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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.w

by 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.
  - bitxbitxbitcoin 7y ago
    It isn't a cryptocurrency. It's just a digital currency.
joeyrideout 7y ago
Not to mention that pegs always fail in the land of financial markets anyhow [1]. Interest rate pegs, currency pegs, pegs to commodities e.g. gold tend to collapse in the long run because they create a "perfect trade". When the value of two separate things eventually diverge due to external market forces, you can take advantage of the peg by trading the less valuable item for the more valuable item at the historical peg. In the context of Facebook being pegged to a basket of international currencies, the peg to each will need to be reevaluated frequently as the currencies fluctuate and arbitrage opportunities increasingly cost the peg-guarantor money to uphold the peg. These fluctuation can be cancelled by derivative contracts e.g. currency swaps, but those cost premiums to maintain and periods of volatility can get very expensive. [1] https://www.google.com/search?q=site%3Aarmstrongeconomics.com+pegs+fail https://www.google.com/search?q=site%3Aarmstrongeconomics.co...
- ForHackernews 7y ago
  All they have to do is make it expensive and/or inconvenient to arbitrage against them. Some minimal transaction fees would probably kill the ability to make money exploiting small tracking errors.
- nickles 7y ago
  > Not to mention that pegs always fail in the land of financial markets anyhow... In the context of Facebook being pegged to a basket of international currencies, the peg to each will need to be reevaluated frequently as the currencies fluctuate and arbitrage opportunities increasingly cost the peg-guarantor money to uphold the peg. Assuming that Facebook is the sole issuer and redeemer of the coin, this is a nonissue. By backing the issued coin 1:1 with reserves according to the composition of the basket, Facebook can redeem any coins at face value. Hong Kong, for example, maintains a currency pegged to USD backed entirely with USD holdings. As an aside, your source, armstrongeconomics.com, may not have the best credibility: "In 1999, Japanese fraud investigators accused Armstrong of collecting money from Japanese investors, improperly commingling these funds with funds from other investors, and using the fresh money to cover losses he had incurred while trading. United States prosecutors called it a three-billion-dollar Ponzi scheme... Armstrong admitted to deceiving corporate investors and improperly commingling client funds—actions that according to prosecutors resulted in commodities losses of more than seven hundred million dollars—and was sentenced to five years in prison." [0] https://en.wikipedia.org/wiki/Martin_A._Armstrong https://en.wikipedia.org/wiki/Martin_A._Armstrong
Bombthecat 7y ago
I doubt it will fail. Facebook is too big to not gain traction from users... Also, they are big enough to push ads every where..
nostrademons 7y ago
The surrounding context around an idea is always changing. Facebook itself was tried many times with various degrees of success (MySpace; Friendster; LiveJournal; Classmates.com; Xanga; EZBoards; AOL; Usenet; fingerd; BBSes; etc.), but it took a new and relatively trusting generation getting online and being packed onto dense college campuses to make it take off. I personally think that Facebook's cryptocurrency will fail because today's climate is anything but trusting, but just because an idea failed in 1983 doesn't mean it'd fail today. There's also a strong possibility of it succeeding in the developing world and failing in the developed world.
- tomc1985 7y ago
  Facebook's original success was because the platform was somewhat pure (no arbitrary CSS decorating profiles) and exclusive. They reached the critical mass they needed at that phase then opened it to the public
  - jbverschoor 7y ago
    Indeed.. fast, Microsoft-like, pure css, complete profiles. Then it copied/pivoted to twitter’s timeline. And finally took off with a proper mobile app, and social apis for gaming. All while copying/buying - stories from Snapchat/Instagram, Whatsapp/messenger, live/ig to/twitch
- panarky 7y ago
  > strong possibility of it succeeding in the developing world and failing in the developed world It could work pretty well in the developed world, too, if transactions are instant and cheaper than credit cards or PayPal. But whether it succeeds or fails as a payment system has nothing to do with any blockchain tech, or whether they call it a cryptocurrency. This is not a competitor to Bitcoin, because it cannot be what Bitcoin is -- open, borderless, neutral, censorship-resistant, and public. Maybe it will be better at buying coffee than Bitcoin. I couldn't care less, because buying coffee isn't the purpose of Bitcoin.
  - dwild 7y ago
spir 7y ago
The Libra whitepaper is supposed to debut this month, so I guess we'll see to what extent it's a true cryptocurrency. I wish Libra was building on an Ethereum scaling technology, like Plasma, but most likely it's a new standalone proof-of-authority blockchain where the validators are the hundred companies investing $10M each. In terms of the sliding scale between centralized and decentralized, Ethereum v1 and Bitcoin are considered to be "pretty much impossible to change history"; Ethereum v2 is expected to be "extremely impossible to change history"; but Libra would require only that the hundred companies agree to a process by which history can be changed: Libra will be very centralized in practice and while it might and I hope help take crypto mainstream, Libra is not a substitute for Ethereum's secure base layer.
- clarkmoody 7y ago
  It's not only about changing history, it's about getting transactions mined in the first place: censorship-resistance. In Bitcoin, as long as you pay the fee, some miner will probably mine your transaction, based on purely economic incentive. Miners that refuse to serve certain customers based on "tainted" coins or illegal activity simply forego that revenue to miners who don't. I'm going to go out on a limb here and conjecture that Facebook at the 100 entrenched industry players who are part of this new system will probably not consider censorship-resistance as a high-priority goal for the system. They will probably have a law-enforcement login portal that calls up Facebook's data profile of participants in a suspect transaction. There will probably be blacklists and fund freezes. There will probably be State Department liaisons to help comply with sanctions.
  - ilaksh 7y ago
    https://github.com/libra/libra/issues/41 https://github.com/libra/libra/issues/41
- wmf 7y ago
  In practice the Bitcoin and Ethereum hashrate is controlled by far fewer than 100 mining pools.
  - 7y ago
ilaksh 7y ago
David Marcus is a Sith Lord. https://github.com/libra/libra/issues/41 https://github.com/libra/libra/issues/41

by runeks 7y ago

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.
- bitxbitxbitcoin 7y ago
  It isn't a cryptocurrency. It's just a digital currency.

joeyrideout 7y ago

Not to mention that pegs always fail in the land of financial markets anyhow [1]. Interest rate pegs, currency pegs, pegs to commodities e.g. gold tend to collapse in the long run because they create a "perfect trade". When the value of two separate things eventually diverge due to external market forces, you can take advantage of the peg by trading the less valuable item for the more valuable item at the historical peg. In the context of Facebook being pegged to a basket of international currencies, the peg to each will need to be reevaluated frequently as the currencies fluctuate and arbitrage opportunities increasingly cost the peg-guarantor money to uphold the peg. These fluctuation can be cancelled by derivative contracts e.g. currency swaps, but those cost premiums to maintain and periods of volatility can get very expensive. [1] https://www.google.com/search?q=site%3Aarmstrongeconomics.com+pegs+fail https://www.google.com/search?q=site%3Aarmstrongeconomics.co...

ForHackernews 7y ago
All they have to do is make it expensive and/or inconvenient to arbitrage against them. Some minimal transaction fees would probably kill the ability to make money exploiting small tracking errors.
nickles 7y ago
> Not to mention that pegs always fail in the land of financial markets anyhow... In the context of Facebook being pegged to a basket of international currencies, the peg to each will need to be reevaluated frequently as the currencies fluctuate and arbitrage opportunities increasingly cost the peg-guarantor money to uphold the peg. Assuming that Facebook is the sole issuer and redeemer of the coin, this is a nonissue. By backing the issued coin 1:1 with reserves according to the composition of the basket, Facebook can redeem any coins at face value. Hong Kong, for example, maintains a currency pegged to USD backed entirely with USD holdings. As an aside, your source, armstrongeconomics.com, may not have the best credibility: "In 1999, Japanese fraud investigators accused Armstrong of collecting money from Japanese investors, improperly commingling these funds with funds from other investors, and using the fresh money to cover losses he had incurred while trading. United States prosecutors called it a three-billion-dollar Ponzi scheme... Armstrong admitted to deceiving corporate investors and improperly commingling client funds—actions that according to prosecutors resulted in commodities losses of more than seven hundred million dollars—and was sentenced to five years in prison." [0] https://en.wikipedia.org/wiki/Martin_A._Armstrong https://en.wikipedia.org/wiki/Martin_A._Armstrong

Bombthecat 7y ago

I doubt it will fail. Facebook is too big to not gain traction from users... Also, they are big enough to push ads every where..

nostrademons 7y ago

The surrounding context around an idea is always changing. Facebook itself was tried many times with various degrees of success (MySpace; Friendster; LiveJournal; Classmates.com; Xanga; EZBoards; AOL; Usenet; fingerd; BBSes; etc.), but it took a new and relatively trusting generation getting online and being packed onto dense college campuses to make it take off. I personally think that Facebook's cryptocurrency will fail because today's climate is anything but trusting, but just because an idea failed in 1983 doesn't mean it'd fail today. There's also a strong possibility of it succeeding in the developing world and failing in the developed world.

tomc1985 7y ago
Facebook's original success was because the platform was somewhat pure (no arbitrary CSS decorating profiles) and exclusive. They reached the critical mass they needed at that phase then opened it to the public
- jbverschoor 7y ago
  Indeed.. fast, Microsoft-like, pure css, complete profiles. Then it copied/pivoted to twitter’s timeline. And finally took off with a proper mobile app, and social apis for gaming. All while copying/buying - stories from Snapchat/Instagram, Whatsapp/messenger, live/ig to/twitch
panarky 7y ago
> strong possibility of it succeeding in the developing world and failing in the developed world It could work pretty well in the developed world, too, if transactions are instant and cheaper than credit cards or PayPal. But whether it succeeds or fails as a payment system has nothing to do with any blockchain tech, or whether they call it a cryptocurrency. This is not a competitor to Bitcoin, because it cannot be what Bitcoin is -- open, borderless, neutral, censorship-resistant, and public. Maybe it will be better at buying coffee than Bitcoin. I couldn't care less, because buying coffee isn't the purpose of Bitcoin.
- dwild 7y ago

spir 7y ago

The Libra whitepaper is supposed to debut this month, so I guess we'll see to what extent it's a true cryptocurrency. I wish Libra was building on an Ethereum scaling technology, like Plasma, but most likely it's a new standalone proof-of-authority blockchain where the validators are the hundred companies investing $10M each. In terms of the sliding scale between centralized and decentralized, Ethereum v1 and Bitcoin are considered to be "pretty much impossible to change history"; Ethereum v2 is expected to be "extremely impossible to change history"; but Libra would require only that the hundred companies agree to a process by which history can be changed: Libra will be very centralized in practice and while it might and I hope help take crypto mainstream, Libra is not a substitute for Ethereum's secure base layer.

clarkmoody 7y ago
It's not only about changing history, it's about getting transactions mined in the first place: censorship-resistance. In Bitcoin, as long as you pay the fee, some miner will probably mine your transaction, based on purely economic incentive. Miners that refuse to serve certain customers based on "tainted" coins or illegal activity simply forego that revenue to miners who don't. I'm going to go out on a limb here and conjecture that Facebook at the 100 entrenched industry players who are part of this new system will probably not consider censorship-resistance as a high-priority goal for the system. They will probably have a law-enforcement login portal that calls up Facebook's data profile of participants in a suspect transaction. There will probably be blacklists and fund freezes. There will probably be State Department liaisons to help comply with sanctions.
- ilaksh 7y ago
  https://github.com/libra/libra/issues/41 https://github.com/libra/libra/issues/41
wmf 7y ago
In practice the Bitcoin and Ethereum hashrate is controlled by far fewer than 100 mining pools.
- 7y ago

ilaksh 7y ago

David Marcus is a Sith Lord. https://github.com/libra/libra/issues/41 https://github.com/libra/libra/issues/41