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Cryptocurrency and blockchain technology have opened up permissionless innovation in an industry that has been so choked by regulation that previously only the

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
- seibelj 7y ago
  > This isn't progress, it's tossing out centuries of financial regulations, monetary theory, and power structures That is my definition of progress. I want experimentation, not being handcuffed to centuries of theory which can never be proven. Economics is not scientific, and I don't like the system we currently have. We need more private innovation and less state influence.
  - ktosobcy 7y ago
    Yeah... let's silly silicon valley be even more disruptive... thanks to beloved FB we have lost privacy, airbnb ef-uped a lot of cities and uber and other gig-economies are chipping in to the downfall of society. thanks...
- lhl 7y ago
  If Libra does become a dominant currency, then I think it's monetary policy is actually the least impactful/most stabilizing one you could ask for. From https://libra.org/en-US/about-currency-reserve/ https://libra.org/en-US/about-currency-reserve/ : * Libra is "fully backed" by "a collection of low-volatility assets, including bank deposits and government securities in currencies from stable and reputable central banks" * "for new Libra coins to be created, there must be an equivalent purchase of Libra for fiat and transfer of that fiat to the reserve. Hence, the reserve will grow as users’ demand for Libra increases. In short, on both the investor and user side, there is only one way to create more Libra — by purchasing more Libra for fiat and growing the reserve." * "The association does not set monetary policy. It mints and burns coins only in response to demand from authorized resellers. Users do not need to worry about the association introducing inflation into the system or debasing the currency. For new coins to be minted, there must be a commensurate payment of fiat by resellers into the reserve. Through interaction with authorized resellers, the association automatically mints new coins when demand increases and destroys them when the demand contracts. Because the reserve will not be actively managed, any appreciation or depreciation in the value of the Libra will come solely as a result of FX market movements." Any changes to this require a supermajority vote by the association's council. Each member has one vote, the association is established as a Swiss non-profit. As to control of processing and monetary flow, I think it'll just reflect/perpetuate current power structures, but considering that Libra will make it easier for people to access/exchange competing coins (fiat or crypto), I don't see why it'll have less market pressure to function (as a medium of exchange) than any other currency.
solotronics 7y ago
Cryptocurrency is the Internet of money, period.
thisisit 7y ago
I am pretty sure when Blythe Masters and her team came up with CDS and CDOs they thought they have come up with an innovative technique to transfer risk and a sophisticated financial instrument. I am sure they also felt there was no need for rules, regulations etc. And I am talking people who were working in finance putting their faith in math. They missed the fact that money isn't a math problem rather a people problem. Risk couldn't be written away because of a derivative. It ultimately led to the biggest recession since 1930s. And with blockchain/crypto we have people who have lesser grounding/experience with finance putting even larger faith in math. They obviously haven't learned the lesson and trying to recreate history.

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

seibelj 7y ago
> This isn't progress, it's tossing out centuries of financial regulations, monetary theory, and power structures That is my definition of progress. I want experimentation, not being handcuffed to centuries of theory which can never be proven. Economics is not scientific, and I don't like the system we currently have. We need more private innovation and less state influence.
- ktosobcy 7y ago
  Yeah... let's silly silicon valley be even more disruptive... thanks to beloved FB we have lost privacy, airbnb ef-uped a lot of cities and uber and other gig-economies are chipping in to the downfall of society. thanks...
lhl 7y ago
If Libra does become a dominant currency, then I think it's monetary policy is actually the least impactful/most stabilizing one you could ask for. From https://libra.org/en-US/about-currency-reserve/ https://libra.org/en-US/about-currency-reserve/ : * Libra is "fully backed" by "a collection of low-volatility assets, including bank deposits and government securities in currencies from stable and reputable central banks" * "for new Libra coins to be created, there must be an equivalent purchase of Libra for fiat and transfer of that fiat to the reserve. Hence, the reserve will grow as users’ demand for Libra increases. In short, on both the investor and user side, there is only one way to create more Libra — by purchasing more Libra for fiat and growing the reserve." * "The association does not set monetary policy. It mints and burns coins only in response to demand from authorized resellers. Users do not need to worry about the association introducing inflation into the system or debasing the currency. For new coins to be minted, there must be a commensurate payment of fiat by resellers into the reserve. Through interaction with authorized resellers, the association automatically mints new coins when demand increases and destroys them when the demand contracts. Because the reserve will not be actively managed, any appreciation or depreciation in the value of the Libra will come solely as a result of FX market movements." Any changes to this require a supermajority vote by the association's council. Each member has one vote, the association is established as a Swiss non-profit. As to control of processing and monetary flow, I think it'll just reflect/perpetuate current power structures, but considering that Libra will make it easier for people to access/exchange competing coins (fiat or crypto), I don't see why it'll have less market pressure to function (as a medium of exchange) than any other currency.

solotronics 7y ago

Cryptocurrency is the Internet of money, period.

thisisit 7y ago

I am pretty sure when Blythe Masters and her team came up with CDS and CDOs they thought they have come up with an innovative technique to transfer risk and a sophisticated financial instrument. I am sure they also felt there was no need for rules, regulations etc. And I am talking people who were working in finance putting their faith in math. They missed the fact that money isn't a math problem rather a people problem. Risk couldn't be written away because of a derivative. It ultimately led to the biggest recession since 1930s. And with blockchain/crypto we have people who have lesser grounding/experience with finance putting even larger faith in math. They obviously haven't learned the lesson and trying to recreate history.