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Facebook Is Developing a Cryptocurrency for WhatsApp Transfers, Sources Say
- bhalperin 8y agoCall it a “cryptocurrency” if that makes it sound sexy, but this is still centralized — it’s effectively the same as the (already existing) Messenger Payments.
- ddtaylor 8y agoExactly. There is virtually a zero-chance that Facebook (or any other company) will develop and release something they have no control over.
- chiefalchemist 8y agoTrue. They might not. But maybe they only want to threaten (e.g., Google Fiber) that X, Y or Z might be possible? The other reason for such things is talent. If you want to attract top talent you have to (R&B) toys for them to play with. On the other hand, to say, "We'll never release this so let's not put any effort into it" is the road to irrelevance. The budget for this effort vs the cost of irrelevance make such project a solid investment. Pointless in terms of product but essential to the brand.
- Hackbraten 8y agohttps://github.com/facebook/buck https://github.com/facebook/buck You’re welcome.
- ddtaylor 8y agoThat's an example of something Facebook has control over. If someone wants to fork it, they could, but it wouldn't affect the code Facebook is running. A blockchain would differ in the sense that the community/hashpower could decide to do things Facebook doesn't want to do at which point they would effectively lose control of the chain. Open source makes sense for companies because they want to share the collective engineering efforts - because often times the code itself isn't the thing being monetized directly. In the case of Facebook it's not the code that is worth billions it's the data they horde. In the context of a blockchain that would mean sharing that data with everyone instead of hording it and acting as a middle-man for advertising, which is very much against the business interests of Facebook or any company with that model.
- en-us 8y agoA build tool is not in the same category as a revenue generating product.
- Hackbraten 8y agoIf Facebook’s developer teams have faster build times, they can create more horrible, unethical, revenue generating features per hour. FB could have kept Buck for themselves but chose not to.
- tzfld 8y agoTBH at this point I have more trust in a centralized cryptocurrency backed by a large corporation than in a decentralized one.
- tCfD 8y agoA centralized cryptocurrency is just digital currency. It may be cryptographically secured against unauthorized transfers/access, but if it doesn't employ some sort of game-theory based custodial sharing scheme which is intended to incentivize decentralization of control (successfully our not), it's not using the 'crypto' protection in the special sense that cryptocurrency implies.
- ramontayag 8y agoTrust in it to do/be what?
- hndamien 8y agoTrust in it to maintain its value if it is a stable coin. Alternatively, trust it not to be hacked or inflated if it isn’t. (As well as trust it to maintain whatever monetary properties they advertise to give it value as money.
- Erlich_Bachman 8y agoJust to be clear, do you expect for example Bitcoin to be hacked? In what way do you envision this? Breaking SHA256?
- ramontayag 8y agoI see. Thanks for clarifying!
- davnicwil 8y agoWhy is that? And what's a centralised cryptocurrency?
- scalesolved 8y ago
- blahblahblogger 8y agoHonest question, but does a cryptocurrency have to be decentralized for it to be determined a cryptocurrency? I didn't think that was the case. It may be more in the spirit of crypto but I don't think it's a hard requirement?
- Erlich_Bachman 8y agoBecause if it is not - it is simply a centralized database of payments. Like an SQL table of transactions. This has been a solved problem for decades. Visa and MC processing servers all use cryptography in many parts of the stack, and yet no one calls Visa a cryptocurrency because of that. This is why if you see anyone use the word "cryptocurrency" when in reality they talk about a legacy centralized (thus lacking all decentralizations perks) database - you know they are assuming you have no actual knowledge about the area and are trying to buzzword you.
- zhte415 8y agoI'm not sure that something like Vision Plus is very similar to a Blockchain. Aside from both using cryptography, in the sense, of encryption. So... if such buzz words are used, it seems like a huge lie.
- andreygrehov 8y agoForget about centralized/decentralized. There is an ecosystem around existing cryptocurrencies. Wallets, exchanges, dapps, etc. All of it wouldn't work use they an SQL table of transactions.
- dagaci 8y agoThe problem with centralisation is that it enables a kind of corruption: entities can engage in both financial censorship and arbitrary money printing. That being said a cryptocurrency does not have to be decentralised. However it is very important to understand the difference. Today even decentralised cyptocurrencies depend on centralised-exchanges, and the consequence is that despite the constraints built into a blockchain algorithm are able to sell unlimited amount of the crypto to users without actually being in possession of the algorithm-limited crypto.
- amelius 8y ago> Call it a “cryptocurrency” if that makes it sound sexy Tbh, to me it sounds scary instead
- i_am_nomad 8y agoIf this allows Facebook to monetize WhatsApp without introducing ads and the privacy corrosion they would bring, then this would be a very good development.
- polyomino 8y agoIf Facebook becomes a bank, they will be required to comply with fincen. E2E encryption is not going to fly.
- r32a_ 8y agoIt's a centralized stable coin built by Facebook, so it's basically PayPal?
- deleted 8y ago[deleted]
- Scoundreller 8y agoSounds like easy bolt-on growth. Paypal is still expensive and uncommon for person to person transactions in real life.
- zelly 8y agoThere’s more potential than just payment transfer. It could be used as a currency outside the context of WhatsApp money transfers. Facebook could become the central bank of the internet.
- r32a_ 8y agoUnless there is a complete collapse of the Bitcoin blockchain and it's ecosystem there is no way any cryptocurrency will take over Bitcoin as the number 1 currency on the internet
- tempsafdjla 8y agothis make zero sense. are they going to let anyone mine the coins? probably not. if its just them mining it, then its totally pointless.
- thaumasiotes 8y agoOn the contrary. If facebook controls minting the coins but can't control transactions using the coins, it'd be perfect, much better than the decentralized cryptocoins we have today. It would instantly bypass state controls on money transmission. They'd probably run into trouble cashing out their coins in that case, though.
- afasfdsasdf 8y agoIf facebook controls the mining, then they have the power to change the blockchain, which in effect would defeat the whole point. They effectively have a database with some very unnecessary complexity. It wouldn't bypass state controls because they would still need to abide by laws.
- coralreef 8y agoI don't think the purpose is to create their own money, but to create a vehicle that takes advantage of crypocurrency-like protocols. For example, perhaps they'll let users generate their own keys, thereby letting everyone transact freely with each other. This may allow FB to wash their hands of KYC laws except for those depositing and withdrawing fiat directly.
- rebuilder 8y agoFacebook would still be maintaining the ledger, which means there's no such thing as letting everyone transact freely with each other. It's like the bank saying they're not liable for KYC procedures because it's their customers who initiate the transactions.
- m-i-l 8y ago
- klyrs 8y agoAlso on HN rn > WhatsApp has an encrypted child porn problem (techcrunch.com) >33 points by sahin-boydas 9 hours ago | hide | 57 comments FML
- ackbar03 8y agoI guess they just had to monetize whatsapp somehow
- empath75 8y agoSuper skeptical about this story. Why should they bother instead of just using regular banking or keeping their own ledger.
- zelly 8y agoTo steal the Bitcoin/Ethereum market share. It doesn’t need to be better. People just need to think it is. That’s the reason buzzwords and marketing exists.
- deleted 8y ago[deleted]
- wonderwonder 8y agoPretty interesting, Facebook generally does not have a reputation for 'jumping on the bandwagon' so I assume they have thought this through. Many of their whatsapp users live in very poor areas that are not traditionally served by banks. If they integrate a wallet into the app it may allow for a real use case. They would still need to provide some sort of 'convert to fiat' functionality for those same unbanked users though. Could very well result in them creating their own economic ecosystem in third world / emerging markets. Effectively locks in a new customer base and revenue stream.
- Scoundreller 8y ago> Many of their whatsapp users live in very poor areas that are not traditionally served by banks. Bingo. Remittances are still expensive. Basic bank accounts are still out of reach for many. Any user with cash could become a convert-to-fiat provider. Before Western Union had to signup shops, now you can go through your friend lists to find someone you already know and trust.
- foepys 8y agoThere is a saying in German: "Bei Geld hört die Freundschaft auf", roughly translated to "don't mix friends and money". Let me tell you: it's a saying for a reason.
- Scoundreller 8y agoI think that’s a very cultural thing. If you need a plumber, in some parts of the world you’d be insane to open up the phone book and call a random one. You would call your cousin who’s friends with one instead. And probably cook them lunch when they come over. Look at MLMs and which countries and groups they thrive in, vs ones that they would never take off in.
- freddie_mercury 8y agoHigh remittance costs are primarily caused by two things: exchange rates and KYC/AML compliance. I don't see how this would address either of those things. Even with large & relatively liquidity cryptocurrency the spread to covert to local currency is large. Right now if I want to get rid of a Bitcoin and get Vietnamese Dong I see rates from 89,286,016.80 to 90,135,312.89. The actual price according to Google is 93,851,364.64. So you're losing 4%, which is already comparable to a traditional remittance (the World Bank says 5% is the average cost for educated users). Except this new cryptocurrency would be less popular and less liquid than Bitcoin, so the spreads would be higher.
- pqs 8y agoWhy can't they just use a good old database, to record transactions? It is a centralized system! I guess Facebook trusts itself!
- viach 8y agoBut do you trust Facebook? Also, regarding the "trust itself" part, it's not necessarily the case. How can one make sure database admin haven't changed some records?
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- pqs 8y agoI do not trust Facebook, but I trust my bank, which doesn't use cryptocurrency. I guess they use databases, with lots of controls, but a regular database nonetheless. edit: I also trust PayPal, as I use it regularly, and it doesn't use a cryptocurrency. My point is that I don't understand why Facebook would need a Cryptocurrency to allow payments. As far as I know, WeChat doesn't use cryptocurrency and is probably the main payment system of China.
- viach 8y ago"My point is that I don't understand why Facebook would need a Cryptocurrency to allow payments" Let me try to explain. You trust your bank and PayPal and it's perfectly fine. But only to the point things are going ok in general. In some, say, areas, the situation is possible when you see a message on the doors and ATMs of your previously trusted for decades banks: "Sorry, no check out today". And it can long for days or even months. And your previously trusted online e-money processor can freeze your funds for whatever reason - "fraud suspect, suspicious activities, server offline". It is hard to imagine for citizens of some countries, but in my opinion, this is only matter of time when it happens. Cryptocurrency and blockchains in general are indeed highly inefficient databases and a tiny Postgres server outperform them all in Transactions Per Second, that's true. But Postgres database running on a centralized service won't give you a feeling of independence and trust the biggest cryptocurrencies can provide (sure, they are volatile in price and you need to manage your private keys etc, but still).
- polyomino 8y agoAs they are trying to build an economy, they will have to bring both consumers and merchants to their platform. Exposing a bunch of people to new money is not enough, they need to be able to buy something useful with it. Facebook will have to build something that its users want to buy, and then find something for the users to do to earn fbcoin. Maybe they could allow ads to be purchased in fbcoin, and pay users to translate ads to their native language for fbcoin.
- fooker 8y agoFacebook has a ton of merchants already using pages and groups. Also, their 'marketplace' feature has more or less replaced craigslist and ebay in my city.
- zelly 8y agoKnew this would happen one day. Big tech has 0 reason to use third party coins when they do literally everything in house. FacebookCoin, AmazonCoin, etc., will work 100x better too—not just technologically but also in interopability with current banking infrastructure and government regulators. Decentralization is objectively worse for user experience all around. If a centralized trusted authority like the FED or a FANG corporation could make electronic cash, then people will happily use that because they don’t care about privacy or cypherpunk ideals. Zero reason for anyone to use Bitcoin/Ethereum/Monero when these exist. (Unless they want to commit crimes—and yes, that’s how it would be perceived.)
- Vinnl 8y agoDoesn't your argument apply to regular money as well, i.e. "Zero reason for anyone to use Bitcoin/Ethereum/Monero when regular money exists. (Unless they want to commit crimes—and yes, that’s how it would be perceived.)"
- fooker 8y agoIt does, that's why people do not usually use bitcoin (/other coins) for everyday transactions.
- thecatspaw 8y agoBitcoin isnt used for everyday transactions not because of its reputaiton. Its because its inconvenient, and people like a stable currency. The reputation followed what people buy with bitcoins When I pay someone 1000$, I expect that to arrive as 1000$ (excluding fees here). With stable currencies that is a pretty safe bet, unless the transaction takes days.
- fooker 8y agoSure, but if you made it extremely convenient, the usage would increase by a few orders of magnitude and the price could stabilize.
- 8y ago
- acd10j 8y agoPayment sector specially in India is highly regulated, with even WhatsApp current application for UPI payment licence in Legal limbo because Facebook specially having bad name/luck with Regulators. Highly Doubtfull that current regulation will allow Cryptocurrency in any form as payment mechanism. Most that could be allowed would be glorified anti fraud Secure logger.
- deleted 8y ago[deleted]
- yason 8y agoCryptocurrency mentioned. Blockchain mentioned. I really should've bought a card for this buzzword bingo. Is this just PR or are they genuinely so clueless? If the former I wonder if they missed the shift this year where cryptocoins stopped being the coolest kid in the town anymore. If a centralized company wants to roll out electronic payments through its services it can just, you know, do that. They don't need blockchain or cryptocurrency to become, well, Facebank.
- dana321 8y agoI've not heard the term "buzzword bingo" before. Quote of the week.
- assblaster 8y agoClassic Dilbert I think.
- assblaster 8y agohttps://dilbert.com/strip/1994-02-22 https://dilbert.com/strip/1994-02-22
- hnauz 8y agoWow, 1994. These things are timeless.
- rococode 8y agoMakes me think it'd be really interesting to see a list of buzzwords (and how they've changed) over the past couple decades.
- trading_wheels 8y ago"synergy" is pretty timeless...
- qertoip 8y agoFacebook is Developing a Shitcoin for WhatsApp Transfers, Sources Say
- point78 8y agoThis isn't reddit
- floatboth 8y agoBecause Telegram's TON was a huge success, yeah,
- karlmcguire 8y agoI can't tell if this is sarcasm (and you know something I don't), or you're being serious. I would agree if you're being serious, despite the lack of news coverage, based on a few points: - $1.7B raised in ICO: This is far more than has ever been raised in any other ICO. I also think it says something about investor optimism. I'd bet that this was a data point in Facebook's decision to do something similar with WhatsApp. - Telegram's development team: Some of the best in the world. They've done a lot with a few highly talented programmers and mathematicians. - 200,000,000+ monthly active users as of March 2018.
- floatboth 8y agoOf course it's sarcasm. It was cancelled, if you don't remember: https://www.independent.co.uk/life-style/gadgets-and-tech/news/telegram-ico-cryptocurrency-bitcoin-ton-a8334551.html https://www.independent.co.uk/life-style/gadgets-and-tech/ne... > development team: Some of the best in the world Well, messaging isn't exactly rocket science. And they did a lot right (open source clients, bots, channels, proxies). But their secret chat implementation is weird (literally every crypto expert has the same question: "why did you pick these extremely unpopular barely known primitives to reinvent your wheel?")
- karlmcguire 8y agoThey cancelled the ICO, not the underlying blockchain.
- BenjaminBlair 8y agoSeriously? With all the security breaches they had this year, Instagram too, do they really expect people to trust them with cryptocurrency? I have no idea how they thought this is a good idea.
- kgdinesh 8y agoI think battling Fake News on WhatsApp should come first before launching a Cryptocurrency. I believe Blockchain can help in the former too.
- Erlich_Bachman 8y agoYou mean, in essence, more censorship? That is the last thing that WhatsApp needs.
- t0astbread 8y agoThis is the WhatsApp strategy in full effect: Advertise how privacy-friendly your service is (blockchain, decentralized, end-to-end encryption) and make it all proprietary and lock it down so that you (FB) still have full control
- randomacct3847 8y agoI think we underestimate how “mainstream” digital currencies could be if the UX is right. In a lot of ways we already deal with “centralized” digital currencies already in the form of loyalty points with airlines, hotels, food/coffee chains, grocery stores and gift cards that can only be spent at specific merchants I.e. currencies that have some value and can be used to pay for things.
- _Codemonkeyism 8y agoI don't get this, is there a financial difference if Facebook holds the money and stores the "amount" in WhatsApp vs. a cryptocurrency with tokens stored in WhatsApp that you can only use in WhatsApp? I'm too stupid for this.
- 0xferruccio 8y agoI’m curious on Mark Zuckerberg’s take on cryptocurrencies. He was big on p2p file sharing as a business model when starting out FB. I don’t think he has had any public comments on Bitcoin https://en.m.wikipedia.org/wiki/Wirehog https://en.m.wikipedia.org/wiki/Wirehog
- rchaud 8y agoI'd be extremely wary of FB's ambitions in this area. FB the social network will not last forever, and it seems obvious that companies like Google, Amazon etc will shift their business model towards secretive "enterprise" services, like AWS for the Pentagon, Dragonfly for China etc. Facebook tried to create it's own walled-garden Internet in India under the extremely deceptive "Facebook.org" initiative. Awareness of stuff like Google+ breaches or FB's data sharing will soon become a thing of the past once these companies start dealing directly with governments and move away from public-facing products entirely. If FB starts to implement an India-specific version of China's "social credit" policy towards blacklisting suspected defaulters, with no recourse, the people likely won't even know who's supplying that technology. Phone-based currency transfers like M-Pesa have been successful in Tanzania, Kenya and is available in India and Afghanistan. Unlike whatever FB will offer, it doesn't require you to use Whatsapp. I can't wait to see the permissions required on the new version of WA once that service is live.
- KenanSulayman 8y agoRe “walled-garden”: there's also Workplace by Facebook (http://work.facebook.com http://work.facebook.com) tailored for enterprise.
- eitland 8y agoYeah, more metadata to Facebook. Also more ways for a huge American company to mess with my life if anyone human, bot or algorithm working there has a bad day at work. (if anyone doesn't catch my drift here, losing access to your mail account happens, getting it fixed most likely involves either knowing a person working with said company and/or hitting the front page of HN or another watering hole.)
- kerng 8y agoFacebook was hiring blockchain engineers during the hype late last year - so I guess they have to ship something to justify the team. I think nothing in this scenario requires a blockchain.