>Libra’s mission is to enable a simple global currency and financial infrastructure [...] This document outlines our plans for a new decentralized blockchain,
The "decentralized" can be parsed different ways. Facebook Libra is decentralizing the transactions but it does not decentralize the currency creation. (This partial decentralization happens because Facebook wants to peg Libra to stable asset reserves.) This is different from Bitcoin's idea of decentralizing both the currency creation _and_ the financial transactions.
We can see this distinction in its list of partners...
> Members of the Libra Association will consist of [...]
The bulleted list includes:
- transaction processors such as Mastercard/Visa, PayPal, Stripe, etc
- ecommerce marketplaces such as ebay, Uber, etc
- telecomm such as Vodafone
We see the industry that's noticeably missing: no banks mentioned such as JP Morgan Chase, Citi, HSBC, etc
That's because Facebook wants to be the "bank" in this new Libra economy. It wants to be the "Federal Reserve" that creates bank notes.
If I misunderstand Facebook's intentions and how it wants to position Libra in the financial world, please correct me.
> This is different from Bitcoin's idea of decentralizing
Libra is Facebook Credits [1] rebooted. All that changed is the meme it’s attaching to, “cryptocurrency” being better at suspending consumers’ scepticism.
>We see the industry that's noticeably missing: no banks mentioned such as JP Morgan Chase, Citi, HSBC, etc
As far as I know, they're missing because they refused to be part of the association:
>Originally the company had ambitions to get Wall Street involved, but found a lack of interest among institutional giants like Goldman Sachs and JPMorgan. It is still looking to have 100 members in the governing association, the person said.
Sounds about as decentralised as my private collection of cloud servers I get to make all the decisions on. Decentralised is supposed to mean individuals are both the caretakers and the users.
I would also like to add that FB is going to tie wallets to accounts so FB will know information about every transation. "Pseudonymous" wallets aren't going to be anonymous to Facebook.
“Every program attempts to expand until it can read mail. Those programs which cannot so expand are replaced by ones which can.”
If you'll allow me to riff on jwz, I think another law is applicable to social media:
"Every social media company will expand until it becomes a bank. Those social media companies which cannot so expand are replaced by the ones which will. A bank is meant in the sense that it will store and mantain things of value including favors, records, and money."
I think this coin is a really bad idea. Its just centralizing a crypto coin and then removing the laws around money because now a dollar has a libra coin wrapper on it so it's obviously totally different than a dollar.
It feels like a federal reserve moment where a bunch of rich folk get together and again dictate the future of currency. Crypto was supposed to change that trend. Unfortunately the want of convenience will probably win out over any sort moralistic/idealistic standing and unless government steps in, it will probably be widely adopted.
I think this coin is a really bad idea. Its just centralizing a crypto coin and then removing the laws around money because now a dollar has a libra coin wrapper on it so it's obviously totally different than a dollar.
Good luck with regulators. Especially regulators in the financial industry.
I don't really think that creating a Facebook account is satisfactory to cover KYC(1) and AML(2) rules, as a for example.
But they're many other examples in finance where the "better ask forgiveness than permission" will get you a go straight to jail, don't collect 200 libra on your way there card if violated.
It's not pegged to a dollar. It's pegged to a blend of currencies and assets. So it's not a dollar wrapped like Tether or USDC.
I don't understand how they plan to make it work across jurisdictions. There are so many laws and rules when it comes to transmitting and storing money or derivatives.
Like I can transfer a billion dollars worth of BTC, no problem. But if I try to wire even $100K between two of my accounts in US and EU, all kinds of red flags go off and phone calls need to happen.
This is seriously scary. The buy-in it's already received from some of the big financial players worries me that this might actually catch-on.
Facebook is the last person I'd trust with any of my data, let alone a complete history of all my transactions.
I hope privacy is more important to the average Western Joe than it was to the Chinese. WeChat sounds like a dystopian nightmare.
"it will be backed by a collection of low-volatility assets, such as bank deposits and short-term government securities in currencies from stable and reputable central banks." from the whitepaper: https://libra.org/en-US/white-paper/#the-libra-currency-and-...
It's like one to one copy of the traditional monetary system with speed of transactions improved. Low volatile assets they rely on are not real and therefore not guaranteed to stay low volatile. It may be decentralized technically but not socially or ethically.
Facebook can't keep people's phone numbers, pictures and sex life private and we trust them to invent a currency?
I'm not a crypto backer - in fact I'm skeptical of the long term usefulness, but this isn't crypto, it's shitty PayPal. It's not decentralized, not removed from fiat, not anonymous and not trustworthy.
Its introduction reads like a goading of antitrust activists. (Facebook’s advantage as a cryptocurrency purveyor being its acumen with getting away with lawlessness.)
From the Move programming language paper: "semantics inspired by linear logic". Any even more technical references? Anybody knows anybody who really work(ed) on Move? Academic? Otherwise? I'm interested because of my "poured only once" current project http://imar.ro/~mbuliga/hapax.html
> Interest on the reserve assets will be used to cover the costs of the system, ensure low transaction fees, pay dividends to investors who provided capital to jumpstart the ecosystem (read “The Libra Association” here), and support further growth and adoption. The rules for allocating interest on the reserve will be set in advance and will be overseen by the Libra Association. Users of Libra do not receive a return from the reserve.
Forget about the cryptography and "blockchain" this system will use. The real innovation here is financial in nature. Only it's not really an innovation.
I doubt today's race to negative interest rates will be kind to Libra validators, who will be demanding a fat payout sooner or later for the loss of business on highly lucrative credit cards.
There's only one way to fund this beast: fractional reserve and ever more risky investments. The temptation will be enormous. The justifications true and well-intentioned. The outcome predictable to anyone who has paid attention.
So when you purchase Libra for cash it’s like buying an index, only with no interest whatsoever. So all the risk and no reward. It’s not for no reason that index funds pay dividends - to compensate for a very real risk of losses. Interesting to see if libra will be able to pull this trick and push risk on its users without compensation.
Sounds to me like Facebook is trying to become the Wechat of the West ... (as per an article 2 days ago explaining how Wechat could be central to every payment in a daily life )
Mark Zuckerberg is very impressed by WeChat as a platform. That’s probably the best way to understand that effort. “Crypto” is less a technology and more a loose governance method because no Western company can have the authority that WeChat has in China.
>The reserve allows users of the system to enjoy a relatively stable medium of exchange from the start. At the same time, it also represents a centralized function. For the network to be fully permissionless, the association will have to explore ways to further distribute and decentralize the reserve, including automating the verification of the assets in the basket and the process of minting and burning of coins. Increasing market competition in the custody and management of the reserve will also be explored to improve the efficiency of this service, and the costs it imposes on users and custodians over time.
So this coin will be backed by a centralized reserve, and you would have to trust Facebook that the coins you own are backed by real money, with no way of verifying this. Tether works the same way, and they are just creating money out of thin air without actual dollars backing them up. I'm curious how Facebook will decentralize this reserve, or if they will even do this in the first place.
I just watched the official launch video for Libra and it's just disgusting how silicon valley is abusing the image of "poor" people or people from developing countries to sell a philanthropist idea while their true intentions are just more money and more power.
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.
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.
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.
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.
You couldn’t pay me to touch a crypto currency built by Facebook. They’re the king of shifty behaviour, dark patterns and unscrupulously harvesting all the data they can get their hands on.
There’ll be no privacy from overlord FB and everything will be more or less at their behest.
A basket of bank deposits and short-term government securities will be held in the Libra Reserve for every Libra that is created, building trust in its intrinsic value.
So... I’ve not had time to read the whole paper, but my initial impression is that this is not really worth consider as a “cryptocurrency” - instead, it’s a limited application of “blockchain” to what amounts to a multi-party private currency.
That in and of itself isn’t a terrible thing necessarily, but I guess I’m failing to see the utility it provides.
OTOH, Facebook is big enough to push this into much larger adoption than existing cryptocurrencies have managed. If they do that, and if Libra is eventually opened enough that it can be traded on the open market without a “trusted” intermediary, then we might at least see the infrastructure, public acceptance, and public understanding of what cryptocurrencies are significantly improve. That could lead to a stronger ecosystem in general.
Personally, I’m trying to figure out if I can have an “account” that is truly anonymous. If so, then I’ll pay attention and study it more. If not... well, then I’ll ignore this unless and until that is possible.
[+] [-] jasode|6 years ago|reply
The "decentralized" can be parsed different ways. Facebook Libra is decentralizing the transactions but it does not decentralize the currency creation. (This partial decentralization happens because Facebook wants to peg Libra to stable asset reserves.) This is different from Bitcoin's idea of decentralizing both the currency creation _and_ the financial transactions.
We can see this distinction in its list of partners...
> Members of the Libra Association will consist of [...]
The bulleted list includes:
- transaction processors such as Mastercard/Visa, PayPal, Stripe, etc
- ecommerce marketplaces such as ebay, Uber, etc
- telecomm such as Vodafone
We see the industry that's noticeably missing: no banks mentioned such as JP Morgan Chase, Citi, HSBC, etc
That's because Facebook wants to be the "bank" in this new Libra economy. It wants to be the "Federal Reserve" that creates bank notes.
If I misunderstand Facebook's intentions and how it wants to position Libra in the financial world, please correct me.
[+] [-] JumpCrisscross|6 years ago|reply
Libra is Facebook Credits [1] rebooted. All that changed is the meme it’s attaching to, “cryptocurrency” being better at suspending consumers’ scepticism.
[1] https://en.m.wikipedia.org/wiki/Facebook_Credits
[+] [-] throwawaylolx|6 years ago|reply
As far as I know, they're missing because they refused to be part of the association:
>Originally the company had ambitions to get Wall Street involved, but found a lack of interest among institutional giants like Goldman Sachs and JPMorgan. It is still looking to have 100 members in the governing association, the person said.
https://www.theblockcrypto.com/2019/06/14/facebooks-cryptocu...
[+] [-] CodiePetersen|6 years ago|reply
[+] [-] m1el|6 years ago|reply
[+] [-] Balgair|6 years ago|reply
“Every program attempts to expand until it can read mail. Those programs which cannot so expand are replaced by ones which can.”
If you'll allow me to riff on jwz, I think another law is applicable to social media:
"Every social media company will expand until it becomes a bank. Those social media companies which cannot so expand are replaced by the ones which will. A bank is meant in the sense that it will store and mantain things of value including favors, records, and money."
[+] [-] sAbakumoff|6 years ago|reply
[+] [-] CodiePetersen|6 years ago|reply
It feels like a federal reserve moment where a bunch of rich folk get together and again dictate the future of currency. Crypto was supposed to change that trend. Unfortunately the want of convenience will probably win out over any sort moralistic/idealistic standing and unless government steps in, it will probably be widely adopted.
[+] [-] CaptainZapp|6 years ago|reply
Good luck with regulators. Especially regulators in the financial industry.
I don't really think that creating a Facebook account is satisfactory to cover KYC(1) and AML(2) rules, as a for example.
But they're many other examples in finance where the "better ask forgiveness than permission" will get you a go straight to jail, don't collect 200 libra on your way there card if violated.
(1) Know Your Customer
(2) Anti Money Laundring
[+] [-] bufferoverflow|6 years ago|reply
I don't understand how they plan to make it work across jurisdictions. There are so many laws and rules when it comes to transmitting and storing money or derivatives.
Like I can transfer a billion dollars worth of BTC, no problem. But if I try to wire even $100K between two of my accounts in US and EU, all kinds of red flags go off and phone calls need to happen.
[+] [-] Nerada|6 years ago|reply
I hope privacy is more important to the average Western Joe than it was to the Chinese. WeChat sounds like a dystopian nightmare.
[+] [-] muratgozel|6 years ago|reply
It's like one to one copy of the traditional monetary system with speed of transactions improved. Low volatile assets they rely on are not real and therefore not guaranteed to stay low volatile. It may be decentralized technically but not socially or ethically.
[+] [-] unknown|6 years ago|reply
[deleted]
[+] [-] berbec|6 years ago|reply
I'm not a crypto backer - in fact I'm skeptical of the long term usefulness, but this isn't crypto, it's shitty PayPal. It's not decentralized, not removed from fiat, not anonymous and not trustworthy.
[+] [-] JumpCrisscross|6 years ago|reply
Its introduction reads like a goading of antitrust activists. (Facebook’s advantage as a cryptocurrency purveyor being its acumen with getting away with lawlessness.)
[+] [-] throwawaylolx|6 years ago|reply
- https://developers.libra.org/docs/assets/papers/the-libra-bl...
- https://github.com/libra/libra
- https://developers.libra.org
- https://developers.libra.org/docs/move-paper
[+] [-] xorand|6 years ago|reply
[+] [-] ArmandGrillet|6 years ago|reply
"target launch in the first half of 2020."
"“Founding Members” upon its completion are, by industry:
Payments: Mastercard, PayPal, PayU (Naspers’ fintech arm), Stripe, Visa Technology and marketplaces: Booking Holdings, eBay, Facebook/Calibra, Farfetch, Lyft, MercadoPago, Spotify AB, Uber Technologies, Inc. Telecommunications: Iliad, Vodafone Group Blockchain: Anchorage, Bison Trails, Coinbase, Inc., Xapo Holdings Limited Venture Capital: Andreessen Horowitz, Breakthrough Initiatives, Ribbit Capital, Thrive Capital, Union Square Ventures Nonprofit and multilateral organizations, and academic institutions: Creative Destruction Lab, Kiva, Mercy Corps, Women’s World Banking"
[+] [-] zxcb1|6 years ago|reply
[+] [-] apo|6 years ago|reply
Forget about the cryptography and "blockchain" this system will use. The real innovation here is financial in nature. Only it's not really an innovation.
I doubt today's race to negative interest rates will be kind to Libra validators, who will be demanding a fat payout sooner or later for the loss of business on highly lucrative credit cards.
There's only one way to fund this beast: fractional reserve and ever more risky investments. The temptation will be enormous. The justifications true and well-intentioned. The outcome predictable to anyone who has paid attention.
Think Tether, but orders of magnitude larger.
[+] [-] flatfilefan|6 years ago|reply
[+] [-] _eLRIC|6 years ago|reply
[+] [-] bertil|6 years ago|reply
[+] [-] kobayashy|6 years ago|reply
[deleted]
[+] [-] daanavitch|6 years ago|reply
So this coin will be backed by a centralized reserve, and you would have to trust Facebook that the coins you own are backed by real money, with no way of verifying this. Tether works the same way, and they are just creating money out of thin air without actual dollars backing them up. I'm curious how Facebook will decentralize this reserve, or if they will even do this in the first place.
[+] [-] orbifold|6 years ago|reply
This is the material anti-trust lawsuits are made of, there is no way that nation states will allow private enterprises to gain that much power.
[+] [-] thefounder|6 years ago|reply
[+] [-] kall1sto|6 years ago|reply
[+] [-] throwmex|6 years ago|reply
[+] [-] 2T1Qka0rEiPr|6 years ago|reply
[+] [-] CodiePetersen|6 years ago|reply
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.
[+] [-] csomar|6 years ago|reply
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.
[+] [-] bitxbit|6 years ago|reply
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.
[+] [-] thefounder|6 years ago|reply
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.
[+] [-] m1el|6 years ago|reply
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.
[+] [-] segmondy|6 years ago|reply
[+] [-] FridgeSeal|6 years ago|reply
There’ll be no privacy from overlord FB and everything will be more or less at their behest.
[+] [-] bencollier49|6 years ago|reply
[+] [-] DanFau|6 years ago|reply
[+] [-] dx034|6 years ago|reply
[+] [-] unknown|6 years ago|reply
[deleted]
[+] [-] zxcb1|6 years ago|reply
And social infrastructure?
[+] [-] samdung|6 years ago|reply
A global federal reserve in the making
[+] [-] rahulkapil|6 years ago|reply
This is not it.
[+] [-] josh2600|6 years ago|reply
I’m not sure we can push the envelope that far, but it’s worth trying to get there.
[+] [-] CodiePetersen|6 years ago|reply
[+] [-] LyndsySimon|6 years ago|reply
That in and of itself isn’t a terrible thing necessarily, but I guess I’m failing to see the utility it provides.
OTOH, Facebook is big enough to push this into much larger adoption than existing cryptocurrencies have managed. If they do that, and if Libra is eventually opened enough that it can be traded on the open market without a “trusted” intermediary, then we might at least see the infrastructure, public acceptance, and public understanding of what cryptocurrencies are significantly improve. That could lead to a stronger ecosystem in general.
Personally, I’m trying to figure out if I can have an “account” that is truly anonymous. If so, then I’ll pay attention and study it more. If not... well, then I’ll ignore this unless and until that is possible.