Facebook’s Cryptocurrency: Libra

Discussion in 'West Mall' started by Dionysus, Jun 19, 2019.

  1. Dionysus

    Dionysus Ok Cool. Hook ’Em! Admin

    This should be interesting to watch in the coming years.

    Facebook announced yesterday they will launch their Cryptocurrency next year, called Libra.

    Libra Association official website: libra.org
    White paper: libra.org/en-US/white-paper
    Founding members (libra.org/en-US/association/#founding_members) include: Mastercard, VISA, PayPal, Ebay, Stripe, Uber, Spotify, Lyft, Vodafone, Coinbase (popular crypto exchange), and several other companies.

    From the Libra website:

    Blockchain Technology — Libra is built on a secure, scalable, and reliable blockchain.

    Stable Value — Libra is backed by a reserve of assets that help keep its value stable.

    Independent Governance — Libra is governed by the independent Libra Association, tasked with evolving the ecosystem.


    “Unlike previous stablecoins, Libra will not be issued by a central party. Instead, Facebook has enlisted 27 fellow Silicon Valley titans—among them PayPal, Visa, Spotify, Mastercard, Uber, and eBay—to operate as preliminary “validator nodes” who will each share a transparent copy of a vast ledger of transactions reflecting all the activity on the network.”

    Within a few hours of the announcement: France Calls for Central Bank Review of Facebook Token (Bloomberg article)

    French Finance Minister Bruno Le Maire said the digital currency known as Libra shouldn’t be seen as a replacement for traditional currencies.

    “It is out of question’’ that Libra “become a sovereign currency,’’ Le Maire said in an interview on Europe 1 radio. “It can’t and it must not happen.”

    Markus Ferber, a German member of the European Parliament, said Facebook, with more than 2 billion users, could become a “shadow bank” and that regulators should be on high alert.


    A few thoughts:
    ~ Regulatory hurdles could kill this before it gets going, but I suspect FB would not announce if there was too much uncertainty on that point [1]
    ~ FB has over two billion monthly users — if this gets traction it could be huge
    ~ FB owns (and abuses) their users’ personal data, and now they get their financial info too... what could possibly go wrong?
    ~ Massive financial surveillance by FB & big data partners

    [1] Facebook has created Calibra, a Financial Crimes Enforcement Network (FinCEN)-registered subsidiary to ensure “separation between social and financial data and to build and operate services on its behalf on top of the Libra network.” Calibra registered with FinCEN as a money services business (MSB) in February to operate in all 50 U.S. states as well as nine commonwealths and territories.

    :popcorn:
     
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  2. Dionysus

    Dionysus Ok Cool. Hook ’Em! Admin

     
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  3. Monahorns

    Monahorns 1,000+ Posts

    My reaction is complicated. Seeing news like this fills me with excitement and hope but at the same time new reservations and fears.

    I always like to see currency competition. There really is none today. Each nation has a "sovereign currency" otherwise known as a currency monopoly. Seeing new crypto or block chain currencies is interesting to see if one or several can successfully break these national monopolies. Having Facebook enter the fray is a bit surprising since they have increasingly become tied into the political system.

    I think it is really exciting to see that Libra is backed by assets. It would be interesting to see what assets they are talking about. This means that Libra is not a fiat currency. There is a commodity standard, like the gold standard. They do not appeal to the Fed or the US gov for stability but the classical way that has been proven to work throughout history. If they are allowed to be a currency and not forced to be a financial asset like Bitcoin, we could see a truly stable alternative to the US$.

    It is not surprising to see France making such statements about how Libra can't be allowed to go forward as planned. Not seeing the Fed or US politicians say anything makes me think some agreements were made up front. However, the proof will be once people are using Libra and it starts to affect the value of other currencies. The Fed is already worried about price deflation while already have low interest rates. So how would reduced demand for US$ affect that? Not sure.

    But on the negative side. Facebook is already guilty of political bias through censorship, deplatforming, and algorithm tweaking. China is already implementing a social score which is used to restrict access to products and services based on how "good" of a citizen you are. Citizen meaning a Communist Party subject.

    Facebook has already demonstrated the willingness to ignore previous guidelines and change things based on political/social pressure. Once the mob calls for suspending Libra accounts of conservatives or other political dissidents, I expect Facebook to follow along and effectually steal the money much like the government does with civil asset forfeiture today.

    Dionysius, as you see more news of this, please post here, I will do the same.
     
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  4. Dionysus

    Dionysus Ok Cool. Hook ’Em! Admin

    It brings up a fundamental question about money, and whether a non-sovereign / non-state currency can succeed. Libra, bitcoin, or some other thing that hasn’t been invented yet. If it is widely adopted, useful, stable, fungible, portable, divisible, etc — it’s money.

    I expect that a natively-digital currency will emerge—eventually—that is superior to government-controlled fiat.
     
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  5. Seattle Husker

    Seattle Husker 5,000+ Posts

    My prediction is this will be a money pit for Facebook. A user clearly can't trust them to maintain security of their personal data and now they should be trusted with their money???? Hard pass.
     
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  6. Dionysus

    Dionysus Ok Cool. Hook ’Em! Admin

    I agree. What FB can count on, though, is that many millions of users are either oblivious to their abuses or simply don’t care.
     
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  7. Monahorns

    Monahorns 1,000+ Posts

    I think a large black market would have to develop first that most people are involved in using crypto for many of their money transactions. Only then would governments be in a position to give up their legal measures to limit and complicate crypto use. Until there is something already existent and widely in use, governments will have large incentive to keep cryptos only for use in small amounts.
     
  8. Monahorns

    Monahorns 1,000+ Posts

    I see I spoke too soon.
     
  9. Driver 8

    Driver 8 smoooove

    My first impression was oh no, a corporate oligarchy running a financial panopticon! then I remembered we already have that

    JoelKovshoff_2019-Jun-19.jpg
     
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  10. Driver 8

    Driver 8 smoooove

    That was quick
    Senate banking hearing on July 16
     
  11. Clean

    Clean 5,000+ Posts

    We don't need any more power concentrated in the hands of the internet titans: Amazon, Facebook, Yahoo, Microsoft, and their brethren. This is one time I actually agree with Maxine Waters. If such a service is needed, it needs to be run by a wholly independent entity that the titans cannot acquire.
     
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  12. Monahorns

    Monahorns 1,000+ Posts

    The bigger issue is the government will fight to protect its currency monopoly. Facebook may not be the group you want to break it, but breaking it would help all of us. If we lived in a country where multiple currencies were allowed to compete, Facebook would lose out do distrust. To compete the vast majority of people would have to trust and use it and maybe one or two others.
     
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  13. Driver 8

    Driver 8 smoooove

    I don't think this stops with Facebook
    Others to possibly issue currency in the near future?
    Apple
    Amazon
    Google
     
  14. Monahorns

    Monahorns 1,000+ Posts

    It won't matter who tries as long as governments restrict their use legally. That is what has happened to Bitcoin. Laws have made it complicated to use and therefore the scope of use has been kept very small.

    You will need a black market that provides most normal goods and services for cryptos to achieve high use.
     
  15. Driver 8

    Driver 8 smoooove

    What laws have complicated bitcoin? US regs are still being worked out but so far the environment has been pretty crypto-friendly

    Also, from the good people of Libra:

    "MOVE MONEY GLOBALLY"
    (* except in those jurisdictions where the US Government has sanctioned money transmission and/or the local regime/central bank has prohibited its use)

     
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  16. Monahorns

    Monahorns 1,000+ Posts

    Maybe you are more aware of the situation than I am, but I had heard that Bitcoin is considered an asset by US law so anytime there is a value gain you have to pay capital gains tax at each transaction. Trump actually increased the level of scrutiny of those transactions because people don't typically follow the law.

    I think there are more but my recollection is vague.
     
  17. Dionysus

    Dionysus Ok Cool. Hook ’Em! Admin

    Does anyone else suspect the govt's pearl-clutching and calling a hearing is a sham, and they are completely on board with Libra?

    I just don’t see how Facebook would make a global announcement without having about 99% clarity on a green light to do it. Or... is FB big enough to push it forward without approval here? I doubt it.
     
  18. Monahorns

    Monahorns 1,000+ Posts

    I have no idea what to think. I don't know how those games are played.
     
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  19. Seattle Husker

    Seattle Husker 5,000+ Posts

    To date, legislative bodies have avoided regulating cryptocurrencies. In many cases they've embraced them. Doesn't Ohio let people pay their state taxes with Bitcoin?
     
  20. Seattle Husker

    Seattle Husker 5,000+ Posts

    A sham? Doubtful. They were fine with cryptocurrencies when they were niche. The fact that a major tech company, one with Antitrust concerns already, is trying to take it mainstream has forced their hand. Now what are the chances more than 3 Congressman have the ability to grasp blockchain technologies?
     
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  21. Driver 8

    Driver 8 smoooove

    Think so, and they convert to fiat, but it's a start
    Wyoming is moving fast on becoming the most crypto-friendly state
    Probably zero chance plus the banking/payments lobby ain't happy with all this new fangled blocks-n-chains stuff, what's wrong with just printing moar dollerz?
     
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  22. ShAArk92

    ShAArk92 1,000+ Posts

    IDK SH ... I've already had to threaten my college boy with being "spun off" if he doesn't knock-it-off with making payments to (anyone) via Facebook. (particularly someone who lives in the same city and attends the same school!)

    There are plenty of people who'll just go along with it and sadly I have one of 'em!
     
  23. ShAArk92

    ShAArk92 1,000+ Posts

    yes, she demonstrates that even a broken clock is correct twice/day.

    She opposes it ... for the wrong reasons ... but she DOES oppose it and I agree with that opposition.
     
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  24. ShAArk92

    ShAArk92 1,000+ Posts

    Ohhhh!

    subterfuge??? From the U.S. Federal Government? SHIRLEY you jest!

    Good call, Dion!
     
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  25. mb227

    mb227 2,500+ Posts

    I believe it is businesses in that State that are permitted to pay taxes with BitCoin (not sure which other cryptocurrencies are permitted), and that they were contemplating an expansion into personal tax payments.

    I know that my DISH account used to offer an option to pay my bill using BitCoin...I have since ditched DISH and never made a payment in crypto, but it WAS an option.
     
  26. Driver 8

    Driver 8 smoooove

    Hypothesis: Libra Association will become an independent central bank
    It will manage reserves ("basket of assets") against liabilities (issued Libra tokens)
     
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  27. Seattle Husker

    Seattle Husker 5,000+ Posts

    The younger generation abandoned Facebook as soon as their parents joined. They'll use Instagram, Snap and other apps but want to be wherever us older people aren't.
     
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  28. ShAArk92

    ShAArk92 1,000+ Posts

    I suppose ... they aren't the ones with the money/earnings tho.

    I'm seeing FB grow, not die ... but it's not the social media part that is referenced, but the marketplace ... and specifically how goods/services are purchased. Less about traditional credit cards/money orders/travelers' checks ... and almost nonexistent cash already.

    Crypto will be it ... like it or not.
     
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  29. Driver 8

    Driver 8 smoooove

    Augustin Carstens, head of the Bank of International Settlements

    "Coins backed by tech giants could "rapidly establish a dominant position" in global finance and pose a potential threat to competition, stability and social welfare."

    saifedean_2019-Jul-01.jpg

    saifedean_2019-Jul-01a.png

    saifedean_2019-Jul-01b.png
     
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  30. Monahorns

    Monahorns 1,000+ Posts

    The central banker of the world is worried about digital currency from a tech company? This is coming from the a group that has destroyed all competition and stability of currency. What a joker.
     
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