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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 h
by 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 agoThe 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 agoThats illegal. Highly highly doubt Facebook or any company in the media spotlight will ever do anything clearly, and obviously illegal.
- mywittyname 7y agoWhat they can do is pay massive bonuses and give their employees very nice perks. I attended a holiday party for non-profit where the prizes consisted of vacations, electronics, and plain old cash. We're talking about Disney Vacations for four, Mediterranean cruises, tropical resort packages, etc. I took home a sweet 65" LED TV and the prizes for the "games" (think musical chairs, limbo) started at $20 and went up to $1000. They easily gave away $50k in prizes to like 200 people. Oh, and they had fire dancers, an open bar, and taxi reimbursement. 10/10 would Christmas party again.
- dllthomas 7y agoI don't know enough about the situation to say which bucket it falls in, where possible buckets include at least "there's nothing morally or legally wrong with that", "that's morally dubious but probably legally okay", "that's illegal but unlikely to be prosecuted", and "that's illegal and you got lucky". Compensation of employees of a not-for-profit is certainly allowed - that's a different thing than returning profit to shareholders except when it isn't (in which case, IIUC, it comes with restrictions, which isn't to say it's never abused, which isn't to say it's never/always prosecuted, etc, etc...). I explicitly admitted the possibility of wiggle room around the restrictions - my point was about what the restrictions referred to in the first place.
- serkanyersen 7y agoIsn't this what happens to your money when it's in your checking account? How is this different?
- jachee 7y agoTo my (admittedly ancient at 41) eye, it's not different enough to warrant all the hubbub that's been raised around it.
- aey 7y agoThe main difference is that self generated private keys are the bank account. Someone earning dollars in the US, can send libra to their folks in Ukraine, and they can spend them without conversion fees.
- ajxs 7y agoRemittances are a contentious issue. I'm a little ignorant of to what degree governing bodies will have oversight of the movement of money. Is allowing for more unregulated monetary trade a bug or a feature of this system?
- aey 7y agoThat’s a good question. My US centric view: The open market faction in the US would love to see those trade barriers lowered. Money is expensive to move. From an ofac perspective, an immutable ledger would allow investigators to trace the funds. Small time criminals use venmo already. USD as a world currency. I really can’t imagine libra being anything else but an extension of USD.
- salawat 7y agoThe issue comes in that financial regulations of the AML and OFAC variety are basically dependent on money only moving in significant amounts through institutions with a lot to lose by not playing ball, and the account creation process having as many controls as possible. While the immutable ledger is nice, it isn't new, nor does it change the game at all. To be honest, the Libra thing wouldn't be much different at all given the right set of business processes being built around it. The problem is who is doing it, and what they gain if they are actually allowed to implement those controls. Facebook would have an undisputed goldmine. Full data on every transaction you process through Libra, all your information as collected through integration with services like LexisNexis (which is bloody creepy by the way, even if it is based on public records) plus their already problematic information w.r.t their social network graph. There is no way that much data collected in one place isn't a societal liability. Period. But no, we're getting reporting that regulators are worried about terrorists. Never mind that private currencies just make auditing and forensic accounting that much more difficult.