4 ms·

I don't know what Libra's plans are but couldn't Facebook make their own Paypal? What would really be the difference? I can hold a balance at Paypal. I can pay

I don't know what Libra's plans are but couldn't Facebook make their own Paypal? What would really be the difference? I can hold a balance at Paypal. I can pay others and others can pay me. The "crypto" part seems like an implementation detail but otherwise irrelevant. Note: I'm not saying Facebook should be allowed to make their own Paypal. I'm just curious other than "Facebook scary because big" what other reason would prevent Facebook from making a Paypal clone. Google has Google Pay, Apple has Apple Pay, why can't Facebook have Facebook Pay. What would really be the difference? Just the part about currency conversion to their own units and back? Is that different from certain game virtual currencies?

Qworg 7y ago
Nothing prevents them from building PayPal, except the regulatory regime they don't want to ascribe to. Also, the currency conversion to their own units and back relates to the taxability of said currency and the inability to use WoW gold to buy Starbucks. It is a matter of degrees - Facebook could seriously destabilize monetary policy for certain countries and subvert currency controls.
ineedasername 7y ago
Apple and Google are still dealing with merchant fees. So is PayPal for many transactions. A PayPal style system might work, but it is only low-cost low-friction (the main appeal for crypto) for the transactions that occur completely within it's own ecosystem. And they don't call it a currency, so they dodge some issues there. Paypal also dodges issues of "being a bank" because funds equivalent to customer balances are actually held in real-world banks, so it's not in any way an independent currency. It doesn't "float" against anything. Libra's basket-of-currencies approach may be very stable, but automatically puts it in a very different class of financial instruments. They could abandon that and really stick to the paypal model though. Even then, there are still many regulations for this that must be followed: It falls in a business class of "money transmitter" which requires a separate license in every state, as well as registration with the federal government. They also must follow laws like filing a CTR for transactions above $10,000, and SARs for suspicious activity. There's simply no getting around major regulations if you're providing any sort of financial services.
- elyobo 7y ago
  Crypto seems like it's (at the moment) neither low cost nor low friction; did I misunderstand you?
  - ineedasername 7y ago
    Nope, no misunderstanding, you're right! But the promise of crypto is cheap frictionless transactions. We're a long way off.
    - elyobo 7y ago
      Understood. Yes, it will probably get there eventually.
  - kybernetikos 7y ago
    Trasferring or requesting lumens on keybase is incredibly easy and very cheap. Turning the lumens into fiat and vice versa isn't so easy at present. Actually, it's obvious to me that this is the future - we want to share money in the same way and with the same ease we share thoughts and images ie inside chat systems and on social media. You don't need crypto to do this, but it's the best way of making a system anyone can join and trust. Libra is going to be big unless it's artificially stopped, and that's my view, even as someone who would much rather see one of the current cryptocurrency systems win rather than a new Facebook invented thing. If we hadn't ceded chat and social media to walled Gardens we would have solved this years ago.
- jakobegger 7y ago
  > Paypal also dodges issues of "being a bank" (...) AFAIK Paypal is a bank in the EU.
  - ineedasername 7y ago
    Oh, that's right. They got a banking license in one of the EU countries, which allows it to operate as such throughout the EU. If that move was necessary to operate as they do withing the EU, i.e., if they cannot simply be money stores without being a bank even if they're not using fractional reserve, then Facebook too would need to register as such.
riffraff 7y ago
Well, they would have to do what PayPal did, which is build 1. A system that is acceptable by the regulations of any possible country they want to operate in. 2. Implemented by as many merchants as PayPal is. This is feasible but not trivial. Now, if you add in the "defy governments" part, it's clear that most merchants would not use it, which means users have a negative incentive to use libra over PayPal or whatever. Even Amazon and Google failed to "just build a PayPal", and I don't see why Facebook would succeed easily.
lawn 7y ago
> The "crypto" part seems like an implementation detail but otherwise irrelevant. Nail on the head. The innovation with cryptocurrencies is decentralized byzantine fault tolerance, using unknown actors. Libra is based on BFT where all parties are known, which has been a solved problem way before Bitcoin. The "crypto" part is irrelevant.
- ineedasername 7y ago
  Yeah, there's no reason they need crypto to offer some type of scrip that is backed by a basket of currencies in the same way... what does crypto really add to this situation? Blockchain transparency? Frankly I don't want all of my transactions transparently available.

Qworg 7y ago

Nothing prevents them from building PayPal, except the regulatory regime they don't want to ascribe to. Also, the currency conversion to their own units and back relates to the taxability of said currency and the inability to use WoW gold to buy Starbucks. It is a matter of degrees - Facebook could seriously destabilize monetary policy for certain countries and subvert currency controls.

ineedasername 7y ago

Apple and Google are still dealing with merchant fees. So is PayPal for many transactions. A PayPal style system might work, but it is only low-cost low-friction (the main appeal for crypto) for the transactions that occur completely within it's own ecosystem. And they don't call it a currency, so they dodge some issues there. Paypal also dodges issues of "being a bank" because funds equivalent to customer balances are actually held in real-world banks, so it's not in any way an independent currency. It doesn't "float" against anything. Libra's basket-of-currencies approach may be very stable, but automatically puts it in a very different class of financial instruments. They could abandon that and really stick to the paypal model though. Even then, there are still many regulations for this that must be followed: It falls in a business class of "money transmitter" which requires a separate license in every state, as well as registration with the federal government. They also must follow laws like filing a CTR for transactions above $10,000, and SARs for suspicious activity. There's simply no getting around major regulations if you're providing any sort of financial services.

elyobo 7y ago
Crypto seems like it's (at the moment) neither low cost nor low friction; did I misunderstand you?
- ineedasername 7y ago
  Nope, no misunderstanding, you're right! But the promise of crypto is cheap frictionless transactions. We're a long way off.
  - elyobo 7y ago
    Understood. Yes, it will probably get there eventually.
- kybernetikos 7y ago
  Trasferring or requesting lumens on keybase is incredibly easy and very cheap. Turning the lumens into fiat and vice versa isn't so easy at present. Actually, it's obvious to me that this is the future - we want to share money in the same way and with the same ease we share thoughts and images ie inside chat systems and on social media. You don't need crypto to do this, but it's the best way of making a system anyone can join and trust. Libra is going to be big unless it's artificially stopped, and that's my view, even as someone who would much rather see one of the current cryptocurrency systems win rather than a new Facebook invented thing. If we hadn't ceded chat and social media to walled Gardens we would have solved this years ago.
jakobegger 7y ago
> Paypal also dodges issues of "being a bank" (...) AFAIK Paypal is a bank in the EU.
- ineedasername 7y ago
  Oh, that's right. They got a banking license in one of the EU countries, which allows it to operate as such throughout the EU. If that move was necessary to operate as they do withing the EU, i.e., if they cannot simply be money stores without being a bank even if they're not using fractional reserve, then Facebook too would need to register as such.

riffraff 7y ago

Well, they would have to do what PayPal did, which is build 1. A system that is acceptable by the regulations of any possible country they want to operate in. 2. Implemented by as many merchants as PayPal is. This is feasible but not trivial. Now, if you add in the "defy governments" part, it's clear that most merchants would not use it, which means users have a negative incentive to use libra over PayPal or whatever. Even Amazon and Google failed to "just build a PayPal", and I don't see why Facebook would succeed easily.

lawn 7y ago

> The "crypto" part seems like an implementation detail but otherwise irrelevant. Nail on the head. The innovation with cryptocurrencies is decentralized byzantine fault tolerance, using unknown actors. Libra is based on BFT where all parties are known, which has been a solved problem way before Bitcoin. The "crypto" part is irrelevant.

ineedasername 7y ago
Yeah, there's no reason they need crypto to offer some type of scrip that is backed by a basket of currencies in the same way... what does crypto really add to this situation? Blockchain transparency? Frankly I don't want all of my transactions transparently available.