Conspiracy theory time: Facebook knows they can't do this legally across the world. They're announcing it beforehand in an attempt to get permissions in like 10 jurisdictions tops, with a soft deadline that's going to be used as an excuse to get those permissions as soon as they can (or, at least, faster than they would otherwise).
For the other 200ish jurisdictions, they won't bother. Why act proactively when they can launch a currency, hope that it catches on, and then act re-actively once other jurisdictions with less power catch on to what's happening. Western governments will get what they want before the projects kicks off, and everyone else... well, who gives a shit about everyone else? Certainly not Facebook's shareholders.
but to play the devil's advocate, why should a service which proportedly offer a benefit to the user of that service be disallowed to be offered? If a country's citizens chose to use libra, it must be because they found it useful, and the country should not have permission to prevent it.
If it was exploitative, then presumably the users would not choose to use libra.
Look, it does not matter to me whether this uses blockchain or not. Such discussion won't even be productive.
Facebook has not been the best steward for its main feature the News Feed, leading to fake news, mass misinformation, not to mention their heavy use of psychology to keep people hooked.
I refuse to trust them something similar won't happen with Libra.
This. Currencies only work if people have confidence in them. They also need to have confidence in the institution backing them. In no way should anyone have any confidence in Facebook.
On top of this, in most economies, deposit taking institutions are backed by Reserve Banks. Facebook could die in 20 years. Do we want to trust it will still exist? If it collapses can you recover your money?
There are so many issues, they haven’t even come close to addressing even a small portion of them.
It is amusing watching big US tech giants trying to launch payment platforms to solve problems the rest of the world has forgotten about.
> “In time, we hope to offer additional services for people and businesses, such as paying bills with the push of a button, buying a cup of coffee with the scan of a code or riding your local public transit without needing to carry cash or a metro pass,”
You can instantly and securely send up to £100,000 for free between any UK banks, and contactless payments are EVERYWHERE here - I've even seen a begger with a chip and pin machine - let alone paying for coffee or a bus fare without cash.
You do know that most of the world isn’t like the UK.
Money transfers between countries in particular poorer ones is absolutely not a solved problem. Neither is accepting money for products/services in countries where not everyone has a bank account or a credit card. And there is rampant corruption in many places as well.
Even a handful of these are enough to make the effort a success.
Have you been to any of countries in the world with dysfunctional banking systems?
India immediately comes to mind, many African nations likely would find this incredibly useful. Just because it isn't useful to YOU doesn't mean its useless.
Honest question: how is this different to a website having a means for users to buy tokens, and then either give those tokens to another person on the site or trade them with another user?
I can buy reddit gold and then gift that gold to someone who amuses me with a comment or a post, and the only difference I’m seeing is that reddit keeps my money and only gifts virtual gold to the funny guy. Is the only difference with Facebook’s Libra that when I give the Libra to someone else they can cash it our for ‘real’ money?
Apologies for the question if I am missing something obvious.
Libra is supposed to be a currency, which means people will sell stuff and get paid in it. That makes it easier to launder money - you can just claim to be selling some digital ebook or whatever, and that the users paying you are customers (when in reality they're just your sockpuppets, or actually paying for other services/products).
I'd say that the difference is in market penetration and scale.
Individual governments actually feel threatened by a global currency that is available on platforms most of their citizens already use and is backed by a basket of geographically distributed low volatility assets.
If US is worried, then governments with smaller and more volatile currencies may be having a panic attack.
The intention of cryptocurrency is the public ledger ("blockchain").
Rather than relying on Reddit, for instance, to determine who owns what, everyone can check the blockchain to see for themselves.
The public ledger means that Reddit doesn't (in theory) control the ledger. Reddit couldn't go in and delete coins or give coins without payment. Reddit could have a large stash of coins though and be willing to buy and sell coins though.
Libra though is kind of really weird. It is a "decentralized" system but really the decentralization is just putting it in the hands of a small group.
That isn't totally a bad thing, but it definitely isn't a great thing. Look at 51% attacks, that is why having a small group of large holders is a really bad idea. On the other side though, the large holders are well-known so at least everyone would know for sure who is pushing around the network.
In your example, Facebook lacks the ability to peer into a complete and (by design) persistent history of your spending activity. That's the biggest difference, and that's why they're pushing for this. Just like every other Facebook venture, it's all about gathering as much information about you as possible and using it to sell ads.
I get the impression from the article that no lawmakers had knowledge of the protocol. I hope Facebook does not plan to introduce this "sneakily" without taking into account laws and the financial issues this can introduce.
Honestly, I really hope this project is stopped as soon as possible. Facebook already has way too much influence in our lives. It controls news, messaging and relationships with others, and it has not been managing them in a responsible way. Why would anyone let this company control money too? What happens if Facebook causes a financial crisis? Who will be controlling them? Who will they be accountable to? What happens if Facebook goes bankrupt? Libra is a project with way too much risk for the benefits it offers.
>If Libra wants to be a big player in the UK's payments system it will have to be regulated by the Financial Conduct Authority and show that it knows who its customers are and that it has strong anti-money-laundering controls. Existing money-transfer firms say complying with all the rules can be an onerous and expensive business.
Similar deal in Japan. They'll need to ensure nobody using it is in a gang, is a terrorist or might be politically exposed. In a lot of cases they'll be required to collect identity documents. They'll also need to cease offering service to any flagged individual across their entire platform.
This is not the first cryptocoin, or stablecoin or anything that has not been released before. It's hard to take these reactions as anything other than politicians grandstanding for popularity points.
Do any of those released before, even in their wildest dreams, have a chance of being as widely used and having as big an impact on ordinary people as Libra?
Facebook is not attracting political and regulatory attention not because what they are doing is new, but rather because they have a realistic chance of doing it on a much larger scale than we've seen so far.
Are they afraid? What happens the next time the pound takes a massive tumble down (again) during a Brexit like event? People might decide to convert their money from pounds to Libra's. The Libra is based on a basket of currency's, much like the SDR governments use. It's potentially MORE stable than the pound. https://en.wikipedia.org/wiki/Special_drawing_rights
Why would they convert into a currency owned and controlled by a private company? A private company proven not to really care about morals?
While it could absolutely be that the £ tumbles there are a number of stable currencies in which £ could be exchanged if people are worried that it loses value (that's value in relation to other currencies).
¨
The concept is called FOREX[1] and is not exactly new or revolutionary.
You could just buy some (or one) of the currencies backing Facebook's Monopoly Money. A basket of major currencies is, purely logical, less risky than the same basket plus a layer of Facebook crypto-voodoo.
Considering some rather beleaguered tech company's fancy new crypto-whatever to be more stable than currencies that have decades of rather benign market histories does not strike me as rational.
Edit: Not Great Britain, but Venezuela: "those who are banked currently face extreme levels of inflation, meaning the worth of their bolivars, sitting in national vaults, diminish in value every day. No doubt, having access to a stable global currency could help encourage savings and accumulate wealth."
A week ago every blockchain and cryptocurrency article on HN was full of comments declaring the whole technology a huge ponzi scam that only con-artists and idiots used ("look at this NIST blockchain workflow [smug face]"[0]).
Now blockchain is the most powerful monetary technology ever created and governments and regulators must put a stop to it immediately!
This isn't a "blockchain" discussion, this is a discussion about an application of blockchain. It's clear that this isn't just a cryptocurrency, but a bank using the cryptocurrency label to avoid regulation - thats why it needs to be stopped.
You should read the comments in this and the announcement article (still on front page since yesterday) as it seems you are confused.
The claims I've seen have been (1) that the whole ecosystem is overrun with scammers and (2) that the blockchain is being ill-used (hence the NIST workflow).
I'd say (2) still applies here - the "blockchain" here is just a distributed database, which already existed before Bitcoin came around. Bitcoin's innovation - combining Merkle Trees with POW - is irrelevant in a network of trusted partners.
Until tech firms start taking responsibility of ensuring that their platforms are robust and cannot be misused, I am not convinced of Libra. Putting the blame on people using the technology is incredibly naive on their part, frankly because it is human nature to exploit something. They need to start operating from a position of 'how can this be misused' not from a position of 'let's make this cool thing and expect some ideal world out there to embrace it and then think about problems as they arise'.
And this is just 1 part of it, the other part is assurances that this data will not be used to further interests of all the validators. I am curious on what is the value proposition pitched by FB to attract validators, besides what is given on the public facing websites. The fact that you have government institutions is to have a body that is removed from profit making goals, and thinks about the society in the long term. Sure, there are corrupt politicians, but not all of them are. Europe seems to have the right mind with regards to tech firms. What is it that fb and other investors look to get out of this thing?
Considering Facebook is either dead or dying in the tech savey under 40 market who is this aimed at? How many 55 year old boomers are going to exchange their known fiat currency for magic Facebook bucks?
Also any note yet or the scope of this? Will it be pushed to Instagram and what ever other garbage Facebook peddle?
This is all about exploiting the unbanked and the migrants/illegals that send cross border payments home. This is why Visa and PayPal are involved too, they want a piece of that pie as well. This is FB seeing how well WeChat has done with payments and going after Africa and South America since Asia has already been won.
They have said this will be available in Messenger and WhatsApp.
The current US dollar holds power globally largely thanks to the oil trade. As the world moves away from oil, surely you'll need a replacement reason for us to keep wanting the US dollar?
I agree with all of that, but still have fear about how unhinged the us could become in that scenario. No matter how unhealthy, uneducated, disrespectful of the judiciary & rule of law, and xenophobic the population grows, the government has always valued stability. A big part of that is the USD's place as the defacto world-currency, stabilised by its place in the global energy sector. Even when I haven't liked where they were headed, I've always felt like America had a steady hand on the wheel. For the first time in my life I feel like that may change.
Let's face it: the traditional world is shitting their pants.
The disruption of 'money' was already on the table with all the cryptocurrencies. And now powerhouses such as Facebook, Visa and MasterCard, Uber and Lyft, eBay, and Spotify stand behind this new Libra.
Even though I hate Facebook, but most politicians do such things only to get featured in the news. They neither understand nor even care about what they are talking about.
...that point where the policymakers realize "Oops this cryptocurrency stuff is not going away on its own". Next step: Pass some laws to shut it all down. (EDIT: To be clear, I don't agree with this, but this is what's going to happen).
The problem is that this isn't the same as a proof of work system - it is proof of stake - with the "burden" of proof put on facebook and its partners. This means that they can simply "create" currency with no oversight or proof of reserve.
In short, it works EXACTLY like a central bank, but it's not regulated. This is extremely dangerous for consumers.
[+] [-] r3bl|6 years ago|reply
For the other 200ish jurisdictions, they won't bother. Why act proactively when they can launch a currency, hope that it catches on, and then act re-actively once other jurisdictions with less power catch on to what's happening. Western governments will get what they want before the projects kicks off, and everyone else... well, who gives a shit about everyone else? Certainly not Facebook's shareholders.
[+] [-] threeseed|6 years ago|reply
Look at Uber, AirBnb, Lime etc. They were launched illegally in many countries.
[+] [-] unknown|6 years ago|reply
[deleted]
[+] [-] chii|6 years ago|reply
If it was exploitative, then presumably the users would not choose to use libra.
[+] [-] myth_buster|6 years ago|reply
> Better to ask for forgiveness than for permission
Mantra/MO that they have been following since inception.
[+] [-] ralphstodomingo|6 years ago|reply
Facebook has not been the best steward for its main feature the News Feed, leading to fake news, mass misinformation, not to mention their heavy use of psychology to keep people hooked.
I refuse to trust them something similar won't happen with Libra.
[+] [-] chris_wot|6 years ago|reply
On top of this, in most economies, deposit taking institutions are backed by Reserve Banks. Facebook could die in 20 years. Do we want to trust it will still exist? If it collapses can you recover your money?
There are so many issues, they haven’t even come close to addressing even a small portion of them.
Caveat emptor!
[+] [-] adwww|6 years ago|reply
> “In time, we hope to offer additional services for people and businesses, such as paying bills with the push of a button, buying a cup of coffee with the scan of a code or riding your local public transit without needing to carry cash or a metro pass,”
You can instantly and securely send up to £100,000 for free between any UK banks, and contactless payments are EVERYWHERE here - I've even seen a begger with a chip and pin machine - let alone paying for coffee or a bus fare without cash.
[+] [-] threeseed|6 years ago|reply
Money transfers between countries in particular poorer ones is absolutely not a solved problem. Neither is accepting money for products/services in countries where not everyone has a bank account or a credit card. And there is rampant corruption in many places as well.
Even a handful of these are enough to make the effort a success.
[+] [-] cthaeh|6 years ago|reply
India immediately comes to mind, many African nations likely would find this incredibly useful. Just because it isn't useful to YOU doesn't mean its useless.
[+] [-] kaolti|6 years ago|reply
[+] [-] randomvectors|6 years ago|reply
[+] [-] docdeek|6 years ago|reply
I can buy reddit gold and then gift that gold to someone who amuses me with a comment or a post, and the only difference I’m seeing is that reddit keeps my money and only gifts virtual gold to the funny guy. Is the only difference with Facebook’s Libra that when I give the Libra to someone else they can cash it our for ‘real’ money?
Apologies for the question if I am missing something obvious.
[+] [-] icebraining|6 years ago|reply
[+] [-] jrochkind1|6 years ago|reply
That's a pretty big difference! It's the one that makes Libra a currency.
[+] [-] gjulianm|6 years ago|reply
There's also the issue of scale. Facebook is everywhere, if it controls our money it can become more powerful than governments.
[+] [-] wickoff|6 years ago|reply
Individual governments actually feel threatened by a global currency that is available on platforms most of their citizens already use and is backed by a basket of geographically distributed low volatility assets.
If US is worried, then governments with smaller and more volatile currencies may be having a panic attack.
[+] [-] madamelic|6 years ago|reply
Rather than relying on Reddit, for instance, to determine who owns what, everyone can check the blockchain to see for themselves.
The public ledger means that Reddit doesn't (in theory) control the ledger. Reddit couldn't go in and delete coins or give coins without payment. Reddit could have a large stash of coins though and be willing to buy and sell coins though.
Libra though is kind of really weird. It is a "decentralized" system but really the decentralization is just putting it in the hands of a small group.
That isn't totally a bad thing, but it definitely isn't a great thing. Look at 51% attacks, that is why having a small group of large holders is a really bad idea. On the other side though, the large holders are well-known so at least everyone would know for sure who is pushing around the network.
[+] [-] unknown|6 years ago|reply
[deleted]
[+] [-] BonesJustice|6 years ago|reply
[+] [-] glaberficken|6 years ago|reply
[+] [-] unknown|6 years ago|reply
[deleted]
[+] [-] gjulianm|6 years ago|reply
Honestly, I really hope this project is stopped as soon as possible. Facebook already has way too much influence in our lives. It controls news, messaging and relationships with others, and it has not been managing them in a responsible way. Why would anyone let this company control money too? What happens if Facebook causes a financial crisis? Who will be controlling them? Who will they be accountable to? What happens if Facebook goes bankrupt? Libra is a project with way too much risk for the benefits it offers.
[+] [-] gtirloni|6 years ago|reply
[+] [-] tjpnz|6 years ago|reply
Similar deal in Japan. They'll need to ensure nobody using it is in a gang, is a terrorist or might be politically exposed. In a lot of cases they'll be required to collect identity documents. They'll also need to cease offering service to any flagged individual across their entire platform.
[+] [-] buboard|6 years ago|reply
[+] [-] tzs|6 years ago|reply
Facebook is not attracting political and regulatory attention not because what they are doing is new, but rather because they have a realistic chance of doing it on a much larger scale than we've seen so far.
[+] [-] digitalengineer|6 years ago|reply
[+] [-] CaptainZapp|6 years ago|reply
While it could absolutely be that the £ tumbles there are a number of stable currencies in which £ could be exchanged if people are worried that it loses value (that's value in relation to other currencies). ¨ The concept is called FOREX[1] and is not exactly new or revolutionary.
[1] https://en.wikipedia.org/wiki/Foreign_exchange_market
edit : wrong word
[+] [-] IAmEveryone|6 years ago|reply
Considering some rather beleaguered tech company's fancy new crypto-whatever to be more stable than currencies that have decades of rather benign market histories does not strike me as rational.
[+] [-] digitalengineer|6 years ago|reply
[+] [-] seibelj|6 years ago|reply
Now blockchain is the most powerful monetary technology ever created and governments and regulators must put a stop to it immediately!
It's incredible what can change in a week.
[0] https://i.redd.it/uu0qg8t28tq11.png
[+] [-] supermatt|6 years ago|reply
You should read the comments in this and the announcement article (still on front page since yesterday) as it seems you are confused.
[+] [-] icebraining|6 years ago|reply
The claims I've seen have been (1) that the whole ecosystem is overrun with scammers and (2) that the blockchain is being ill-used (hence the NIST workflow).
I'd say (2) still applies here - the "blockchain" here is just a distributed database, which already existed before Bitcoin came around. Bitcoin's innovation - combining Merkle Trees with POW - is irrelevant in a network of trusted partners.
[+] [-] unknown|6 years ago|reply
[deleted]
[+] [-] IAmEveryone|6 years ago|reply
[+] [-] morsmodr|6 years ago|reply
And this is just 1 part of it, the other part is assurances that this data will not be used to further interests of all the validators. I am curious on what is the value proposition pitched by FB to attract validators, besides what is given on the public facing websites. The fact that you have government institutions is to have a body that is removed from profit making goals, and thinks about the society in the long term. Sure, there are corrupt politicians, but not all of them are. Europe seems to have the right mind with regards to tech firms. What is it that fb and other investors look to get out of this thing?
[+] [-] unknown|6 years ago|reply
[deleted]
[+] [-] drc37|6 years ago|reply
[+] [-] PretzelFisch|6 years ago|reply
[+] [-] swarnie_|6 years ago|reply
Also any note yet or the scope of this? Will it be pushed to Instagram and what ever other garbage Facebook peddle?
[+] [-] snarf21|6 years ago|reply
They have said this will be available in Messenger and WhatsApp.
[+] [-] malvosenior|6 years ago|reply
[+] [-] Mengkudulangsat|6 years ago|reply
The current US dollar holds power globally largely thanks to the oil trade. As the world moves away from oil, surely you'll need a replacement reason for us to keep wanting the US dollar?
Libra would be a geopolitical coup.
[+] [-] jkoudys|6 years ago|reply
[+] [-] unknown|6 years ago|reply
[deleted]
[+] [-] koonsolo|6 years ago|reply
The disruption of 'money' was already on the table with all the cryptocurrencies. And now powerhouses such as Facebook, Visa and MasterCard, Uber and Lyft, eBay, and Spotify stand behind this new Libra.
I would shit my pants too.
[+] [-] trpc|6 years ago|reply
[+] [-] stakhanov|6 years ago|reply
[+] [-] supermatt|6 years ago|reply
The problem is that this isn't the same as a proof of work system - it is proof of stake - with the "burden" of proof put on facebook and its partners. This means that they can simply "create" currency with no oversight or proof of reserve.
In short, it works EXACTLY like a central bank, but it's not regulated. This is extremely dangerous for consumers.