As someone somewhat out of the crypto-loop, would someone be able to explain/posit/cite why Facebook are entering this market, and why traditional payment providers are also getting involved? On the face of it, this suggests it aims to essentially reduce transaction costs (which would be to the detriment of the status-quo)?
It's not really a crypto coin. It's a stable coin. The value is backed by hard cash in a vault somewhere. And not anyone can mine it, only the 10 million buy in organizations can process transactions on their nodes. But essentially it's pay pal labeled as a crypto coin. So they can get away with skirting some laws because "it's not actually money man".
Just a sleezeball move in my opinion to capitalise on the hard work the crypto community has been putting in to make safe trustworthy decentralised systems. That's in no way saying there isn't sleeze balls in the community, but there are real believers about the whole idea that have been working hard.
On top of that it's likely that they'll run a fractional reserve scheme, meaning that only a small portion of the coins will be backed by real currency at any given time. I haven't found any reference to this in their paper, I wonder if they'll provide transparency on this topic.
Because people (especially here) have been underestimating crypto by (maybe) a Trillion Dollar margin.
There are many legitimate uses for a cross-border currency that has a strong backer. There is a ton of services (like Skrill) that try to bridge the gap for a big portion of the world un-banked.
I say "legitimate" because the uses are fine within the US/EU (holding a "hard" currency like the USD). But many countries around the world prohibit that. If Facebook currency ignores that (given their size), they can access these markets.
This is, maybe, a trillion dollar market.
People here have been ignoring crypto because they don't understand the effects on closed economies. Small online-banks have failed because of difficult regulations and name recognition. Facebook might make it because they have a strong brand, big audience and can battle whole countries.
Put it differently, banks have failed to implement something more efficient and the “bitcoin” innovators have also failed on practical aspects. As a result we have a void and it’s anyone’s game right now. Facebook is throwing money at it. A small chance it works but public trust is a big factor in currency isn’t it?
Here’s what I think: any alternative currency tied to the USD (meaning a currency without intrinsic value) is DOA. The next generation currency cannot be tied to resource constraints.
FedWire transfers are instantaneous and cheap if not free at many institutions. The “bank transfers are slow and expensive” argument is financially illiterate.
I agree. I think we should have used Keynes' Bancor proposal [1], rather than gold and therefore USD as a reserve currency.
> Keynes was able to make his proposal the official British proposal at the Bretton Woods Conference but it was not accepted. Rather than a supranational currency, the conference adopted a system of pegged exchange rates ultimately tied to physical gold in a system managed by the World Bank and IMF. In practice, the system implicitly established the United States dollar as a reserve currency convertible to gold at a fixed price on demand by other governments. The dollar was implicitly established as the reserve by the large trade surplus and gold reserves held by the US at the time of the conference.
It looks like for the end customer this is no better than a closed payment platform(think of visa network or ACH) unless they provide at least read access to the blockchain ledger/database. If that's the case it's not worth the name of crypto currency.
They also say in 5 years will provide full(r/w) access to the public clients/nodes...I wouldn't hold my breath.
It has "fraud" prevention built in, charge backs, compliance etc...how would that work on a public blockchain? I believe they lie and they know it will never be released as a public/permisionless blockchain.
As far as I can tell, FB wants to be a bank to print money. Their own money. For every country.
All full nodes on that blockchain are going to be owned by FaceBook. FB will be able to see all transactions and take money from people they don't like.
Yes - I was just reading the other article on the front page of HN which gives a summary. Pegged to fiats and traded in for fiats, so... Facebook is creating its own fiat which it wants to profit off, use its existing user network as a leap pad to do so, and to be considered the global fiat? Is that fair?
I imagine the only reason a traditional payment provider will get involved is to "keep your enemies closer" Once there's real money to be made, the greed will show and their will be all sorts of split & forks of the project.
