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Call me dumb for saying this, but I can go to a casino or chuck e. cheese and trade in USD for chips I use at their location. I could take those chips somewhere

Call me dumb for saying this, but I can go to a casino or chuck e. cheese and trade in USD for chips I use at their location. I could take those chips somewhere else if I wanted to and use them with anyone willing to take them. Why is Libra so upsetting? Isn't it the same thing? It seems to me like criticizing Facebook is just the fashionable response to it right now.

pelario 7y ago
Casinos are highly regulated. If Facebook was under a similar degree of regulations I would be at ease.
- deleted 7y ago
  [deleted]
- lammalamma25 7y ago
  I don't think using chips is why they are regulated though. It is more the gambling with chips or actual dollars that causes the regulation.
  - narag 7y ago
    You're going in circles. Dealing with money is why they're regulated. Actually chips are a way to soften the fact that a lot of money is changing hands very quickly, so it's a part of the regulation, no some accident.
- prostoalex 7y ago
  His example would be relevant to any virtualized dollar substitute. I could send someone an Amazon gift card or a Starbucks digital code as long as me and recipient agree on a common medium for such transaction.
vqdwj 7y ago
It's upsetting because it involves Facebook which means that a) HN and b) the press are very, very upset.
bongobongo 7y ago
I won’t call you dumb, but you can only stretch an analogy so far. And some weirdos trading pizza arcade tokens like they are real money is not at all the same as one of the richest companies in the world trying to disrupt the global currency market for gain. Since you asked—that’s the difference, that’s what has got people “upset.”
- lammalamma25 7y ago
  Fair enough. I definitely see the potential downside of them doing this. It seems like people are saying this is bad because of who is doing it though. Not what is being done. I find it a tough spot because I think something like Libra (A nation-less currency) is a really good idea. But it will take some sort of large fiat backing to happen. IMO the decentralized model isn't really working.
  - grenoire 7y ago
    It is a situation where the who is the what. It's the way forward to a dystopian sci-fi trope: Corporate-owned and minted money that transcends national fiat currencies. The implications of which have again been extensively discussed in aforementioned media.
  - mtnGoat 7y ago
    Nationless doesn't really exist in this case, whether they like it or not Facebook is still regulated by national laws of the jurisdiction they are incorporated in. As you are seeing now with US regulators considering stepping in. If they were supporting crypto they'd work with one of the x000 existing crypto currencies. Not sure they are adding any value by creating Libra aside for gaining control. And that ultimately is what bothers me.
Lucadg 7y ago
with money it's usually about: - financial data: who will own it. Governments want access to it first hand. - monetary policy: governments want to be able to define the circulating amount.
CPLX 7y ago
You actually can't. Nevada law is explicit that casino chips are not allowed to be used "for any monetary purpose" and federal law prohibits the creation of currencies. Casino chips are highly regulated and only permitted to be used as a stand in for gambling funds where it is permitted. In real life if a casino doesn't think you got a chip from them directly as part of gaming at that casino they won't pay out on it. That actually happens with some regularity.
- lammalamma25 7y ago
  Well I learned something new today. But I'm meaning there are many examples of business that will take your money and give some other form of "currency." Like if Libra where called a "facebook gift card" would it be a significant different thing. (Joking)
  - wil421 7y ago
    A lot of times when you exchange money for chips or coupons there are signs everywhere saying “no monetary value” or something like that.
- lmm 7y ago
  > In real life if a casino doesn't think you got a chip from them directly as part of gaming at that casino they won't pay out on it. That actually happens with some regularity. Really? In Bringing Down the House there was a plot point of the crew enlisting strippers to cash in their chips, because they could do so easily and without attracting suspicion because it was normal for them to get paid in casino chips.
  - TuringNYC 7y ago
    That supports the parents point — they had to go thru difficult means to actually use the chips.
    - lmm 7y ago
      Only because they didn't want to tip the casino off as to how much they were winning from them.
pjc50 7y ago
This is actually a very valid question - what is the difference between a company token, a casino chip, a "reward point", company scrip, gift cards, Steam account balances, Steam hats, unlicensed money transmitters, hawala banks, bearer bonds, Jaffa cakes, e-gold, Liberty reserve, Scottish banknotes, shadow banks, Libera, Canadian Tyre money, the Black Sheep Bank, a piece of paper with "IOU £10" written on it, a cheque written on a cow, an unpaid invoice, a Totnes pound, a Zimbabwe dollar, and Bitcoin? Broadly they fall into these categories: - debt-like: bonds, banknotes, credit balances, invoice/PO pairs, chips, and so on. Things where theoretically you could redeem it for the face value of real money. These should appear as liabilities on the balance sheet of the issuer. There may be problems if this gets very large. - redeemable for services: Canadian Tyre, most gift cards. If you look closely at a lot of these things they will have an "equivalent cash value" of a tiny fraction of a penny printed on the back. - "those that belong to the emperor": state-issued money - security-like (Howey Test, and similar rules elsewhere): this is the big one for cryptocurrencies, since it depends very heavily on the marketing. If Libera is floating this may be a problem. If it's a normal token redeemable at a par value, it's not. - non-redeemable consumable or durable items that are commonly used in barter: can usually be distinguished from money by not having a face value of any kind. Steam items don't look like money even if they can be traded. I agree that a lot of this is combining people getting upset about cryptocurrency with people getting upset about Facebook, but in both cases there are underlying valid points; there is also potentially a TBTF issue - how much is Facebook going to issue, and what effects would its huge market dominance have?
- tzakrajs 7y ago
  Stone money too https://en.wikipedia.org/wiki/Rai_stones https://en.wikipedia.org/wiki/Rai_stones
- logifail 7y ago
  > a "reward point" Are there reward points that you a) actually own, b) have a formal value, and/or c) are allowed to trade? For instance: https://www.britishairways.com/en-gb/executive-club/terms-and-conditions https://www.britishairways.com/en-gb/executive-club/terms-an... "21.1. Avios points, and all rights of title to and property in such Avios points issued at any time, remain with AGL at all times and never pass to the Member. 22.1. [...] Avios points are not transferable [...] 22.2. Any purported purchase, sale, transfer, unauthorised use (including bartering), procurement or redemption of Avios points issued or awarded to another person [..] will constitute a fundamental breach by the Member of these Terms and Conditions and the Conditions of Use."
bufferoverflow 7y ago
Because Libra is a financial derivative by design, meant to go across borders, on a large scale. It is subject to all kinds of laws. Casinos and their chips are regulated as well, even more than the regular currencies. Chuck e cheese tokens are one way, you can't exchange them back into dollars, as far as I know. While technically you can create a large-ish society that uses their tokens as currency, it hasn't happened yet.
jshowa3 7y ago
The upsetting part, to me anyway, is not that it uses blockchain. It's because: a) not a true crypto-currency because it's centralized b) such currencies are not regulated yet in the slightest c) the centralized authority is a consortium of private corporations of which one, Facebook, is providing the entire infrastructure d) Facebook is known to not handle data appropriately and is not well regulated when it comes to privacy and data protection e) I haven't seen any method to allow other people to invest or directly convert the money back to nation currencies which makes it easy for the consortium to just decide to pull the plug and exit scam with no insurance for people who bought Libra f) The consortium have essentially become a bank out of thin air and that comes with a whole slew of regulatory issues
- vasilipupkin 7y ago
  Not following why any of this any more upsetting than any product created by one or more private companies or entities. Don’t like it or it’s not for you - don’t use it.
  - jshowa3 7y ago
    Because banks are insured by the government per FDIC, companies aren't. That's just one example I know of off the top of my head and probably hundreds more I don't know. Facebook is not just any company either. It holds world wide dominance in marketing, advertising, and communication. It is also accessible through a wide age range. If Libra becomes the only way to interact with Facebook, what do we do about children on Facebook who are often, in the eyes of the law, not able to handle financial responsibility? Due to the current problem with loot boxes and in game gambling in video games, I can see this becoming a problem. Libra apparently isn't pegged to a specific currency but fluctuating assets that are claimed stable. So if you put 10 fiat currency into Libra, you're not guaranteed to receive or get 10 out (even if we account for a transaction fee) which would normally happen when interacting with a bank and its services. One poor investment by some random company, and your Libra tanks.
snarf21 7y ago
The whole cryptocurrency part is just misdirection and a red herring so they can claim that it is "decentralized". This is a banking consortium and they want to leverage the FB network effect to rent seek on cross border payments and the unbanked. The problem with your analogy is that unlike your CeC tokens, the FB Mafia completely controls whether you can give them to someone else or not. You can't trade them on their (fake) blockchain to someone else if they say no and without making a direct payment to the FB Mafia. It is also likely you can't even try to do the exchange without using the FB Mafia's wallet application. There is no physical thing that can be exchanged like with your tokens. They have also said they will comply with any government regulations. So if someone reports your CeC tokens as stolen, the FB Mafia can just steal them back and you have no recourse.
salawat 7y ago
There is also the whole issue surrounding the aggregation of things like location data or traffic analysis via Facebook's tendency to data vacuum combined with the right tooling around the blockchain. Essentially, what you'd be doing by embracing Libra is giving Facebook access to one of the few types of information about you that they can't access by law. Throw in the extra creepiness of the inevitable forensic accounting services to governments the world over, and you've basically turned Facebook into something with damn near panoptiv capabilities if there isn't some serious revamps to how customer data is mandated to be treated.
lupire 7y ago
Private currency is highly regulated. https://en.wikipedia.org/wiki/Private_currency https://en.wikipedia.org/wiki/Private_currency https://en.wikipedia.org/wiki/History_of_banking_in_the_United_States#1837%E2%80%931863:_%22Free_Banking%22_Era https://en.wikipedia.org/wiki/History_of_banking_in_the_Unit... https://en.wikipedia.org/wiki/National_Bank_Act https://en.wikipedia.org/wiki/National_Bank_Act
rchaud 7y ago
The answer is in the article: > "Jerome H. Powell, chairman of the Federal Reserve, said on Tuesday that the central bank would be looking at Libra “very carefully” given its potential scale. “I think that our expectations from a consumer protection standpoint, from a regulatory standpoint, are going to be very, very high,” When Chuck E Cheese becomes one of the world's biggest companies and wants to turn its tokens into legal tender, regulators will be paying attention then too.

pelario 7y ago

Casinos are highly regulated. If Facebook was under a similar degree of regulations I would be at ease.

deleted 7y ago
[deleted]
lammalamma25 7y ago
I don't think using chips is why they are regulated though. It is more the gambling with chips or actual dollars that causes the regulation.
- narag 7y ago
  You're going in circles. Dealing with money is why they're regulated. Actually chips are a way to soften the fact that a lot of money is changing hands very quickly, so it's a part of the regulation, no some accident.
prostoalex 7y ago
His example would be relevant to any virtualized dollar substitute. I could send someone an Amazon gift card or a Starbucks digital code as long as me and recipient agree on a common medium for such transaction.

vqdwj 7y ago

It's upsetting because it involves Facebook which means that a) HN and b) the press are very, very upset.

bongobongo 7y ago

I won’t call you dumb, but you can only stretch an analogy so far. And some weirdos trading pizza arcade tokens like they are real money is not at all the same as one of the richest companies in the world trying to disrupt the global currency market for gain. Since you asked—that’s the difference, that’s what has got people “upset.”

lammalamma25 7y ago
Fair enough. I definitely see the potential downside of them doing this. It seems like people are saying this is bad because of who is doing it though. Not what is being done. I find it a tough spot because I think something like Libra (A nation-less currency) is a really good idea. But it will take some sort of large fiat backing to happen. IMO the decentralized model isn't really working.
- grenoire 7y ago
  It is a situation where the who is the what. It's the way forward to a dystopian sci-fi trope: Corporate-owned and minted money that transcends national fiat currencies. The implications of which have again been extensively discussed in aforementioned media.
- mtnGoat 7y ago
  Nationless doesn't really exist in this case, whether they like it or not Facebook is still regulated by national laws of the jurisdiction they are incorporated in. As you are seeing now with US regulators considering stepping in. If they were supporting crypto they'd work with one of the x000 existing crypto currencies. Not sure they are adding any value by creating Libra aside for gaining control. And that ultimately is what bothers me.

Lucadg 7y ago

with money it's usually about: - financial data: who will own it. Governments want access to it first hand. - monetary policy: governments want to be able to define the circulating amount.

CPLX 7y ago

You actually can't. Nevada law is explicit that casino chips are not allowed to be used "for any monetary purpose" and federal law prohibits the creation of currencies. Casino chips are highly regulated and only permitted to be used as a stand in for gambling funds where it is permitted. In real life if a casino doesn't think you got a chip from them directly as part of gaming at that casino they won't pay out on it. That actually happens with some regularity.

lammalamma25 7y ago
Well I learned something new today. But I'm meaning there are many examples of business that will take your money and give some other form of "currency." Like if Libra where called a "facebook gift card" would it be a significant different thing. (Joking)
- wil421 7y ago
  A lot of times when you exchange money for chips or coupons there are signs everywhere saying “no monetary value” or something like that.
lmm 7y ago
> In real life if a casino doesn't think you got a chip from them directly as part of gaming at that casino they won't pay out on it. That actually happens with some regularity. Really? In Bringing Down the House there was a plot point of the crew enlisting strippers to cash in their chips, because they could do so easily and without attracting suspicion because it was normal for them to get paid in casino chips.
- TuringNYC 7y ago
  That supports the parents point — they had to go thru difficult means to actually use the chips.
  - lmm 7y ago
    Only because they didn't want to tip the casino off as to how much they were winning from them.

pjc50 7y ago

This is actually a very valid question - what is the difference between a company token, a casino chip, a "reward point", company scrip, gift cards, Steam account balances, Steam hats, unlicensed money transmitters, hawala banks, bearer bonds, Jaffa cakes, e-gold, Liberty reserve, Scottish banknotes, shadow banks, Libera, Canadian Tyre money, the Black Sheep Bank, a piece of paper with "IOU £10" written on it, a cheque written on a cow, an unpaid invoice, a Totnes pound, a Zimbabwe dollar, and Bitcoin? Broadly they fall into these categories: - debt-like: bonds, banknotes, credit balances, invoice/PO pairs, chips, and so on. Things where theoretically you could redeem it for the face value of real money. These should appear as liabilities on the balance sheet of the issuer. There may be problems if this gets very large. - redeemable for services: Canadian Tyre, most gift cards. If you look closely at a lot of these things they will have an "equivalent cash value" of a tiny fraction of a penny printed on the back. - "those that belong to the emperor": state-issued money - security-like (Howey Test, and similar rules elsewhere): this is the big one for cryptocurrencies, since it depends very heavily on the marketing. If Libera is floating this may be a problem. If it's a normal token redeemable at a par value, it's not. - non-redeemable consumable or durable items that are commonly used in barter: can usually be distinguished from money by not having a face value of any kind. Steam items don't look like money even if they can be traded. I agree that a lot of this is combining people getting upset about cryptocurrency with people getting upset about Facebook, but in both cases there are underlying valid points; there is also potentially a TBTF issue - how much is Facebook going to issue, and what effects would its huge market dominance have?

tzakrajs 7y ago
Stone money too https://en.wikipedia.org/wiki/Rai_stones https://en.wikipedia.org/wiki/Rai_stones
logifail 7y ago
> a "reward point" Are there reward points that you a) actually own, b) have a formal value, and/or c) are allowed to trade? For instance: https://www.britishairways.com/en-gb/executive-club/terms-and-conditions https://www.britishairways.com/en-gb/executive-club/terms-an... "21.1. Avios points, and all rights of title to and property in such Avios points issued at any time, remain with AGL at all times and never pass to the Member. 22.1. [...] Avios points are not transferable [...] 22.2. Any purported purchase, sale, transfer, unauthorised use (including bartering), procurement or redemption of Avios points issued or awarded to another person [..] will constitute a fundamental breach by the Member of these Terms and Conditions and the Conditions of Use."

bufferoverflow 7y ago

Because Libra is a financial derivative by design, meant to go across borders, on a large scale. It is subject to all kinds of laws. Casinos and their chips are regulated as well, even more than the regular currencies. Chuck e cheese tokens are one way, you can't exchange them back into dollars, as far as I know. While technically you can create a large-ish society that uses their tokens as currency, it hasn't happened yet.

jshowa3 7y ago

The upsetting part, to me anyway, is not that it uses blockchain. It's because: a) not a true crypto-currency because it's centralized b) such currencies are not regulated yet in the slightest c) the centralized authority is a consortium of private corporations of which one, Facebook, is providing the entire infrastructure d) Facebook is known to not handle data appropriately and is not well regulated when it comes to privacy and data protection e) I haven't seen any method to allow other people to invest or directly convert the money back to nation currencies which makes it easy for the consortium to just decide to pull the plug and exit scam with no insurance for people who bought Libra f) The consortium have essentially become a bank out of thin air and that comes with a whole slew of regulatory issues

vasilipupkin 7y ago
Not following why any of this any more upsetting than any product created by one or more private companies or entities. Don’t like it or it’s not for you - don’t use it.
- jshowa3 7y ago
  Because banks are insured by the government per FDIC, companies aren't. That's just one example I know of off the top of my head and probably hundreds more I don't know. Facebook is not just any company either. It holds world wide dominance in marketing, advertising, and communication. It is also accessible through a wide age range. If Libra becomes the only way to interact with Facebook, what do we do about children on Facebook who are often, in the eyes of the law, not able to handle financial responsibility? Due to the current problem with loot boxes and in game gambling in video games, I can see this becoming a problem. Libra apparently isn't pegged to a specific currency but fluctuating assets that are claimed stable. So if you put 10 fiat currency into Libra, you're not guaranteed to receive or get 10 out (even if we account for a transaction fee) which would normally happen when interacting with a bank and its services. One poor investment by some random company, and your Libra tanks.

snarf21 7y ago

The whole cryptocurrency part is just misdirection and a red herring so they can claim that it is "decentralized". This is a banking consortium and they want to leverage the FB network effect to rent seek on cross border payments and the unbanked. The problem with your analogy is that unlike your CeC tokens, the FB Mafia completely controls whether you can give them to someone else or not. You can't trade them on their (fake) blockchain to someone else if they say no and without making a direct payment to the FB Mafia. It is also likely you can't even try to do the exchange without using the FB Mafia's wallet application. There is no physical thing that can be exchanged like with your tokens. They have also said they will comply with any government regulations. So if someone reports your CeC tokens as stolen, the FB Mafia can just steal them back and you have no recourse.

salawat 7y ago

There is also the whole issue surrounding the aggregation of things like location data or traffic analysis via Facebook's tendency to data vacuum combined with the right tooling around the blockchain. Essentially, what you'd be doing by embracing Libra is giving Facebook access to one of the few types of information about you that they can't access by law. Throw in the extra creepiness of the inevitable forensic accounting services to governments the world over, and you've basically turned Facebook into something with damn near panoptiv capabilities if there isn't some serious revamps to how customer data is mandated to be treated.

lupire 7y ago

Private currency is highly regulated. https://en.wikipedia.org/wiki/Private_currency https://en.wikipedia.org/wiki/Private_currency https://en.wikipedia.org/wiki/History_of_banking_in_the_United_States#1837%E2%80%931863:_%22Free_Banking%22_Era https://en.wikipedia.org/wiki/History_of_banking_in_the_Unit... https://en.wikipedia.org/wiki/National_Bank_Act https://en.wikipedia.org/wiki/National_Bank_Act

rchaud 7y ago

The answer is in the article: > "Jerome H. Powell, chairman of the Federal Reserve, said on Tuesday that the central bank would be looking at Libra “very carefully” given its potential scale. “I think that our expectations from a consumer protection standpoint, from a regulatory standpoint, are going to be very, very high,” When Chuck E Cheese becomes one of the world's biggest companies and wants to turn its tokens into legal tender, regulators will be paying attention then too.