
Paypal Withdraws from Facebook's Libra Cryptocurrency - coloneltcb
https://www.cnbc.com/2019/10/04/paypal-withdraws-from-facebooks-libra-cryptocurrency.html
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csomar
Here are some wild predictions I'm making

\+ Many (or potentially all of the backers except Facebook) will withdraw from
the alliance.

\+ Facebook/Zuckerberg will defy the gov.s and launch Libra.

\+ Libra might not dominate the world, but it'll be a success (at least a
niche success) and it'll eat up some of the marketshare of these financial
institutions.

I think Zuckerberg has come (or already know) to the realization that these
institutions "added value" is navigating the regulations/laws of the different
countries. They are a kind of monopoly. Sending money across "borders" is hard
only because governments made it so. If Libra ignored these rules, they'll put
these guys (or at least a part of their offerings) out of business. Why would
anybody use Western Union if they can send money through their Facebook for
less or no fees? It's easier and more convenient too.

~~~
goatinaboat
_it 'll be a success_

Imagine being unable to buy food because an algorithm determined that “you
violated our community standards” and there’s no way to contact them. One or
two stories like that will kill Libra stone dead.

 _If Libra ignored these rules, they 'll put these guys (or at least a part of
their offerings) out of business_

This is called money laundering, people go to jail for it.

~~~
AngryData
Ive had similar thoughts about paypal for a long time after they randomly shut
down one of my accounts for unspecified suspicious activity and was doing
everything possible to not deal with it and fix their mistake. And I know I
wasn't the only one either. And yet it still survives to this day.

~~~
tootahe45
My favourite thing is how they wait for you to put money in and then lock your
account for ID verification/adding a bank account. They know that 99% of
people would just exit the site if they had to verify on registration, so they
wait until you get paid, holding your money hostage so you have no choice but
to verify or lose the money. Skrill is the worst, their ID verification is all
automated, wonder if they deleted my $900 yet after 2 years because i just
couldn't be bothered sending ID for a 5th time.

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vertex-four
If Facebook attempts to become a money transfer service or bank without the
required licensing, they will have their offices raided and their doors locked
on them. This is something Governments don't tend to mess around with.

~~~
nikanj
FB is banking (pun unnintended) on the regulators and goverments being
absolutely useless lately. Both AirBnB and Uber built empires on ”What if we
just ignore the rules”

~~~
toast0
The feds can come and shut down all of FB over money transmittal, they don't
have to limit the shutdown to only the money parts. That's a huge risk to
take. If Uber was shut down for violating taxi rules, they only had an
unlicensed taxi business.

~~~
oceanplexian
Is this the same feds who all have Facebook accounts, including their
families, children, relatives, bosses, and so on? Including everything they
buy, everything they look at, their location, and complete profiles of their
personality, photos, photos that were taken OF them by other people, likes and
dislikes, dirty secrets, and so on?

It sure would be a shame if FBI directors in charge of such an investigation
were cheating on their wives or were illegally getting kickbacks from
contractors. Would be absolutely inconceivable that Facebook might even leak
that information to their friends at the CIA or NSA and call in a favor.

~~~
mypalmike
Spy novels are a hell of a drug.

------
Nokinside
Big megacorps suck at innovation. Their internally developed product
innovations are typically crap.

This comes as a surprise for companies like Facebook because they were once
internet startups. They still see themselves as youthful and innovative.
Wearing T-shirt or being casual may correlate with innovation, but there is no
causality. The founder/CEO had success with one big idea that turned into
success. What evidence there is that they can recognize and repeat the success
multiple times?

They can successfully refine and expand their original idea and grow it, but
their internally developed 'disruptions' are crap just like any random pitch.

Microsoft, Facebook, Apple, Google, Amazon buy new ideas, then use the
economics of scale and network effects to make it success. Amazon has expanded
the idea of internet retail from books to everything, including data centers.
Apple finds success in design and branding competence. Google is still search
and advertising company.

~~~
randomsearch
Agree with your general point but I think Apple and Amazon are clear examples
of big corps that _have_ continued to innovate. My hypothesis is that
companies with CEOs able to stay close to the end users and keep a product
focus are able to counterbalance the main problem with big companies - that
their decision makers are no longer close to their customers. I think they’re
exceptions though.

~~~
Nokinside
Can you mention biggest Apple or Amazon innovations in the last 10 years that:

1\. Are not incremental, or just leveraging existing business to obvious
directions.

2\. originated internally

3\. turned into big profitable business.

~~~
tim333
How many innovations from any source turn into profitable business within 10
years? It's a very small percentage.

~~~
Nokinside
Exactly my point.

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democracy
When Facebook needs to jump on the train of "cryptocurrency" something is
wrong with the company and makes me really question their competence... Is it
really Zuck behind this idea or just some top manager with ambitions? I still
don't understand why they had to shut down "facebook credits" and come up with
this crazy idea, when all they had to do to start "facebook credits v2" and
that would draw zero attention.

~~~
pier25
I don't trust nor agree with Facebook but I can see the appeal.

I recently sold a synth on its Marketplace which I had never used before. Here
in Mexico its extremely popular. If Facebook starts using Libra for payments
and escrow without having to pay credit card or bank transfer fees it would
make it much more popular than Bitcoin. At least for small transactions.

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tanilama
Libra can be a good idea, but probably not from Facebook.

What Facebook lacks among Big Techs the most, is public trust.

In an era where anything from Big Techs are meticulously scrutinized,
something that seems to aim to bypass government regulation is probably the
last thing people want.

~~~
xlc0212
What I don’t understand is, the whole point of using blockchain technology is
it doesn’t matter who creates it, as long as the code does what it intend to
do, there are no trust needed. (Assuming Libra eventually actually become a
decentralized network)

~~~
speedplane
> the whole point of using blockchain technology is it doesn’t matter who
> creates it, as long as the code does what it intend to do, there are no
> trust needed

That may have been the original point of blockchain, but control over money is
still a pretty political issue. Accordingly, anyone who creates or transacts
currency, regardless if done by fiat or mathematics, will necessarily wade
into local political and social restrictions.

Bitcoin is impressive technology and definitely brought a nice jab to
government monetary control, but it does not seem to be able to deliver a
knock-out. No government will give up control over monetary policy without a
fight. If governments can't control bitcoin directly, they'll do so indirectly
(making them difficult to cash-out, blocking IPs, straight-up making it
illegal).

It's yet another example of tech's beautifully orchestrated high-minded
ideals, that come crashing down when they meet real power and reality.

~~~
Mirioron
> _It 's yet another example of tech's beautifully orchestrated high-minded
> ideals, that come crashing down when they meet real power and reality._

My worry is that this teaches tech companies even more that they should get
into politics, because that is the only way to enact their vision.

I like the idea that money transfers shouldn't cost essentially anything and
should be instant. I think it's a shame that we don't already have that, but
I'm just worried that this will give too much power to companies like FB.

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Retroity
Interesting, but not surprising considering all the pressure from governments
regarding Libra. I wonder if Facebook will ever back down from Libra
considering how popular it is, or if they're going to adopt a "rain or shine"
attitude and go forward with it regardless of what happens?

~~~
eugeniub
> considering how popular it is

Excuse me, popular with whom?

~~~
MereInterest
Popular with people who are looking for another pyramid scheme to invest in,
perhaps.

~~~
justapassenger
Libra is nothing like bitcoin - it doesn't have investment potential - it's
100% backed by basket of fiat money.

~~~
jameslevy
It does have some potential to act as a hedge against USD. It will probably
produce some small amount of capital gains (or losses) for its users.

~~~
whoanow
I don't think so, there is no way it would achieve mainstream adoption if
there was a potential tax liability for users spending their after tax
dollars.

------
segmondy
Not surprised, when I saw the heavyweights all part of Libra, I think this was
their intention all along. They hoped that it would fail, I wouldn't be
surprised if behind the scenes they lobbied against it. They seem to have
latched onto it so if it took off they won't be left behind. It was really
order seeing companies like MasterCard & PayPal as part of it.

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nxtninja
Maybe soon the headlines will be "Paypal one of the Trustline of Stellar" :)

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omfgwhat
Surprising since David Marcus, the head of Libra, was once the CEO of Paypal.

~~~
dao-
Is it in PayPal's interest that Libra succeeds? It seems that they would be
competitors. They might just have backed it strategically to somehow have a
stake in it if it takes off big time. Given the pushback they could now bank
on the whole thing failing instead.

~~~
antpls
The point of the cryptocurrency was to decentralize Libra amongst several
actors, such as Visa, Master Card, Paypal, etc

If done, Libra would have been the common interest of all those actors. That
was the goal of the project.

~~~
dao-
That doesn't seem to contradict what I said? Sure, PayPal wanted a stake in
this assuming it would become a success that they couldn't stop... but they
may still be better off if Libra doesn't become a success in the first place.

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aey
Next week: PayPal announces Pal, the cryptocurrency for friends.

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vfc1
I hope Libra goes through, even with the Cambridge Analytica scandal and
everything.

It might lite a fire under goverments to take some action and create a proper
crypto currency at the state or maybe even EU level for example, it's time.

Just try to run a business and take online payments via credit card, using
something like Stripe for example. Literally near 8 to 10% of your
transactions will FAIL, just like that.

Customers that want to pay you and their card fails a huge percentage of
times, preventing you from gaining recurring customers.

The current credit card system is a mess, its a thing of the past sorely
needing competition. It's ready to be disrupted by the next big thing and if
its Facebook Libra, I'll take it.

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rq1
Max Weber seems unfashionable in Menlo Park.

What do they want to achieve without military and police power anyway?

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sebastianconcpt
_Federal Reserve Chairman Jerome Powell said this summer that libra raises
“serious concerns regarding privacy, money laundering, consumer protection,
financial stability” and the Fed had launched a working group to examine it._

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lowracle
It is now pretty clear that those financial institution joined Libra only
because they saw it as a threatening competitor in the space. Now that they
think that the project is unlikely to be implemented due to strong opposition
from govt, they are leaving. I believe they are doing a big mistake, and that
Libra will still be successful.

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tedsuo
I suspect that fb is dialing back their ambitions with libra, to something
that is more like a regular money transfer service. PayPal and other partners
would naturally be less interested in that; it’s just more competition.

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SkyMarshal
I suspect France, Germany, US and other govs are pressuring PayPal,
Mastercard, VISA and others to withdraw, and that’s the main reason they’re
getting cold feet.

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paulie_a
So crappy payment company removes support for unsupported privacy theft
company. Sounds like a win win. This is amazing win for tech.

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buboard
Maybe they ll go with the chinese one instead

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wpdev_63
Zuckerberg is really ballsy to go up against the government like this. I hope
he has some really good security cause I can't see the US government rolling
over.

~~~
biesnecker
I can't see the US government rolling over either, but him having security or
not is not an issue. The US government has means beyond those of the average
opposing gang leader if they want to shut the business down.

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jramey
Probably for the best.

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pxtail
Well, well, well suddenly it looks like everyone who is making money thanks to
current status quo is withdrawing from initiative/opposing it. Probably it
means that FB is doing something right... Question is if FB is strong/clever
enough to keep moving forward.

~~~
benj111
Why were they in the initiative to start with then???

~~~
jimmaswell
PR and to make it look bad by withdrawing, maybe.

