11 ms·

Nipping Libra in the Bud

156 points by robin_reala 7y ago

lowdose 7y ago
The ZuckBuck has the potential to achieve massive adoption thanks to the hundredth monkey effect. It would be awesome if somebody like Brian Acton would tweet the #ZuckBuck hashtag. This is an awesome opportunity to brand this ridiculous proposal with possibly sticking language network effects. https://en.m.wikipedia.org/wiki/Hundredth_monkey_effect https://en.m.wikipedia.org/wiki/Hundredth_monkey_effect
crispyporkbites 7y ago
Facebook (or a consortium of companies, whatever this is) controlling a significant global currency feels like a dystopian nightmare. It's one of very few things that genuinely worry me.
- djohnston 7y ago
  really? libra is the thing that keeps you up at night?
  - save_ferris 7y ago
    Not OP but sure. Having both a vast trove of data on user behavior, emotions, and financial background coupled with its own financial system is deeply concerning.
    - bpfrh 7y ago
      I don't really understand that point. If facebook wants to control users and their financial data, wouldn't it be easier to simply make a fintech? I mean, sure libra gives them more data, but the same could easily be reached if facebook founds a fintech? With the current libra afaik they only have 1 seat out of 28 so less control than with a fintech. With libra you could at least control more than with a fintech.
    - deleted 7y ago
      [deleted]
  - crispyporkbites 7y ago
    Can you imagine getting a mortgage from Facebook? Or having your salary paid into your WhatsApp account directly? Having Zuckerberg maintain your pension? Now imagine doing that and being a non-US resident. Who are you going to contact when something goes wrong? Facebook won’t pick up the phone, you can’t vote for regulation or changes, at best you’re a number. Just try and use PayPal as a bank account and see what happens.
    - hombre_fatal 7y ago
      Travelers such as myself do some of things all the time like use Paypal as a bank. Without credit history or a good score you can't do much either, and that's pretty frightening. In Vancouver you need a credit card (not debit card) just to park your car. So yes, I'd love another competitor to all the holes that the existing system has. A lot of these comments just seem a bit... sheltered. Like wondering why people go to Mexico for dental care because your stellar white collar insurance covered 100% of your dental surgery. The current system has major issues. And btw, I'd gladly compare mortgage terms from my bank vs from Zuckerberg.
  - ohiovr 7y ago
    Lose your facebook account and you totally lose your ability to do business, get paid, or just participate in the economy. Facebook wants to be more powerful than governments. People that want that kind of power love to use it.
    - root_axis 7y ago
      Huh? Why would losing your Facebook account mean "you totally lose your ability to do business, get paid, or just participate in the economy"?
      - ohiovr 7y ago
        We are talking about a global currency. Libra the thing we are talking about. If you dont need facebook at all for that I stand corrected right? If facebook does not have a monopoly on some critical aspect of it I could care less. tell me now so i can just ignore this story along with all the other crimecoins and extortion tools.
        root_axis 7y ago
        The existence of Libra does not negate the existence of real money.
        deleted 7y ago
        [deleted]
        djohnston 7y ago
        you don't need facebook for libra. the two are disjoint.
    - lightgreen 7y ago
      You can use a wallet of any other provider from the network if you don’t trust Facebook.
- nikolay 7y ago
  So, your craptocurrency, run by Chinese miners and exchanges, is less scary? Gimme a break!
  - d4rti 7y ago
    My currency, run by the Bank of England, is much less scary, and far more useful.
    - lightgreen 7y ago
      It is definitely more useful at the moment while there’s no libra, because zonzero is greater than zero. But it is much less useful than it could be. Just paying a small debt (like 20 pounds for a restaurant) to a friend who visited from another country is nightmarish now when your currency is run by Bank of England and your friend’s currency is run by eg FRS, in terms of both fee, time, and numbers of fields need to be filled in the forms. When you need to send these money to your parents in Moldova or Kenya, it’s 10 times more pain. I could definitely use this currency.
- carlosdp 7y ago
  I agree that a real global currency controlled by a group of corporations instead of (in many cases anyways) elected governments is a concerning concept that we need to really analyze. My issue is that experts right now are instead just dismissing Libra is a dumb idea that will simply never work. It isn't dumb and it definitely could, I wish they would consider that for a second and talk about whether it SHOULD work.
- Grue3 7y ago
  Replace "companies" with "governments" and you're already living in this "dystopian nightmare". Add to this the fact that two corporations (Visa and Mastercard) are controlling most of money transactions made by regular people.
idlewords 7y ago
A lot of discussions I've seen of Libra treat it as 12-dimensional chess where one of the players is a malign entity called "Facebook", looking to maximize revenue, or power, or in some other way malevolently patting a white cat in its lap. I have a different theory to suggest. What if Zuckerberg is simply a very idealistic person who happens to have full voting control of one of the largest corporations in the world, and insists on pushing it to idiosyncratic ends? This is a guy who a couple of years ago decided that "we will cure all disease" was a non-ridiculous goal to put his and his wife's name on. A lot of the complexity around Libra can be explained as Zuckerberg pushing for unfettered access to the financial system for everyone, and the many smart legal and technical minds at Facebook trying to protect the company from the regulatory and criminal nightmare such a system would pose in practice. I may be wrong in this analysis, but in general I think we spend too little time analyzing what vapid thought may have come into Zuckerberg's head this time around, when it is a perfectly sufficient explanation of Facebook's behavior. In this model, the complexity and subtlety of the strategy come from people around the Great Leader trying to mitigate his vision, or adapt it to their own bureaucratic or ideological ends.
- jjeaff 7y ago
  Besides a few public comments here and there, what evidence do you see that Zuckerberg is altruistic in any way whatsoever? I've seen quite a bit of evidence and stories that he cares little for anything but total world domination. Not so much on the other side. I like to give people the benefit of the doubt too. But his main mantra since forever has been that he wants to connect the world. But if that was really his goal, then facebook wouldn't be such a closed, proprietary system.
  - crispyporkbites 7y ago
    In the Zuckerberg fan world, that IS altruism
  - idlewords 7y ago
    I don't claim to see into the guy's mind, but I can imagine a power-hungry person telling himself stories about the hunger being justified by all the great things he wants to do for humanity. It doesn't really matter whether the motives are pure or base; my point is more that the system is set up to amplify the wishes of one person with no recourse. So when the pharaoh gets obsessed with something weird, the empire must follow.
ilaksh 7y ago
This is sort of the first level reaction. If you can understand what Libra and cryptocurrency really are, you may be able to get to another level. The next level of grasping this is to realize that real scalable cryptocurrency is the actual threat to the establishment. And secondly to realize that Libra is the polar opposite of real cryptocurrency. Cryptocurrency that scales is digital cash. It is controlled entirely by citizens. It is difficult to track. Difficult to tax. Nearly impossible for governments to disable access for person's or countries. It is difficult for centralized companies to profit from it. And it provides a direct competition to all fiat currencies. Libra on the other hand is none of those things. It is totally centralized, completely dependant on fiat currencies. Controlled by one company who will give backdoors to governments. Visa, MasterCard, and PayPal (all sponsors of Libra) will be able to continue to take a cut of all digital transactions. The Libra group will profit from interest on your assets and happily freeze them if the government sneezes in your direction. So my main concern is that the government may realize this and do a 180. And that Libra could block adoption of real cryptocurrencies that are making big pushes for scalability.
- Alex3917 7y ago
  Cryptocurrency is any system where entries in a ledger are cryptographically signed by each participant and cryptographically validated by a third party. If you project any other values or technologies beyond that onto the concept then you’re missing its full power and potential. Libra is a real cryptocurrency. There is zero ambiguity here.
- cycrutchfield 7y ago
  >Cryptocurrency that scales is digital cash. It is controlled entirely by citizens. It is difficult to track. Difficult to tax. Nearly impossible for governments to disable access for person's or countries. Why do I get the feeling like you are describing these as positive attributes? Last time I checked, unfettered money laundering, tax evasion, and buying illegal shit like hitman contracts isn’t exactly a good thing. >It is difficult for centralized companies to profit from it. Oh, you mean like premining or ICOs?
  - 7y ago
buboard 7y ago
But if Libra is so well-founded, what if, in the face of regulation, facebook decides to leave the project? And what if the project is cancelled altogether? It will be an admission of defeat and bowing down to the banks, and there are thousands of cryptocurrencies that could take its place.
bo1024 7y ago
Is this article correct in its claims that Facebook is in control of Libra and, more specifically, that Facebook makes money from the initial registration fees and will be able to directly make money in the future from e.g. transaction fees?
- carlosdp 7y ago
  - Facebook does not control Libra, it is 1 of 28 (will be 100 by 2020) companies (several are competitors) that do. Facebook developed it and will definitely have the largest wallet deployment (at least at first, likely for a good while), but they don't have a structural advantage in governance or validation over any other member company, and anyone can develop wallet apps for Libra. - Validators can take transaction fees, as most cryptocurrency nodes do, but we're likely talking very tiny fees. The primary money from Libra for members comes from the underlying basket of asset's appreciation, which members get dividends of as pay back for being part of the network. The REAL money is in the massive economic opportunity that could be built on top of a successful Libra though.
  - bo1024 7y ago
    My understanding is that what you wrote is pretty much correct. (This would be an unnecessary comment, but you seem downvoted for some reason.)
- drcode 7y ago
  FB has written marketing materials saying that they would like to have less control over Libra, but it's very vague around timelines. Clearly, their incentives are to maintain as much control as possible while making generous statements about how they hope to have less control in the future, to derail as many regulatory attempts as possible.
  - carlosdp 7y ago
    You don't need to read their marketing materials to understand why they don't have full control. Read the whitepapers on the Libra site. (or read my top comment on this thread)
carlosdp 7y ago
Idk why this article is so high up here, it's not very good. - The article implies Facebook "already made money off Libra", that's false. That $270M goes to the non-profit Libra Association in Switzerland, of which Facebook is 1 of 28 current members. They don't "get" that money, it's there to fund the Association's maintenance costs. - Facebook built this, yes, but they do not have full control. In both governance and validation, they have 1 vote of 28 (currently, the number is supposed to go to 100 by launch). Will Facebook have the largest deployed Libra wallet? Yes, at least initially. Can anybody make a Libra wallet? Yes. This isn't a data play, it's very clearly a play at getting a bunch of people in developing markets that can only pay with cash right now the ability to pay online. That's a HUGE opportunity all on its own, they don't need our data to make this worth it if it works. How can they sell ads to people in emerging markets, Facebook's fastest growing userbase, if none of these people can buy the things they are advertising? Facebook doesn't need an ulterior motive to make a buttload of money off of this, if it works. I don't know why "experts" are looking for one. Edit: I originally said the initial $10M buy-in per member goes to the Libra Reserve, but that was in error. It goes to the Association to fund the non-profit itself. The Reserve will be funded by the initial on-ramp of users.
- soulofmischief 7y ago
  > This isn't a data play, it's very clearly a play at getting a bunch of people in developing markets that can only pay with cash right now the ability to pay online Just like Facebook Zero was simply a play at getting a bunch of people in developing markets with no internet access a way to use the internet and not just a way to use Facebook as the internet?
  - carlosdp 7y ago
    No? Look, you can say things like that, but there is no evidence thus far to back up this being a data play, and every piece of evidence says it is exactly what they say it is. - Facebook wants to make more money, they stand to make the most money if this thing works they way they say it will. Surely we can trust their greed? - You don't need a Facebook account to use Libra. - The thing is built so Facebook doesn't have full control, enshrined in Swiss law and math.
lhl 7y ago
As a long-time follower of digital currencies, while I have some skepticism about Libra (and see plenty of opportunities for competition), it's hard to take an editorial like this seriously when it's making such terrible arguments. The piece starts by claiming that Facebook is profiting from Libra by collecting one-time fees from participants, and that this would somehow be motivation to launch the endeavor. This is so wholly wrong that my head spins a bit at this - the Libra Association members pay in $10M (which gives them a single vote, and "Libra Investment Tokens"), and the cash goes to support 1:1 backing into the Libra Reserve - while there may be a float, the return is basically de minimas since it's basically going into short term treasuries and the like. Considering these funds are controlled by the association (a Geneva non-profit) and that all members have equal voting right, I don't see how there's any way that Facebook Inc (or any individual member) could actually make a "cool billion dollars" in any way from this. Either this argument was made from not taking a few minutes to make a cursory read any of the website announcements or white papers, or is, I don't know, pure imagination? The second argument is less bewildering, but shows even less understanding of what kind of play Libra is. It imagines that somehow FB will benefit (as a 1/100th investor in the LA) from transaction fees! If the goal were to maximize tx fees from a payment system within FB properties, they'd have been much better off launching a first party payment system (the same is true if the only goal was for collection of transaction data, btw). Sure FB wants to make money from Libra, but it'll be by creating exactly what it says on a tin - an open access, low friction, cross-border, transactional digital currency. FB benefits from opening up huge markets in (especially) its EM marketplace, which has been largely underserved by er everyone, and by creating new markets (microtransactions, small international transfers) that have been simply impossible without a true "internet" currency. Of course there won't be any privacy, but this IMO is driven as much by KYC/AML/global money flow of sovereign interests, as much as for consumer data mining purposes. We know how to make private cryptocurrencies, but it'd simply be DOA if that were what were proposed to any regulatory authority around the world. IMO FB has pushed the conversation forward in a good way and I'd say that it's up to everyone else (whether its competing national or corporate consortiums, or open-source/independent cryptocurrency projects) to step up and offer some better alternative. For those arguing that this should simply be stopped (or for the status quo of how money and banking currently work globally, which I personally think is much worse than what Libra promises), well, I guess at the very least, argue better.
seibelj 7y ago
Cryptocurrency and blockchain technology have opened up permissionless innovation in an industry that has been so choked by regulation that previously only the largest, most well-connected players could get in the door: finance. You can, right this second, create a smart contract that allows extremely sophisticated financial instruments and attract real users. The initial shoots of innovation are already happening, such as MakerDao's Collatorized Debt Positions (CDPs)[0] and Compound Finance for money market crypto instruments.[1] Regulators and governments can stick their fingers in their ears, outlaw the technology, and drive everything offshore or underground. The point is that these technologies are permissionless and unstoppable. As long as the internet exists, you can't eliminate such technology and behavior. Rather than knee-jerk outlaw progress in the industry by projects such as Libra, governments need to let the industry mature and eventually pass laws that protect consumers without stifling innovation. HN users especially need to embrace their so-called "hacker" roots and stop lobbying for the state to crush such innovative technology in its infancy. Seriously - the outrage to blockchain and crypto on HN is entirely absurd. This is cool, interesting technology and entrepreneurs should be analyzing it for its disruptive potential rather than whining that there aren't enough licenses and bureaucrats involved. [0] https://makerdao.com/en/ https://makerdao.com/en/ [1] https://compound.finance/ https://compound.finance/
- khawkins 7y ago
  This isn't progress, it's tossing out centuries of financial regulations, monetary theory, and power structures to give a consortium of businesses more power than nations. They're trying to set up what is effectively a global, private central bank and replace the currencies of the world. If Libra actually does become the dominant world currency, a handful of individuals beholden to only to corporations and not to any nation can make decisions which affect all of humanity. They can cause hyperinflation spikes or prolong depressions with credit crunches. They can unilaterally cripple the finances of critics by removing their ability to process the currency and create an atmosphere where people are fearful of speaking out. They'll be able to control the actions of countries by making their entire economy dependent on processing the currency. Their actions could send all of humanity into desperate destabilization, and by the time you realize there's a problem it's too late. You can't undo, with regulation or anything, power of this scale. Also, the technology isn't permissionless, it's permissioned.[0] [0] https://libra.org/en-US/white-paper/#introducing-libra https://libra.org/en-US/white-paper/#introducing-libra
dep_b 7y ago
The World does need a easy to use system to do cross-border payments. US clients often say “can’t we use PayPal?” while it’s often a major pain in the ass for the receiver outside of the US perhaps Europe. Bank transfers are somehow very hard for a lot of people. So yes, I do see something that can give me money in my bank / hand easily across borders succeed. Jay because the alternatives suck.
Proven 7y ago
Just another statist who wants to tell others what to do. > In the end, the questions boil down to this: do we want to hand over our money to a company that The hell it does! If that were the question you'd want to let them be and leave the decision to each individual. But as all statists do, you want the State to make that decision for us.

156 points by robin_reala 7y ago

The ZuckBuck has the potential to achieve massive adoption thanks to the hundredth monkey effect. It would be awesome if somebody like Brian Acton would tweet the #ZuckBuck hashtag. This is an awesome opportunity to brand this ridiculous proposal with possibly sticking language network effects. https://en.m.wikipedia.org/wiki/Hundredth_monkey_effect https://en.m.wikipedia.org/wiki/Hundredth_monkey_effect

crispyporkbites 7y ago

Facebook (or a consortium of companies, whatever this is) controlling a significant global currency feels like a dystopian nightmare. It's one of very few things that genuinely worry me.

djohnston 7y ago
really? libra is the thing that keeps you up at night?
- save_ferris 7y ago
  Not OP but sure. Having both a vast trove of data on user behavior, emotions, and financial background coupled with its own financial system is deeply concerning.
  - bpfrh 7y ago
    I don't really understand that point. If facebook wants to control users and their financial data, wouldn't it be easier to simply make a fintech? I mean, sure libra gives them more data, but the same could easily be reached if facebook founds a fintech? With the current libra afaik they only have 1 seat out of 28 so less control than with a fintech. With libra you could at least control more than with a fintech.
  - deleted 7y ago
    [deleted]
- crispyporkbites 7y ago
  Can you imagine getting a mortgage from Facebook? Or having your salary paid into your WhatsApp account directly? Having Zuckerberg maintain your pension? Now imagine doing that and being a non-US resident. Who are you going to contact when something goes wrong? Facebook won’t pick up the phone, you can’t vote for regulation or changes, at best you’re a number. Just try and use PayPal as a bank account and see what happens.
  - hombre_fatal 7y ago
    Travelers such as myself do some of things all the time like use Paypal as a bank. Without credit history or a good score you can't do much either, and that's pretty frightening. In Vancouver you need a credit card (not debit card) just to park your car. So yes, I'd love another competitor to all the holes that the existing system has. A lot of these comments just seem a bit... sheltered. Like wondering why people go to Mexico for dental care because your stellar white collar insurance covered 100% of your dental surgery. The current system has major issues. And btw, I'd gladly compare mortgage terms from my bank vs from Zuckerberg.
- ohiovr 7y ago
  Lose your facebook account and you totally lose your ability to do business, get paid, or just participate in the economy. Facebook wants to be more powerful than governments. People that want that kind of power love to use it.
  - root_axis 7y ago
    Huh? Why would losing your Facebook account mean "you totally lose your ability to do business, get paid, or just participate in the economy"?
    - ohiovr 7y ago
      We are talking about a global currency. Libra the thing we are talking about. If you dont need facebook at all for that I stand corrected right? If facebook does not have a monopoly on some critical aspect of it I could care less. tell me now so i can just ignore this story along with all the other crimecoins and extortion tools.
      - root_axis 7y ago
        The existence of Libra does not negate the existence of real money.
      - deleted 7y ago
        [deleted]
      - djohnston 7y ago
        you don't need facebook for libra. the two are disjoint.
  - lightgreen 7y ago
    You can use a wallet of any other provider from the network if you don’t trust Facebook.
nikolay 7y ago
So, your craptocurrency, run by Chinese miners and exchanges, is less scary? Gimme a break!
- d4rti 7y ago
  My currency, run by the Bank of England, is much less scary, and far more useful.
  - lightgreen 7y ago
    It is definitely more useful at the moment while there’s no libra, because zonzero is greater than zero. But it is much less useful than it could be. Just paying a small debt (like 20 pounds for a restaurant) to a friend who visited from another country is nightmarish now when your currency is run by Bank of England and your friend’s currency is run by eg FRS, in terms of both fee, time, and numbers of fields need to be filled in the forms. When you need to send these money to your parents in Moldova or Kenya, it’s 10 times more pain. I could definitely use this currency.
carlosdp 7y ago
I agree that a real global currency controlled by a group of corporations instead of (in many cases anyways) elected governments is a concerning concept that we need to really analyze. My issue is that experts right now are instead just dismissing Libra is a dumb idea that will simply never work. It isn't dumb and it definitely could, I wish they would consider that for a second and talk about whether it SHOULD work.
Grue3 7y ago
Replace "companies" with "governments" and you're already living in this "dystopian nightmare". Add to this the fact that two corporations (Visa and Mastercard) are controlling most of money transactions made by regular people.

idlewords 7y ago

A lot of discussions I've seen of Libra treat it as 12-dimensional chess where one of the players is a malign entity called "Facebook", looking to maximize revenue, or power, or in some other way malevolently patting a white cat in its lap. I have a different theory to suggest. What if Zuckerberg is simply a very idealistic person who happens to have full voting control of one of the largest corporations in the world, and insists on pushing it to idiosyncratic ends? This is a guy who a couple of years ago decided that "we will cure all disease" was a non-ridiculous goal to put his and his wife's name on. A lot of the complexity around Libra can be explained as Zuckerberg pushing for unfettered access to the financial system for everyone, and the many smart legal and technical minds at Facebook trying to protect the company from the regulatory and criminal nightmare such a system would pose in practice. I may be wrong in this analysis, but in general I think we spend too little time analyzing what vapid thought may have come into Zuckerberg's head this time around, when it is a perfectly sufficient explanation of Facebook's behavior. In this model, the complexity and subtlety of the strategy come from people around the Great Leader trying to mitigate his vision, or adapt it to their own bureaucratic or ideological ends.

jjeaff 7y ago
Besides a few public comments here and there, what evidence do you see that Zuckerberg is altruistic in any way whatsoever? I've seen quite a bit of evidence and stories that he cares little for anything but total world domination. Not so much on the other side. I like to give people the benefit of the doubt too. But his main mantra since forever has been that he wants to connect the world. But if that was really his goal, then facebook wouldn't be such a closed, proprietary system.
- crispyporkbites 7y ago
  In the Zuckerberg fan world, that IS altruism
- idlewords 7y ago
  I don't claim to see into the guy's mind, but I can imagine a power-hungry person telling himself stories about the hunger being justified by all the great things he wants to do for humanity. It doesn't really matter whether the motives are pure or base; my point is more that the system is set up to amplify the wishes of one person with no recourse. So when the pharaoh gets obsessed with something weird, the empire must follow.

ilaksh 7y ago

This is sort of the first level reaction. If you can understand what Libra and cryptocurrency really are, you may be able to get to another level. The next level of grasping this is to realize that real scalable cryptocurrency is the actual threat to the establishment. And secondly to realize that Libra is the polar opposite of real cryptocurrency. Cryptocurrency that scales is digital cash. It is controlled entirely by citizens. It is difficult to track. Difficult to tax. Nearly impossible for governments to disable access for person's or countries. It is difficult for centralized companies to profit from it. And it provides a direct competition to all fiat currencies. Libra on the other hand is none of those things. It is totally centralized, completely dependant on fiat currencies. Controlled by one company who will give backdoors to governments. Visa, MasterCard, and PayPal (all sponsors of Libra) will be able to continue to take a cut of all digital transactions. The Libra group will profit from interest on your assets and happily freeze them if the government sneezes in your direction. So my main concern is that the government may realize this and do a 180. And that Libra could block adoption of real cryptocurrencies that are making big pushes for scalability.

Alex3917 7y ago
Cryptocurrency is any system where entries in a ledger are cryptographically signed by each participant and cryptographically validated by a third party. If you project any other values or technologies beyond that onto the concept then you’re missing its full power and potential. Libra is a real cryptocurrency. There is zero ambiguity here.
cycrutchfield 7y ago
>Cryptocurrency that scales is digital cash. It is controlled entirely by citizens. It is difficult to track. Difficult to tax. Nearly impossible for governments to disable access for person's or countries. Why do I get the feeling like you are describing these as positive attributes? Last time I checked, unfettered money laundering, tax evasion, and buying illegal shit like hitman contracts isn’t exactly a good thing. >It is difficult for centralized companies to profit from it. Oh, you mean like premining or ICOs?
- 7y ago

buboard 7y ago

But if Libra is so well-founded, what if, in the face of regulation, facebook decides to leave the project? And what if the project is cancelled altogether? It will be an admission of defeat and bowing down to the banks, and there are thousands of cryptocurrencies that could take its place.

bo1024 7y ago

Is this article correct in its claims that Facebook is in control of Libra and, more specifically, that Facebook makes money from the initial registration fees and will be able to directly make money in the future from e.g. transaction fees?

carlosdp 7y ago
- Facebook does not control Libra, it is 1 of 28 (will be 100 by 2020) companies (several are competitors) that do. Facebook developed it and will definitely have the largest wallet deployment (at least at first, likely for a good while), but they don't have a structural advantage in governance or validation over any other member company, and anyone can develop wallet apps for Libra. - Validators can take transaction fees, as most cryptocurrency nodes do, but we're likely talking very tiny fees. The primary money from Libra for members comes from the underlying basket of asset's appreciation, which members get dividends of as pay back for being part of the network. The REAL money is in the massive economic opportunity that could be built on top of a successful Libra though.
- bo1024 7y ago
  My understanding is that what you wrote is pretty much correct. (This would be an unnecessary comment, but you seem downvoted for some reason.)
drcode 7y ago
FB has written marketing materials saying that they would like to have less control over Libra, but it's very vague around timelines. Clearly, their incentives are to maintain as much control as possible while making generous statements about how they hope to have less control in the future, to derail as many regulatory attempts as possible.
- carlosdp 7y ago
  You don't need to read their marketing materials to understand why they don't have full control. Read the whitepapers on the Libra site. (or read my top comment on this thread)

carlosdp 7y ago

Idk why this article is so high up here, it's not very good. - The article implies Facebook "already made money off Libra", that's false. That $270M goes to the non-profit Libra Association in Switzerland, of which Facebook is 1 of 28 current members. They don't "get" that money, it's there to fund the Association's maintenance costs. - Facebook built this, yes, but they do not have full control. In both governance and validation, they have 1 vote of 28 (currently, the number is supposed to go to 100 by launch). Will Facebook have the largest deployed Libra wallet? Yes, at least initially. Can anybody make a Libra wallet? Yes. This isn't a data play, it's very clearly a play at getting a bunch of people in developing markets that can only pay with cash right now the ability to pay online. That's a HUGE opportunity all on its own, they don't need our data to make this worth it if it works. How can they sell ads to people in emerging markets, Facebook's fastest growing userbase, if none of these people can buy the things they are advertising? Facebook doesn't need an ulterior motive to make a buttload of money off of this, if it works. I don't know why "experts" are looking for one. Edit: I originally said the initial $10M buy-in per member goes to the Libra Reserve, but that was in error. It goes to the Association to fund the non-profit itself. The Reserve will be funded by the initial on-ramp of users.

soulofmischief 7y ago
> This isn't a data play, it's very clearly a play at getting a bunch of people in developing markets that can only pay with cash right now the ability to pay online Just like Facebook Zero was simply a play at getting a bunch of people in developing markets with no internet access a way to use the internet and not just a way to use Facebook as the internet?
- carlosdp 7y ago
  No? Look, you can say things like that, but there is no evidence thus far to back up this being a data play, and every piece of evidence says it is exactly what they say it is. - Facebook wants to make more money, they stand to make the most money if this thing works they way they say it will. Surely we can trust their greed? - You don't need a Facebook account to use Libra. - The thing is built so Facebook doesn't have full control, enshrined in Swiss law and math.

lhl 7y ago

As a long-time follower of digital currencies, while I have some skepticism about Libra (and see plenty of opportunities for competition), it's hard to take an editorial like this seriously when it's making such terrible arguments. The piece starts by claiming that Facebook is profiting from Libra by collecting one-time fees from participants, and that this would somehow be motivation to launch the endeavor. This is so wholly wrong that my head spins a bit at this - the Libra Association members pay in $10M (which gives them a single vote, and "Libra Investment Tokens"), and the cash goes to support 1:1 backing into the Libra Reserve - while there may be a float, the return is basically de minimas since it's basically going into short term treasuries and the like. Considering these funds are controlled by the association (a Geneva non-profit) and that all members have equal voting right, I don't see how there's any way that Facebook Inc (or any individual member) could actually make a "cool billion dollars" in any way from this. Either this argument was made from not taking a few minutes to make a cursory read any of the website announcements or white papers, or is, I don't know, pure imagination? The second argument is less bewildering, but shows even less understanding of what kind of play Libra is. It imagines that somehow FB will benefit (as a 1/100th investor in the LA) from transaction fees! If the goal were to maximize tx fees from a payment system within FB properties, they'd have been much better off launching a first party payment system (the same is true if the only goal was for collection of transaction data, btw). Sure FB wants to make money from Libra, but it'll be by creating exactly what it says on a tin - an open access, low friction, cross-border, transactional digital currency. FB benefits from opening up huge markets in (especially) its EM marketplace, which has been largely underserved by er everyone, and by creating new markets (microtransactions, small international transfers) that have been simply impossible without a true "internet" currency. Of course there won't be any privacy, but this IMO is driven as much by KYC/AML/global money flow of sovereign interests, as much as for consumer data mining purposes. We know how to make private cryptocurrencies, but it'd simply be DOA if that were what were proposed to any regulatory authority around the world. IMO FB has pushed the conversation forward in a good way and I'd say that it's up to everyone else (whether its competing national or corporate consortiums, or open-source/independent cryptocurrency projects) to step up and offer some better alternative. For those arguing that this should simply be stopped (or for the status quo of how money and banking currently work globally, which I personally think is much worse than what Libra promises), well, I guess at the very least, argue better.

seibelj 7y ago

Cryptocurrency and blockchain technology have opened up permissionless innovation in an industry that has been so choked by regulation that previously only the largest, most well-connected players could get in the door: finance. You can, right this second, create a smart contract that allows extremely sophisticated financial instruments and attract real users. The initial shoots of innovation are already happening, such as MakerDao's Collatorized Debt Positions (CDPs)[0] and Compound Finance for money market crypto instruments.[1] Regulators and governments can stick their fingers in their ears, outlaw the technology, and drive everything offshore or underground. The point is that these technologies are permissionless and unstoppable. As long as the internet exists, you can't eliminate such technology and behavior. Rather than knee-jerk outlaw progress in the industry by projects such as Libra, governments need to let the industry mature and eventually pass laws that protect consumers without stifling innovation. HN users especially need to embrace their so-called "hacker" roots and stop lobbying for the state to crush such innovative technology in its infancy. Seriously - the outrage to blockchain and crypto on HN is entirely absurd. This is cool, interesting technology and entrepreneurs should be analyzing it for its disruptive potential rather than whining that there aren't enough licenses and bureaucrats involved. [0] https://makerdao.com/en/ https://makerdao.com/en/ [1] https://compound.finance/ https://compound.finance/

khawkins 7y ago
This isn't progress, it's tossing out centuries of financial regulations, monetary theory, and power structures to give a consortium of businesses more power than nations. They're trying to set up what is effectively a global, private central bank and replace the currencies of the world. If Libra actually does become the dominant world currency, a handful of individuals beholden to only to corporations and not to any nation can make decisions which affect all of humanity. They can cause hyperinflation spikes or prolong depressions with credit crunches. They can unilaterally cripple the finances of critics by removing their ability to process the currency and create an atmosphere where people are fearful of speaking out. They'll be able to control the actions of countries by making their entire economy dependent on processing the currency. Their actions could send all of humanity into desperate destabilization, and by the time you realize there's a problem it's too late. You can't undo, with regulation or anything, power of this scale. Also, the technology isn't permissionless, it's permissioned.[0] [0] https://libra.org/en-US/white-paper/#introducing-libra https://libra.org/en-US/white-paper/#introducing-libra

dep_b 7y ago

The World does need a easy to use system to do cross-border payments. US clients often say “can’t we use PayPal?” while it’s often a major pain in the ass for the receiver outside of the US perhaps Europe. Bank transfers are somehow very hard for a lot of people. So yes, I do see something that can give me money in my bank / hand easily across borders succeed. Jay because the alternatives suck.

Proven 7y ago

Just another statist who wants to tell others what to do. > In the end, the questions boil down to this: do we want to hand over our money to a company that The hell it does! If that were the question you'd want to let them be and leave the decision to each individual. But as all statists do, you want the State to make that decision for us.