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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

by 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)
- theorangejuice 7y ago
  What is vague is when and how Libra will become permissionless. It is very clear right now why Facebook don't have control over Libra more than any other association member.
benj111 7y ago
My understanding is that the currency would be pegged against a basket of bonds, they would keep the interest from those bonds. I don't believe transaction fees are currently part of the plan, but of course that could change. The registration fees are basically for the ICO, (well the right to run the transaction processing) so it doesn't go to Facebook but into Libra. How much control Facebook has? In the future they 'would like' to make it fully independent, that isn't how it will be launching though.
- carlosdp 7y ago
  On the last point, true, but even before that, they only have 1 vote of 28 (100 by next year) companies.
  - benj111 7y ago
    Perhaps? I suspect they would have outsized influence being the senior partner. There isn't really enough detail at this point to say much more than that.
- lightgreen 7y ago
  Registration fee is not ICO at all. Participants of the network do not get any coins upon registrations, but they can emit any number of coins any time for selling them to users at fixing price and investing fiat money into bonds.

by bo1024 7y ago

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)
theorangejuice 7y ago
What is vague is when and how Libra will become permissionless. It is very clear right now why Facebook don't have control over Libra more than any other association member.

benj111 7y ago

My understanding is that the currency would be pegged against a basket of bonds, they would keep the interest from those bonds. I don't believe transaction fees are currently part of the plan, but of course that could change. The registration fees are basically for the ICO, (well the right to run the transaction processing) so it doesn't go to Facebook but into Libra. How much control Facebook has? In the future they 'would like' to make it fully independent, that isn't how it will be launching though.

carlosdp 7y ago
On the last point, true, but even before that, they only have 1 vote of 28 (100 by next year) companies.
- benj111 7y ago
  Perhaps? I suspect they would have outsized influence being the senior partner. There isn't really enough detail at this point to say much more than that.
lightgreen 7y ago
Registration fee is not ICO at all. Participants of the network do not get any coins upon registrations, but they can emit any number of coins any time for selling them to users at fixing price and investing fiat money into bonds.