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Facebook’s Libra cryptocurrency: Privacy and stability concerns

137 points by headalgorithm 7y ago

dngray 7y ago
douche marks (one of the names people were calling them) https://news.ycombinator.com/item?id=20181639 https://news.ycombinator.com/item?id=20181639 Yeah now it's called Libra. I can totally see my daughter wanting to think about her girl products every time she uses this coin. They better consider how their marketing will look if they want to enter the Australian market. Especially with this day and age of memes. Usually what the teens find "cool" is what the older generations adopt.
- pdpi 7y ago
  > Yeah now it's called Libra. I can totally see my daughter wanting to think about her girl products every time she uses this coin. The iPad didn't really suffer much from the same naming "problem". Libra is pretty much just the latin name for "Pound". It's a pretty damn good name for the currency.
  - dngray 7y ago
    > The iPad didn't really suffer much from the same naming "problem". It's not really the same thing. Pad can often refer to things like "pads of paper", or be a slang name for an apartment. > Libra is pretty much just the latin name for "Pound". It's a pretty damn good name for the currency. A lot of teenagers probably aren't going to know that. Whereas there is literally a brand called "Libra" that makes tampons, pads and those sorts of products. That is what people think of here when they hear that, either that or the star sign.
    - supakeen 7y ago
      The Libra name is only used in Australia and New Zealand [0], it's unlikely that two things carrying the same name will influence the brand of Facebook's currency a whole lot. https://en.wikipedia.org/wiki/Libresse#International_branding https://en.wikipedia.org/wiki/Libresse#International_brandin...
      - stcredzero 7y ago
        The first thing I thought about was Libranet Linux.
        dngray 7y ago
        > The first thing I thought about was Libranet Linux. Yes and you're on HN like me. This site caters for a certain audience.
gemjam 7y ago
Bloomberg did a nice video about the real implications; Chinese app style payments would deprive banks of their cut of transaction processing.[1] Isn't it strange that the Chinese copied facebook, but now facebook copys WeChat "U.S. Banks Are Terrified of Chinese Payment Apps" https://www.youtube.com/watch?v=SJh_Uir5EMI https://www.youtube.com/watch?v=SJh_Uir5EMI https://www.nytimes.com/2019/03/07/technology/facebook-zuckerberg-wechat.html https://www.nytimes.com/2019/03/07/technology/facebook-zucke...
- dngray 7y ago
  > Isn't it strange that the Chinese copied facebook, but now facebook copys WeChat Not really, Facebook is lacking in originality and sees how much money can be made (Wechat is doing it). They also see how they can harvest huge amounts of data on what people buy with a high degree of preciseness.
- duxup 7y ago
  Every company of a certain size eventually starts picking up other companies / ideas. Heck plenty of start ups pivot to existing ideas. And in Japan pay with your phone has been around for ages.
- thablackbull 7y ago
  > Isn't it strange that the Chinese copied facebook, but now facebook copys WeChat You've clearly never used WeChat if you're under the impression they copied Facebook. This "___ of the West" is just a simplified trope to help readers make a comparison. Western companies/apps fail in the East and Eastern apps often fail in the West as the market is completely different that you can't just port something over and hope to replicate its success. https://hbr.org/2018/08/why-western-digital-firms-have-failed-in-china https://hbr.org/2018/08/why-western-digital-firms-have-faile...
- buboard 7y ago
  facebook copied chinese / korean / japanese social media in many ways over the years. And their games ecosystem (zynga era) were mostly copies of chinese games.
- 7y ago
duxup 7y ago
I think it remains to be seen how many Facebook users WANT to use Facebook (or whatever they call it) to buy things. I'm not sure that's an automatic yes from most users.
justforyou 7y ago
This is the thing that will ultimately get facebook as we know it regulated out of existance -- unless politicians get hooked on social media micro-donations. https://www.banking.senate.gov/imo/media/doc/5.9.19%20Facebook%20Letter.pdf https://www.banking.senate.gov/imo/media/doc/5.9.19%20Facebo...
- lowdose 7y ago
  Is this a new narrative pushed by old banks that do not innovate enough to keep up with Zuckerberg et al?
shiado 7y ago
Could this whole project be a tax play? Many jurisdictions don't tax cryptocurrency until sale where capital gains applies, some don't tax at all. It is very convenient for tax purposes for a corporation to have a currency that exists on a global network where you don't need to transfer anything between countries and all that matters is where you cash out.
toomuchequate 7y ago
If it is pegged to USD, there is no investment potential. It is just as bad as cash. The idea behind bitcoin is that you don't need to rely on the US government for storing value. There are 21,000,000 BTC ever ever, you can't print more. That article did not address this at all. This is the most compelling reason to buy bitcoin.
- thefounder 7y ago
  >> It is just as bad as cash. You mean that it is as good as cash. Bitcoin become a failed project, a big internet casino. Some people want to use digital money to make payments and get paid, you know? The success of the facebook coins depends by the ways to redeem the tokens(i.e do other shops accept it, can they be cashed out at atm, can you use it with 3rd party wallets etc)
  - maxlybbert 7y ago
    Quoting the animated Dilbert TV show when Dilbert buys his mom a gift card: “you’ve exchanged your money for something like money, but less useful.”
    - jrvxo 7y ago
      That series was brilliant. I don't know what happened to it :(
    - maxlybbert 7y ago
      I finally found a real source, and as usual, my memory leaves much to be desired (ultimately Dilbert gets a gift certificate): Alice: A gift certificate is completely different from cash. Dilbert: No, it's not. They're both pieces of paper you can exchange for goods and services. Alice: You're missing the point. Dilbert: Actually, a gift certificate is worse than cash, because you can only use it in one place. Wally: And it expires. Alice: At least it shows some thought. Dilbert: It shows defective thought. You're trading perfectly good money for something that does the same thing, only not as well. Facebook’s currency may not expire or be limited to one place, but it does seem to me that “it does the same thing [as money], only not as well.”
catacombs 7y ago
With the number of data leaks, PR disasters and the federal probes looming over Facebook, the last thing I want is the company handling any kind of financial transactions, especially if it's with cryptocurrency.
- duxup 7y ago
  I suspect though this is just crypto currency ... in tech and name, but generally will just be controlled by facebook in a way that isn't as susceptible to the usual hacking / non reversible transactions as "real" crypto currency. I think this is really just Facebook payments that will be controlled by Facebook.
  - catacombs 7y ago
    Sounds like it. I'm interested to see how this plays out ... from the sidelines. I haven't had a Facebook account in years. I deleted it a while ago and haven't looked back.
deleted 7y ago
[deleted]
runeks 7y ago
The reason for Bitcoin’s design is precisely because a centralized/pegged alternative was tried and failed: https://en.m.wikipedia.org/wiki/Ecash https://en.m.wikipedia.org/wiki/Ecash Facebook’s currency is not a successor of Bitcoin, it’s an inferior reincarnation of a failed predecessor.
- throwawaylolx 7y ago
  How is it inferior to Ecash? FB's coin is not meant to provide anonymity features like Ecash did, but that's just a design choice. Other than that, Ecash is often suspected to have died due to the lack of reach and partnerships, which is not something FB lacks. So far, FB's coin looks very interesting. >Facebook’s currency is not a successor of Bitcoin Yeah the title is just low-quality clickbait; it's got nothing to do with Bitcoin.
  - russdpale 7y ago
    I don't think its clickbait, a lot of projects in the crypto space claim to be like bitcoin but better, bitcoin is the foundation upon which a lot of projects showcase themselves to potential users, usually in the first few paragraphs of the white paper. This coin might look interesting, but for all of the wrong reasons.
  - polyomino 7y ago
    What makes this a cryptocurrency? It should be called facebook giftcard.
    - gesman 7y ago
      +1
    - Anon84 7y ago
      cryptocurrency is more SEO/Marketing friendly than giftcard. /s Seriously, though... the whitepaper isn't out yet so we don't really know how this is supposed to work. It'm sure it will use some type of permissioned blockchain for convenience/ensure trust between all the partners and dissolve responsibility for all decisions the consortium takes.
hello_1234 7y ago
I really wish they succeed. It takes 3 to 5 business days to transfer money using ACH in the US if you don't want to shell out 25$ for wire transfer. Transferring money is just about transferring a few bytes of data. Why does it take 3 business days? Why are customers still forced to shell out 25$ for instant transfers?
- jiveturkey 7y ago
  You appear to have a fundamental misunderstanding of ACH vs wire. They aren't the same thing, with one of them having a fee just for the speed of it. 3-5 days is actually a feature of ACH. This delay includes the ability to reverse a transaction, a built-in risk management. For example, here is a quote from an article on the front page of HN right now (#5, SIM swap horror story): > After a couple of days, our bank reversed the $25,000 charge and told us that the fraud department caught the ACH withdrawal before it was fully processed so that neither my family nor the bank lost this money forever. Google will give you lots of good information on the difference between wire and ACH.
  - hello_1234 7y ago
    Here's a great podcast on NPR's planet money if you want to learn more - https://www.npr.org/sections/money/2018/01/10/576879734/episode-489-the-invisible-plumbing-of-our-economy https://www.npr.org/sections/money/2018/01/10/576879734/epis... You cannot just give me two anecdotes to defend one of the most inefficient systems in the US.
    - ForHackernews 7y ago
      How is ACH "inefficient"? It's certainly slow, but speed and efficiency are not the same thing. It's far more efficient than bitcoin. It's a mainframe batch-processing system built in the 1970s, and it's mostly worked just fine for 40 years. That's pretty efficient!
      - hello_1234 7y ago
GrumpyNl 7y ago
I bet you, to get some, you have to buy them with dollars.
jonlucc 7y ago
I don't really understand the upside to an FB stablecoin, but maybe I'm missing something. Why would I want FB to be the store of my money instead of FDIC-backed banks if the value and purchasing power is going to be identical?
- TACIXAT 7y ago
  If they can move your money cheaper than credit and debit card networks. That is the only part I'm interested in. Given they are partnered with PayPal though, I'm not hopeful on it being low fee.
  - jonlucc 7y ago
    That makes sense, but when buying things, the price of those networks is opaque to the consumer and things won't get cheaper for consumers if a business is selling to both "traditional" purchasers and FBcoin purchasers.
    - TACIXAT 7y ago
      Yea, agreed. My dream for it would be changing the way the internet is funded. If you could send 1 or 2 cents digitally, you could bill people for social media use rather than showing them ads. You could tip content creators and not have a payment network take 30%, same for in app purchases. The kill ads feature doesn't align with FB's interest though. We'll see what their fee structure looks like.
  - bduerst 7y ago
    Those fees with credit and debit card networks aren't arbitrary - they usually cover dispute support, insurance, anti-fraud, and other financial services that consumers have come to expect. If Facebook has fees that are less than industry standard I would be highly suspect of that payment method.
    - gervase 7y ago
      They're not arbitrary, but they're not razor-thin, either. If we take a quick look at profit margins (net income over revenue) for 2017 as a proxy for fees relative to service costs, Visa was something like 36%, which is pretty good (for context, Google's is ~22%, Apple's is also ~22%, Citigroup is ~25%, Mastercard ~31%, Paypal ~13%, Facebook is just under 40%). It would definitely be a big shift from the "support" they offer now, admittedly, but if they can break the Visa/MC duopoly at scale, I think you could make a business case for it.
grey-area 7y ago
This appears to be: 1. Pegged to USD 2. Controlled by a central entity 3. Tied to a social media account So it has very little to do with currencies like bitcoin (it certainly violates the spirit of them, even if it chooses to reproduce some of the morphology), but they are IMO associating it with cryptocurrencies for publicity and more importantly in the hope of avoiding regulation by confounding regulators for long enough to become established de-facto amongst consumers. Banks and payment networks like Visa/Mastercard/Paypal should be most worried by this, as it will be designed to cut them out of transactions between users, advertisers, readers of media/news entirely - load up your account with Facebook coins (have they really called it 'Libra coin'?!?), and merchants will not have to pay mastercard, but they'll have to pay Facebook fees to accept your payment.
- throwawaylolx 7y ago
  >payment networks like Visa/Mastercard/Paypal should be most worried by this I don't think they're worried seeing that they're some of the biggest investors in the project https://www.wsj.com/articles/facebooks-new-cryptocurrency-gets-big-backers-11560463312 https://www.wsj.com/articles/facebooks-new-cryptocurrency-ge...
  - grey-area 7y ago
    I’d be concerned if dealing with Zuckerberg. If it fails they lose lots of money, if it succeeds FB has huge leverage over them which it didn’t have before. Can’t really see an upside for these companies to this.
    - russdpale 7y ago
      The point is that its "trustless", they don't have to trust zuckerberg, they can see the code themselves and where the payments fee's break way to, he isn't the only one running nodes from what I understand, I believe the partners are as well, which I imagine is the only way they agreed to this.
      - 7y ago
buboard 7y ago
Will it be in any crypto exchanges, e.g. coinbase, binance? (nobody from facebook here?)
rdiddly 7y ago
I can grasp the idea that Facebook would want to capture more payments like WeChat does; what I can't figure is how having their own cryptocurrency would add anything. Whom does it appeal to? I doubt Facebook wants the drug dealer/money launderer market segment for example. (I also doubt it'll be secure or anonymous enough to satisfy those people.) And it's no good for speculators, if it's pegged. Seems like at best it's just a novelty or gimmick that maybe gets a few more people to try it out for giggles. Using the term "innovation" might be a bit too generous here. Not that combining two things that already exist can't be innovative. When the boomers combined "white music" with "black music" they got rock and roll. But this is Facebook + crypto, two things that suck. (Apologies.)
- buboard 7y ago
  i doubt any drug dealer would use Libra directly. BUT, if it can be exchanged for Monero ...
- notahacker 7y ago
  Novelty or gimmicks are appealing when your payments business is only 2% of revenue and yet lots of people are discovering products and wasting money on pay-to-win-games through your platform. Their assumption is probably that Facebook gamers (and especially the "whales") are more likely to be the sort of people excited by breathless hype about cryptocurrency being the future without really understanding much about it, and less likely to be the sort of person that says "but you could do that with a centralised ledger".
  - buboard 7y ago
    They had facebook credits before and they curbed it, so i doubt the social gamers are their target market. But a payment system a-la apple and google pay could be a safeguard for them once their social media stop being so lucrative.
- thecupisblue 7y ago
  They're using cryptocurrency because - off the top of my head in no particular order: 1. Hype 2. It gives "credibility" to their currency 3. they can be regulated as a crypto-currency that way. 4. It enables faster transactions and reactions to the transaction states than regular currency. 5. It locks the users in to their partners because it's more friction to get money. 6. Easier to obtain the data on how users spend their money. 7. Easier to introduce new models based upon transactions/currency. 8. It can be given away for free easily.
root_axis 7y ago
I think Facebook's reputation will be enough to relegate this thing to the ash heap. The only people who are going to be interested in Facebook coins are some subset of cryptocurrency enthusiast who can find value in moving their cryptocurrency into a coin that will have more onramps to spendable money. For everyone else, it's going to be viewed as yet another digital money app you have to hook up to your bank account and there will be little incentive to do so since everyone is already comfortable with their cryptocurrency/venmo/paypal/cashapp of choice. When you mix in Facebook's horrible reputation, particularly with regard to tracking and privacy abuse I think we're going to find that people mostly just ignore this offering.
- jrvxo 7y ago
  Facebook's reputation outside HN is not bad. In fact I'd argue that in undeveloped countries it's pretty, pretty good.
  - Bombthecat 7y ago
    That too! This coin could be the second naira..
  - okmokmz 7y ago
    >Facebook's reputation outside HN is not bad It depends who you talk to. The only people I know who still use, or don't hold a negative view of, Facebook are my parents, grandparents, and other old people who certainly won't be purchasing Facebook's "cryptocurrency". The vast majority of the young people I talk to, as well as other engineers, have a negative view of Facebook and don't use their services (aside from maybe Instagram). The latter is the group that would potentially be interested in crypto, but they won't be buying it from Facebook. Personally, I hope Facebook fails spectacularly
  - kerng 7y ago
    I'm not sure about that... 3 of my friends have quit Facebook last few months because of the company's reputation.
- buboard 7y ago
nvk 7y ago
Apples and Oranges. One is just a fiat pegged shitcoin the other an independent monetary system.
nopinsight 7y ago
Facebook's Libra coin looks like its version of WeChat Pay or AliPay rather than a competitor of Bitcoin. It is a stablecoin meant for facilitating transactions, not an asset to be invested in.
DINKDINK 7y ago
"Can't wait for a cryptocurrency with the ethics of Uber, the censorship resistance of Paypal, and the centralization of Visa, all tied together under the proven privacy of Facebook." https://twitter.com/SarahJamieLewis/status/1139429913922957312 https://twitter.com/SarahJamieLewis/status/11394299139229573...
xmly 7y ago
It is just called cryptocurrency and actually, it is not. Any stable coins are just payment network without a license.
- cdiddy2 7y ago
  Not Dai
cribbles 7y ago
I think it's not a coincidence that one of Facebook's flagship partners is MercadoLibre, the Argentine ecommerce giant. Argentina's YOY inflation rate will "slow" to 34 percent this year - if all goes well.[1] The Argentines I know making monthly salaries are used to saving money in foreign currencies anyway. (HN Argentines, feel free to correct me on that point.) Many of us live in places where we can rely on our regional currencies to remain stable. Maybe the pound will flounder under Brexit, the Euro under the debt crisis or the dollar under whatever the trade war is supposed to be doing, but there's little or no public will to divest from national currencies, and the main reason anyone would dip into cryptocurrencies is speculation. Also we're hackers and distrust Facebook. Fine - we're not the target demographic. I think the general population of Argentina, India, Venezuela, etc etc, _are_ the target demographic. The idea would be to make savings, payments, and digital purchases for people in developing or unstable economies reliable, inflation resistant, and low-fee - particularly vs forex. As a bonus for us hackers, I'm sure every Orwellian data scraping fever dream you can imagine is rolled in too - but most people aren't hackers, so whether this is a showstopper remains to be seen. I'm not just spitballing here - Facebook claim this to be so.[2] Thiel and Altman's Reserve Currency works basically the same way, with the same ambitions[3]. The implications are _much_ bigger than Johnny-come-latelies from Menlo Park stumbling into the blockchain hype - which seems to be the prevailing take here. What we're seeing is tech giants betting big on having total ownership over banking and purchases in much of the world's population. [1] https://www.reuters.com/article/us-argentina-economy-oecd/argentina-inflation-rate-will-slow-to-about-34-percent-this-year-oecd-idUSKCN1R82IS https://www.reuters.com/article/us-argentina-economy-oecd/ar... [2] https://www.theverge.com/2019/6/6/18655366/facebook-cryptocurrency-libra-token-zuckerberg https://www.theverge.com/2019/6/6/18655366/facebook-cryptocu... [3] https://reserve.org/about https://reserve.org/about. Pedantic technical note: Reserve is moving in a three phase sequence from USD collateralization (like Tether / Coinbase's token) to algorithmic stabilization against a basket of goods (not currencies), whereas Facebook is skipping to phase three and using a basket of currencies as the peg. (It's an open question how this will be accomplished, since Libra's whitepaper won't be released until tomorrow.)
DrJosiah 7y ago
Here's the best reason not to involve yourself: it gives Facebook more power. Haven't we seen how Facebook uses that power? Yeah? So maybe we don't get on board with what Facebook wants.
kerng 7y ago
Even though this has nothing todo with cryptocurrency, the naming confusion will benefit Bitcoin and Co I assume.
antpls 7y ago
2 things about a virtual currency : - people may finally be able to "sell" their personal data - it may help to remunerate artists and content creators on Instagram

137 points by headalgorithm 7y ago

douche marks (one of the names people were calling them) https://news.ycombinator.com/item?id=20181639 https://news.ycombinator.com/item?id=20181639 Yeah now it's called Libra. I can totally see my daughter wanting to think about her girl products every time she uses this coin. They better consider how their marketing will look if they want to enter the Australian market. Especially with this day and age of memes. Usually what the teens find "cool" is what the older generations adopt.

pdpi 7y ago
> Yeah now it's called Libra. I can totally see my daughter wanting to think about her girl products every time she uses this coin. The iPad didn't really suffer much from the same naming "problem". Libra is pretty much just the latin name for "Pound". It's a pretty damn good name for the currency.
- dngray 7y ago
  > The iPad didn't really suffer much from the same naming "problem". It's not really the same thing. Pad can often refer to things like "pads of paper", or be a slang name for an apartment. > Libra is pretty much just the latin name for "Pound". It's a pretty damn good name for the currency. A lot of teenagers probably aren't going to know that. Whereas there is literally a brand called "Libra" that makes tampons, pads and those sorts of products. That is what people think of here when they hear that, either that or the star sign.
  - supakeen 7y ago
    The Libra name is only used in Australia and New Zealand [0], it's unlikely that two things carrying the same name will influence the brand of Facebook's currency a whole lot. https://en.wikipedia.org/wiki/Libresse#International_branding https://en.wikipedia.org/wiki/Libresse#International_brandin...
    - stcredzero 7y ago
      The first thing I thought about was Libranet Linux.
      - dngray 7y ago
        > The first thing I thought about was Libranet Linux. Yes and you're on HN like me. This site caters for a certain audience.

gemjam 7y ago

Bloomberg did a nice video about the real implications; Chinese app style payments would deprive banks of their cut of transaction processing.[1] Isn't it strange that the Chinese copied facebook, but now facebook copys WeChat "U.S. Banks Are Terrified of Chinese Payment Apps" https://www.youtube.com/watch?v=SJh_Uir5EMI https://www.youtube.com/watch?v=SJh_Uir5EMI https://www.nytimes.com/2019/03/07/technology/facebook-zuckerberg-wechat.html https://www.nytimes.com/2019/03/07/technology/facebook-zucke...

dngray 7y ago
> Isn't it strange that the Chinese copied facebook, but now facebook copys WeChat Not really, Facebook is lacking in originality and sees how much money can be made (Wechat is doing it). They also see how they can harvest huge amounts of data on what people buy with a high degree of preciseness.
duxup 7y ago
Every company of a certain size eventually starts picking up other companies / ideas. Heck plenty of start ups pivot to existing ideas. And in Japan pay with your phone has been around for ages.
thablackbull 7y ago
> Isn't it strange that the Chinese copied facebook, but now facebook copys WeChat You've clearly never used WeChat if you're under the impression they copied Facebook. This "___ of the West" is just a simplified trope to help readers make a comparison. Western companies/apps fail in the East and Eastern apps often fail in the West as the market is completely different that you can't just port something over and hope to replicate its success. https://hbr.org/2018/08/why-western-digital-firms-have-failed-in-china https://hbr.org/2018/08/why-western-digital-firms-have-faile...
buboard 7y ago
facebook copied chinese / korean / japanese social media in many ways over the years. And their games ecosystem (zynga era) were mostly copies of chinese games.
7y ago

duxup 7y ago

I think it remains to be seen how many Facebook users WANT to use Facebook (or whatever they call it) to buy things. I'm not sure that's an automatic yes from most users.

justforyou 7y ago

This is the thing that will ultimately get facebook as we know it regulated out of existance -- unless politicians get hooked on social media micro-donations. https://www.banking.senate.gov/imo/media/doc/5.9.19%20Facebook%20Letter.pdf https://www.banking.senate.gov/imo/media/doc/5.9.19%20Facebo...

lowdose 7y ago
Is this a new narrative pushed by old banks that do not innovate enough to keep up with Zuckerberg et al?

shiado 7y ago

Could this whole project be a tax play? Many jurisdictions don't tax cryptocurrency until sale where capital gains applies, some don't tax at all. It is very convenient for tax purposes for a corporation to have a currency that exists on a global network where you don't need to transfer anything between countries and all that matters is where you cash out.

toomuchequate 7y ago

If it is pegged to USD, there is no investment potential. It is just as bad as cash. The idea behind bitcoin is that you don't need to rely on the US government for storing value. There are 21,000,000 BTC ever ever, you can't print more. That article did not address this at all. This is the most compelling reason to buy bitcoin.

thefounder 7y ago
>> It is just as bad as cash. You mean that it is as good as cash. Bitcoin become a failed project, a big internet casino. Some people want to use digital money to make payments and get paid, you know? The success of the facebook coins depends by the ways to redeem the tokens(i.e do other shops accept it, can they be cashed out at atm, can you use it with 3rd party wallets etc)
- maxlybbert 7y ago
  Quoting the animated Dilbert TV show when Dilbert buys his mom a gift card: “you’ve exchanged your money for something like money, but less useful.”
  - jrvxo 7y ago
    That series was brilliant. I don't know what happened to it :(
  - maxlybbert 7y ago
    I finally found a real source, and as usual, my memory leaves much to be desired (ultimately Dilbert gets a gift certificate): Alice: A gift certificate is completely different from cash. Dilbert: No, it's not. They're both pieces of paper you can exchange for goods and services. Alice: You're missing the point. Dilbert: Actually, a gift certificate is worse than cash, because you can only use it in one place. Wally: And it expires. Alice: At least it shows some thought. Dilbert: It shows defective thought. You're trading perfectly good money for something that does the same thing, only not as well. Facebook’s currency may not expire or be limited to one place, but it does seem to me that “it does the same thing [as money], only not as well.”

catacombs 7y ago

With the number of data leaks, PR disasters and the federal probes looming over Facebook, the last thing I want is the company handling any kind of financial transactions, especially if it's with cryptocurrency.

duxup 7y ago
I suspect though this is just crypto currency ... in tech and name, but generally will just be controlled by facebook in a way that isn't as susceptible to the usual hacking / non reversible transactions as "real" crypto currency. I think this is really just Facebook payments that will be controlled by Facebook.
- catacombs 7y ago
  Sounds like it. I'm interested to see how this plays out ... from the sidelines. I haven't had a Facebook account in years. I deleted it a while ago and haven't looked back.

deleted 7y ago

[deleted]

runeks 7y ago

The reason for Bitcoin’s design is precisely because a centralized/pegged alternative was tried and failed: https://en.m.wikipedia.org/wiki/Ecash https://en.m.wikipedia.org/wiki/Ecash Facebook’s currency is not a successor of Bitcoin, it’s an inferior reincarnation of a failed predecessor.

throwawaylolx 7y ago
How is it inferior to Ecash? FB's coin is not meant to provide anonymity features like Ecash did, but that's just a design choice. Other than that, Ecash is often suspected to have died due to the lack of reach and partnerships, which is not something FB lacks. So far, FB's coin looks very interesting. >Facebook’s currency is not a successor of Bitcoin Yeah the title is just low-quality clickbait; it's got nothing to do with Bitcoin.
- russdpale 7y ago
  I don't think its clickbait, a lot of projects in the crypto space claim to be like bitcoin but better, bitcoin is the foundation upon which a lot of projects showcase themselves to potential users, usually in the first few paragraphs of the white paper. This coin might look interesting, but for all of the wrong reasons.
- polyomino 7y ago
  What makes this a cryptocurrency? It should be called facebook giftcard.
  - gesman 7y ago
    +1
  - Anon84 7y ago
    cryptocurrency is more SEO/Marketing friendly than giftcard. /s Seriously, though... the whitepaper isn't out yet so we don't really know how this is supposed to work. It'm sure it will use some type of permissioned blockchain for convenience/ensure trust between all the partners and dissolve responsibility for all decisions the consortium takes.

hello_1234 7y ago

I really wish they succeed. It takes 3 to 5 business days to transfer money using ACH in the US if you don't want to shell out 25$ for wire transfer. Transferring money is just about transferring a few bytes of data. Why does it take 3 business days? Why are customers still forced to shell out 25$ for instant transfers?

jiveturkey 7y ago
You appear to have a fundamental misunderstanding of ACH vs wire. They aren't the same thing, with one of them having a fee just for the speed of it. 3-5 days is actually a feature of ACH. This delay includes the ability to reverse a transaction, a built-in risk management. For example, here is a quote from an article on the front page of HN right now (#5, SIM swap horror story): > After a couple of days, our bank reversed the $25,000 charge and told us that the fraud department caught the ACH withdrawal before it was fully processed so that neither my family nor the bank lost this money forever. Google will give you lots of good information on the difference between wire and ACH.
- hello_1234 7y ago
  Here's a great podcast on NPR's planet money if you want to learn more - https://www.npr.org/sections/money/2018/01/10/576879734/episode-489-the-invisible-plumbing-of-our-economy https://www.npr.org/sections/money/2018/01/10/576879734/epis... You cannot just give me two anecdotes to defend one of the most inefficient systems in the US.
  - ForHackernews 7y ago
    How is ACH "inefficient"? It's certainly slow, but speed and efficiency are not the same thing. It's far more efficient than bitcoin. It's a mainframe batch-processing system built in the 1970s, and it's mostly worked just fine for 40 years. That's pretty efficient!
    - hello_1234 7y ago

GrumpyNl 7y ago

I bet you, to get some, you have to buy them with dollars.

jonlucc 7y ago

I don't really understand the upside to an FB stablecoin, but maybe I'm missing something. Why would I want FB to be the store of my money instead of FDIC-backed banks if the value and purchasing power is going to be identical?

TACIXAT 7y ago
If they can move your money cheaper than credit and debit card networks. That is the only part I'm interested in. Given they are partnered with PayPal though, I'm not hopeful on it being low fee.
- jonlucc 7y ago
  That makes sense, but when buying things, the price of those networks is opaque to the consumer and things won't get cheaper for consumers if a business is selling to both "traditional" purchasers and FBcoin purchasers.
  - TACIXAT 7y ago
    Yea, agreed. My dream for it would be changing the way the internet is funded. If you could send 1 or 2 cents digitally, you could bill people for social media use rather than showing them ads. You could tip content creators and not have a payment network take 30%, same for in app purchases. The kill ads feature doesn't align with FB's interest though. We'll see what their fee structure looks like.
- bduerst 7y ago
  Those fees with credit and debit card networks aren't arbitrary - they usually cover dispute support, insurance, anti-fraud, and other financial services that consumers have come to expect. If Facebook has fees that are less than industry standard I would be highly suspect of that payment method.
  - gervase 7y ago
    They're not arbitrary, but they're not razor-thin, either. If we take a quick look at profit margins (net income over revenue) for 2017 as a proxy for fees relative to service costs, Visa was something like 36%, which is pretty good (for context, Google's is ~22%, Apple's is also ~22%, Citigroup is ~25%, Mastercard ~31%, Paypal ~13%, Facebook is just under 40%). It would definitely be a big shift from the "support" they offer now, admittedly, but if they can break the Visa/MC duopoly at scale, I think you could make a business case for it.

grey-area 7y ago

This appears to be: 1. Pegged to USD 2. Controlled by a central entity 3. Tied to a social media account So it has very little to do with currencies like bitcoin (it certainly violates the spirit of them, even if it chooses to reproduce some of the morphology), but they are IMO associating it with cryptocurrencies for publicity and more importantly in the hope of avoiding regulation by confounding regulators for long enough to become established de-facto amongst consumers. Banks and payment networks like Visa/Mastercard/Paypal should be most worried by this, as it will be designed to cut them out of transactions between users, advertisers, readers of media/news entirely - load up your account with Facebook coins (have they really called it 'Libra coin'?!?), and merchants will not have to pay mastercard, but they'll have to pay Facebook fees to accept your payment.

throwawaylolx 7y ago
>payment networks like Visa/Mastercard/Paypal should be most worried by this I don't think they're worried seeing that they're some of the biggest investors in the project https://www.wsj.com/articles/facebooks-new-cryptocurrency-gets-big-backers-11560463312 https://www.wsj.com/articles/facebooks-new-cryptocurrency-ge...
- grey-area 7y ago
  I’d be concerned if dealing with Zuckerberg. If it fails they lose lots of money, if it succeeds FB has huge leverage over them which it didn’t have before. Can’t really see an upside for these companies to this.
  - russdpale 7y ago
    The point is that its "trustless", they don't have to trust zuckerberg, they can see the code themselves and where the payments fee's break way to, he isn't the only one running nodes from what I understand, I believe the partners are as well, which I imagine is the only way they agreed to this.
    - 7y ago

buboard 7y ago

Will it be in any crypto exchanges, e.g. coinbase, binance? (nobody from facebook here?)

rdiddly 7y ago

I can grasp the idea that Facebook would want to capture more payments like WeChat does; what I can't figure is how having their own cryptocurrency would add anything. Whom does it appeal to? I doubt Facebook wants the drug dealer/money launderer market segment for example. (I also doubt it'll be secure or anonymous enough to satisfy those people.) And it's no good for speculators, if it's pegged. Seems like at best it's just a novelty or gimmick that maybe gets a few more people to try it out for giggles. Using the term "innovation" might be a bit too generous here. Not that combining two things that already exist can't be innovative. When the boomers combined "white music" with "black music" they got rock and roll. But this is Facebook + crypto, two things that suck. (Apologies.)

buboard 7y ago
i doubt any drug dealer would use Libra directly. BUT, if it can be exchanged for Monero ...
notahacker 7y ago
Novelty or gimmicks are appealing when your payments business is only 2% of revenue and yet lots of people are discovering products and wasting money on pay-to-win-games through your platform. Their assumption is probably that Facebook gamers (and especially the "whales") are more likely to be the sort of people excited by breathless hype about cryptocurrency being the future without really understanding much about it, and less likely to be the sort of person that says "but you could do that with a centralised ledger".
- buboard 7y ago
  They had facebook credits before and they curbed it, so i doubt the social gamers are their target market. But a payment system a-la apple and google pay could be a safeguard for them once their social media stop being so lucrative.
thecupisblue 7y ago
They're using cryptocurrency because - off the top of my head in no particular order: 1. Hype 2. It gives "credibility" to their currency 3. they can be regulated as a crypto-currency that way. 4. It enables faster transactions and reactions to the transaction states than regular currency. 5. It locks the users in to their partners because it's more friction to get money. 6. Easier to obtain the data on how users spend their money. 7. Easier to introduce new models based upon transactions/currency. 8. It can be given away for free easily.

root_axis 7y ago

I think Facebook's reputation will be enough to relegate this thing to the ash heap. The only people who are going to be interested in Facebook coins are some subset of cryptocurrency enthusiast who can find value in moving their cryptocurrency into a coin that will have more onramps to spendable money. For everyone else, it's going to be viewed as yet another digital money app you have to hook up to your bank account and there will be little incentive to do so since everyone is already comfortable with their cryptocurrency/venmo/paypal/cashapp of choice. When you mix in Facebook's horrible reputation, particularly with regard to tracking and privacy abuse I think we're going to find that people mostly just ignore this offering.

jrvxo 7y ago
Facebook's reputation outside HN is not bad. In fact I'd argue that in undeveloped countries it's pretty, pretty good.
- Bombthecat 7y ago
  That too! This coin could be the second naira..
- okmokmz 7y ago
  >Facebook's reputation outside HN is not bad It depends who you talk to. The only people I know who still use, or don't hold a negative view of, Facebook are my parents, grandparents, and other old people who certainly won't be purchasing Facebook's "cryptocurrency". The vast majority of the young people I talk to, as well as other engineers, have a negative view of Facebook and don't use their services (aside from maybe Instagram). The latter is the group that would potentially be interested in crypto, but they won't be buying it from Facebook. Personally, I hope Facebook fails spectacularly
- kerng 7y ago
  I'm not sure about that... 3 of my friends have quit Facebook last few months because of the company's reputation.
buboard 7y ago

nvk 7y ago

Apples and Oranges. One is just a fiat pegged shitcoin the other an independent monetary system.

nopinsight 7y ago

Facebook's Libra coin looks like its version of WeChat Pay or AliPay rather than a competitor of Bitcoin. It is a stablecoin meant for facilitating transactions, not an asset to be invested in.

DINKDINK 7y ago

"Can't wait for a cryptocurrency with the ethics of Uber, the censorship resistance of Paypal, and the centralization of Visa, all tied together under the proven privacy of Facebook." https://twitter.com/SarahJamieLewis/status/1139429913922957312 https://twitter.com/SarahJamieLewis/status/11394299139229573...

xmly 7y ago

It is just called cryptocurrency and actually, it is not. Any stable coins are just payment network without a license.

cdiddy2 7y ago
Not Dai

cribbles 7y ago

I think it's not a coincidence that one of Facebook's flagship partners is MercadoLibre, the Argentine ecommerce giant. Argentina's YOY inflation rate will "slow" to 34 percent this year - if all goes well.[1] The Argentines I know making monthly salaries are used to saving money in foreign currencies anyway. (HN Argentines, feel free to correct me on that point.) Many of us live in places where we can rely on our regional currencies to remain stable. Maybe the pound will flounder under Brexit, the Euro under the debt crisis or the dollar under whatever the trade war is supposed to be doing, but there's little or no public will to divest from national currencies, and the main reason anyone would dip into cryptocurrencies is speculation. Also we're hackers and distrust Facebook. Fine - we're not the target demographic. I think the general population of Argentina, India, Venezuela, etc etc, _are_ the target demographic. The idea would be to make savings, payments, and digital purchases for people in developing or unstable economies reliable, inflation resistant, and low-fee - particularly vs forex. As a bonus for us hackers, I'm sure every Orwellian data scraping fever dream you can imagine is rolled in too - but most people aren't hackers, so whether this is a showstopper remains to be seen. I'm not just spitballing here - Facebook claim this to be so.[2] Thiel and Altman's Reserve Currency works basically the same way, with the same ambitions[3]. The implications are _much_ bigger than Johnny-come-latelies from Menlo Park stumbling into the blockchain hype - which seems to be the prevailing take here. What we're seeing is tech giants betting big on having total ownership over banking and purchases in much of the world's population. [1] https://www.reuters.com/article/us-argentina-economy-oecd/argentina-inflation-rate-will-slow-to-about-34-percent-this-year-oecd-idUSKCN1R82IS https://www.reuters.com/article/us-argentina-economy-oecd/ar... [2] https://www.theverge.com/2019/6/6/18655366/facebook-cryptocurrency-libra-token-zuckerberg https://www.theverge.com/2019/6/6/18655366/facebook-cryptocu... [3] https://reserve.org/about https://reserve.org/about. Pedantic technical note: Reserve is moving in a three phase sequence from USD collateralization (like Tether / Coinbase's token) to algorithmic stabilization against a basket of goods (not currencies), whereas Facebook is skipping to phase three and using a basket of currencies as the peg. (It's an open question how this will be accomplished, since Libra's whitepaper won't be released until tomorrow.)

DrJosiah 7y ago

Here's the best reason not to involve yourself: it gives Facebook more power. Haven't we seen how Facebook uses that power? Yeah? So maybe we don't get on board with what Facebook wants.

kerng 7y ago

Even though this has nothing todo with cryptocurrency, the naming confusion will benefit Bitcoin and Co I assume.

antpls 7y ago

2 things about a virtual currency : - people may finally be able to "sell" their personal data - it may help to remunerate artists and content creators on Instagram