Facebook’s New Cryptocurrency Gets Big Backers

https://www.wsj.com/articles/facebooks-new-cryptocurrency-gets-big-backers-11560463312?mod=rsswn

by Osiris30 • 7 years ago

117 256 7 years ago

Any suspicions on how this will differ from the last decade of crypto coins?

nelsonic2• 7 years ago

Deeper integration into the most popular social network meaning more people have exposure to it. In terms of functionality, it won't be any different.

A2017U1• 7 years ago

It will far more likely be a database under the hood than a cryptocurrency.

tomglynch• 7 years ago

Functionality may be different - we don't know yet. It hasn't been announced how decentralised it will be.

inflatableDodo• 7 years ago

It will be marketed a lot better, it will be slightly more efficient and function more easily as money and it will also much more evil and bring a curse across the land, making horses lame and suchlike.

askmike7• 7 years ago

It won't be decentralized, it's more like Paypal than crypto coins.

nelsonic2• 7 years ago

This sounds like a great way for FB to know even more about you.

jmalkin• 7 years ago

Facebook's equivalent of Google pay on the sense of data gathering?

LilBytes• 7 years ago

Yes.

ddtaylor2• 7 years ago

Will this be a centralized currency?

godzillabrennus• 7 years ago

It’s Mark “I’m CEO B!t(h” Zuckerberg.

Do you think he’d start a currency he wouldn’t be able to use to spy on every user?

ddtaylor2• 7 years ago

I'm not really interested in the spying aspect of it, since most cryptocurrencies make all transaction information public in their blockchains.

My interest is in who controls issuance of the currency itself and if that control is decentralized or controlled by a central entity, like Facebook.

clarkmoody• 7 years ago

  Facebook Inc. has signed up more than a dozen companies
  including Visa Inc., Mastercard Inc., PayPal Holdings Inc.
  and Uber Technologies Inc. to back a new cryptocurrency it
  plans to unveil next week and launch next year.

This means each of these companies will pay $$$ to run a "node" for this currency and have full visibility into the transactional behavior of the users of the coin.

The term "cryptocurrency" is applied a bit too liberally in the space, but what are the odds that Facebook's coin is censorship-resistant? Will Facebook help enforce US monetary imperialism, or will it thumb its nose at US sanctions? (e.g. allow a US Facebook user to send Libra to Iranian Facebook users)

Now, there could be a surprise plot twist in which these megacorps stand up for individual liberties. There have been stranger things.

pfundstein2• 7 years ago

I'm interested to see the how existing crypto exchanges will handle this currency, if it can be traded on them at all. The market that develops in the cryptosphere around Libra will certainly liberate any attempted sanctions on the coin itself, unless Facebook can prevent free trading of the currency on exchanges.

egypturnash• 7 years ago

I would only put money on Facebook standing up for individual liberties if they were going to make money off of it.

camjohnson264• 7 years ago

If Facebook can pull this off they will have brought about the first universal internet currency, which would be a stunning achievement and could revolutionalize the web as we know it. Failed projects give us some idea of what their challenges will be.

Cryptocurrencies right now have a trade off between scalability and decentralization. Bitcoin is theoretically decentralized even though the reality is more complex. But theoretically anyone with a computer can randomly decide to mine the coin and participate in the network. This whole process is made possible by Proof of Work, which was the key brilliant idea that made bitcoin secure and possible. The problem right now is this algorithm doesn’t allow very many transactions per second.

Other currencies have experimented with something called Proof of Stake to solve the scaling problems but it’s not known if it can be as secure as proof of work. Facebook’s currency will probably use this method. The basic idea is that the holders of the currency vote for what happens on the network. It’s an interesting idea but it’s a very different direction than the key idea of bitcoin.

Another issue is that governments rely on setting interest rates to manage their economies. If an internet currency starts to take off that will limit their ability to do this. At that point you can expect major pushback.

And also, the cryptocurrency ecosystem is a huge target for hackers. Millions of dollars have been stolen over the last decade. Brilliant attacks have been created to exploit the tiniest flaws in code. The phone numbers of crypto enthusiasts have been hacked and their wallets drained. Hackers have even embedded malware on websites or servers to mine cryptocurrency on computers they don’t control. Facebook will need an iron clad security process if it wants to succeed.

daveevad• 7 years ago

Would you rather:

Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State. And the Congress may by general Laws prescribe the Manner in which such Acts, Records and Proceedings shall be proved, and the Effect thereof.

Mark

ChainOfFools2• 7 years ago

depends on the Mark: Zuckerberg or Karpeles?

on second thought, no it doesn't

sethgecko• 7 years ago

The choice of consensus algorithm (PoW/PoS) has nothing to do with scalability (tx/s)

glitchc3• 7 years ago

The computational complexity per transaction does not affect the number of transactions.... wow.

camjohnson264• 7 years ago

Many factors go into it but consensus algorithm definitely plays a role.

LeoPanthera• 7 years ago

There's a strong argument to be made that "the first universal internet currency" is the US dollar.

cyberpunk• 7 years ago

What does that argument sound like? I'm 32 and have never spent any US currency on the internet...

camjohnson264• 7 years ago

I see no evidence to believe that.

ForHackernews2• 7 years ago

Facebook’s currency will probably use this method...the holders of the currency vote for what happens on the network

What are you basing this assumption on?

From everything Facebook has ever done to date, I expect Zuckcoin will use the method of "what FB says goes, and if you don't like it, you can pound sand."

celticninja3• 7 years ago

Which really boils down to 'what Zuckerberg says goes" so you want to put the control of a currency, perhaps used by 1bn real users, in the hands of a single greedy individual who has already shown contempt for users and their data.

camjohnson264• 7 years ago

If that is true then this isn’t a cryptocurrency and in my mind is not newsworthy

superkuh• 7 years ago

Is it really a cryptocurrency when it's completely centralized? No. This is just Facebook-bucks. Store dollars. It's has absolutely none of the benefits of a real cryptocurrency.

AlexCoventry• 7 years ago

Is the ledger public and irrepudiable, at least? That'd be something,I guess.

root_axis3• 7 years ago

It's as good as any ICO; exercising control isn't good for businesses, but Buterin has shown he can make it happen if the stakes are big enough, just like Zuck will also be able to do.

RexetBlell• 7 years ago

The fact that Ethereum Classic exists proves that Buterin has no control.

ChainOfFools2• 7 years ago

there seems to be a desire, arising from confusion and encouraged by opportunism, to conflate the term cryptocurrency with conventional notions of electronic cash.

I've listened to people from the world bank, the IDB and at least one representative of a central bank explain to me with enthusiasm how their pet crypto and blockchain projects were creating new opportunities for their organizations. There's always some crypto consultant lurking in the background of these conversations.

askmike7• 7 years ago

Having done different projects both in the public and private blockchain space, I believe the majority of the confusion comes from almost no one actually understanding the point of something like Bitcoin. While it's clear for IT people to look at a Paypal like system and point to the obvious central point of failure (the company behind it, the website "paypal.com', etc), almost no one outside of IT understands decentralization and why someone would want it.

Especially after learning all the downsides you get with these kind of distributed systems (slow finality, low throughput, limited in capabilities, inefficient, open to new attack vectors).

colechristensen4• 7 years ago

At that point and in so many circumstances the crypto part is ultimately just a different kind of database. Databases and protocols are just boring... At least from the perspective of the person using the currency.

In general, who cares how Chase keeps track of my checking account? It might have this feature or that feature but when it is being used as it is there isn't much to be excited about. If you're Chase it might make life a little easier to choose one thing or the other but the rest of the world probably doesn't care.

c0wb0yc0d3r• 7 years ago

I can't read the article in it's entirety but decentralisation is not what makes a crypto currency a crypto currency. Visa, Master card, Joe shmoe, anyone can start a centralized ledger that uses crypto.

colordrops2• 7 years ago

What sort of crypto? Just hiding the ledger behind SSL or encrypting the data is not what makes the "crypto" in cryptocurrency.

SI_Rob7• 7 years ago

I would strongly disagree here. Decentralization, though a term fraught with poorly acknowledged and contradictory premises, is essentially the defining value proposition of cryptocurrency.

Take away decentralization (which I would be more comfortable calling "aspirational decentralization" to reflect actual practice) and cryptocurrency is indistinguishable from conventional electronic currency.

magnamerc5• 7 years ago

Well, Nakamoto consensus or practical byzantine fault tolerance is decentralization. It's literally how groups of nodes come to consensus.

pjc505• 7 years ago

Facebook-bucks

Missed opportunity to call them "Marks", although maybe only German speakers will get the joke.

max762• 7 years ago

Is this a joke about fiat currencies and their tendency to suddenly become valueless and cryptocurrencies tendency to suddenly become valueless by making a cross language pun connecting the owner of a new cryptocurrency and the name of a currency most famously known for a hyperinflation.

Terretta• 7 years ago

Get it but “Facebook Zucks” has a doubly tongue in cheek ring to it.

turtlecloud3• 7 years ago

Word on the blockchain is that the crypto people are calling them “Zuck Bucks”

Nursie7• 7 years ago

I'd have just gone straight for "Facebucks"!

andreygrehov• 7 years ago

I call it Zuckerbucks.

DonHopkins6• 7 years ago

Mark's?

SI_Rob7• 7 years ago

Well there's also Dunning-Krugerrands, but that's already been taken

stillworks• 7 years ago

With all due respect to nations' currency names... can I but recommend "Douche Mark" in this instance ?

wtmt• 7 years ago

If a new "coin" is created every minute, it could be referred to as "There's a Zucker born every minute."

ionised2• 7 years ago

Or just FaceBucks

divbyzer0• 7 years ago

This smells of identity verification. They offer a payment mechanism which needs to be legally compliant.

Bingo! Social credit system with verified ID.

The crypto part is just to make sound hip.

pjc505• 7 years ago

WeChat payment for westerners.

narrator2• 7 years ago

When you get banned from Facebook for talking about whatever you can't buy or sell on the Internet anymore because you don't carry "the Mark". They are a private company so they can deal with whomever they want. You can still use cash. These tech companies want it so that if they ban you they can really screw up your life. Just look at people who have their whole Google existence wiped out because of some random policy violation.

yesforwhat• 7 years ago

Is it really a cryptocurrency when it's completely centralized? No.

What is decentralized about a handful of Chinese miners controlling all supply?

extropy• 7 years ago

That there is a well established (if expensive) method to re-take the decentralized control should things go south.

Same for open source software, the best pieces are generally run by a no-nonsense autocrats.

tuesdayrain• 7 years ago

If it's a currency and is implemented using cryptographic concepts, I feel comfortable calling it a cryptocurrency. "Decentralization" is a spectrum and a highly subjective one, so I don't think it should be a requirement.

xtracto3• 7 years ago

Indeed nowadays a lot of people relate the word 'crypto' with Blockchain related concepts, but being crypto only entails using some cryptographic concepts.

Cryptocommunication might be nothing but HTTPS/TLS. Cryptocurrency could very well be something similar, without involving Blockchain technology.

buboard2• 7 years ago

Can it be exchanged in binance for bitcoin? If yes, and this gets a lot of users, then it s a huge deal, centralized or not. (And yeah it is cryptocurrency as long as it is based in Cryptography )

magnamerc5• 7 years ago

It'll likely be an ERC20 token. So maybe people should be exchanging them for ETH.

magnamerc5• 7 years ago

The only benefit I see is that it'll likely be an ERC20 token which means more gas payed to Ethereum (which is great). Also, it'll essentially be a fiat on-ramp for billions of people looking to get into real cryptocurrencies. Assuming they allow the token to be traded on crypto exchanges anyway.

coolspot• 7 years ago

I don’t think FB will use Ethereum or any other existing cryptocurrency. They would want full control and there is no reason not to run own blockchain. Also environmental impact of Ethereum mining is bad PR for Facebook.

issa2• 7 years ago

I feel like this move will almost guarantee anti-trust actions. Although if nothing has already, who knows.

whatpreventsit• 7 years ago

What makes you think that?

issa2• 7 years ago

Just that Facebook influencing public opinion, elections, and currency seems like it would be too much for the government to allow.

turtlecloud3• 7 years ago

Printing money has always been under the domain of the government. Wars have been fought over rights to print money.

gear54rus• 7 years ago

I mean... Are they kidding me with that name?

giancarlostoro• 7 years ago

Means pound in Spanish. As if it holds any weight in the real world. Alt Timeline: Zuckerberg becomes POTUS in 2018. By 2020 he becomes POTKW and conquers all countries with just the information he knows about people on Facebook.

nyolfen4• 7 years ago

what do you think is weird or bad about it? it's a pretty appropriate name for a currency

mirimir3• 7 years ago

Sure, but not one owned by Facebook.

It's a sick joke.

tiagobraw• 7 years ago

Libra is the portuguese word for pound sterling

tmp2846• 7 years ago

Whether this succeeds or fails it is very good for crypto.

nsx147• 7 years ago

The real question here is if there will be a way to exchange this coin with Bitcoin or other crypto

sidcool• 7 years ago

Facebook has done horrible things, but bad business is not one of them. They already have 2 billion+ people on their platform(s) and if Facebook enables a virtual currency to exchange goods (real or virtual) it may be a hit. Just like mobile wallets have taken off pretty well, this could too. Again, I am not a facebook fan, but they know how to make money. This could be the next billion dollar idea.

snitko8• 7 years ago

Ugh. This will pass too. The value of Bitcoin is in the fact that nobody can control and censor it. It's black market money. If it didn't have this quality, it'd be useless. Nobody (meaning customers) cares about Facebook launching a coin. Facebook will not be the champion of freedom. How do I know? Ask yourself, if Facebook Coin is going to be available in Crimea (currently under sanctions) or Iran (currently under sanctions) or China (where facebook is banned). The answer is of course not. Bitcoin is available in all of those places and not a single government was able to do anything about it yet.

SomeOldThrow4• 7 years ago

You're forgetting how much credit card transaction suck. As I see it this is the main problem facebook could solve through sheer volume of use: microtransactions.

Granted this is about the worst way this future could come about....

asaph• 7 years ago

If Libra is a threat to credit cards, then why are Visa and MasterCard investing at least $10M each in it?

qwsxyh• 7 years ago

Do they suck?

chatmasta• 7 years ago

Who thinks credit card transactions suck?

final_approach• 7 years ago

I'm just going to add to this: it's been 10 years. Hacker News is still hoping very hard this so called libertarian wet dream cryptocurrency called Bitcoin will soon be out of the picture, replaced by something proper, that is fair and doesn't make you feel angry. And yet, it's still here, angering a whole bunch of people who didn't buy early and think the distribution is unfair & the political ideas behind it are awful and yet, Bitcoin is still #1 and widely used. "Blockchain not Bitcoin" hype is gone (remember how big banks invested millions blockchain projects?). Ethereum scammy ICOs hype is gone. This big-corp-coin thing will soon be gone too.

And all the issues people talk about here - like solving micropayments - are already being successfully solved by Lightning Network. Quietly.

simiones• 7 years ago

Except next to no one is using Bitcoin, not to mention Ethereum or Lightning Network.

It's very much like the Linux Desktop - it exists, some people love it, it's never going to disappear, but it is very much a niche interest that will never be mainstream, for a multitude of reasons.

xwdv• 7 years ago

IMO this is it, the last best chance for a cryptocurrency to take off and actually be used as a currency and not a speculative vehicle. If Libra fails, even with all of Facebook’s resources at its disposal, then there is unlikely to be any viable cryptocurrency for at least another generation.

Disclaimer: I hold a lot of stock in FB and no positions in other crypto.

snitko8• 7 years ago

Speculative vehicle? We're paying devs salaries in Bitcoin, what are you talking about?

Barrin92• 7 years ago

and many people are compensated in highly volatile stocks that are subject to speculation, you paying someone in bitcoin doesn't change anything about its speculative nature, it just means your employees are willing to receive compensation in a volatile currency.

jeffwass• 7 years ago

I’m curious. Is their salary paid as X BTC per month, regardless of the movement of BTC? Or are they paid the BTC equivalent of Y USD (or similar currency) per month?

lostmsu• 7 years ago

As mentioned in the top comment, FB currency is not a cryptocurrency in the sense "decentralized trustless public cryptography based ledger", so its adoption or lack thereof has little to no consequences on Bitcoin and Ethereum.

ulfw2• 7 years ago

and what on earth would be the advantage of paying in Facebook Marks instead of US Dollars?

imjustsaying2• 7 years ago

the advantage is you get to be part of the token pyramid before the next guy.

Mengkudulangsat2• 7 years ago

I'll be honest, I'm excited.

The biggest hurdle to Bitcoin adoption are on-ramps / off-ramps. Businesses and individuals dealing with Bitcoin frequently get de-risked by banks and suppressed by regulators (e.g: China & India).

Libra if (a) can be interacted with via API, (b) can itself be acquired via bank transfers / credit cards & (c) not geo-fenced, will eventually be adapted into one of the many exchanges and will contribute greatly to solving Bitcoin's on-ramping issues.

Whether consumers want Bitcoin once they've tasted Libra, well that's an ideological choice. It'll be interesting to see how it plays out.

snitko8• 7 years ago

Why would anyone want a facebook coin that is completely controlled by Facebook which can be controlled by the government when with Bitcoin you get complete sovereignty?

sametmax• 7 years ago

Nobody but it doesnt mattet. Facebook has the potential to br the western wechat with this.

ahalam• 7 years ago

Micropayments.

ramraj07• 7 years ago

Because not everyone cares about "complete sovereignty"? There's a reason why all these companies are still successful, most people don't care that much about their privacy or other dignities if it means convenience.

pfundstein2• 7 years ago

If this coin can be traded freely on crypto exchanges, then it will provide a convienient on/off ramp for other cryptocurrencies.

empath752• 7 years ago

Because you want to be able to actually buy stuff other than drugs with it?

rasengan• 7 years ago

All I care for is the end of the fiat system and the beginning of freedom for humanity.

thedudeabides5• 7 years ago

Can anyone explain how this will be different (from a user perspective) than any other tech enabled payments platform (Alipay, Paypal, Venmo etc)?

What's the rationale?

bandushrew• 7 years ago

its run by facebook.

datenhorst• 7 years ago

The white paper will be published next week, then we'll know more.

SomeOldThrow4• 7 years ago

Can't read the article. What is it backed by? Where's this information coming from? I can't find any press release or sources that aren't publishers themselves—this smells like insubstantial technology and bought hype (not that it won't work...).

ac29• 7 years ago

Its backed by some large companies and a bunch of money:

"The financial and e-commerce companies, venture capitalists and telecommunications firms will invest around $10 million each in a consortium that will govern the digital coin, called Libra, according to people familiar with the matter. The money would be used to fund the creation of the coin, which will be pegged to a basket of government-issued currencies to avoid the wild swings that have dogged other cryptocurrencies, they said."

ForHackernews2• 7 years ago

I assume it's backed by faith in Mr. Zuckerberg's sterling reputation as a steward of the public trust.

treelovinhippie• 7 years ago

I've met a hell of a lot of authoritarians in the crypto scene over the past decade. Blockchain technology is a centralized datastore so of course it's a tool for global authoritarianism; think IBM in the 1930s selling slow databases to the Nazi's so they can keep a universal ledger of the Jews.

P2P distributed architectures such as Holochain which actually decentralize data and control are far more positive paradigms for humanity.

polotics• 7 years ago

You wrote: "Blockchain technology is a centralized datastore". care to explain?

icebraining3• 7 years ago

I think they're talking about the blockchain working by a single global (hence, "central") consensus. It seems Holo avoids that somehow.

john_moscow• 7 years ago

Has everyone already forgotten KODAKCoin [0]?

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

1290cc3• 7 years ago

What I find hilarious is that Zuckerberg has probably been trolling the forums of bitcoin.org and reddit crypto groups for many months.

And like any good crypto "expert", he spent his time sharing opinions and copying other peoples source code versus building anything real.

dang4• 7 years ago

Please don't post unsubstantive comments here.

1290cc3• 7 years ago

Which part of my statement is "unsubstantive" the joke or the fact?

wyxuan• 7 years ago

Visa MasterCard and PayPal are just there to ensure that they don't get left behind if the FB coin succeeds, payments are their bread and butter, so if they can hop on the train they can be partially insulated. Otherwise they don't care.

raquo• 7 years ago

Why does this centralized stablecoin need to be crypto? It's not like they need to raise funding for this.

They could have made their own boring but extremely well positioned WePay / Paypal alternative ages ago, and instead they waited until cryptocurrencies are past peak hype to launch this. Puzzling.

I guess the only thing they have to sell here is the privacy aspect of crypto, but I doubt you'll get effective privacy from Facebook on any Facebook platform, crypto or not.

colechristensen4• 7 years ago

Yes. The biggest fans of Bitcoin have been all about the privacy and freedom of the coin but unless you have perpetually perfect opsec what actually happens is total information awareness. Everybody knows what everybody else is doing.

opportune2• 7 years ago

Monero doesn't require as good opsec since it effectively does all the tumbling for you

nroets2• 7 years ago

It's a token i.e. a financial derivative. So Facebook is not giving it's users bank accounts. So there is less regulation e.g. Know Your Customer.

A block chain will make it easier to build trust because (some) third parties can audit it.

pxndxx• 7 years ago

How is this different from the "digital coins" e.g. gems in pay to win games then? They don't give me a bank account, but it's still digital money, but not a cryptocurrency.

empath752• 7 years ago

They will not be able to get around know your customer laws. I don't know why people insist on thinking that they can get away with money laundering if they rub a little crypto on their financial transactions.

mirekrusin• 7 years ago

If it’s going to be anything close to what people call cryptocurrency - it’ll be deployed outside of fb 3 days later by somebody.

neonate• 7 years ago

http://archive.is/roYY9

reizorc• 7 years ago

What's in it for Facebook?

jbb123• 7 years ago

I can imagine few things I'd be less likely to do than use a currency backed by facebook.

bashwizard• 7 years ago

Thanks, I hate it.

runeks8• 7 years ago

It has been a decade since bitcoin was born, yet consumers hardly use it—or the hundreds of other cryptocurrencies—to pay for things.

And why would they? Adding two extra steps to paying someone -- the buyer converting local currency to bitcoin, and then the seller converting bitcoin to local currency -- can never compete with just transferring local currency directly. Cryptocurrency was meant to be much more than just a payment system.

Cryptocurrencies will not succeed until they close the loop: people receive their wages in cryptocurrency, which they use to pay for consumer goods in retail stores that accept only cryptocurrency (because their suppliers would pay their employees in cryptocurrency).

This is where cryptocurrency would shine, ie. by creating a global credit market, since the unit of account could be the same for e.g. Turkey, Nicaragua and Vietnam. A global cryptocurrency-credit market could arise, in which savers finance e.g. consumer goods on the shelves of retail shops. This would incentivize savers to purchase cryptocurrency in order to earn a low-risk return on their money -- something which is not possible to do in most Western economies with short-term interest rates at zero or below.

PS: If anyone is interested in creating the software infrastructure to make this happen, please let me know.

tikkabhuna• 7 years ago

Couldn't my employer then see what I'm spending money on? If they know the address of the wallet they're putting money into, they know where that money then goes?

Also, with a distributed ledger and billions of transactions a day, how is anyone supposed to actually index and understand all the transaction data? I like how Bitcoin I can actually sync all the data and (potentially) see stuff, but that was GBs of data and no where near as widely used.

Cryptocurrencies have a place, but they are a solution to a small subset of problems while creating others. There's a reason why people still use cash over cards.

colechristensen4• 7 years ago

You probably can't have a stable global cryptocurrency without a central bank. Bitcoin fundamentally cannot work for credit because the risk to the lender is ridiculous.

Macroeconomics doesn't work in diverse economies if you can't partition off areas of the globe and create friction at the borders for trade (with monetary policy).

The same products and services need to have location based costs to ensure local economies can function.

Now complete isolation is worse that perfect free trade, but there must be a balance. Lack of balance brings wealth concentration, poverty, starvation, and war.

narrator2• 7 years ago

"Bitcoin fundamentally cannot work for credit because the risk to the lender is ridiculous."

Kind of like this startup founder who wanted to buy property with a SAFE. I told him get a bank loan. He said: "That's risky!"

pjc505• 7 years ago

Arguably there already is a global dollar-denominated credit market, it's just highly intermediated. And the risk history of p2p credit shows why the intermediaries are useful.

in order to earn a low-risk return on their money

How does the economics of this work - you're claiming lower risk and higher return, but cryptocurrency does nothing to help with default risk?

runeks8• 7 years ago

Arguably there already is a global dollar-denominated credit market, it's just highly intermediated.

Correct. However, the fact that the Federal Reserve can underbid everyone (with regards to interest) on short term credit causes a destabilization of interest rates (which is why they've been falling for the past ~40 years). There's no point in saving dollars when you can't protest against a too-low rate of interest -- a bank can always tap into the Fed's credit and underbid you. This can't happen with non-centrally produced money.

So the "killer app" here is money for which no central party can control the interest/discount rate.

How does the economics of this work - you're claiming lower risk and higher return, but cryptocurrency does nothing to help with default risk?

I'm not claiming lower risk. I'm claiming a higher return by not competing with a party (the Fed) that can always underbid you on short-term credit.

The low risk comes from financing consumer goods in high demand sitting on the shelves of retail stores (ie. Bills of Exchange). Unless people suddenly stop eating food, you ought to get your money back (plus the prevailing discount rate).

skohan2• 7 years ago

As someone with a split existence between North America and the Euro Zone, I was sincerely hoping that cryptocurrency would at a minimum be a reliable medium of exchange: i.e. a way to convert dollars into euros and vice-versa in a matter of minutes with very low fees. I never needed it to be an investment vehicle.

Unfortunately, bitcoin's utility in that respect seems to have gotten worse since I was playing around with it 5 years ago. I haven't been following recently so maybe it's changed, but during the bubble there was a move towards high fees and less liquidity, with plenty of horror stories of exchanges locking people out of their wallets during big price moves.

IMO bitcoin would be much more useful if it had remained a niche tool for people to buy drugs on the internet rather than the pure speculative instrument it seems to have turned into.

runeks8• 7 years ago

As someone with a split existence between North America and the Euro Zone, I was sincerely hoping that cryptocurrency would at a minimum be a reliable medium of exchange: i.e. a way to convert dollars into euros and vice-versa in a matter of minutes with very low fees.

You're not looking for a new currency, you're looking for a regular currency exchange. Whatever fees your currency exchange charges for going from EUR to USD (and back) can only increase if you need to involve another exchange (for the bitcoin-conversion).

lordnacho• 7 years ago

dollars into euros and vice-versa in a matter of minutes with very low fees

I can do that immediately on one of the challenger bank platforms. And yes, the rates seem to be the same ones as what I used to trade institutional FX.

shtack• 7 years ago

I had a similar idea about closing the loop a couple of years ago. I actually built the buying half you mention (olodolo.com) and it is still used by a small handful of happy customers. On top of it I imagined an Uber-like app where you're paid in tokens along with fiat currency, thus closing the loop, but never got further along than that thought.

nradov• 7 years ago

There's no way to close the loop unless governments also agree to accept tax payments directly in cryptocurrency (not just a conversion). And that's never going to happen, at least not in any major industrialized country.

runeks8• 7 years ago

The idea would be to start with less developed countries -- who lack both strict taxation rules and retail financing.

SalimoS• 7 years ago

As it's said in another comment, it's not cryptocurrency when it's centralized and by a singe entity

i'm seeing it like all the in-game currency, controlled by the entity convert your local currency to this platform bucks to use it ONLY inside that platform

beatle_sauce• 7 years ago

It isn’t known, even to some members of the consortium, how the coin will work or what their roles will be, people familiar with the project said.

Such a stablecoin still requires a regulatory approval process before roll-out.

Just as a reminder that there are open alternatives, GNU Taler would offer a more privacy-oriented stablecoin with an already clear specification, but has not yet been adopted by banks that require the regulatory approval. On the mailing list, the developer wrote that they work on the two missing features needed for approval (cross-device synchronization and an integrated backup solution).

ptah• 7 years ago

literally printing money

sgt101• 7 years ago

Is this a brutal, final, swing at the Winklevoss twins?

SI_Rob7• 7 years ago

Heh. You know their Bitcoin exchange is called ... wait for it... Gemini, right?

They've wallpapered the DC Metro system with ads for it... calling it the first safe regulated Bitcoin exchange.

randomsearch• 7 years ago

My speculative take:

Facebook’s main product has likely peaked, in terms of users and advertising unit economics. The brand is tarnished, it’s not cool for younger people, its value proposition has been heavily eroded by short sighted decisions.

Instagram is doing really well, but by its nature is no substitute for Facebook. It’s too specialised, too narrow a demographic, and doesn’t have the same appeal all round. It can’t pick up the slack from a declining Facebook.

There are real regulatory dangers that Instagram etc will be separated off anyhows.

This is a bet on something that could be big. I’d bet against it working out, but a series of bets like this are probably the best strategy to hedge against decline. We know payments dovetails well with messaging apps (hence perhaps the attempt to unify them, conveniently making it more difficult to break up the company). Payments is a no brainer, the “crypto” spin original but probably irrelevant. For Facebook it does have the advantage of enabling them to accumulate a large fund of “deposits” they can invest.

If the above is right, we should see a few other big bets being placed soon.

bpicolo• 7 years ago

It’s too specialised, too narrow a demographic

Instagram has a billion users. What's narrow?

romanovcode• 7 years ago

I think even Instagram is slowly but steadily decaying. The amount of "influencers" are getting annoying even to younger people. I believe soon only people who will remain are influencers influencing influencers, you can even see this in the comments of said posts.

noitsnot• 7 years ago

Regardless, the company attempts to move forward with technology, acquisitions, and revenue. Facebook payments, gift cards in stores, stickers, etc. I don't think Insta is anywhere near full ad or revenue optimization.

Pulletwee12549• 7 years ago

Yeaaaah, Facebook doesn’t give a shit about privacy and love to sell our data for $$. What makes them think we will trust them with our banking info? Lmao.

Ahmed902• 7 years ago

Everyone here is debating is it crypot or not... but does it matter? it's Facebook after all, we are (the typical techy user) not the target audience.

Unfortunately, it's going to sell just because it's the big old facebook, your non-techy friend probably don't know the difference between crypto and food stamps all they know it's points for money, one is a boring piece of paper and the other is cool futuristic out of the matrix Bitcoin like super numbers

julianlam• 7 years ago

Didn't Facebook try something like this years and years ago in the form of Facebook credits, going so far as to even disallowing apps from having their own currency?

I wonder how this is different, besides the whole "blockchain" bit, because otherwise it's just a rehashed idea with makeup on it.

Ahmed902• 7 years ago

That was around 2010 iirc, before it was cool.

thefounder2• 7 years ago

This is good for the ecosystem. Next phase would be a crypto backed by government(s).

glitchc3• 7 years ago

If govts actually introduced crypto, it would be completely isolated from existing ecosystems. Unlike other players, govts. (western specifically) have a mandate to protect user privacy on their systems.

thefounder2• 7 years ago

I believe some crypto currencies provide privacy(i.e monero) so a gov fork could work.

Currently most of the governments share the data with various corporations(usually US based such as Visa and Mastercard, SWIFT, plus various national or foreign banks) and US gov agencies so the level of privacy is not that great.

Crypto currencies could also provide transparency and open protocols so I believe a gov backed crypto would be successful in many areas(i.e public procurement)

jormungand• 7 years ago

and in the meantime real crypto projects like ICON is ignored by all.

rattlesnakedave• 7 years ago

Finally! A cryptocurrency with the ethics of Uber, the censorship resistance of Paypal, and the centralization of Visa, all tied together under the proven privacy of Facebook. Just what I’ve been waiting for.

DonHopkins6• 7 years ago

And the magnanimousity of Oracle. And the carbon footprint of cow farts.

https://edition.cnn.com/videos/tv/2019/02/16/exp-gps-0217-ga...

runeks8• 7 years ago

https://edition.cnn.com/videos/tv/2019/02/16/exp-gps-0217-ga...
Bill Gates explains how no one knows how to stop bovine flatulence, a major contributor to climate change.

I doubt we need to prevent cows from farting. As I understand it, all we need to do is stop killing naturally occurring methanotrophic[1] fungi[2] with pesticides and chemical fertilizers.

[1] https://en.wikipedia.org/wiki/Methanotroph

[2] https://en.wikipedia.org/wiki/Mycorrhiza

pieter_mj• 7 years ago

It's not the fart, it's the burp!

mAEStro-paNDa• 7 years ago

I don't disagree, but uhm...

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

thinkmassive• 7 years ago

That’s catchy, but provide credit where it’s due... https://twitter.com/sarahjamielewis/status/11394299139229573...

HocusLocus• 7 years ago

I am not an ultra PC tech startup fantron and I found your comment hilarious. Keep striking, rattlesnakedave!

idlewords• 7 years ago

Don't steal other people's jokes without attribution.

SI_Rob7• 7 years ago

About the name - Libra

IIRC the Winklevoss twins have a Bitcoin exchange called Gemini

Surely a coincidence

brb going all in on tokenized cults

DoreenMichele2• 7 years ago

IIRC the Winklevoss twins have a Bitcoin exchange called Gemini

Gemini = "sign of the twins" (And, according to Wikipedia, is Latin for "twins" https://en.wikipedia.org/wiki/Gemini_(constellation))

It's probably just narcissism in that case.

I'm guessing "Libra" in this case is probably a variation of Libre -- free -- rather than an astrological reference. But that's totally a guess and could be completely wrong.

If anyone actually knows why they named it Libra, I would love to hear the explanation. A quick search isn't turning up answers.

SI_Rob7• 7 years ago

The joke (maybe, maybe not) in drawing the presumably intentional astrological connection has to do with the fact that the Winks and Zuckerberg have some ... shared history.

_pmf_• 7 years ago

Dear god. I find China's approach of the social credit system less threatening.

mountainofdeath• 7 years ago

So a cryptocurrency that is more currency than crypto? Again, back to the argument that the market is the same as in-game currency, store gift cards, Chuck-E-Cheese tokens, etc.

Let's be honest, most of the hype around cryptocurrency is for speculation and not as a legitimate means of exchange. Normal money works fine for means-of-exchange barring a few exceptions e.g. capital flight, money laundering, generally escaping regulation so the only value left is hype.

derefr• 7 years ago

People are using the wrong term here. Stablecoins (what Facebook has made here) aren’t cryptocurrencies in-and-of themselves; they’re systems that expose regular fiat currency to smart contracts, so that you can pass e.g. “5USD” from one contract to another without it losing value; or so that exchanges don’t all have to have their own relationships with physical payment-processors and banks, instead just allowing you to “buy in” and “cash out” in stablecoin assets, which you can then take to some other service to trade for physical dollars.

As such, stablecoins have entirely different requirements and properties than regular cryptocurrencies; for one, you usually want one big well-known entity backing them, because for the stablecoin to be stable, someone needs to back the coin with liquidity.

“Liquidity” is something Facebook obviously has more of than most others, so they’re an obvious party to build a stablecoin.

(Really, though, the best stablecoin for USD, would actually be run by the US government. There’s no reason for them not to do so, and no reason for people to reject them doing so. One could even interpret running a wrapped-USD stablecoin on any popular-in-the-US blockchain as being an obligation of the US Mint, given their mission. They’re currently failing to “print money” for these US markets!)

opportune2• 7 years ago

Or more cynically, stablecoins are fiat wrappers that people hope will trick regulators into not applying financial regulations to them.

DonHopkins6• 7 years ago

You don't have to worry about the liquidity of Santorumcoin.

Since it's water based, it will always flow smoothly, because Cathio will "provides the tools necessary to increase donations and connect with both local and global Catholic communities" to maintain a large frothy supply.

https://gizmodo.com/rick-santorum-is-a-cryptocurrency-guy-no...

buboard2• 7 years ago

What about people being excluded from payment controllers and banks because they are adult sites / fringe ideologies / whatever paypal’s terms disallow?

aphextim• 7 years ago

Is there an official name for these tokens yet?

Facebucks?

Zuckbucks?

Cuckbucks?

Facecoins?

lostmymind66• 7 years ago

The only reason Facebook is doing this is so they can track your purchases and mine even more of your data.

This reminds me of what WeChat is doing in China, where most purchases are made and tracked by the government from this app. I don't even know if you can use cash there anymore.

With the amount of information Zuckerberg has on the US population, he shouldn't ever be allowed to run for president while still running Facebook.

xtracto3• 7 years ago

I remember a Blockchain related story here in HN some days ago where someone said that he did not believed in blockchain because there were no big-name Engineers working on it, specifically nobody from FAANG.

There you go...

tistoon• 7 years ago

<< A Facebook spokeswoman declined to comment. >>

Every time I see this kind of news, I wonder, how do journalists get so much information when "an official spokesman declined to comment". Is this mainly just buzz so FB is in the headlines?

Facebook’s New Cryptocurrency Gets Big Backers

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