Libra, 2 Weeks In

https://www.facebook.com/notes/david-marcus/libra-2-weeks-in/10158616513819148/

185 276 7 years ago

I have been following Libra very closely, and have read their white paper twice.

There have been a few good discussions here on HN when it launched [0], but I think most of these have been very biased against anything Facebook-related.

I find the launch of Libra a really interesting "experiment", with potentially big negative or positive consequences for the entire world.

Right now, it's really hard to judge on the technical merits (e.g. the Move language, or the architecture, or how they're going to transition to a truly permissionless and decentralized consensus).

However, I think that it's wise to follow Libra's evolution with attention, as it might, and probably will, have consequences in our lives.

[0] https://news.ycombinator.com/item?id=20210791

hajile3• 7 years ago

When you're talking about controlling money, politics matter more than "technical merit".

Libra is invite only and they invited their business friends.

Libra consortium is based in Switzerland, so the businesses involved have guaranteed essentially zero government oversight.

Libra's owners have complete control over how much currency, the currency exchange rate, and even inflation rates (note that inflation is actually a tax on wealth).

I can't regulate it. I can't get my government to regulate it. I can't get a non-partisan consortium to regulate it (eg, Bitcoin). Businesses proven to put profits first have complete control. I have everything to lose and nothing to gain.

I don't care about the technical merit; everything about this stinks.

EDIT: and all that is before the privacy aspect. While accounts may be "anonymous", Facebook can use their data to identify you anyway. I don't like these big date companies tracking my friends or website visits. I certainly don't want them tracking my money too.

There's also the wrongthink aspect. Recent leaks from different companies seem to show them exerting political power and banning dissent. My political opinions may align with their now, but I'd bet anything that sooner or later, I'll disagree with them on something. I don't want my financial stability based on a platform that punishes me for thinking or believing "the wrong thing" (which could just be saying something critical about the companies in control).

Libra giving economic power to companies is straight out of fascism.

dmix2• 7 years ago

Libra consortium is based in Switzerland, so the businesses involved have guaranteed essentially zero government oversight.

Do you really think a massive US company using some Switzerland corporation is going to protect Facebook and their investors against any regulatory scrutiny?

carlosdp7• 7 years ago

Libra is invite only and they invited their business friends.

That's a big assumption. They were able to get their business friends to sign on, probably because they are already friends. I'm sure they asked a lot of other groups that were more hesitant, it would have made the initial announcement much more powerful.

Also important to note non-profits, NGOs, and universities are included, and they don't have to pay the $10m buy-in.

and all that is before the privacy aspect. While accounts may be "anonymous", Facebook can use their data to identify you anyway...

The way Libra is designed, that would probably be a lot more trouble than it is worth. Tracking methods without direct trackers (like 3rd-party cookies) work because there are many data points. Like in browser fingerprinting, you have user agents, JS feature availability, history, etc.

With Libra, you only have an account address and transactions to other anonymous account addresses. One dimension of data like that would be very very hard to trace back to the user, without direct participation from many many merchants.

There's also the wrongthink aspect.

Fair, however afaik only 1 of the 28 current companies (Facebook) has this attribute.

TomMckenny5• 7 years ago

It certainly intends to circumvent financial controls from democratic institutions. As if someone read parts of a dystopian SciFi novel as a how to manual. So it's certainly anti-democratic.

But technically it lacks the ethnic hatred, anti-intellectualism and gleeful blood-lust of fascism.

Faark• 7 years ago

note that inflation is actually a tax on wealth

I thought so as well, initially. But it only taxes a very specific form of wealth... money. As such this tax probably disproportionally affects those unable to transfer their wealth into other forms. Probably once again mostly the poor. Still a valuable tool, but not the great solution I once thought it to be.

MuffinFlavored2• 7 years ago

with potentially big negative or positive consequences for the entire world.

What are some of the biggest positive consequences potentially offered by Libra in your opinion?

carlosdp7• 7 years ago

Literally what they say it's designed for: giving access to the digital economy to the 500m+ people in emerging markets that have internet + phone, but no banking services.

jammygit• 7 years ago

Facebook is enough of a problem without letting them control part of the money supply too

hndamien2• 7 years ago

Short of transaction speed and cost, there is so little that is appealing in this compared to Bitcoin, and it has all of the centralisation and compliance pitfalls that a neutral, free (liberty), decentralised money already avoids.

emef• 7 years ago

Transaction cost and speed are enormous problems for bitcoin, not sure why that would only be mildly appealing to solve. Not vouching for Libra, but my understanding of bitcoin was that it caps out at something ridiculously low like 11 transactions/second, which each cost multiple USD. Clearly that is the bottleneck that needs to be addressed by whatever would lead crypto moving forward (I remember reading visa processes more than 10k transactions/s).

wmf• 7 years ago

Bitcoin is the oldest and thus technically least advanced cryptocurrency. There are plenty of coins that are much better than Bitcoin in terms of privacy and scalability; Libra should be compared against these.

1ark• 7 years ago

Unfortunately very few alternatives have been created which ticks the same boxes as bitcoin, but some with speed improvements. It's too bad that so many developers have stranglehold their innovations by premining, receiving development tax, keeping a percentage of all coins by themselves. Or lacking a good process for protocol innovation like BIP. Because there are some really shiny coins out there.

I thought that transaction cost and speed was a problem, but I am not so sure anymore. There are second layer solutions, like Lightning Network. And it is also possible to use current solutions like Visa, through pre-filled cards or debit cards. Of course not optimal.

It's not that long ago when we got to choose network protocols in games for example, IPX/SPX in favor of TCP/IP because of speed. Maybe it is a similar time, we'll see.

javert7• 7 years ago

There is an extremely easy way to get over that issue. It has already been solved for all fiat currencies. When big banks transfer dollars between one another, their balances at the Fed get updated to reflect this. But this doesn't happen for 99.9% of transactions.

carlosdp7• 7 years ago

It has price stability, that's a big one.

hndamien2• 7 years ago

Supply stability (or constraint) may be the more important feature.

justapassenger• 7 years ago

If Libra delivers, its value will be stable, which is a one of the most basic requirements for a currency. Bitcoin failed spectacularly at that.

shitgoose3• 7 years ago

well, libra has to get to where bitcoin is now first, then we will see who failed.

gopher2• 7 years ago

The large price fluctuations that bitcoin has are also undesirable for some.

r32a_3• 7 years ago

Let's call this for what it really is, they want to replace democracy with Corporatism.

At least with a government backed currency we get a choice on who runs the government. Even though that power is constantly being eroded.

The companies that run Libra however have 0 obligation to users of Libra but only to maximise profits for their shareholders. This is their plan:

* Dedicate a lot of resources to spread the adoption of Libra

* Change the language of what Libra is.

* Extract as much value as they possibly can from Libra users.

The proof is simple, If FB and all of those companies dedicated resources to development and adoption of Bitcoin itself then it would be able to reach the goals of Libra and be more decentralised than Libra.

David Marcus and the entire Facebook Libra team make me sick to my stomach.

conanbatt• 7 years ago

As a non-Us national, I prefer FB corporatism to US democracy. Puts more people on even ground.

r32a_3• 7 years ago

Or choose Bitcoin and have neither :)

ajdlinux• 7 years ago

As another non-US national, I still have far, far more faith in US democracy than FB corporatism.

In any case, the US isn't the only country in the world with a monetary policy that could get trampled over.

gowld• 7 years ago

What does Libra do to people who don't opt to use it?

whateveracct• 7 years ago

Assuming adoption - It exists in the world and has all the influence an adopted currency has. Influence controlled by Facebook.

skybrian3• 7 years ago

Could you explain why you think democracy is important and has much to do with how U.S. currency is managed? It seems to me that voters have very little influence on decisions made by the Federal Reserve, and that's intentional. We wouldn't want a central bank to be much influenced by the latest election.

The Federal Reserve is a consortium of banks and tends to make decisions that are good for banks, so if you're worried about corporatism, it's already here.

ma2rten• 7 years ago

The chair and board of the federal reserve are appointed by the president.

threeseed2• 7 years ago

I think you fundamentally misunderstand how currencies work. They are managed by central banks which are designed to be independent of the government of the day.

And corporates basically own and run the internet and it seems to be doing pretty well.

mbesto4• 7 years ago

They are managed by central banks which are designed to be independent of the government of the day.

Heh, I think you fundamentally misunderstand how central banks work.

1. The US Mint creates the supply of currency in the US, which is literally governed by the government.[0]

2. It's literally governed by presidentially appointed officials.

3. The Fed manages the banking system, which is a trusted system that utilizes fiat currency as a medium of exchange. Their focus is much more aligned to economic prosperity and policy formulation then it is about how the "currency is managed" (the two are obviously interrelated).

And corporates basically own and run the internet and it seems to be doing pretty well.

There's a big difference between "it basically does" and "it is".

EDIT: [0] - My bad, the BEP creates currency which is overseen by the Treasury, which is in fact a government entity.

carlosdp7• 7 years ago

Bitcoin is not more decentralized than Libra today[1]. Libra has 28 members, going to 100. The top 11 bitcoin mining pools control 99% of the hashrate.

[1] https://www.blockchain.com/pools

whatshisface2• 7 years ago

If 100 miners meet at the same country club and follow the same government's laws/nudges that's as decentralized as one.

clarkmoody• 7 years ago

Pools are groups of miners. If the pool operator starts behaving badly, the constituent miners will point their hashpower elsewhere.

javert7• 7 years ago

Bitcoin is more decentralized than Facebook's coin no matter what because mining is controlled by an algorithm, rather than being an invite-only club.

malandrew• 7 years ago

If what you say is true, why not support the project and buy shares in the 28 controlling entities?

provolone5• 7 years ago

From my reading corporatism is defined as the government dictating economic policy via various syndicates. I.e. the business owner retains nominal control over the means of production, but the actual production decisions are made by an industry-wide government bureau.

mromanuk• 7 years ago

Call me pessimist, but cartelized private global corporations owning and “printing” money can only bring bad things. It is centralized and is controlled by an elite.

whatshisface2• 7 years ago

The Fed isn't? It has more private board members than appointed board members, and some have argued that it has consistently prioritized the interests of the banks at the expense of encouraging leverage like cash is going out of style. This is closer to a battle between west coast elites and east coast elites than it is about the people versus the elites.

sidlls• 7 years ago

Well, The Fed is a bit different. It's not exactly a private corporation that is not beholden to the voting public.

More importantly, though, is your note about who this battle is between: it's a battle between groups of people who should both be viewed very skeptically when it comes to the interests of "the rest of us".

Corporate controlled money has been tried in the past; it didn't end well for workers.

dragonwriter• 7 years ago

It has more private board members than appointed board members

Only in the world where 0 > 7; there are 7 members of the Board of Governors, all Senate-confirmed Presidential appointees.

mbesto4• 7 years ago

Even if it isn't fully apparent, the people can vote out a president that controls the Fed. There is no such option to the "100 member companies". Also, the Fed is US only...so there's that.

The scary thing about Libra is that it truly has the potential for global-scale "boil the frog" ramifications.

javert7• 7 years ago

The Fed isn't?

This kind of response derails the discussion. Yes, the Fed is centralized, too. That doesn't defeat the point you are responding to.

snowwrestler• 7 years ago

The Fed Board of Governors (the body that makes monetary policy) is an agency of the federal government. That means that yes, it is centralized, but it also means that it operates under a public, transparent, and democratically changeable legal structure. If Americans don't like the Fed, they can vote for a president and members of Congress who will change it.

Bitcoin has become centered on the few largest mining operations. Libra is centered on Facebook. Who elected them? How do currency holders influence them? There are no defined ways to do so.

chillacy• 7 years ago

Banks used to print banknotes, and still do in some places. As long as those notes are backed by assets, what’s the problem?

lightgreen5• 7 years ago

They are not going to “print” money. Each libra dollar is backed by real dollar/euro/jpy.

lanrh1836• 7 years ago

My biggest question right now is how many people will want to use Libra enough to pass stringent KYC checks for a wallet like Facebook’s Calibra? You’ll need to give Facebook much more information than they have on a user today, such as photo ID, address, SSN, etc (depending on country).

My cynical view is that Calibra is actually the real value to Facebook here, and they are betting that it will be the biggest wallet by far. It will allow Facebook to reconcile millions if not billions of identities in ways they have not been able to to this date.

0xDEFC0DE5• 7 years ago

With Libra, anyone with a $40 smartphone and connectivity will have the ability to securely safeguard their assets, access the world economy, transact at a much lower cost, and over time access a whole range of financial services.

Bad actors will lift old exploitative models into Libra's ecosystem: payday loans with huge interest rates, wallet services that force a deposit and allow you to overspend and charge fees when you do, sign up people for accounts and services that they don't want and make commissions. Or maybe just wallet/business services that straight up scam people and disappear with no repercussions. The thing you set out to kill will just come back with a new flavor. Plus it's even easier now since you can do it all with a single click!

Then someone has to decide what to do with bad actors involved with Libra and allocate resources to actually enforce some actions against them (legislative, the cops, server bans, ISP bans, etc.). Now you've got those services paid by tax dollars dealing with a corporate currency and taking time away from other enforcement actions.

All of this is going to happen at the juicy, vulnerable threshold where the technical controls interface with the human element. I probably won't ever hack Libra/Move itself, but the human part is still there. If I can actually manage to get away with the crime and transact with a fake identity, it can't be reversed.

Bonus: that same $40 phone stops getting updated by a phone carrier and some drive-by malware swipes all of your LibraBucks with a corrupt text message and no one can reverse the transaction. Or maybe that Bloomberg supply-chain attack article will finally become a reality once there's enough economy behind Libra.

If this is widely adopted, it's going to have a pretty steep learning curve and plenty of real losses for everyone.

TheSpiceIsLife• 7 years ago

Where does Libra claim it's transactions are non-reversible?

And by reversible I mean refundable.

0xDEFC0DE5• 7 years ago

That’s a blockchain thing. They can fork, but they aren’t going to do that if I lose $150 in Libra. If they can single reverse transactions, there’s really no point to it being a blockchain.

If it’s refundable then they are just paying for the crime itself out of their own pockets. They will still need a human layer to verify theft has occurred and it isn’t a fraudulent claim of theft where just I stole from myself.

skybrian3• 7 years ago

Wouldn't much of this also be true of other kinds of phone-based payment, such as M-Pesa?

0xDEFC0DE5• 7 years ago

Probably. M-Pesa sounds like a bank itself. Are deposits insured in any way? Do they work with victims to restore their account balances?

Balgair• 7 years ago

During the initial stages of the invasion of Afghanistan, the US would pay the ANA, just like everyone else, with cash and checks. However, it was soon discovered that the officers were the ones handing out the money. As could be expected, there was a lot of corruption and grift going on, and the grunts weren't getting their pay. Desertion rates went up by a lot. Eventually, the US figured out that you could pay the soliders in phone credits that they could redeem at 7-11 and the like. That went well for a little while, until the officers confiscated all the phones.

Which, actually, went a lot better. A lot of the common soliders would call up their relatives when they went on patrol or a mission so that their relatives knew to either stay away or come around later. A lot of relatives ended up being in the Taliban. As such, OpSec was a lot easier.

Vice news has a mini-docu on this a few years back, but I can't seem to find it online right now.

Point is, bad actors aren't sitting in cyberspace and aren't without authority. Money that you can't hold in your hands or bury in a tin can is worthless if the system you are in is corrupt. I'll wager that Libra is not going to be well adopted people in corrupt police jurisdictions.

seibelj• 7 years ago

One thing that’s been nice since the Libra announcement is the number of knee-jerk reaction “cryptocurrency is 100% useless and look at this NIST blockchain flow chart hurrr hurrrr” comments have mostly disappeared. It seems like crypto is not totally useless after all, but the biggest threat to humanity ever created... or something...

b_tterc_p3• 7 years ago

Lots of useless things can become useful if powerful people say they’re important now. It doesn’t say much about the underlying tech.

danShumway• 7 years ago

Crypto isn't the reason why Libra is dangerous, Facebook is.

If Facebook was launching their own business-controlled currency that was backed by an SQL database, you'd see the exact same reaction. The crypto part is just an implementation detail, what people are actually upset about is corporations trying to seize control of our currency.

antpls• 7 years ago

Corporations are subjects to local laws, so what's the issue ? It seems people are afraid of the unknown more than Facebook.

My personal questions : If anything goes wrong with the Libra scheme, who will be responsible ? Who would be fined / sent to prison ?

gexla• 7 years ago

At the core, we believe that a network that helps move more cash transactions — where a lot of illicit activities happen — to a digital network that features regulated on and off ramps with proper know-your-customer (KYC) practices, combined with the ability for law enforcement and regulators to conduct their own analysis of on-chain activity, will be a big opportunity to increase the efficacy of financial crimes monitoring and enforcement.

I wonder how many people in the world can pass a KYC check right this moment.

hartator• 7 years ago

Know your customer is BS. It's just an excuse to invade your privacy and ask you personal questions.

javert7• 7 years ago

That's not true. People who don't do KYC to their customers go to prison.

KYC exists for the same reason the drug war exists: People believe in paternalism and want to feel that there is some greater power that is in control. And there are people with guns and throw-you-in-prison capability who are happy to make it so.

dymk• 7 years ago

And all efforts to curb money laundering, and all AML compliance laws are just to invade your personal privacy and nothing more too, right?

shitgoose3• 7 years ago

the moment libra is exchanged for fiat, it is under scrutiny (know your client etc). fbi routinely nails various e-gold enterprises, where clients exchange fiat for tokens and freely transact tokens across the globe. all it takes is to open a couple of libra accounts and send a transaction with "hurt as many americans as possible" in the details. a lot of people were busted for a lot less than that.

imagine high volume small denomination libra transactions between florida and colombia - fb will spend the rest of their days trying to explain to fbi they didn't mean no harm.

jillesvangurp2• 7 years ago

The FBI has no jurisdiction outside the US and you are right that cash is more safe to use for buying cocaine, ordering hit men, buying child pornography, etc. Libra is probably not going to be popular for that sort of thing. The irony of a distributed ledger is that it actually makes enforcement a lot easier. Facebook will simply point to the ledger and tell the FBI that "everything you need to know is public information". FB is also uniquely positioned to facilitate all the required KYC and AML processes.

The reason governments are worried about Libra is not his but the fact that people might choose to no longer exchange for fiat. If you are transacting and earning Libra, why would you swap for dollars/euros and pay the transaction fees for that? This is a much bigger concern for governments than the black market economy.

shitgoose3• 7 years ago

"The FBI has no jurisdiction outside the US"

tell this to Vinnik, a Russian national who was arrested in Greece on behalf of FBI and extradited to US:)

if FB starts enforcing KYC, then the adoption will be very narrow - US and few other developed countries. even in US i doubt that many people will be happy to share their driver's licences and bank accounts with FB for obvious reasons. and without wide adoption there will be no libra "closed system" as you described. this is catch 22. i don't see how FB can pull this off. i don't even see any clear strategy behind libra.

andreshb• 7 years ago

You should really update your stereotypes.

b_tterc_p3• 7 years ago

Libra feels like a great new avenue for physical, violent crime.

probe• 7 years ago

"It’s easy to assume from the headlines that Libra is only associated with Facebook, but that is not the case."

With the post on.... Facebook.com

qwertox3• 7 years ago

"Oopsie" -- Facebook Marketing Department

sophiebits2• 7 years ago

You too can post anything you want on... Facebook.com

IAmGraydon• 7 years ago

I'm asking this in all seriousness. Why would anyone want to use Libra?

Let's say a consumer wants to buy something. They can either pay with "normal" money in one step or they can use their phone to convert their money into Libra and then make the purchase with Libra. Why would they go through the extra step(s)? Am I to believe that the benefit is "lower transaction fees"? Because if so, Libra doesn't have a chance. Only vendors, not customers, see those fees directly. Even if the customers did see them, they aren't big enough to sway the inertia of the way things are.

In the real world, the vast majority cares very little about things like decentralization. They don't care about how the banking system works and who controls the flow of money. They want to swipe their card and get what they want. Anything more than that is just an obstacle. At least BTC has the benefits of pseudo-anonymity and speculative appreciation. Libra has neither.

Beyond all of this, people like to have control over their money. To feel they have control, people need to have understanding. Paper is easy to understand. Cryptocurrency makes people nervous. Facebook REALLY makes people nervous. Put the two together and it will feel like a big risk to users.

I'm an open minded guy, but I don't see it. Someone please enlighten me as to why this won't be Facebook's biggest failure. Why would anyone want to use Libra?

rtpg• 7 years ago

Most payment apps are locked to a specific country. If Libra becomes "Alipay except cross-country" then a bunch of tourist-y places in (for example) southeast Asia could start using it to get tourist's money without much of a hassle (especially given how many people are already accepting QR code payments from some local app)

Similarly, cross-border payments in general are a huge PITA and affect enough people that stuff like Transferwise exists. If Libra can help assuage that there's a nice market there.

It might not be a resounding success but it could be enough to sustain an ecosystem.

xyzzy_plugh• 7 years ago

Am I to believe that the benefit is "lower transaction fees"?

I don't intend to speak to various other merits (or the lack thereof) of Libra, but to this: yes?

Of course! Transaction fees are huge. If you are operating in a razor-margin business, which more and more businesses are these days, then it adds up.

FasTrak, the Bay Area toll processor, charges your card when you drop below a certain balance, and also charges you what they think your average monthly rate will be. Why? To avoid excessive transaction fees on every toll eating into their coffers.

If the only way to buy something is Libra, or if merchants prefer Libra, then folks will be using Libra. Just look at how much market share PayPal has conquered, and they're arguable garbage.

If you can substantially beat PayPal, you win.

provolone5• 7 years ago

There's already a feeless, decentralized cryptocurrency which settles transactions in less than a second.

https://nano.org

Libra's selling point will be FB's onboarding of users. It would not be unreasonable to expect dark patters there.

TomMckenny5• 7 years ago

Why would anyone want to use Libra?

Money laundering. You'd no longer need to buy a condo in New York to get your rubles into dollars.

lightgreen5• 7 years ago

I don’t understand, how buying a condo in New York helps you converting rubles into dollars.

lightgreen5• 7 years ago

Why would they go through the extra step(s)?

Extra step can be very simple: your libra wallet can be auto topped up from credit card.

Only vendors, not customers, see those fees directly.

A lot of small shops around the world (like one next to my home) do not accept Amex because of higher Amex fees. And require cash if total cost is less then several bucks. Maybe these shops will eventually stop accepting Visa and MasterCard and/or allow libra on even smallest transactions.

Facebook REALLY makes people nervous.

Are you talking about common people or people who visit HN frequently? I doubt common people really care about their data shared with advertisers. Even I don’t really care.

And again, Facebook will be not the only provider of libra.

Why would anyone want to use Libra?

To be able to send money to your parents living abroad. To pay on vacation and don’t worry about conversion rates. To be able to send small debts to your friends easily. And so on.

the_watcher2• 7 years ago

When vendors see transaction fees, they pass them on to consumers. Sometimes it's in the form of "$X minimum for credit card transaction", other times it's passing the costs though silently, other times it's not accepting cards at all. In the developing worlds, what we consider trivial fees for a vendor to accept are anything but.

spaced-out• 7 years ago

There are millions of people around the world that are unbanked. Especially in 3rd world countries, they get on the internet by buying the cheapest possible smartphone and data with cash. I was just in the Philippines, and I saw places selling access to only Facebook and WhatsApp, in increments of 30MB of data, for cash.

The problem for Facebook is that these people can't buy anything online, because they don't have a bank account. If Libra launches successfully and remains stable, those same places selling X MB of data for cash, could easily start selling Libra too.

That's what so many people here are missing. Facebook isn't targeting this at people who have credit cards, Paypal accounts, and know what Bitcoin is, they're targeting the day laborer in a rural, 3rd world country, who might be enticed to part with some of their spending money for some Chinese plastic trinket that they never could have bought before, because none of the few stores in a 100 mile radius stock stuff like that.

jankotek• 7 years ago

I am not sure about Philippines, but most African countries have better mobile banking than US.

umanwizard• 7 years ago

If Libra launches successfully and remains stable, those same places selling X MB of data for cash, could easily start selling Libra too.

Why couldn’t they sell prepaid Visa cards, or Venmo/PayPal (or whatever is the local equivalent) top-ups?

I get that having access to brokers that will sell a globally recognized hard currency for local cash is super useful, especially if it’s in electronic form.

I don’t get why it’s useful for it to be a blockchain, or why Facebook is the most likely company to run it successfully. When I ask people this the answer seems to be some hand-waving about regulation, but if this is hard for Venmo and PayPal to offer because of regulation, why would throwing around the word “blockchain” magically make it any easier for Facebook?

democracy4• 7 years ago

The fact that they don't have a "bank account" in a traditional sense doesn't mean that they can't do what they want to do - transfer money to each other and make purchases using other means. The "bank the unbanked" idea that crypto-shills like so much only works for people who know nothing about these "3rd world countries".

johnmarcus2• 7 years ago

yes, this.

raverbashing2• 7 years ago

targeting the day laborer in a rural, 3rd world country, who might be enticed to part with some of their spending money for some Chinese plastic trinket that they never could have bought before, because none of the few stores in a 100 mile radius stock stuff like that.

Yeah, if that's what they're thinking they don't know too much about "3rd world countries"

lawn• 7 years ago

One of the reasons many people are unbanked is the expensive KYC laws. Libra also need to respect KYC.

TACIXAT• 7 years ago

Reasons I'm interested, stability and transaction fees. You don't want to pay someone in a deflationary currency, as their salary will always increase. A stable coin solves this in allowing people to actually use it.

The lower fees enable micro transactions which is something that I believe the internet needs in order to move away from ads. I'd happily pay a fraction of a cent per page view, there is no good way to do that right now.

anonytrary• 7 years ago

They don't care about how the banking system works and who controls the flow of money

That's because the person controlling the flow of money hasn't taken enough away from them. History has plenty of examples where a centralized controller went "too far", causing a mass exodus.

This is very hyperbolized, but consumerism and society today is truly reminiscent of a rat inside a cage with infinite sugar water, cocaine, and a steady supply of new mates.

---

As for Libra, what is Facebooks plan? The only way I can see them winding up on top is if they make the "next Bitcoin" where they own like ~10% of the supply, kinda like Satoshi. I don't see Libra working if it's centralized.

moksly2• 7 years ago

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

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

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

mrweasel2• 7 years ago

like in small stores that can’t really afford to have a credit card terminal

Remember that most of those small stores are able to do this by breaking the terms of service. Accepting MobilePay is NOT free for business, it's not even cheap. As a customers is pretty easy to spot, if the stores MobilePay number is just their phone number, they're breaking the terms of service, and you should pay cash.

viraptor2• 7 years ago

This seems doable without Libra. I'm in Australia and my local transfers from the bank app (ING) are both free and instant. At least to banks that joined Osko. That sorts out pretty much all simple/tiny transfers. If Libra can guarantee international transfers for free, I expect that fee will also go away from the banks.

gilbertmpanga12• 7 years ago

Libra indeed, is such a huge win for 3rd world countries because cross border payments are way to expensive plus if you're starting a tech startup with hopes of earning from US, or Canada, it's impossible because Stripe, or Paypal are not supported, so they're left out. Libra is great for Startups with global ambitions :)

Abishek_Muthian• 7 years ago

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

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

Closest related statements I could find in the blog,

while Facebook, Inc. owns and controls Calibra, it won’t see financial data from Calibra
More commerce means ads will be more effective, and advertisers will buy more of them to grow their businesses.

foldingmoney• 7 years ago

Imagine you live in Zimbabwe in 2008, or Argentina now, where people have no faith in their central banks to responsibly manage their money supply. Then ask yourself what's the value of a portable, anonymous, relatively stable currency that your government can't easily manipulate or confiscate.

seventhtiger2• 7 years ago

Large parts of the world have no access to banking and can never convert from cash to digital currency. How easily can you transfer money to random individual in random developing countries who might offer their digital labor?

If they are paid in Libra, and can pay in Libra, they become part of the global economy.

teekert3• 7 years ago

In the Netherlands (or the EU) banking is sort of changing, we have some Fintech companies moving into the space (bunq, revolut, N26). I'm a customer at bunq and they are a breath of fresh air, I can:

* Have 25 separated accounts or savings goals

* Share any bank account (or savings goal) with anyone (using bunq)

* On the fly couple my passes to any of the accounts

* Use NFC on my Android phone to pay

* Have a website where people can transfer me money coupled to any account

* Make payment request that are (when accepted) in my account in seconds

* Make 5 virtual MasterCard to route online payments to different accounts

* Choose what they do with my savings to generate interest (I have it set to "invest in green companies")

They are mobile first (the app is first class) but they have an API (and an open source desktop client as a result). All this is more expensive than traditional banks (I pay 8 euro a month) but they do not invest in shady things and promise to respect my privacy. I imagine Libra will do the same and more (but for the privacy part). It will be more like an ecosystem.

Not that I want it. I completely agree with all the sentiments here. I chose bunq because they have the same ideology as I do.

benj1113• 7 years ago

"On the fly couple my passes to any of the accounts"

I don't understand what you mean by this?

stronglikedan• 7 years ago

That's all well and good, but can you also anonymously buy some blow with cash when you want to party?

wickoff3• 7 years ago

Check out FX charts for Russian Ruble, Argentinian Peso, Turkish Lyra or even the British Pound. Then ask yourself which of these countries have financial institutions that allow their clients to seamlessly transact in more stable currencies like US dollar or Euro and you have your answer.

gerikson2• 7 years ago

These countries can simply ask Facebook/Calibra to not offer their wallet, or to require FB to disable the wallet functionality.

Or they can ban Facebook.

benj1113• 7 years ago

"Russian Ruble, Argentinian Peso, Turkish Lyra or even the British Pound....more stable currencies like US dollar or Euro"

I know Brexit has taken its toll, but its not quite that bad.

pjc503• 7 years ago

I don't follow this line of argument? I already keep my investments in a UK tax-sheltered savings account invested in US securities, and my credit and debit cards work for buying things in dollars, but most of my spending is in GBP. I could have a Euro-denominated bank account if I wanted. How much more "seamless" would I want?

marc3842h• 7 years ago

I like to argue that Libra has the potential to become a widespread "mainstream"-like Cryptocurrency. Mainstream is the important factor here.

Sending money internationally takes several days currently and comes with high fees.

If Facebook implements Libra into their platforms such as Whatsapp, Facebook Messenger, Instagram etc. this brings less familiar people in contact with Cryptocurrency.

People might start to use it because of way faster international money transfers and (most likely) less fees. I know I will because of that reason.

jillesvangurp2• 7 years ago

Very easy: convenience, security, and cost. You are right that consumers will care little about the cost aspect, because it is largely hidden from them (even though they pay for it indirectly) but they do care about convenience and security. Online payments are actually not really that convenient. That's why Amazon is so popular because they sort of shield you from having to setup payments with each of the merchants they proxy for you. This convenience comes at a price; Amazon is not a charity and highly profitable.

Copying credit card numbers all over the place is tedious and risky and people are kind of nervous about it for valid reasons. Swiping cards like a caveman is already a thing of the past and also not that safe. There's a huge amount of friction around payments for both users and merchants both online and offline. Even cash has a cost for merchants.

Contact-less payments with cards or phones are rapidly replacing cash payments (more convenient). But of course online you basically still get to copy credit card details around or deal with middle men like paypal or one of the many direct debit systems in many countries.

BTC is nice as a gold alternative and similarly tedious to transact with. It's useless for payments as transactions are extremely slow and rate limited to a ridiculous ~5 transactions per second globally. Price volatility means that it is hard to price things in it because you have to update the prices continuously. Ethereum is useless for the same reasons (in its current form).

Libra will require a bit of selling and educating obviously but actually comes with all the tools needed to make that easy. E.g. micro payments and tipping are very easy to implement on it and you could use that to incentivize users with e.g. bonuses, tiny refunds/rebates, etc. Integrating payments into chat removes a lot of friction for the user. And once there are enough merchants adopting this that incentivize users to use this, adoption could be quite rapid. Having low transaction fees will make this very interesting for merchants.

johnmarcus2• 7 years ago

that's a valid vue from the top of the dollar pyramid, but if your much lower and your local "dollar" doesn't have kind of sway in the world, than this starts making more sense. Look at Venezuela - if the citizens opted in to buy a stable coin (which they can easily do, unlike purchasing physical US dollars, which they can not easily do) than a currency like Libra makes a lot more sense.

everyone seems to think crypto is for the first world, it's not, it's for the third worlds. will it empower the citizens like they claim? i don't know, but they definitely have a more valid use case.

qwertox3• 7 years ago

Very telling that his article is hosted on facebook.com instead of libra.org.

It kind of proves that the separation between Facebook and Libra is nothing but a lie.

He just doesn't get it and he never will.

sophiebits2• 7 years ago

It isn’t an Official Facebook Announcement though. Think of it more like a Medium post.

iamzozo• 7 years ago

You know, when the message is "this is not a facebook product", because some people confused about it and you post an "unoffical" announcement on facebook, then maybe it's not a good PR.

xiphias22• 7 years ago

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

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

H8crilA6• 7 years ago

It doesn't matter really. It's a political/financial experiment. Tech is of little relevance to the success.

simplesleeper2• 7 years ago

Don't Merkle trees underpin bitcoin? Why does it disqualify it as a blockchain?

simplesleeper2• 7 years ago

wikipedia says - https://en.m.wikipedia.org/wiki/Blockchain - that transaction data is generally represented by a merkle tree in block chains

xiphias22• 7 years ago

Yes, the block of transactions is arranged in a Merkel tree, but that Merkel tree is finalized, chained to the previous block and secured by proof of work.

Libra is changing the Merkel tree over time, it is never final, which is similar to pre-Bitcoin digital currencies.

Lucadg5• 7 years ago

This is the part where they reveal how they plan to negotiate with regulators:

"At the core, we believe that a network that helps move more cash transactions — where a lot of illicit activities happen — to a digital network that features regulated on and off ramps with proper know-your-customer (KYC) practices, combined with the ability for law enforcement and regulators to conduct their own analysis of on-chain activity, will be a big opportunity to increase the efficacy of financial crimes monitoring and enforcement"

In other words: let us do Libra and we'll help you win the war on cash.

The biggest blow on privacy in the world's history, brought to you buy Facebook.

H8crilA6• 7 years ago

Not to defend them, but this is exactly what happens to all non cash transactions. Which you kind of have to do to with any sizeable quantity of money (say over 100k) for practical reasons, like theft.

Lucadg5• 7 years ago

True. This is exactly the problem with non cash transactions. Every single transaction, no matter how small, is recorded forever and shared with several governments and secret services. I never signed up for this. This is why we need cash and why they are fighting it.

roel_v2• 7 years ago

"all non cash transactions. Which you kind of have to do to with any sizeable quantity of money (say over 100k)"

Sort of related, in the Netherlands, we will soon (2 years or so) have a ban on cash transaction of more than 3000 euros. Not to one-up, just saying that it's happening. To be fair, I contribute to this by doing pretty much all payments electronically. Just like I contribute to local bookstores disappearing by buying from Amazon, although I claim to like local bookstores.

rbrtl• 7 years ago

Did you read the Guardian articles about UK Gov't sponsored money laundering? An eye-opener to be sure: https://www.theguardian.com/world/2019/jul/05/how-britain-ca...

raverbashing2• 7 years ago

Hey remember how the press has been pushing for total control of money and transactions? Under the guise of fighting money laundry?

This is what you get. How do you like the "deprecation of cash" now?

Don't worry, the million/billionaires will still put their money on real estate or other places where there are convenient exceptions for it, make no mistake.

gridlockd7• 7 years ago

This is exactly how all cryptocurrencies already are allowed to operate. Any domestic crypto exchange has to do KYC, but also cooperate with the IRS. With most cryptocurrencies, transactions are public and traceable.

sametmax3• 7 years ago

You mean exchanges.

Exchanges != crypto.

Individuals can use btc anonymously. It's public, but only the person you deal with know who owns your wallet.

sametmax3• 7 years ago

Not just privacy. Democracy in general.

No cash mean you can't do anything that has not been validated by the state first.

It means kids will have less options to foul around without the parents checking it.

It means you won't be able to pay in a gay bar anonymously.

It means any new (and hence controversial) political concept will have no way to financially grow to acceptance.

It means no living off the grid.

It means hobo will be even more excluded.

It means in case of crisis, the financial system is paralyzed.

It means if powerful people wants something bad for you, you can't be on the run.

It means easy censorship against unpopular activists or artists.

It means no way to test a weird idea off the record to see if it's worth it.

It means no escape if the gov raises taxes in an unjust way.

It means no workaround for paralyzing bureaucracy.

It means no grandpa selling his home grown vegetable at the farmer market on the side.

It means everything you do, where you do, at what time and with whom is tracked, permanently recorded, then passed to algo or AI for analysis.

No grey area. No margin of error.

Just the immovable, inflexible structure of current society imposing itself to everybody.

baq• 7 years ago

in other news, wechat pay has 900M users monthly.

api2• 7 years ago

There has never in all of history been totalitarianism like what is possible now. We are building the technical infrastructure for our own total enslavement.

Of course it makes me wonder if this is just history repeating in some sense. People came to the new world in part to flee European monarchist tyrannies. Now people will go to space to flee the Earth technocracy.

thorwasdfasdf• 7 years ago

It means no escape if the gov raises taxes in an unjust way.

This is already the case, and has been for almost a hundred years.

Govt spending/taxation is 38% in the US! So, I we're already there.

sireat• 7 years ago

Our best hope against cashless remains seniors and immigrants: https://www.npr.org/2019/02/11/691334123/swedens-cashless-ex...

Otherwise we end up with cash that only outlaws use:

"His total assets were quickly converted to New Yen, a fat sheaf of the old paper currency that circulated endlessly through the closed circuit of the world's black markets like the seashells of the Trobriand islanders. It was difficult to transact legitimate business with cash in the Sprawl; in Japan, it was already illegal."

Lucadg5• 7 years ago

Typo, sorry: brought to you by Facebook

Lucadg5• 7 years ago

I made this video today on the subject. It's an analysis of the Facebook post linked in the parent. https://youtu.be/1BVXc3jUsSU

jddj• 7 years ago

I'm pretty skeptical about Libra overall.

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

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

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

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

SuperNinjaCat2• 7 years ago

My immediate gut reaction to this entire thing (and again, this is only a personal viewpoint not held by others) is along the lines of: What could go wrong with giving one of the most shady corporations on the planet the permission to print its own currency?

on_and_off• 7 years ago

Same. The only interrogation I have is what can be done to stop Libra.

chicob• 7 years ago

In Portuguese, "libra" is the word for the British Pound Sterling (GBP).

I wonder how it is being branded here and whether there will be some kind of confusion, or mandatory differentiation.

kuu• 7 years ago

Same in Spain...

robteix• 7 years ago

Currency names are not unique. How many countries use "dollar" or "peso"? Portuguese-speakers don't seem to have a problem with that, so I'm sure they will somehow find a way to deal with two "libras"

glitchdout• 7 years ago

You usually prefix it with the country name. So that leaves us with "australian dollar", "mexican peso" and, huh, I guess, "facebook libra"?

nobrains• 7 years ago

From the blog: "I wanted to remind everyone that Facebook, through its subsidiary Calibra, is just one of the initial 28 Founding Members that are coming together to form the Libra Association. It’s easy to assume from the headlines that Libra is only associated with Facebook, but that is not the case."

Then why is Facebook the only entity making blog posts about Libra? Except, when you assume the reader is dumb.

_7fvc• 7 years ago

Facebook is asking corporate interests of different sizes, big and small, to join Libra effort. They will all have equal stake, including the founding company, Facebook. It'll be the biggest, possibly only, corporate altruism experiment in history. I think they have a small chance of succeeding if they are willing to pump in billions of dollars without expecting any return.

MH15• 7 years ago

Corporate altruism experiment Libra is a tool to control the global poor, not an "altruism experiment".

aliswe• 7 years ago

So sorry, I just found this being very funny: "Economic empowerment is one of our core values"

stesch• 7 years ago

Wondering how normal Germans would react to Libra. See https://www.youtube.com/watch?v=EJ26TbhZW8k (How to deal with money like a German | Meet the Germans)

ilaksh• 7 years ago

transition to a truly permissionless and decentralized consensus

The fact that this is something that is supposed to happen at some unspecified point in the future but the "blockchain" they have cannot handle it -- I think its just a lie. It looks like it would require a massively different codebase and hardfork to get to permisionless and decentralized. They are not actually planning on doing it.

Also, the fact that its backed by Visa, Mastercard, and PayPal -- they are the absolute enemies of cryptocurrency.

Real cryptocurrencies like Bitcoin and Ethereum will be able to scale. Ethereum in particular has very advanced plans for rolling out very high scalability in a matter of months. That is what I support.

I do not think it makes sense to use a fake "cryptocurrency" just so that the old companies can continue to get a cut of my transactions and the government can more easily control my money if they want.

p0nce• 7 years ago

What is the value of tracking every transaction? For us.

tigerlily• 7 years ago

I like to think of cash as a kind of slack in the system. Yeah there's corrupt stuff going on, but I like its immediacy and utility. A digital currency that is under full surveillance would just cause the whole financial machinery to seize up like a rusted Rube Goldberg.

antihero• 7 years ago

Well I can't use Libra, because an algorithm banned me for an obvious joke post and has absolutely nothing in terms of a proper appeals process or accountability. So if I had ever depended on Libra I'd be up shit creek, I guess?

mymythisisthis• 7 years ago

I've noticed that power tools (cordless electric drills) have started to become the currency of the underground economy.

gonational2• 7 years ago

Poe’s Law may apply here, but are you being serious? Please explain.

gruez4• 7 years ago

Presumably because power tools are high value goods that are often stolen by addicts to pay for their addictions. Then they make their way up the value chain. It doesn't really make sense though - they're not really fungible, they're pretty hard to transact with, and converting them to cash is tricky (how are you going to find a steady stream of buyers?).

Tide detergent is also used as currency, and it's better than power tools as a currency in all regards.

towlinson• 7 years ago

They see easy money, they get easy money, poor people get f.

Libra, 2 Weeks In

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