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.
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.
Papiermark (https://en.m.wikipedia.org/wiki/German_Papiermark) pre 1924 was the hyperinflated currency, then followed the stable Reichsmark and after World War II Deutsch Mark and East Deutsch Mark. Deutsch Mark remained until 2002 when the Euro got introduced. For Germans Mark is just a name for currency like Kronas (Sweden), Francs (France), Lira (Italy). Hyperinflation is too long ago to remember.
Germans use cash much more than the average Western European. The memory of hyperinflation and bank system collapse is one of the explanations why people prefer to store value in currency (often foreign currency) and not trust so much a bank or card issuer.
Also, in West Germany, the Deutsche Mark (1948-2002) is strongly associated with the post-war economic boom. It's still a common rhetoric among conservative populists to argue for a return to the good old times ^W Mark.
I don't think it is just a "common rhetoric", but rather a common mainstream truth that the change from the Mark to the Euro (which can be kept weaker) allows German companies to export cheaply while making people's salaries and savings worth less.
I think Hyperinflation fears are ingrained into EU policymakers DNA. They are so afraid to create demand in the macro economy via deficit spending because of the legacy of the Weimar Republic and what it led to. Looking at the WR case, they had to pay war reparations in hard currency not fiat. Because of this, you have Germany pushing for very dovish fiscal policy limits on Greece and the PIGS. And to make things worse, monetary policy, doesn't work even with negative interest rates.
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.
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).
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.
Who cares? You should. Bitcoin offers a public audit trail less commonly known as triple-entry bookkeeping or momentum accounting. Chase still uses double entry.
What's more Chase charges $25 per month to keep an open checking account, keeps only a small portion of your funds on hand and may both lock you out of your account and freeze your funds on a whim whereas Bitcoin won't.
I'd rather not have the entire planet be able to audit my transactions.
I don't care what Chase does with my dollars because the promise isn't that there's a vault somewhere that a banker can point to a pile of bills and say "that's Cole's money right there." The promise is that at any time I can withdraw any amount of money, and o have no problem believing that promise.
As for locking my account on a whim, that's what I signed up for. Every time so far I have had a financial account locked it has been because someone who wasn't me was trying to use my money. As for avoiding being punished for crime well I'm not too into money laundering so I think I'll be ok. Otherwise it's balancing the risk that the bank will make a fixable mistake with the existing system which has the ability to fix errors and reverse thefts.
The public audit trail has yet to return thousands of my dollars from mtgox. I bet if there was massive fraud and or theft of the reserves at Chase that I would have had my money back immediately.
(I don't actually have a checking account at Chase)
> Chase charges $25 per month to keep an open checking account
This is just a ""feature"" of the backwards American system, plenty of countries still mostly have free current accounts. Although the very low interest rates are definitely putting pressure on banks to try to find ways to charge people.
Cash can't do those things either. It would be relatively easy to have a regulated bitcoin bank that offers such services. Coinbase is heading that way.
Presumably that wouldn't fit with any of the demands of cryptocurrency enthusiasts though, being able to freeze your funds etc. Also I'm not sure how they would tackle reversing any fraud given that bitcoin is amazingly irreversible.
If cryptocurrency is, for you, a way to get away from the abusive dominance of banks, why would you use such a service?
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.
It's called "cloud feudalism". Amazing how accurate that term is, during feudal times, the king was free to change their terms, and if you disagreed you could shut up or get out of the kingdom, which was a difficult process and meant cutting off ties with people and business partners (or letting them know about your change of address). And if the king said "You, you did something I disliked, out!", you could protest all you want but that would fall mostly on deaf ears.
Of course "deaf ears" is nowadays support emails being handled by copy-pasting bots.
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.
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.
In that case I can say that I'm doing my groceries with a cryptocurrency, because the transaction is encrypted between the terminal and the bank. That doesn't make any sense.
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 )
Could you please expand? If the big Chinese miners go rogue (actually go rogue, take over a currency and actively tries to stop the larger public from taking it back), what recourse does the larger public have? Wouldn't they need more mining power, or an impractical fenced-off network that's still decentralized in some manner?
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.
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.
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.
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.
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.
No it doesn't. ETC is worth something like 2% of the value of ETH, it's a joke in comparison. Besides, the existence of "Ethereum Classic" is not something special, it's the inevitable side effect of suddenly having the balance of your ETH wallet "cloned" in a fork, you only have to lose if you don't treat both wallets like they're real.
The "community" chose to roll back a $40 million transaction that was very inconvenient for Vitalik. If he had instead said "code is law, and we stand by it" then ETC would never have existed in the first place. My point is, it was Vitalik's prerogative to reverse a million dollar transaction that he didn't like, a privilege reserved for the elite.
Beyond that, the community didn't really have a choice either way. By definition of owning ETH you are incentivized to (primarily) support whichever chain the creator says he will continue to support. What kind of choice is that? There is no "market" in the sense you speak of, ETH users are a captive audience.
It's important to keep in mind that the creators of ETH gave themselves an order of magnitude more coins to start with than will ever be mined. While it is true that some of it has been sold many times over by now, it still creates a power dynamic within the community which can hardly be ignored.
It's especially problematic for a project that was supposed to be PoS, where the coin holders are also the miners, with the privileges that brings.
The existence of ETC says to me that ETH has the same problem, that is a bunch of power users can change the rules if they want to (if it is financially beneficial for them to do so). No different to a fiat currency controlled by the government.
Yeah that's just wrong. If you want to change the rules, you need to update the client software which means forking. Are you saying that a group of core devs can fork the chain and not have it be contentious?
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
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.
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.
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!)
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.
What about people being excluded from payment controllers and banks because they are adult sites / fringe ideologies / whatever paypal’s terms disallow?
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.
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.
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.
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.
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.
> 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."
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.
> 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).
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.
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.
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.
Many businesses exclusively accept WeChat and Alipay. So there is a mechanism for paying rent, utilities and tax. Otherwise they would run out of cash.
To replicate that level of success, Facebook must create a mechanism to convert tokens back to cash.
So the tokens are basically just used to get past regulations. Facebook will then gather some hard numbers to show that crime is negligible. Sensible governments will tolerate the tokens because it's replacing physical cash where crimes like tax evasion are rampant.
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.
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.
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.
> 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.
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.
> 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.
> 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).
So the promise of Bitcoin when I started reading up about it was that the fees could be close to zero. It's become less of an issue, because there are some traditional currency exchange services out there which have reasonable flat-rate offerings nowadays, but I would still be happy to pay less.
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.
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?
> 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).
> This can't happen with non-centrally produced money.
As cryptocurrency investors keep finding out the hard way, you can create credit in bitcoin very easily, every exchange balance is a credit; what the lack of a central bank means is that when there is a bank run or "liquidity event" you definitely can't get your money back. The Tether people have been very effective at centrally producing decentralised money too.
> I'm claiming a higher return by not competing with a party (the Fed) that can always underbid you on short-term credit.
OK, so what does the other side of this equation look like: what's the advantage to the borrower in taking out more expensive credit? Even worse, they're taking out credit in a currency that's appreciating against the dollar?
I'm not saying cryptocurrency-denominated debt doesn't exist. It clearly does, as you say. What I'm saying is that when the cryptocurrency in question is not centrally produced, there's no actor who's able to underbid everyone else on interest.
With regards to bank runs, they are not a problem if the deposited money is invested in something sufficiently liquid (like the Bill of Exchange). After all, a bank run just means you sell into the market whatever instrument you've purchased for the deposited money, and this will only be a problem if this instrument isn't liquid enough. Bonds, for example, are not sufficiently liquid to sell into the market in case of a bank run. The lesson here is to not invest demand deposits in bonds (or anything else of insufficient liquidity).
> OK, so what does the other side of this equation look like: what's the advantage to the borrower in taking out more expensive credit?
The advantage to the retail credit borrower is that they don't have to compete with businesses who are good friends with the commercial banks (who have access to the Fed's cheap credit). All savers, world-wide, become lenders, instead of just a few huge banks, who don't really care to lift a finger unless there are huge profits in sight.
Also, a reasonable, market-based 3% discount rate compared to, say, a cheaper Fed-funded 1% rate, is relatively insignificant in the context of retail credit with a maximum duration of three months. For goods that take three months to clear, the retail shop will pay three fourths of a percent instead of one quarter of a percent. That's a very small additional price to pay for widely available retail credit (ie. not having to rely on big banks to give you a credit line).
> Even worse, they're taking out credit in a currency that's appreciating against the dollar?
Taking out credit in a currency that's not stable against the dollar is only a problem if your income is dollar-denominated. After all, millions of people take out non-dollar denominated debt every day, which is fine since their income is denominated in that same currency.
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.
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.
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.
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.
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.
That's exactly the issue. How is this any advantageous compared to say putting fiat USD on my Apple account and then spending that on iTunes/Appstore/In-App etc?
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.
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?
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.
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?
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.
If your national government cares at all about sovereignty, it will force you to use bitcoin by rule of law / force. Countries like Venezuela, Turkey, and Argentina with struggling currencies are under the mercy of the US petrodollar. A move to BTC would end their hyper inflation.
Most people are too self centered to realize the political/ economical implications of BTC. The most likely case will be that nothing changes in our day to day, except that our currency is now backed by BTC instead of US debt.
Facebook is trying to create a common currency accessible to a global userbase whose transmission bypasses traditional banking rails. It'll be super convenient, even the USD can't do that.
This combined with Whatsapp for Business is going to be game changing for SMEs in developing markets.
Do I want to keep my savings in it? Probably not...
It might be a great project, it just has very little to do with actual cryptocurrencies. It's great to be excited about it, the issue many people in this thread have the project being called a cryptocurrency.
I don't see Facebook allowing that. This is going to be a locked-down, siloed currency that can only be purchased with a Facebook account and real currency, with the consortium members taking a cut.
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.
Including the British pound - until decimalisation in 1971, the abbreviations for pounds, shillings and pence were Lsd (with the L often having a single or double cross bar) from the Latin libra, solidus and denarius respectively.
Sorry. If I had explained, I don't think that it would have been unsubstantive. But I didn't. So anyway, to the point.
As the sign of balance, symbolized by scales, Libra is certainly relevant to money. But the name is also a riff on liberty/liberation aka freedom. And that's the sick joke, because Libre will be totally under Facebook control.
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.
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.
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.
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...).
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."
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
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?
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.
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.
Well, I have no idea what you are talking about. Care to elaborate?
I just find how things get named interesting. I did realize it was a joke, but that doesn't preclude actually discussing why these things got the names they have.
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.
That's not what anyone in the space calls centralized. It's actually called "decentralized" by everyone because the way this consensus is kept and changed happens decentralized (to some degree).
Right now it seems: If you don't have central consensus you can't have digital currency. Since everybody needs to be on the same line regards to who owns what. This is different from cash in the current world. Where nobody needs to agree to how much I have because I can physically store it and it's impossible to copy my dollars.
They are calling it decentralised but it really isn't. Transactions with physical cash are fully decentralised, anonymous (save for finger prints etc.) and asynchronous. In terms of convenience credit cards, apple pay and PayPal are hard to beat. I do not know of a single use case for consumer facing crypto currencies that is compelling to me.
I agree that "global" would be a better word than "central", but that doesn't really affect treelovinhippie's point.
> If you don't have central consensus you can't have digital currency.
From what I can tell, the Holochain developers agree with this: you can't have a single global currency without global consensus. Their approach seems to be: rather than having a single global currency, have a network of IOUs, trusted and enforced locally: https://medium.com/holochain/beyond-blockchain-simple-scalab...
Personally, I have no opinion on their approach, other than welcoming experiments, since that's what I find interesting in Bitcoin and the rest of the crypto space (and frankly wish it hadn't passed that stage yet).
I started reading with that article but it doesn't really seem to answer the questions it's claiming to answer. It's talking about how Bitcoin et al. have a shared consensus that's updated once every 10 minutes, and how everyone needs to validate everything which is inefficient (I agree). But while trying to explain how holochain does it different I don't read how except for insect analogies, for example:
> ## Order of Operation Matters
> It turns out when you focus on distributing process first you end up with even more greatly distributed data. This is because each participant holds only their own data. In contrast, blockchains store everybody’s transactions in a single database that every node verifies and copies. The underlying foundation of distributed process enables deeper distribution of data and parallel architectures. Ethereum and smart contracts, are doing this the other way around — layering processes on top of a global ledger.
> By distributing process at the foundation, and leveraging Intrinsic Data Integrity, our approach results in massive improvements in throughput (from parallel simultaneous independent processing), speed, latency, efficiency, and cost of hardware. There is no need to wait 10 minutes to see if your transaction gets committed. This architecture can facilitate huge volumes of even extremely “low value” transactions permitting creative uses for coordinating shared activities that wouldn’t merit the cost or energy of implementing on a blockchain. You also don’t need to incent people to hold their own record — they already want it.
This is all true but the section heading "order of operation matters" - and how holochain deals with this - is simply not addressed. Given HN is a technical community feel free to link to actual research papers or more technical content that actually explains how Holochain solves the problems. This piece looks like a PR piece to me, one that doesn't really have any answers.
I think their point is that the Order of Operation matters for global currencies, but not for mutual credit systems like theirs. But don't quote me on that.
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.
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.
If you keep the default settings and use it to buy anything it will spam your 'friends' just like Farmville. "Joe Wilson just used Libra to remove the ransomware from his Dell, how will you use it?".
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.
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.
> 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.
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.
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)
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.
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.
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.
Well, sure, but then the 4 year chart of returns on my high school summer lawn moving business went up 13,500%, from $5 net my first week, to $675 on my last. Behold my 15 year old financial genius. /s
Any asset that doesn't crash back to a penny likewise goes up astronomically from the day trackable value is first created. Bitcoin's chart appears to have outperformed the market so dramatically, percentage-wise, because its chart tracks price from effectively zero (depending on how you would price a 1/10000th slice of pizza) or a dozen or so pennies (if you're starting from the first BTC-E numbers). But this is really not any different from what happens to shares in a private company, which also start at effectively zero as well.
Publicly-traded share values aren't visible to the public until they have already risen a hundredfold or more from their inception (in terms of percentage gains). Sure, Bitcoin was visible to "the public" but only if you happened to be in the right place at the right time and knew the right people - which in practice are opportune circumstances no different than those available to people who happen to be close to the founders of a privately owned company.
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....
Isn't this a lot like asking why Tyson invested in Beyond Meat when BYND is a threat to Tyson? Maybe you could call this defensively "investing in the future" of your industry (if this turns out to be anything at all).
if your company were under threat and you had the option to invest in your competitor at an early stage, wouldn't you? I don't think I agree that this is a threat to credit cards, but even if I did I think I would understand the investment.
