11 ms·

Highlights from Facebook’s Libra Senate hearing

113 points by lil-scamp 7y ago

whatshisface 7y ago
>Facebook’s core revenue model around Libra is that more online commerce will lead businesses to spend more on Facebook ads That's not believable, but I think it was meant as a believable motivation that could be told to people to make them feel like they understood Facebook's motivation.
- tmh79 7y ago
  Agreed, its not believable at all. It feels like when FB told everyone that they would never data mine whatsapp, and then started mining like 18 months after acquisition.
  - lawn 7y ago
    It's painfully obvious FB will data mine Libra to the max and monetize it via even more targeted ads. Why would anyone believe otherwise?
  - SolaceQuantum 7y ago
    Funnily enough it was claimed that whatsapp is encrypted and thus not mineable in the senate hearing when a senator explicitly brought this up!
    - envy2 7y ago
      Message content is encrypted and thus not mineable; metadata is a separate issue.
- Hongwei 7y ago
  It could be the most complete business model they've defined - that and interest on Libra deposits. Surely, the value of creating a new global financial payments platform and being the incumbent/biggest player will be fully realized in yet-to-be-imagined ways, but it would obviously sound bad for them to say that in a Senate hearing.
- asveikau 7y ago
  I would also guess that they don't actually know everything they want to use it for, but they know cryptocurrencies are hyped right now and don't want to miss out. See also: VR.
- epiphanitus 7y ago
  If Libra takes off, FB's AIs will not only know you and your friends talking about the flu, they will also know if that conversation ends with somebody purchasing more Purell. They might even boost the visibility of your conversation so that more people participate and more people buy Purell.
rufusroflpunch 7y ago
I genuinely hope this takes off. The idea of breaking the government money monopoly is very appealing to me.
- colechristensen 7y ago
  You prefer government by Facebook shareholders instead of democracy?
  - sp332 7y ago
    I'm not a fan of Libra. But I don't think I would call the "Federal" Reserve a democracy.
    - ameister14 7y ago
      The Fed is not in itself a democracy. Why would anyone think that it is? The US government is, though, and the Fed is managed by and subject to the government.
      - andreilys 7y ago
        Although an instrument of the US Government, the Federal Reserve System considers itself "an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding appropriated by the Congress, and the terms of the members of the board of governors span multiple presidential and congressional terms.
        Tasboo 7y ago
        The federal reserve was created using laws passed through legislation. Legislation can modify any rules that have been set for it.
      - nishmastime 7y ago
        So, if nobody votes the way I do, I should be happy that I got to vote even though I will never get the thing I want. I don't see why that's better than having that plus other options that help me today.
groovybits 7y ago
What is the difference between 'Calibra' and 'Libra'? This article uses them interchangably, and does not seem to distinct between the two. Edit: Looking more closely -- "That means that even though Facebook might not know how much money is in someone’s Calibra wallet or their other transactions [...]" It seems that Calibra is the name of the 'wallet', and Libra is the name of the 'coin' itself.
- SolaceQuantum 7y ago
  There's also this site: https://calibra.com/ https://calibra.com/
  - groovybits 7y ago
    Thanks, I didn't even know Calibra existed. I had only heard about the Libra currency itself.
    - CamperBob2 7y ago
      They seem to have hired their marketing people from the USB Forum.
  - snek 7y ago
    LGTM https://gc.gy/31025051.png https://gc.gy/31025051.png
    - aarongolliver 7y ago
      I think Firefox's Facebook container causes this
- carlosdp 7y ago
  Calibra = Facebook's subsidiary Libra wallet company Libra = currency itself
motohagiography 7y ago
Any new system will necessarily have better oversight than the one that has co-evolved in a murky organic soup with cash and foreign exchange. Even bitcoin has more transparency than the majority of transactions today. Watching some of those Senate hearings is like a trial organized by superstitious villagers. Libra is just a company scrip, like poker chips, which happens to be facilitated by a distributed ledger. I don't use Facebook because it is an abomination, but given the trend toward de-dollarization, the return of currency baskets and reserves made of special drawing rights, and effective negative interest rate policies, Libra may be the last best hope of the US to maintain its current level of influence in the international currency market. Only thing I recommend is that the company should just change it's name to Statebook.
- deleted 7y ago
  [deleted]
- hash872 7y ago
  > Libra may be the last best hope of the US to maintain its current level of influence in the international currency market Sorry- what's the connection here? Libra will apparently be a basket of different major currencies, how does this benefit the US specifically? I say this as someone who would like to preserve dollar hegemony, I just don't see the connection
  - solotronics 7y ago
    If the US doesn't take a lead in the fintech race China will take over the world. Imagine everyone in Africa, S.E. Asia, etc using Alipay. This takes away power from the US in control and de-dollarization.
    - jasonjei 7y ago
      You raised an interesting point about Alipay. But I’ve had equally fast transactions with Apple Pay/Android Pay. Why not double down on NFC payment options coupled with desktop devices instead of building an Alipay alternative? If you’re using a credit card as source payment, you get a bank to protect your purchase and presumably some points or rebate? I understand cryptocurrency as potential replacement to wire transfers and cash payments. But as a consumer friendly choice, why would somebody choose to pay with crypto over NFC pay (with banks promising purchase protection when coupled with credit card)?
olyjohn 7y ago
> It is “not the intention at all” for Calibra to sell or directly monetize user data directly, though if it offered additional financial services in partnership with other financial organizations it would ask consent to use their data specifically for those purposes. And of course, they'll get consent with a small EULA update to their existing users, knowing they won't read it.
neura 7y ago
This all comes down to Facebook and friends holding on to your money, making interest on it, while everybody passes their tokens around. Many other companies have been doing this for a very long time, just not in such a widespread way and opening their currencies up to whoever wants to use it. Take xbox live's original currency (still in use) where you pay $X for Y coin. They had your money in the bank, while you had some coins in your account, just sitting there, doing nothing for you. They had a bit more control and you could only buy amounts of coin that were not equal to the amount of coin you had to spend to buy anything, so you always had some left in your account. In Facebook's case, just the time it takes to convert money to Libra and then back into actual money will net them some interest on it. On such a large scale, that's a constant income. They're trying to be a non-profit because they don't actually charge for the service, but the investors still make money by way of holding on to your cash while it's in Libra form.
- dllthomas 7y ago
  > They're trying to be a non-profit because they don't actually charge for the service, but the investors still make money by way of holding on to your cash while it's in Libra form. A not-for-profit can charge for service, and cannot return a profit to investors. Maybe they've ways to wiggle around the latter, but not charging for the service is simply irrelevant.
  - solotronics 7y ago
    The non-profit could sell your financial transaction data to a for profit corp. for basically nothing. The for-profit then makes all the money selling the data to other corporate partners. Just one of the many ways I can see this being abused.
    - cthaeh 7y ago
      Thats illegal. Highly highly doubt Facebook or any company in the media spotlight will ever do anything clearly, and obviously illegal.
thinkloop 7y ago
The most important quote might be from Mnuchin yesterday: "Treasury takes very seriously the role of the US Dollar as the world's reserve currency, and will continue our efforts to protect our country". [1] Are you supposed to say that out loud? [1] https://youtu.be/zAICzg8ir50?t=370 https://youtu.be/zAICzg8ir50?t=370
- ForHackernews 7y ago
  Huh? Why not? The US gains strategic advantage from the power of the USD, and signalling their intention to protect that advantage will only help reinforce it.
  - thinkloop 7y ago
    Well there's this whole thing about fighting terrorism and money laundering, and individual rights and small government, etc. In this context it's odd for the government to be picking winners. We are also the leaders in crypto. Many US citizens are involved in crypto. It's almost as if the government had a stake in GM and so started making rules against Ford under the guise of public safety. Doesn't it seem like this should have zero effect on policy decision? If not, shouldn't the rest of the world then also be looking out for their own interests and make sure that the dollar reserve status is undermined? The latter isn't beneficial to the US, so framing it that way seems like a bit of a slip.
    - adventured 7y ago
      > If not, shouldn't the rest of the world then also be looking out for their own interests and make sure that the dollar reserve status is undermined? I'm confused by most of what you wrote. The rest of the world is looking after their own interests, that's why nearly every country has its own currency. It's why the Euro exists. It's why the Federal Reserve isn't literally the global central bank controlling a single currency that everyone on earth must use. The Eurozone - for one example - is and always has been interested in promoting the Euro as a dollar-competing global currency. Russia and China, as the primary military competitors to the US (and China as the sole economic superpower competitor to the US), are persistently attempting to either compete with or undermine the US dollar hegemony. Russia hasn't been subtle about wanting to see the dollar's prominence reduced for most of Putin's time in office.
steve76 7y ago
I will like to introduce everyone to the most wonderful currency ever created. The USA Ginnie Mae Bond! (GNMA) For only $25,000, you get a Social Security check. Just go to ??? it really doesn't matter, work, save, buy one, and quit. If it fails, you get to tell Marines what to murder, yet alone get your very own Aircraft carrier! What fun! You could take the coupon, and value base invest it far far away from the hippy hell known as California. You leave them alone. They leave you alone. If you like crypto, just make a video game, and doll out experience. Worry not about the rich friends in San Fran. There's behavioral wards right? Those people from the county that come and help out the disadvantaged? Screw them! Because they are screwing you so so much.
golemiprague 7y ago
How do we ensure that they don't politically discriminate against people? What happen if they block you on facebook? At least if the government is doing something I don't like I can vote for a different one, how can I influence facebook decisions? I'd rather have someone who must uphold the first amendment managing my money than someone who don't or even worst, will take the interest and demands of countries like China into consideration.
- raxxorrax 7y ago
  Mastercard and Paypal have already done this, so getting any different payment provider would be a success already.
  - golemiprague 7y ago
    I am talking about making a coin, not a payment provider. Controlling a coin gives you a different level of power.
epiphanitus 7y ago
Isn't this currency play just a way for Facebook to get more data? Data about social interactions and how they influence purchase decisions would be very marketable, especially to e-commerce businesses that want to take on Amazon. It's also a potential moat for FB to protect its ad business against encroachment by Amazon's own ad business.
- carlosdp 7y ago
  No, it's about increasing revenue per user for their fastest growing market (emerging market) by giving access to the 500m+ unbanked people that have internet/cells/FB/WhatsApp in these markets a way to access the digital economy, so they can actually buy things people advertise on Facebook, driving up the price for those ads. They can make a killing on this without needing to touch anyone's data.
  - epiphanitus 7y ago
    Why not both? Besides, the lions share of FB's current revenue still comes from US Ad spending. Amazon's dominance of e-commerce threatens this because people who want to buy something increasingly just go to Amazon.com. Amazon's ads offer the opportunity to influence consumers at the end of the conversion funnel. But this means that Amazon will get a bigger slice of both the ad spend and the purchase data which FB doesn't yet have. Their ad business already makes almost $3B a quarter - that's almost 1/5th of FB's revenue. This is money that likely would otherwise have gone to FB/Google, but isn't anymore. This is big threat to FB's core business in what is their most lucrative market right now. Would they leverage this data to try to keep their ad business competitive? I certainly think so. Just imagine how much stuff an AI that knows your purchases and your social life can get you to buy.
    - carlosdp 7y ago
      > Besides, the lions share of FB's current revenue still comes from US Ad spending But the largest opportunity for growth is in the emerging world.
- 7y ago
carlosdp 7y ago
I think a lot of the confusion around Facebook's motivations with Libra lie around the fact that Americans think they're the main target customer. It becomes more clear when you realize (by literally reading the copy on the front page of the Libra website, mind you) that the emerging markets (FB's fastest growing sector) are the real target. We'd just be a nice to have.
- wmf 7y ago
  But it looks like Facebook doesn't know much about emerging markets either. Internet.org didn't go over well in some places. Letting Americans set moderation policy for Myanmar. Now they're talking about supporting unbanked people in the developing world... with KYC. Many unbanked people do not have "proper" ID and Facebook probably doesn't know how to parse such IDs anyway.
ajxs 7y ago
There are some very interesting posts being flagged and killed in this thread that I feel raise some very valid points. My chief contention with allowing Facebook and ilk the ability to expand their influence and authority is that the motivations of such entities are, at best, amoral. There seems to be a troublingly significant movement of people who seem to think that Facebook, Google et al are doing god's work when it comes to their political involvement. But these companies ultimately will only serve their own interests. Democracy has its obvious pitfalls. You may often feel like you as an individual are not well served by the democratic process, as I often do not, but the democratic process _is_ there. It provides a mechanism that is fundamentally egalitarian for society to steer the direction of its governing bodies by voting. FAANG is not bound to such a restrictive system, their motivations concede no moral imperative. There is no incentive for them to suffer the inconveniences of egalitarian principles any further than it serves their agenda.
- dang 7y ago
  What posts are being flagged and killed in this thread? I don't see any. If you a [dead] post that shouldn't be dead, you should vouch for it by clicking on its timestamp, then clicking 'vouch' at the top of its page. This is precisely why we added that feature.
  - ajxs 7y ago
    There was one in particular post I was referring to, it looks like someone has vouched for it since my noting it. Thanks for pointing that out, I was unaware. I'm not sure I have the rep necessary however.
    - dang 7y ago
      If by rep you mean karma, the threshold is 30, so you're fine.
  - mrguyorama 7y ago
    That's an bit undiscoverable. I was wondering how people accomplished that
Lucadg 7y ago
in other words: "let us create Libra otherwise Bitcoin wins. We have the technical capabilities, you write the laws. Let's fight it together." Put like this it will start making sense to the institutions. Just give them some time to digest it.
willvarfar 7y ago
Moving social networks into banking seems to be an excellent business opportunity for social networks! Suddenly they can make money from their users directly, rather than from selling their users to advertising customers. I think Apple should investigate doing the same; make it so you can have an iBankAccount, and use phones to transfer money and pay etc using Apple as a bank. Apple could beat Facebook at this. And with Tim Cook at the helm, we might actually trust them more than Facebook and the current crop of actual banks. The thing I don't get is the 'crypto' part of the currency; why that? Why not just become FaceBank and do it the old fashioned way?
- lasagnaphil 7y ago
  I want to note that KakaoTalk [0], which is the de-facto messenger service of Korea, is exactly going this route. Although having a straightforward monopoly on messenger services in the country, it has failed to find a sustainable business model in the past. However, five years ago they launched a service called KakaoPay [1], which lets you send money across KakaoTalk friends right in the app. And quite recently it launched its own bank called KakaoBank [2], and is nowadays even issuing debit cards. I expect many social network companies to move in similar directions; once you have a monopoly on communications, network effects are too strong to ignore. [0] https://en.wikipedia.org/wiki/KakaoTalk https://en.wikipedia.org/wiki/KakaoTalk [1] https://en.wikipedia.org/wiki/KakaoPay https://en.wikipedia.org/wiki/KakaoPay [2] https://en.wikipedia.org/wiki/KakaoBank https://en.wikipedia.org/wiki/KakaoBank
jmalkin 7y ago
Is it unusual or unheard of for a senate hearing to be held into an unreleased product?
qqn 7y ago
I can't believe no one's mentioned that Mr. Robot scene yet: http://youtube.com/watch?v=1ee-cHbCI0s http://youtube.com/watch?v=1ee-cHbCI0s

113 points by lil-scamp 7y ago

>Facebook’s core revenue model around Libra is that more online commerce will lead businesses to spend more on Facebook ads That's not believable, but I think it was meant as a believable motivation that could be told to people to make them feel like they understood Facebook's motivation.

tmh79 7y ago
Agreed, its not believable at all. It feels like when FB told everyone that they would never data mine whatsapp, and then started mining like 18 months after acquisition.
- lawn 7y ago
  It's painfully obvious FB will data mine Libra to the max and monetize it via even more targeted ads. Why would anyone believe otherwise?
- SolaceQuantum 7y ago
  Funnily enough it was claimed that whatsapp is encrypted and thus not mineable in the senate hearing when a senator explicitly brought this up!
  - envy2 7y ago
    Message content is encrypted and thus not mineable; metadata is a separate issue.
Hongwei 7y ago
It could be the most complete business model they've defined - that and interest on Libra deposits. Surely, the value of creating a new global financial payments platform and being the incumbent/biggest player will be fully realized in yet-to-be-imagined ways, but it would obviously sound bad for them to say that in a Senate hearing.
asveikau 7y ago
I would also guess that they don't actually know everything they want to use it for, but they know cryptocurrencies are hyped right now and don't want to miss out. See also: VR.
epiphanitus 7y ago
If Libra takes off, FB's AIs will not only know you and your friends talking about the flu, they will also know if that conversation ends with somebody purchasing more Purell. They might even boost the visibility of your conversation so that more people participate and more people buy Purell.

rufusroflpunch 7y ago

I genuinely hope this takes off. The idea of breaking the government money monopoly is very appealing to me.

colechristensen 7y ago
You prefer government by Facebook shareholders instead of democracy?
- sp332 7y ago
  I'm not a fan of Libra. But I don't think I would call the "Federal" Reserve a democracy.
  - ameister14 7y ago
    The Fed is not in itself a democracy. Why would anyone think that it is? The US government is, though, and the Fed is managed by and subject to the government.
    - andreilys 7y ago
      Although an instrument of the US Government, the Federal Reserve System considers itself "an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding appropriated by the Congress, and the terms of the members of the board of governors span multiple presidential and congressional terms.
      - Tasboo 7y ago
        The federal reserve was created using laws passed through legislation. Legislation can modify any rules that have been set for it.
    - nishmastime 7y ago
      So, if nobody votes the way I do, I should be happy that I got to vote even though I will never get the thing I want. I don't see why that's better than having that plus other options that help me today.

groovybits 7y ago

What is the difference between 'Calibra' and 'Libra'? This article uses them interchangably, and does not seem to distinct between the two. Edit: Looking more closely -- "That means that even though Facebook might not know how much money is in someone’s Calibra wallet or their other transactions [...]" It seems that Calibra is the name of the 'wallet', and Libra is the name of the 'coin' itself.

SolaceQuantum 7y ago
There's also this site: https://calibra.com/ https://calibra.com/
- groovybits 7y ago
  Thanks, I didn't even know Calibra existed. I had only heard about the Libra currency itself.
  - CamperBob2 7y ago
    They seem to have hired their marketing people from the USB Forum.
- snek 7y ago
  LGTM https://gc.gy/31025051.png https://gc.gy/31025051.png
  - aarongolliver 7y ago
    I think Firefox's Facebook container causes this
carlosdp 7y ago
Calibra = Facebook's subsidiary Libra wallet company Libra = currency itself

motohagiography 7y ago

Any new system will necessarily have better oversight than the one that has co-evolved in a murky organic soup with cash and foreign exchange. Even bitcoin has more transparency than the majority of transactions today. Watching some of those Senate hearings is like a trial organized by superstitious villagers. Libra is just a company scrip, like poker chips, which happens to be facilitated by a distributed ledger. I don't use Facebook because it is an abomination, but given the trend toward de-dollarization, the return of currency baskets and reserves made of special drawing rights, and effective negative interest rate policies, Libra may be the last best hope of the US to maintain its current level of influence in the international currency market. Only thing I recommend is that the company should just change it's name to Statebook.

deleted 7y ago
[deleted]
hash872 7y ago
> Libra may be the last best hope of the US to maintain its current level of influence in the international currency market Sorry- what's the connection here? Libra will apparently be a basket of different major currencies, how does this benefit the US specifically? I say this as someone who would like to preserve dollar hegemony, I just don't see the connection
- solotronics 7y ago
  If the US doesn't take a lead in the fintech race China will take over the world. Imagine everyone in Africa, S.E. Asia, etc using Alipay. This takes away power from the US in control and de-dollarization.
  - jasonjei 7y ago
    You raised an interesting point about Alipay. But I’ve had equally fast transactions with Apple Pay/Android Pay. Why not double down on NFC payment options coupled with desktop devices instead of building an Alipay alternative? If you’re using a credit card as source payment, you get a bank to protect your purchase and presumably some points or rebate? I understand cryptocurrency as potential replacement to wire transfers and cash payments. But as a consumer friendly choice, why would somebody choose to pay with crypto over NFC pay (with banks promising purchase protection when coupled with credit card)?

olyjohn 7y ago

> It is “not the intention at all” for Calibra to sell or directly monetize user data directly, though if it offered additional financial services in partnership with other financial organizations it would ask consent to use their data specifically for those purposes. And of course, they'll get consent with a small EULA update to their existing users, knowing they won't read it.

neura 7y ago

This all comes down to Facebook and friends holding on to your money, making interest on it, while everybody passes their tokens around. Many other companies have been doing this for a very long time, just not in such a widespread way and opening their currencies up to whoever wants to use it. Take xbox live's original currency (still in use) where you pay $X for Y coin. They had your money in the bank, while you had some coins in your account, just sitting there, doing nothing for you. They had a bit more control and you could only buy amounts of coin that were not equal to the amount of coin you had to spend to buy anything, so you always had some left in your account. In Facebook's case, just the time it takes to convert money to Libra and then back into actual money will net them some interest on it. On such a large scale, that's a constant income. They're trying to be a non-profit because they don't actually charge for the service, but the investors still make money by way of holding on to your cash while it's in Libra form.

dllthomas 7y ago
> They're trying to be a non-profit because they don't actually charge for the service, but the investors still make money by way of holding on to your cash while it's in Libra form. A not-for-profit can charge for service, and cannot return a profit to investors. Maybe they've ways to wiggle around the latter, but not charging for the service is simply irrelevant.
- solotronics 7y ago
  The non-profit could sell your financial transaction data to a for profit corp. for basically nothing. The for-profit then makes all the money selling the data to other corporate partners. Just one of the many ways I can see this being abused.
  - cthaeh 7y ago
    Thats illegal. Highly highly doubt Facebook or any company in the media spotlight will ever do anything clearly, and obviously illegal.

thinkloop 7y ago

The most important quote might be from Mnuchin yesterday: "Treasury takes very seriously the role of the US Dollar as the world's reserve currency, and will continue our efforts to protect our country". [1] Are you supposed to say that out loud? [1] https://youtu.be/zAICzg8ir50?t=370 https://youtu.be/zAICzg8ir50?t=370

ForHackernews 7y ago
Huh? Why not? The US gains strategic advantage from the power of the USD, and signalling their intention to protect that advantage will only help reinforce it.
- thinkloop 7y ago
  Well there's this whole thing about fighting terrorism and money laundering, and individual rights and small government, etc. In this context it's odd for the government to be picking winners. We are also the leaders in crypto. Many US citizens are involved in crypto. It's almost as if the government had a stake in GM and so started making rules against Ford under the guise of public safety. Doesn't it seem like this should have zero effect on policy decision? If not, shouldn't the rest of the world then also be looking out for their own interests and make sure that the dollar reserve status is undermined? The latter isn't beneficial to the US, so framing it that way seems like a bit of a slip.
  - adventured 7y ago
    > If not, shouldn't the rest of the world then also be looking out for their own interests and make sure that the dollar reserve status is undermined? I'm confused by most of what you wrote. The rest of the world is looking after their own interests, that's why nearly every country has its own currency. It's why the Euro exists. It's why the Federal Reserve isn't literally the global central bank controlling a single currency that everyone on earth must use. The Eurozone - for one example - is and always has been interested in promoting the Euro as a dollar-competing global currency. Russia and China, as the primary military competitors to the US (and China as the sole economic superpower competitor to the US), are persistently attempting to either compete with or undermine the US dollar hegemony. Russia hasn't been subtle about wanting to see the dollar's prominence reduced for most of Putin's time in office.

steve76 7y ago

I will like to introduce everyone to the most wonderful currency ever created. The USA Ginnie Mae Bond! (GNMA) For only $25,000, you get a Social Security check. Just go to ??? it really doesn't matter, work, save, buy one, and quit. If it fails, you get to tell Marines what to murder, yet alone get your very own Aircraft carrier! What fun! You could take the coupon, and value base invest it far far away from the hippy hell known as California. You leave them alone. They leave you alone. If you like crypto, just make a video game, and doll out experience. Worry not about the rich friends in San Fran. There's behavioral wards right? Those people from the county that come and help out the disadvantaged? Screw them! Because they are screwing you so so much.

golemiprague 7y ago

How do we ensure that they don't politically discriminate against people? What happen if they block you on facebook? At least if the government is doing something I don't like I can vote for a different one, how can I influence facebook decisions? I'd rather have someone who must uphold the first amendment managing my money than someone who don't or even worst, will take the interest and demands of countries like China into consideration.

raxxorrax 7y ago
Mastercard and Paypal have already done this, so getting any different payment provider would be a success already.
- golemiprague 7y ago
  I am talking about making a coin, not a payment provider. Controlling a coin gives you a different level of power.

epiphanitus 7y ago

Isn't this currency play just a way for Facebook to get more data? Data about social interactions and how they influence purchase decisions would be very marketable, especially to e-commerce businesses that want to take on Amazon. It's also a potential moat for FB to protect its ad business against encroachment by Amazon's own ad business.

carlosdp 7y ago
No, it's about increasing revenue per user for their fastest growing market (emerging market) by giving access to the 500m+ unbanked people that have internet/cells/FB/WhatsApp in these markets a way to access the digital economy, so they can actually buy things people advertise on Facebook, driving up the price for those ads. They can make a killing on this without needing to touch anyone's data.
- epiphanitus 7y ago
  Why not both? Besides, the lions share of FB's current revenue still comes from US Ad spending. Amazon's dominance of e-commerce threatens this because people who want to buy something increasingly just go to Amazon.com. Amazon's ads offer the opportunity to influence consumers at the end of the conversion funnel. But this means that Amazon will get a bigger slice of both the ad spend and the purchase data which FB doesn't yet have. Their ad business already makes almost $3B a quarter - that's almost 1/5th of FB's revenue. This is money that likely would otherwise have gone to FB/Google, but isn't anymore. This is big threat to FB's core business in what is their most lucrative market right now. Would they leverage this data to try to keep their ad business competitive? I certainly think so. Just imagine how much stuff an AI that knows your purchases and your social life can get you to buy.
  - carlosdp 7y ago
    > Besides, the lions share of FB's current revenue still comes from US Ad spending But the largest opportunity for growth is in the emerging world.
7y ago

carlosdp 7y ago

I think a lot of the confusion around Facebook's motivations with Libra lie around the fact that Americans think they're the main target customer. It becomes more clear when you realize (by literally reading the copy on the front page of the Libra website, mind you) that the emerging markets (FB's fastest growing sector) are the real target. We'd just be a nice to have.

wmf 7y ago
But it looks like Facebook doesn't know much about emerging markets either. Internet.org didn't go over well in some places. Letting Americans set moderation policy for Myanmar. Now they're talking about supporting unbanked people in the developing world... with KYC. Many unbanked people do not have "proper" ID and Facebook probably doesn't know how to parse such IDs anyway.

ajxs 7y ago

There are some very interesting posts being flagged and killed in this thread that I feel raise some very valid points. My chief contention with allowing Facebook and ilk the ability to expand their influence and authority is that the motivations of such entities are, at best, amoral. There seems to be a troublingly significant movement of people who seem to think that Facebook, Google et al are doing god's work when it comes to their political involvement. But these companies ultimately will only serve their own interests. Democracy has its obvious pitfalls. You may often feel like you as an individual are not well served by the democratic process, as I often do not, but the democratic process _is_ there. It provides a mechanism that is fundamentally egalitarian for society to steer the direction of its governing bodies by voting. FAANG is not bound to such a restrictive system, their motivations concede no moral imperative. There is no incentive for them to suffer the inconveniences of egalitarian principles any further than it serves their agenda.

dang 7y ago
What posts are being flagged and killed in this thread? I don't see any. If you a [dead] post that shouldn't be dead, you should vouch for it by clicking on its timestamp, then clicking 'vouch' at the top of its page. This is precisely why we added that feature.
- ajxs 7y ago
  There was one in particular post I was referring to, it looks like someone has vouched for it since my noting it. Thanks for pointing that out, I was unaware. I'm not sure I have the rep necessary however.
  - dang 7y ago
    If by rep you mean karma, the threshold is 30, so you're fine.
- mrguyorama 7y ago
  That's an bit undiscoverable. I was wondering how people accomplished that

Lucadg 7y ago

in other words: "let us create Libra otherwise Bitcoin wins. We have the technical capabilities, you write the laws. Let's fight it together." Put like this it will start making sense to the institutions. Just give them some time to digest it.

willvarfar 7y ago

Moving social networks into banking seems to be an excellent business opportunity for social networks! Suddenly they can make money from their users directly, rather than from selling their users to advertising customers. I think Apple should investigate doing the same; make it so you can have an iBankAccount, and use phones to transfer money and pay etc using Apple as a bank. Apple could beat Facebook at this. And with Tim Cook at the helm, we might actually trust them more than Facebook and the current crop of actual banks. The thing I don't get is the 'crypto' part of the currency; why that? Why not just become FaceBank and do it the old fashioned way?

lasagnaphil 7y ago
I want to note that KakaoTalk [0], which is the de-facto messenger service of Korea, is exactly going this route. Although having a straightforward monopoly on messenger services in the country, it has failed to find a sustainable business model in the past. However, five years ago they launched a service called KakaoPay [1], which lets you send money across KakaoTalk friends right in the app. And quite recently it launched its own bank called KakaoBank [2], and is nowadays even issuing debit cards. I expect many social network companies to move in similar directions; once you have a monopoly on communications, network effects are too strong to ignore. [0] https://en.wikipedia.org/wiki/KakaoTalk https://en.wikipedia.org/wiki/KakaoTalk [1] https://en.wikipedia.org/wiki/KakaoPay https://en.wikipedia.org/wiki/KakaoPay [2] https://en.wikipedia.org/wiki/KakaoBank https://en.wikipedia.org/wiki/KakaoBank

jmalkin 7y ago

Is it unusual or unheard of for a senate hearing to be held into an unreleased product?

qqn 7y ago

I can't believe no one's mentioned that Mr. Robot scene yet: http://youtube.com/watch?v=1ee-cHbCI0s http://youtube.com/watch?v=1ee-cHbCI0s