Facebook is a US company, with a US headquarters, publicly traded on a US stock market, and with an American CEO and controlling shareholder. So, unless they all want to relocate permanently to "some random African country that is in the middle of a civil war", they're going to have to deal with US regulations.
> This is meant to be a completely different ecosystem, no? An ecosystem not controlled with the US. This isn't a normal financal service, it's not banking, it's outside of banking hence why it's aimed and people without banks.
Last I checked, Facebook is a US company, with a US headquarters, publicly traded on a US stock market, and with an American CEO and controlling shareholder. So, unless they all want to relocate permanently to "some random African country that is in the middle of a civil war", they're going to have to deal with US regulations.
It's not legally Facebook though.
> This is meant to be a completely different ecosystem, no? An ecosystem not controlled with the US.
There is no such thing as an ecosystem not controlled by the US. You have any ties with the States (and Facebook, clearly, does), you gonna comply with whatever rules they come up with. If you don't believe me, ask Huawei's top manager. Or lots of other people like him.
There is no such thing as an ecosystem not controlled by the US. You have any ties with the States (and Facebook, clearly, does), you gonna comply with whatever rules they come up with. If you don't believe me, ask Huawei's top manager. Or lots of other people like him.
For further reading on what exactly they were trying to do in the first place: Libra Shrugged by David Gerard
https://davidgerard.co.uk/blockchain/libra/
https://davidgerard.co.uk/blockchain/libra/
The key to this is the part of the White Paper that notes they'll need to create a digital identity standard.
This is something that's been widely advocated. But imagine a private company creating one, particularly one with Facebook's track record.
Imagine having to use Facebook to access any money - not just Diem Dollars.
(my book on Facebook's Libra/Diem plan goes into this, particularly ch 8 on privacy)
This is something that's been widely advocated. But imagine a private company creating one, particularly one with Facebook's track record.
Imagine having to use Facebook to access any money - not just Diem Dollars.
(my book on Facebook's Libra/Diem plan goes into this, particularly ch 8 on privacy)
> Imagine having to use Facebook to access any money - not just Diems.
I don't think this can happen in practice. For any such system to work at all, the vast majority of the entire society needs to be using it and be satisfied with it, and then there'll always be cash anyway for which there can't be access control enforced by any one entity.
I don't think this can happen in practice. For any such system to work at all, the vast majority of the entire society needs to be using it and be satisfied with it, and then there'll always be cash anyway for which there can't be access control enforced by any one entity.
A bunch of people who bought Oculus Quest 2's are being locked out of their hardware because it requires a Facebook account and they'll automatically close new accounts with low activity (playing Quest doesn't count apparently) - so it seems that if you create a Facebook account purely to use the Quest 2, you'll be locked out if you don't share enough pictures/make enough friends.
I will NEVER use a currency that requires a connection to my facebook account.
I will NEVER use a currency that requires a connection to my facebook account.
> and that excludes most unbanked people
I don't agree, my step parents (in Romania) are unbanked and they have ID documents. A lot of people are in a similar situation there. Yet they all have smart phones.
I don't agree, my step parents (in Romania) are unbanked and they have ID documents. A lot of people are in a similar situation there. Yet they all have smart phones.
As EU citizens with ID documents and smartphones they can open a full EU bank account in a few taps if they want to. They don't need Diem if they want bank accounts surely?
We’re actually trying to send them money from the US these days and the fees are not great, made me wish Diem was out already :)
TransferWise already exists. It requires your recipients to have bank accounts but they could easily get them.
Libra was interesting. With their basket of currencies and easily programmable contracts, it was a semi-unique project in crypto space.
Over the months, their ambition has been cut a lot by regulators. No more basket of currencies, now just US Dollar. At this point I'm not sure there's any benefit to it being on the blockchain either.
Over the months, their ambition has been cut a lot by regulators. No more basket of currencies, now just US Dollar. At this point I'm not sure there's any benefit to it being on the blockchain either.
> Over the months, their ambition has been cut a lot by regulators.
I don't see how this is a surprise. Facebook basically wanted to take monetary sovereignty away from states and give control to private companies. What did they expect? Especially when right now people are noticing the reach Facebook has into our lives and how irresponsibly they're acting with it. Why would any sane person give Facebook any more control over their lives?
I don't see how this is a surprise. Facebook basically wanted to take monetary sovereignty away from states and give control to private companies. What did they expect? Especially when right now people are noticing the reach Facebook has into our lives and how irresponsibly they're acting with it. Why would any sane person give Facebook any more control over their lives?
Was there ever any benefit to using a blockchain - other than marketing BS, of course? It was always Facebook (or their chosen partners) who controlled the coin, so the blockchain was pointless - there never was any decentralized trust, as I understand it?
"Blockchain" in some sense can also be seen as a programming framework where you have a common set of functionality that people know how to work with and can gain a transferable skill set with. Similar to how MVC knowledge is to some degree transferable between Rails and Django.
So in that regard I wouldn't immediately dismiss a usage of a blockchain as pointless. Given that PoA chains are usually pretty efficient, there also doesn't seem to be an immediate downside to it.
So in that regard I wouldn't immediately dismiss a usage of a blockchain as pointless. Given that PoA chains are usually pretty efficient, there also doesn't seem to be an immediate downside to it.
We normally call that an 'API', no chains of blocks required!
An API would only be the _interface_, which just like with MVC isn't the same between a lot of different implementations of the same model and doesn't cover additional assumptions, like e.g. having a chain of blocks with a consensus mechanism to decide which chain of blocks to prefer over a diverging chain of blocks.
If you want to argue for an alternative to a chain of blocks you could of course do that, but in my personal experience if you consider all the requirements (multi-party, auditable, etc.) the usual argument of "you could just use a normal centralized database" falls apart and you end up with something that in some form or another resembles a blockchain (or something equally complex), so why not use a blockchain?
If you want to argue for an alternative to a chain of blocks you could of course do that, but in my personal experience if you consider all the requirements (multi-party, auditable, etc.) the usual argument of "you could just use a normal centralized database" falls apart and you end up with something that in some form or another resembles a blockchain (or something equally complex), so why not use a blockchain?
The standard definition of "blockchain" presumes that there is zero-trust between nodes and that anyone on the Internet can join the network. These properties are probably not what you want for most practical applications.
For most practical applications a git repo where you have some set of trusted notaries and at least M of N notaries must sign each commit is probably closer to what you want. (Or something that is similar logically but still does not fit the standard definition of blockchain, which again is trustless.)
For most practical applications a git repo where you have some set of trusted notaries and at least M of N notaries must sign each commit is probably closer to what you want. (Or something that is similar logically but still does not fit the standard definition of blockchain, which again is trustless.)
I also prefer zero-trust blockchains, as they are more interesting ideologically and intellectually. I disagree however that the "standard" definition presumes zero-trust. In my opinion the only thing that is presumed is some form of consensus mechanism, which can also be a trusted one like PoA (proof of authority).
> git repo where you have some set of trusted notaries and at least M of N notaries
There isn't really much difference between a PoA blockchain and what you describe on a data structure level. The main differences here will be the mode of operation (active node vs. passive repository) and builtin support and optimizations for currency transactions.
If you were really inclined, you could probably implement a optimized git client/server that could achieve that (and I wouldn't be surprised if someone has done that already). What's the point in doing so tough, if you could just as well use an existing implementation of a PoA blockchain?
> git repo where you have some set of trusted notaries and at least M of N notaries
There isn't really much difference between a PoA blockchain and what you describe on a data structure level. The main differences here will be the mode of operation (active node vs. passive repository) and builtin support and optimizations for currency transactions.
If you were really inclined, you could probably implement a optimized git client/server that could achieve that (and I wouldn't be surprised if someone has done that already). What's the point in doing so tough, if you could just as well use an existing implementation of a PoA blockchain?
I would rather people learned the basics of RDBM's and concepts like "primary keys", "indexes". The kids these days depend on that stuff being hidden from them by CPU/disk speeds and ORMs. If they can't get the concepts of a technology they are most likely to encounter in their day jobs, what chance do they have with Blockchain, considering that it is NOT a trivial thing.
Blockchain has a zinger name, but it's useless when real-world applications are in play. It is slow and energy inefficient. Considering that it got "reset" by the owners once after a divergence, it's not that "decentralized". It has a group that controls it.
Secondly, it's definitely not secure in the sense that is advertised. Aside from regular social engineering and old-school hacks to get people's tokens, governments have been successful in tracing transections in investigations. That's how SilkRoad got got, and recently Japan did it as well.
Secondly, it's definitely not secure in the sense that is advertised. Aside from regular social engineering and old-school hacks to get people's tokens, governments have been successful in tracing transections in investigations. That's how SilkRoad got got, and recently Japan did it as well.
> governments have been successful in tracing transections in investigations. That's how SilkRoad got got
Tracing transactions on the BTC public ledger did not lead to the downfall of the Silk Road.
Tracing transactions on the BTC public ledger did not lead to the downfall of the Silk Road.
Don't opine about things you don't understand. Its not necessarily slow, energy inefficient or trackable. There are solutions to all if these problems which are available today.
There were some interesting ideas about decentralized management of "treasury" (and issuing/burning of Libra coins), mostly related to the "basket of currencies" model. I think that will stay even with value only being pegged to the US Dollar, but there is less need for that.
> mostly related to the "basket of currencies" model. I think that will stay even with value only being pegged to the US Dollar, but there is less need for that
Indeed, that was their most unique feature.
A stablecoin pegged to a basket of fiat (say just USD, CAD, EUR, GBP, JPY, SGD), using traditional crypto tools (burning, pegging) definitely has a place and a bright future ahead.
However, there's no need for facebook - defi may be able to do that with smart contracts over wrapped stablecoins (say USDC for the USD, etc.)
Hell, even USD, EUR, JPY would still be EXTREMELY valuable and useful.
Indeed, that was their most unique feature.
A stablecoin pegged to a basket of fiat (say just USD, CAD, EUR, GBP, JPY, SGD), using traditional crypto tools (burning, pegging) definitely has a place and a bright future ahead.
However, there's no need for facebook - defi may be able to do that with smart contracts over wrapped stablecoins (say USDC for the USD, etc.)
Hell, even USD, EUR, JPY would still be EXTREMELY valuable and useful.
What would you use instead?
Completely different property rights enforcement (programmable and decentralized). Sure a theft may still have to be resolved via the courts, but it significantly reduces many overheads.
Thefts on the blockchain can't be resovled by the courts, that's the entire point. Billions of dollars worth of bitcoin, eth, and other coins have already been stolen through hacks of exchanges, fraudulent exchanges, and buggy smart contracts, and none of it can ever be returned because the transaction history is immutable and new transactions require digital signatures.
The website still says "The Diem payment system will support single-currency stablecoins (e.g., ≋USD, ≋EUR, and ≋GBP) and a multi-currency coin (≋XDM)."
Is that no longer true? I'm not sure if the website is up to date.
https://www.diem.com/en-us/vision/
Is that no longer true? I'm not sure if the website is up to date.
https://www.diem.com/en-us/vision/
Libra was never interesting. A centralised fiat currency run by arguably one of the most unethical, unscrupulous, invasive surveillance capitalists in the world was never going to be interesting, at least not in any technical or socially useful sense. Adding the ever-popular "but blockchain" into the mix still didn't make it a real cryptocurrency, never will. Rebranding it changes nothing.
> Libra was interesting. ..., it was a semi-unique project in crypto space.
I think It was mostly interesting, because It had a potential of going real mainstream if FB really pushed it to it's millions of users that are not technical in one way or the other.
Technically, there is so many ambitious projects going on in crypto space anyways.
I think It was mostly interesting, because It had a potential of going real mainstream if FB really pushed it to it's millions of users that are not technical in one way or the other.
Technically, there is so many ambitious projects going on in crypto space anyways.
I don't think an interesting cryptocurrency will ever come out of the US , they have the dollar.
US has a culture that knows that resisting the change isn't way to stay as #1, and you better innovate and disrupt yourself. However, state's innovation might not end up being what crypto advocates are looking for.
I wish the US still had that culture. Our federal legislature has been intentionally deadlocked by a single man for years, without any hope of that changing.
This mistake in this line of thinking is that innovation comes from the government.
And yet here I am on the internet, an invention of government-funded researchers.
But seriously: I didn't innovation originates from the government, but our elected officials are certainly a reflection of the culture of our country.
In fact, one of our major political parties rages against the things that made the US innovative: creating a haven for immigrant scientists and entrepreneurs, excellent research universities, and social programs that acted as a safety net for anyone taking a risk on an innovative business.
But seriously: I didn't innovation originates from the government, but our elected officials are certainly a reflection of the culture of our country.
In fact, one of our major political parties rages against the things that made the US innovative: creating a haven for immigrant scientists and entrepreneurs, excellent research universities, and social programs that acted as a safety net for anyone taking a risk on an innovative business.
> US has a culture that knows that resisting the change isn't way to stay as #1
Are you kidding? This is the country that avoids the Metric system remember. https://en.wikipedia.org/wiki/A_Metric_America oops.
Are you kidding? This is the country that avoids the Metric system remember. https://en.wikipedia.org/wiki/A_Metric_America oops.
Are you saying that because of It's refusal of metric system, It has lost its #1 spot?
No I'm saying that for quite some time, the US has not made the reforms it should have that other countries did.
Perhaps the ratio of exceptionalism to gridlock as the excuse for stasis has changed, but the stasis itself hasn't.
Perhaps the ratio of exceptionalism to gridlock as the excuse for stasis has changed, but the stasis itself hasn't.
Technically, avalanche is a US coin. It was also the first proof of stake crypto currency but I have not seen it picking up much traction in the US. https://www.avalabs.org
*EDIT Avalanche was not the first proof of state crypto currency.
*EDIT Avalanche was not the first proof of state crypto currency.
Avalanche is not the first PoS coin. You could make an argument that the first was Tezos but there are PoS like instruments that predate it significantly.
Looks like Peercoin predates Tezos by about six years (2012 vs 2018):
https://en.wikipedia.org/wiki/Peercoin
https://en.wikipedia.org/wiki/Tezos
https://en.wikipedia.org/wiki/Peercoin
https://en.wikipedia.org/wiki/Tezos
AFAIK peercoin is recognized as the first PoS cryptocurrency.
Cryptocurrencies are being used by so-called cybercriminals (cybercrooks) as we speak. Because it is decentralized, its more difficult to close down illegal transactions, and they consider themselves anonymous after mixing.
I don't find cryptocurrency interesting at all for a free society. I don't see any purpose of it, if you live in a free society. And I do live in one.
I don't find cryptocurrency interesting at all for a free society. I don't see any purpose of it, if you live in a free society. And I do live in one.
dollars are used by all sorts of criminals and terrorists
Maybe Facebook sees that the US dollar will no longer be the reserve currency one day relatively soon?
Wouldn't bet on it. People said the Yen was going to displace USD, then they said that about the Euro...
I’m not saying that I feel that it’s a likely event. I’m saying that Facebook thinks it’s one. On a related note, when it seems like Ray Dalio is saying the same thing (the US dollar will be replaced as a reserve currency), there’s more credence to the idea
Why would Facebook care? As a huge multi-national they have billions in all kinds of currencies across different banks. They already are prepared to exchange in any freely traded currencies.
Because it gives people a good reason to use Facebook’s Diem
This is the most on point comment.
There are some within that realize the U.S is in an unsustainable path of devaluing, borrowing, and excess spending in pursuit of failed policies. There is still hope!
What does that have to do with crypto?
hard to devalue a currency you don't control. which then leads to reigning in of the leviathan.
I don't know what makes you think the US would have no control over the value of any popular crypto.
If it's being spent in the US, they have control. They can make it illegal, tax it to hell, or just start mining it themselves.
If it's being spent in the US, they have control. They can make it illegal, tax it to hell, or just start mining it themselves.
Diem/Libra seems like a convoluted scheme for Facebook to be able to globally repatriate money at will. Sure they would have to manage to grow it to a certain scale first, but by controlling the whole wooden nickel factory it wouldn't be hard nor detectable for them to do.
"We're a creepy Orwellian company with a demonstrated record of having no morals and psychologically manipulating people not only for profit, but for sport!
Have faith and trust in our cryptocurrency!"
Have faith and trust in our cryptocurrency!"
What I haven't seen posted here is this:
- the prospect of large corporations making thousand percent ROI is very real, while the common person using this does not get any of that.
My opinion of this is that we should be concerned - what are the possible upsides of corporations having outsized returns that can't be touched by governments at all (at least with current day laws)
This would only serve to make the wealth gap more extreme.
I urge everyone to read more here: https://www.coindesk.com/billion-dollar-returns-the-upside-o...
- the prospect of large corporations making thousand percent ROI is very real, while the common person using this does not get any of that.
My opinion of this is that we should be concerned - what are the possible upsides of corporations having outsized returns that can't be touched by governments at all (at least with current day laws)
This would only serve to make the wealth gap more extreme.
I urge everyone to read more here: https://www.coindesk.com/billion-dollar-returns-the-upside-o...
FB’s brand is suffering. They understand this themselves obviously. It’s best to liberate new products from the word “facebook” and make it appear as a seperate entity. That’s basically what this is.
I’m not sure about that. Whatsapp and Instagram are going in the opposite direction, they added Facebook in the Splash Screen.
That "unified" splash screen is menacing. A constant reminder that wherever you turn, it's a FB property.
With Google/Apple/Microsoft it's quite straightforward, everything they make is clearly their style, their brand. This is not the case with Facebook's properties, they don't have a unified design language or branding. So adding a unified splash is a step in "marking it's territory", I just hate the feeling of that.
With Google/Apple/Microsoft it's quite straightforward, everything they make is clearly their style, their brand. This is not the case with Facebook's properties, they don't have a unified design language or branding. So adding a unified splash is a step in "marking it's territory", I just hate the feeling of that.
Would disagree that it's obvious companies like "Beats by Dre" (Apple) or GitHub/LinkedIn (Microsoft) are subsidiaries from styling/branding
So, are you basically saying that you feel uncomfortable having the ugly, naked truth made more obvious to you?
I think so, yes. It felt better to see Instagram at least visually untouched by the blue "f".
Although, that splash has helped me reduce my usage of FB apps, so maybe that's a positive.
Although, that splash has helped me reduce my usage of FB apps, so maybe that's a positive.
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I think this is to make these products look more integrated with Facebook in the event of antitrust action. Same with unifying the messaging system.
"Your honor, we can't possibly spin off Instagram, it's now part of the core Facebook product!"
"Your honor, we can't possibly spin off Instagram, it's now part of the core Facebook product!"
Interestingly too, I noticed the box for their Oculus Quests only subtly display the FB connection. And on the recent model, using a different/new 'thinner, all-caps' logo.
Anything by Facebook is a no. Anything cryptocurrency by Facebook is a double, triple, quadruple no.
So mixing shady with shady doesn't cancel them out? Huh.
You can only get murkier shades.
I'm not sure I feel empowered by any scheme where I'm the marketable product.
Also, since they didn't bother to s/Libra/Diem that white paper is this just the same scheme with a different name? It's somewhat unclear.
Also, since they didn't bother to s/Libra/Diem that white paper is this just the same scheme with a different name? It's somewhat unclear.
This project seems to be a fantastic advertisement of why large companies can't innovate. Rather than building a product that people can use - even in a very limited setting, Libra has been a series of big announcements followed by enormously expensive negotiations with regulators. How long has this been going on for and how many people are using this? That's not how you innovate.
I suppose it’s easier when you’re smaller and you can just ignore regulations (Uber, Airbnb).
Are they rebranding because of bad publicity?
Yes. They never say it outright, but this is the way their PR statement begins:
"The Libra Association announces the adoption of a new name and the recruitment of key executives, reinforcing its organizational independence. Now transitioning to the name “Diem”, which denotes a new day for the project, the Diem Association will continue to pursue a mission of building a safe, secure and compliant payment system that empowers people and businesses around the world."
https://www.diem.com/en-us/updates/diem-association/
"The Libra Association announces the adoption of a new name and the recruitment of key executives, reinforcing its organizational independence. Now transitioning to the name “Diem”, which denotes a new day for the project, the Diem Association will continue to pursue a mission of building a safe, secure and compliant payment system that empowers people and businesses around the world."
https://www.diem.com/en-us/updates/diem-association/
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Are any crypto currencies widely used for transactions these days? ie the classic coffee shop purchase. BTC had a start but now seems only useful for people buying as an asset.
Today's Bitcoin's average transaction fee is $6.34. For "coffee shop purchases" that is horrendous. Ethereum is better, at $1.43, but still not usable for coffee. Only highly-centralized cryptocurrencies, such as Stellar, have reasonable transaction fees.
I think for the time being it's meaningful to think of cryptocurrency transactions as stock purchases / fees to the stock exchange.
I think for the time being it's meaningful to think of cryptocurrency transactions as stock purchases / fees to the stock exchange.
I agree with you that the fees for some of the cryptocurrency’s make them impractical, and this certainly will hinder mainstream adoption. I do not think that I will try to pay for coffee with some of my antique gold coins any time soon, but that does not render them any less valuable. bitcoin plays a similar role in the context of digital assets for the moment. It frustrates me when I read other comments here dismissing cryptocurrency out of hand without taking the time to understand it. As you rightly point out, some tokens are better at certain tasks depending on the situation In the same way that some fiat currencies are circumstantially better than others... I think a number of people in Lebanon would prefer BTC to LBP right now regardless of the fees. For my part, I am more concerned with micro transaction fees for running applications, and I will leave the speculation to someone else.
I know what you're trying to say but 99.999% of people do not own antique gold coins, are you saying the same about bitcoin?
Not at all. I suppose that I am just trying to point out that every asset has its pros and cons depending on the situation. The Euros at the bottom of my travel case are just as useful to me as my gold coins at the moment, and the pennies under my couch cushions, though easily more liquid, are much less valuable than either. Bitcoin is obviously far more accessible and convenient than gold, but I just cannot see anyone using it for small transactions... at least while the network fees are as high as they currently are.
There are decentralized crypto currencies that have sub 1 cent fees - where the fee even gets smaller as the blocksize automatically adjusts larger to accommodate more transactions.
Edit: Monero. It's currently 15th on Coin Gecko by market cap at $2.3 billion. It's 3rd in the number of most developers behind Bitcoin and Ethereum.
Edit: Monero. It's currently 15th on Coin Gecko by market cap at $2.3 billion. It's 3rd in the number of most developers behind Bitcoin and Ethereum.
> It's 3rd in the number of most developers behind Bitcoin and Ethereum.
It's a gameable metric. How do you track it anyway- by github contributors? By number of people submitting patches?
Also, not all contributors are equal...
It's a gameable metric. How do you track it anyway- by github contributors? By number of people submitting patches?
Also, not all contributors are equal...
A simple native payment on Ethereum is only $0.16 right now, complex transactions inflate the average.
And roll-up transactions are currently sitting at less than a penny.
And roll-up transactions are currently sitting at less than a penny.
Right now crypto is being mainly used for decentralized finance involving larger transactions for lending and savings with actual yield. See https://defipulse.com for some of the largest dapps in the space (has grown to have $14 billion in assets in less than one year).
"Fraud dressed up in confusing language" is what he means.
No. Cryptocurrencies are currently used mainly for:
1. Speculation on highly manipulated markets.
2. Illegal transactions.
3. Ransomware.
4. Innovative new kinds of fraud using smart contracts.
1. Speculation on highly manipulated markets.
2. Illegal transactions.
3. Ransomware.
4. Innovative new kinds of fraud using smart contracts.
In my experience, most shops that accept Bitcoin also accept Bitcoin Cash or Ethereum. I personally use BCH to purchase domains from porkbun.
LTC is often the cheapest mainstream coin for moving stuff around on chain, and has faster confirm times. They seem to be focusing more on transactions as opposed to storing value like BTC.
FYI: I collect all things Facebook's Diem (formerly Libra) at the Awesome Diem (formerly Libra) page [1] incl. Best Libra Book of the Year 2020 Award and much more. [1]: https://github.com/openblockchains/awesome-diem
What I don't get is why people all try to do their own when there is already a slew of existing solution and it hasn't gained adoption. Why not back something like Stellar if what you really care about is helping financial transactions!
Good riddance but im not sure how. The entire idea of Libra as a cryptocurrency was more ludicrous than any state adopting btc. It essentially was the western Union / paypal with same contributors but with a shiny new word, crypto.
My question. What is the "benefit" of using Libra when you can just as easily transact with xrp ? Dictatorship by Facebook first, tracking of spending for MOAR ADS.
Who benefits from Libra ? Not the end user at least. Oh and fees. If there are no fees on Libra,why is PayPal investing money in this model ?
My question. What is the "benefit" of using Libra when you can just as easily transact with xrp ? Dictatorship by Facebook first, tracking of spending for MOAR ADS.
Who benefits from Libra ? Not the end user at least. Oh and fees. If there are no fees on Libra,why is PayPal investing money in this model ?
Wow. They really want to get away from the facebook brand. Zero mentions of Libra or facebook, despite the fact it was renamed only a few days ago. Not even in the FAQs.
Digital value transfer is a oligopoly of a few US companies that can effectively exclude anyone in the world from the digital economy in general, any innovation and any competition by anyone at all is a very good thing. It's too bad that fb listened to the US politics and made their project much worse, but its still very good in terms of cyrpto adoption by the non-technical people which can in turn make way for other, better projects.
Just did a search on site for "facebook" (ignored community forums), all the results are very carefully worded and scrubbed as of now.
Same was true for Libra as well. The only place you would find "Facebook" was FAQs (to say that it is NOT a FB product, fully independent, nothing to see here) and whitepapers (that explained FB role in more detail, but not more honesty).
Sometimes those names make you wonder. Is it a bad attempt at name squatting? As in diem25? So that all the kids will think of FB currency first, when they hear diem25? Or is it the latin word "diem"? Did they mean to write "dime" and have a typo?
And of course in typical FB fashion, the website will be garbage, if you don't allow all their abusive scripts.
And of course in typical FB fashion, the website will be garbage, if you don't allow all their abusive scripts.
Yup, FB is primarily attempting to subvert a fringe European political movement.
Well, I wouldn't put it past them, since they are quite anti-democratic in their nature.
Maybe based on the phrase "per diem" [1]?
[1] https://en.wikipedia.org/wiki/Per_diem
[1] https://en.wikipedia.org/wiki/Per_diem
I thought of https://en.wikipedia.org/wiki/Ngo_Dinh_Diem
This has been downvoted, but I guarantee that people involved with this process would have read Yanis’ work (he’s one of the most famous economic ministers of the early 21st century) and been familiar with the Diem movement. I wonder what Diem25 will do now that they’ve been either trolled or namesquatted by Facebook, depending on how you want to look at it.
Maybe they’re hoping Diem25 will embrace the collision and ride on their platform?
Maybe they’re hoping Diem25 will embrace the collision and ride on their platform?
Interestingly hosted by Wordpress.com (VIP).
It doesn't mention facebook. Why?
If you look at the members section, at the bottom of this page, facebook is not there.
https://www.diem.com/en-us/association/
If you look at the members section, at the bottom of this page, facebook is not there.
https://www.diem.com/en-us/association/
If a company owns the regulation of a widely used currency, how will it be devalued if it becomes necessary.
Popular currencies need to be regulated by the people, even if indirectly. Otherwise in times of crisis these currencies will be harmful to most.
Popular currencies need to be regulated by the people, even if indirectly. Otherwise in times of crisis these currencies will be harmful to most.
Calibra was renamed to Novi, and now Libra has been renamed to Diem? How confusing.
My general impression after reading between the lines over last years about Libra is they are targeting in-app micropayments and more like a competition to something like Paysafecard.
Libra seems increasingly like a regulator-lightning-rod that Facebook never actually intend to be successful but that keeps prying eyes away from other parts of their business.
Well, for somebody it finally became obvious that Zuckerberg's Libra is a play on Winklevosses' Gemini (their crypto exchange project) :)
Poorer countries are going to see this as Western neo-colonialism.
They have a point.
Would you want your national currency to be controlled by a Chinese private company?
They have a point.
Would you want your national currency to be controlled by a Chinese private company?
I love clicking "I do not accept cookies" on a facebook site and having it not do anything else. It feels so liberating.
Landing page looks almost exactly like the hundreds of other scamcoins I have researched over the past few years tbh.
I'm learning another cased language that isn't Latin, is Diem the right declension to use in this instance?
I don't think branding was really the issue here. Nore does the semantic weight of Diem vs. Libra really present a significant difference.
The problem has always been that it's an attempt to create an extra-governmental monetary system spearheaded by one of the largest tech companies in the world, in particular one that has a low level of social trust within both the political sphere and the libertarian-privacy-maximalist sphere that represents a cornerstone of crypto support.
For my own opinion, it doesn't matter how independent the oversight group may be from Facebook, it is still a Facebook initiative. Web standards, ostensibly independent, can be subverted by corporate interests. I have no trust that something as foundational to the world economy as a global monetary system would not also be subject to such interests at a fundamental level. Give the ACLU a seat, give the EFF a seat, find a dozen other non-corporate NGO's with a tangential interest in such a project, and I will still not be convinced that the system wouldn't be coopted a plutocratic oligarchy, if not outright kleptocracy. There would simply be too much power and money that would acrue to the "winners".
Whatever the future of crypto may be, it should be shoved forcefully away from such a direction, as well as any direction that makes it easy to facilitate criminal enterprise/money laundering. I freely admit that I don't have a solution that solves that range of problems though.
The problem has always been that it's an attempt to create an extra-governmental monetary system spearheaded by one of the largest tech companies in the world, in particular one that has a low level of social trust within both the political sphere and the libertarian-privacy-maximalist sphere that represents a cornerstone of crypto support.
For my own opinion, it doesn't matter how independent the oversight group may be from Facebook, it is still a Facebook initiative. Web standards, ostensibly independent, can be subverted by corporate interests. I have no trust that something as foundational to the world economy as a global monetary system would not also be subject to such interests at a fundamental level. Give the ACLU a seat, give the EFF a seat, find a dozen other non-corporate NGO's with a tangential interest in such a project, and I will still not be convinced that the system wouldn't be coopted a plutocratic oligarchy, if not outright kleptocracy. There would simply be too much power and money that would acrue to the "winners".
Whatever the future of crypto may be, it should be shoved forcefully away from such a direction, as well as any direction that makes it easy to facilitate criminal enterprise/money laundering. I freely admit that I don't have a solution that solves that range of problems though.
Whims of an amoral and decadent empire.
[deleted]
They're just rebranding to annoy author David Gerard, who recently published a great book "Libra Shrugged" looking into Libra and Facebook's bad ideas: https://davidgerard.co.uk/blockchain/libra/
This will only be allowed to succeed if:
- it's compatible with existing tax systems.
- it doesn't get in the way of the banking system.
- it doesn't get in the way of existing power structures, e.g.: people that depend on an impoverished populace.
- it's compatible with existing tax systems.
- it doesn't get in the way of the banking system.
- it doesn't get in the way of existing power structures, e.g.: people that depend on an impoverished populace.
[deleted]
Diem is silent in Indonesian slang language
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Banking is the lucrative and powerful form of rentier capitalism.
Combined with the ability to mine user data for 'insights' and you’ve got the greatest panopticon.
Hello corporate dystopia.
Combined with the ability to mine user data for 'insights' and you’ve got the greatest panopticon.
Hello corporate dystopia.
Banking is the most
Interesting. They went from "Libra" (implying Freedom) to "Diem" (which sounds a lot like Die or Dying).
Their press release for the name change even called it "a new day for the project" - a Novi Diem, if you will. https://www.diem.com/en-us/updates/diem-association/
From The Awesome Diem (formerly Libra) Page [1]:
Diem stems from the famous latin phrase 'Carpe Diem' translating to 'Enjoy the present, make the most of today', a common mistranslation is 'Seize the Day' (via Wiktionary)
Carpe is the second-person singular present active imperative of carpō "pick or pluck" used by Horace to mean "enjoy, seize, use, make use of". Diem is the accusative of dies "day". A more literal translation of carpe diem would thus be "pluck the day as it is ripe" - that is, enjoy the moment. It has been argued by various authors that this interpretation is closer to Horace's original meaning (via Carpe diem @ Wikipedia)
[1]: https://github.com/openblockchains/awesome-diem
Diem stems from the famous latin phrase 'Carpe Diem' translating to 'Enjoy the present, make the most of today', a common mistranslation is 'Seize the Day' (via Wiktionary)
Carpe is the second-person singular present active imperative of carpō "pick or pluck" used by Horace to mean "enjoy, seize, use, make use of". Diem is the accusative of dies "day". A more literal translation of carpe diem would thus be "pluck the day as it is ripe" - that is, enjoy the moment. It has been argued by various authors that this interpretation is closer to Horace's original meaning (via Carpe diem @ Wikipedia)
[1]: https://github.com/openblockchains/awesome-diem
Using the accusative case as nominative. Ugh.
Nominative is "dies" which is not stellar as a brand in English.
"Facebook dies" sounds pretty good to me.
Diem is known from "Carpe Diem", in English "Seize the Day". Hence Diem possibly means Day. I don't know why the name. Though, if you call it Noctum it has a negative/blackhat connotation, IMO.
They probably did a search for short domain names, and went from there.
Per Diem. It sounds a lot like per diem.
> On December 1, 2020, the Libra Association was renamed to Diem Association.
i find the entire site difficult to read :\
Don't you think it could use some more animations?
/s
/s
It is still Facebook, so nope. Actually, hell nope.
still a hell to the no
Article title at the time of this post, in case HN editors change it:
> Diem - A rebrand of Facebook Libra
Understanding who is behind this is extremely relevant.
> Diem - A rebrand of Facebook Libra
Understanding who is behind this is extremely relevant.
It is not the original title. They have already modified it. Original title was:
> Facebook Diem (Facebook's Libra has rebranded)
https://i.imgur.com/nS9FaV5.png
> Facebook Diem (Facebook's Libra has rebranded)
https://i.imgur.com/nS9FaV5.png
Oh. That new title obfuscates the fact that Facebook is still behind this, imo, although the old wording was awkward
Pretty scary that there is almost no mention of Facebook on the website (only in the logo of Novi, the wallet app for Diem by Facebook).
I'm wondering if all involvement in Diem at Facebook goes through Novi, and with that the members section is "truthful" (though still obfuscating the involvement), and/or if they will cherry-pick which companies appear on the list of members based on how good/bad their image is.
I'm wondering if all involvement in Diem at Facebook goes through Novi, and with that the members section is "truthful" (though still obfuscating the involvement), and/or if they will cherry-pick which companies appear on the list of members based on how good/bad their image is.
why so little trust of the HN mods?
Because official policy is to use the original title as written by the authors, which in this case doesn’t mention Facebook at all.
I'm not sure where this policy is written, but hn modifies titles all the time to reduce clickbait. however in this case I understand where you are coming from. the submission has added context. I think it's harmless.
Can someone give me a quick rundown of Facebook's involvement? I get that they are the driving force behind it but what does it mean in practice? Do they have any power over the currency and its flow? Is Facebook governing the currency? Are there privacy concerns and if so, how do manifest in practice? Is it tied to Facebook stock or something, if not then what's the point?
They started the whole thing, were the only member of the Libra Association (now Diem Association) for several months, and still fund the staff and almost all of the engineering effort.
Diem is deeply and fundamentally a Facebook project.
Diem is deeply and fundamentally a Facebook project.
Currently a deeply Facebook project, like Kubernetes was a deeply Google project until RedHat joined in. This rebranding and the association in general makes that kind of a transition smoother.
I still don’t see why anyone should use crypto in place of fiat. The space is dominated by commercial interests and they’re not at all focused on dislodging traditional financial institutions that are entrenched which is the source of all the problems.
nixass(1)
Basically, I think the underlying idea is valuable - low-cost, fast, reliable, accessible money transfers - clearly something missing right now in this world, even for the "global rich" (citizens of first-world countries), let alone for the "unbanked". It could even scale even more to a money store but that's basically being a bank, which is related but somewhat orthogonal (e.g. both Revolut and TransferWise started as mostly money-sending services and are now moving towards the "bank" stage).
So, my thoughts / questions are the following:
1) Is there a reason this is tied to the blockchain? For most purposes, blockchain without proof of work is just a glorified git repository, and I'm pretty sure that not even the most law-abiding citizens want all their transactions to be public.
2) Is there a reason this would be tied to a company, instead of being run by e.g. a charity? I understand why Facebook / Apple might be more successful with launching this than e.g. TransferWise (they can utilize their platform to push this (or any other) idea to a massive userbase), but really there's no underlying reason why you'd want this to be run by a non-financial company (and an ad ("use people's data to manipulate them") company) and many reasons why you wouldn't want to comingle your financial data with the likes of Facebook / Google / Apple.
3) Why a "new currency" ("stablecoin")? I understand that it might have some desirable properties but I'm pretty sure that most people would be negatively surprised if their "stable" coins started losing value (in terms of their local currency). Also, I'd say that most people don't even care/think about "FX rates" etc. and those that do are mainly currency traders / "speculators". So I envision the "ideal" system to be basically just an app displaying "sending 100EUR to person A in country Z will cost you 0.3% and the payment will arrive in 20 minutes" and the other person seeing "person B sent you 8919 INR".
4) I'm sure there are many issues with fraud/reversible transactions/KYC/anti-terrorism/anti-money-laundering that would need to be resolved somehow.
I think this is an ideal case scenario for a charity - an almost-government (non-profit, "for the people") organisation handling an area of "social tech" that global governments aren't tackling (because they aren't incentivized to) but fundamentally all the pieces of technology are there.
If anyone is interested in funding / founding such an organization, let me know.