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A payments system on Facebook makes a ton of sense and would be very useful. I just don't get why it has to be cryptocurrency.

negamax 7y ago
Biggest benefit of using blockchain and cryptocurrency here is open trust (this term is the best way I can think about describing this). Any internal database is subject to all kind of human and technical errors. But with a network of trusted parties that solves the Byzantine Generals Problem. This becomes secure and trusted as trust is given. No one can hack it at will without taking the 50% of the network down and compromising multiple entities. This is a bizarre technical, social and economic feat. I wish Apple was the one pulling this instead of FB. But quite certainly there are more FB users than iPhone users.
- Geee 7y ago
  Not true for stablecoins, which aren't really cryptocurrencies. The most important single-point-of-failure in currencies is the supply mechanism, which must be trusted. The supply of centralized stablecoins can't be trusted. It is open to human greed, errors and hacking. Do you trust Mr. Zuckerberg having control of the future money supply? Centralized stablecoins should be illegal, because the issuer can print money from thin air without collateral, unlike banks which are regulated and the money supply is controlled with interest rates.
tim333 7y ago
A feature of cryptocurrencies like ethereum or bitcoin is they can be anonymous and unregulated which can make small transactions cheap. You can get an ethereum address and I can send you 10c worth of it for maybe 2c in costs and that's it. To do similar in fiat we each need financial institutions which may have to spend a fair bit each to do KYC on us. It remains to be seen where Facebook will fit on the regulated/unregulated spectrum. Somewhere between the two I imagine.
dead_mall 7y ago
What else would it be? Some in house software, mysql based currency system? What is it about cryptocurrency that people still don't get?
zeroxfe 7y ago
Two things I can think of: - you can get transparency (the entire ledger must be public, so you reduce the risk of many kids of internal fraud and manipulation.) - you can use these coins outside the facebook ecosystem -- I can't think of immediate value here, but I can see a long play where Facebook can turn into a bank
- e12e 7y ago
  Surely the long play is turning Facebook into sovereign nation state? Only half-joking...
- rafiki6 7y ago
  This is the first and only comment I've read that actually gives credence to the idea of FB making it as a cryptocurrency, but it still falls short of a simple idea and gives FB too much credit for being an "open" player. FB is the issuer, why can't they just provide APIs to their ledger and APIs for settlement so it can be used outside of their direct ecosystem, but still allows them full control? FB wants to keep people in their ecosystem.
- Barrin92 7y ago
  wait a second, when did facebook say that the ledger will be visible to the public?
miguelmota 7y ago
Cryptocurrencies are trustless in principle. You don’t have to trust that FB updated your balance in their database correctly or tampered with historical data when you can simply pull all the transaction history from the blockchain and verify for yourself and with peers from the network.
flycaliguy 7y ago
Don’t forget that Facebook is extremely capable of reading the public. It could be a marketing tool designed to capture early adaptors.
- village-idiot 7y ago
  They’re also capable of the self delusion that is depressingly common for large companies.
  - flycaliguy 7y ago
    I agree and it really does blow my mind how powerful their service could be if fully utilized as an internal intelligence gathering tool.
hn_throwaway_99 7y ago
Facebook already had Facebook Credits around 2011-2012, but it was killed in 2013.

negamax 7y ago

Biggest benefit of using blockchain and cryptocurrency here is open trust (this term is the best way I can think about describing this). Any internal database is subject to all kind of human and technical errors. But with a network of trusted parties that solves the Byzantine Generals Problem. This becomes secure and trusted as trust is given. No one can hack it at will without taking the 50% of the network down and compromising multiple entities. This is a bizarre technical, social and economic feat. I wish Apple was the one pulling this instead of FB. But quite certainly there are more FB users than iPhone users.

Geee 7y ago
Not true for stablecoins, which aren't really cryptocurrencies. The most important single-point-of-failure in currencies is the supply mechanism, which must be trusted. The supply of centralized stablecoins can't be trusted. It is open to human greed, errors and hacking. Do you trust Mr. Zuckerberg having control of the future money supply? Centralized stablecoins should be illegal, because the issuer can print money from thin air without collateral, unlike banks which are regulated and the money supply is controlled with interest rates.

tim333 7y ago

A feature of cryptocurrencies like ethereum or bitcoin is they can be anonymous and unregulated which can make small transactions cheap. You can get an ethereum address and I can send you 10c worth of it for maybe 2c in costs and that's it. To do similar in fiat we each need financial institutions which may have to spend a fair bit each to do KYC on us. It remains to be seen where Facebook will fit on the regulated/unregulated spectrum. Somewhere between the two I imagine.

dead_mall 7y ago

What else would it be? Some in house software, mysql based currency system? What is it about cryptocurrency that people still don't get?

zeroxfe 7y ago

Two things I can think of: - you can get transparency (the entire ledger must be public, so you reduce the risk of many kids of internal fraud and manipulation.) - you can use these coins outside the facebook ecosystem -- I can't think of immediate value here, but I can see a long play where Facebook can turn into a bank

e12e 7y ago
Surely the long play is turning Facebook into sovereign nation state? Only half-joking...
rafiki6 7y ago
This is the first and only comment I've read that actually gives credence to the idea of FB making it as a cryptocurrency, but it still falls short of a simple idea and gives FB too much credit for being an "open" player. FB is the issuer, why can't they just provide APIs to their ledger and APIs for settlement so it can be used outside of their direct ecosystem, but still allows them full control? FB wants to keep people in their ecosystem.
Barrin92 7y ago
wait a second, when did facebook say that the ledger will be visible to the public?

miguelmota 7y ago

Cryptocurrencies are trustless in principle. You don’t have to trust that FB updated your balance in their database correctly or tampered with historical data when you can simply pull all the transaction history from the blockchain and verify for yourself and with peers from the network.

flycaliguy 7y ago

Don’t forget that Facebook is extremely capable of reading the public. It could be a marketing tool designed to capture early adaptors.

village-idiot 7y ago
They’re also capable of the self delusion that is depressingly common for large companies.
- flycaliguy 7y ago
  I agree and it really does blow my mind how powerful their service could be if fully utilized as an internal intelligence gathering tool.

hn_throwaway_99 7y ago

Facebook already had Facebook Credits around 2011-2012, but it was killed in 2013.