
Libra White Paper - hulahoof
https://libra.org/en-US/white-paper/
======
jasode
_> Libra’s mission is to enable a simple global currency and financial
infrastructure [...] This document outlines our plans for a new decentralized
blockchain,_

The "decentralized" can be parsed different ways. Facebook Libra is
decentralizing the _transactions_ but it does not decentralize the _currency
creation_. (This partial decentralization happens because Facebook wants to
peg Libra to stable asset reserves.) This is different from Bitcoin's idea of
decentralizing both the currency creation _and_ the financial transactions.

We can see this distinction in its list of partners...

 _> Members of the Libra Association will consist of [...]_

The bulleted list includes:

\- _transaction processors_ such as Mastercard/Visa, PayPal, Stripe, etc

\- _ecommerce marketplaces_ such as ebay, Uber, etc

\- _telecomm_ such as Vodafone

We see the industry that's noticeably missing: no _banks_ mentioned such as JP
Morgan Chase, Citi, HSBC, etc

That's because Facebook wants to be the "bank" in this new Libra economy. It
wants to be the "Federal Reserve" that creates bank notes.

If I misunderstand Facebook's intentions and how it wants to position Libra in
the financial world, please correct me.

~~~
JumpCrisscross
> _This is different from Bitcoin 's idea of decentralizing_

Libra is Facebook Credits [1] rebooted. All that changed is the meme it’s
attaching to, “cryptocurrency” being better at suspending consumers’
scepticism.

[1]
[https://en.m.wikipedia.org/wiki/Facebook_Credits](https://en.m.wikipedia.org/wiki/Facebook_Credits)

~~~
jasode
_> Libra is Facebook Credits [1] rebooted. All that changed is the meme it’s
attaching to, “cryptocurrency”_

My posting history will show I'm skeptical of Facebook but setting my biases
aside, I think there's still a real _technical_ difference here.

I believe the old Facebook Credits required the transactions to go through
Facebook's centralized servers. (The programming api for processing Facebook
Credits communicated with Facebook's servers.) This would be similar to a
customer holding Marriott Hotel points and she wants to give them to a friend;
she would have to call up Marriott customer service and have them transfer the
credits/points from her account to someone else's. The transactions can't
happen without Facebook and Marriott getting involved. That's fundamentally
different from Libra since its transactions are validated by _external partner
nodes_.

Therefore, the Libra isn't a cryptocurrency in just a "meme" bandwagon sense;
it's actually _designed_ for decentralized transactions that don't require
centralized Facebook servers.

Whether the public (and merchants accepting payments) finds that technical
difference of any value and massively adopts it, I don't know.

~~~
daanavitch
>Initially, the association (and validators) will consist of a geographically
distributed and diverse set of Founding Members. These members are
organizations chosen according to objective participation criteria, including
that they have a stake in bootstrapping the Libra ecosystem and investing
resources toward its success. Over time, membership eligibility will shift to
become completely open and based only on the member’s holdings of Libra.

So it's not going to be Facebook's centralized servers, but Facebook + their
friend's centralized servers. There are some vague promises, but this will
start out just as centralized as Facebook Credits.

~~~
panarky
"Can't wait for a cryptocurrency with the ethics of Uber, the censorship
resistance of Paypal, and the decentralization of Visa, all tied together with
the proven privacy of Facebook."

[https://twitter.com/SarahJamieLewis/status/11394299139229573...](https://twitter.com/SarahJamieLewis/status/1139429913922957312)

------
CodiePetersen
I think this coin is a really bad idea. Its just centralizing a crypto coin
and then removing the laws around money because now a dollar has a libra coin
wrapper on it so it's obviously totally different than a dollar.

It feels like a federal reserve moment where a bunch of rich folk get together
and again dictate the future of currency. Crypto was supposed to change that
trend. Unfortunately the want of convenience will probably win out over any
sort moralistic/idealistic standing and unless government steps in, it will
probably be widely adopted.

~~~
bufferoverflow
It's not pegged to a dollar. It's pegged to a blend of currencies and assets.
So it's not a dollar wrapped like Tether or USDC.

I don't understand how they plan to make it work across jurisdictions. There
are so many laws and rules when it comes to transmitting and storing money or
derivatives.

Like I can transfer a billion dollars worth of BTC, no problem. But if I try
to wire even $100K between two of my accounts in US and EU, all kinds of red
flags go off and phone calls need to happen.

~~~
grey-area
They plan to ignore regulations and grow quick enough so that they are too big
to fail and thus too big to regulate.

~~~
ninjin
If you made this proposition to me a year ago, I would probably shrug it off.
But after having read about several successful companies from the late 90s and
early 00s doing exactly this – PayPal being a prime example – I think you may
very well be right. Heck, one could even say that the current legal/lobbying
fights between the internet giants and major states is exactly this.

------
Nerada
This is seriously scary. The buy-in it's already received from some of the big
financial players worries me that this might actually catch-on. Facebook is
the last person I'd trust with any of my data, let alone a complete history of
all my transactions.

I hope privacy is more important to the average Western Joe than it was to the
Chinese. WeChat sounds like a dystopian nightmare.

------
muratgozel
"it will be backed by a collection of low-volatility assets, such as bank
deposits and short-term government securities in currencies from stable and
reputable central banks." from the whitepaper: [https://libra.org/en-US/white-
paper/#the-libra-currency-and-...](https://libra.org/en-US/white-paper/#the-
libra-currency-and-reserve)

It's like one to one copy of the traditional monetary system with speed of
transactions improved. Low volatile assets they rely on are not real and
therefore not guaranteed to stay low volatile. It may be decentralized
technically but not socially or ethically.

------
berbec
Facebook can't keep people's phone numbers, pictures and sex life private and
we trust them to invent a currency?

I'm not a crypto backer - in fact I'm skeptical of the long term usefulness,
but this isn't crypto, it's shitty PayPal. It's not decentralized, not removed
from fiat, not anonymous and not trustworthy.

~~~
JumpCrisscross
> _it 's shitty PayPal_

Its introduction reads like a goading of antitrust activists. (Facebook’s
advantage as a cryptocurrency purveyor being its acumen with getting away with
lawlessness.)

~~~
TeMPOraL
Could have been worse. Could have been Uber.

EDIT: Oh crap. It _is_ Uber.

[https://news.ycombinator.com/item?id=20211358](https://news.ycombinator.com/item?id=20211358)

~~~
JumpCrisscross
> _Could have been Uber_

Uber is a Libra Association voting member.

------
throwawaylolx
More tech-y resources:

\- [https://developers.libra.org/docs/assets/papers/the-libra-
bl...](https://developers.libra.org/docs/assets/papers/the-libra-
blockchain.pdf)

\- [https://github.com/libra/libra](https://github.com/libra/libra)

\- [https://developers.libra.org](https://developers.libra.org)

\- [https://developers.libra.org/docs/move-
paper](https://developers.libra.org/docs/move-paper)

~~~
xorand
From the Move programming language paper: "semantics inspired by linear
logic". Any even more technical references? Anybody knows anybody who really
work(ed) on Move? Academic? Otherwise? I'm interested because of my "poured
only once" current project
[http://imar.ro/~mbuliga/hapax.html](http://imar.ro/~mbuliga/hapax.html)

~~~
throwawaylolx
> Anybody knows anybody who really work(ed) on Move?

The authors are listed in the PDF

~~~
xorand
Thank you. I meant to ask for others than the authors. Probably the repository
is the best resource...

... I notice now that it uses the gas mechanism from Ethereum. Less
interesting than I thought.

------
ArmandGrillet
Interesting bits:

"target launch in the first half of 2020."

"“Founding Members” upon its completion are, by industry:

Payments: Mastercard, PayPal, PayU (Naspers’ fintech arm), Stripe, Visa
Technology and marketplaces: Booking Holdings, eBay, Facebook/Calibra,
Farfetch, Lyft, MercadoPago, Spotify AB, Uber Technologies, Inc.
Telecommunications: Iliad, Vodafone Group Blockchain: Anchorage, Bison Trails,
Coinbase, Inc., Xapo Holdings Limited Venture Capital: Andreessen Horowitz,
Breakthrough Initiatives, Ribbit Capital, Thrive Capital, Union Square
Ventures Nonprofit and multilateral organizations, and academic institutions:
Creative Destruction Lab, Kiva, Mercy Corps, Women’s World Banking"

~~~
zxcb1
Is this the face of technological liberation or domination?

~~~
FridgeSeal
Facebook is involved, so I don’t think anything positive (for users) is being
liberated here.

------
apo
> Interest on the reserve assets will be used to cover the costs of the
> system, ensure low transaction fees, pay dividends to investors who provided
> capital to jumpstart the ecosystem (read “The Libra Association” here), and
> support further growth and adoption. The rules for allocating interest on
> the reserve will be set in advance and will be overseen by the Libra
> Association. Users of Libra do not receive a return from the reserve.

Forget about the cryptography and "blockchain" this system will use. The real
innovation here is financial in nature. Only it's not really an innovation.

I doubt today's race to negative interest rates will be kind to Libra
validators, who will be demanding a fat payout sooner or later for the loss of
business on highly lucrative credit cards.

There's only one way to fund this beast: fractional reserve and ever more
risky investments. The temptation will be enormous. The justifications true
and well-intentioned. The outcome predictable to anyone who has paid
attention.

Think Tether, but orders of magnitude larger.

~~~
flatfilefan
So when you purchase Libra for cash it’s like buying an index, only with no
interest whatsoever. So all the risk and no reward. It’s not for no reason
that index funds pay dividends - to compensate for a very real risk of losses.
Interesting to see if libra will be able to pull this trick and push risk on
its users without compensation.

------
_eLRIC
Sounds to me like Facebook is trying to become the Wechat of the West ... (as
per an article 2 days ago explaining how Wechat could be central to every
payment in a daily life )

~~~
bertil
Mark Zuckerberg is very impressed by WeChat as a platform. That’s probably the
best way to understand that effort. “Crypto” is less a technology and more a
loose governance method because no Western company can have the authority that
WeChat has in China.

------
daanavitch
>The reserve allows users of the system to enjoy a relatively stable medium of
exchange from the start. At the same time, it also represents a centralized
function. For the network to be fully permissionless, the association will
have to explore ways to further distribute and decentralize the reserve,
including automating the verification of the assets in the basket and the
process of minting and burning of coins. Increasing market competition in the
custody and management of the reserve will also be explored to improve the
efficiency of this service, and the costs it imposes on users and custodians
over time.

So this coin will be backed by a centralized reserve, and you would have to
trust Facebook that the coins you own are backed by real money, with no way of
verifying this. Tether works the same way, and they are just creating money
out of thin air without actual dollars backing them up. I'm curious how
Facebook will decentralize this reserve, or if they will even do this in the
first place.

------
orbifold
> simple global currency and financial infrastructure that empowers billions
> of people.

This is the material anti-trust lawsuits are made of, there is no way that
nation states will allow private enterprises to gain that much power.

~~~
thefounder
Tell that to visa and mastercard or SWIFT

~~~
Angostura
I don't believe either of those have introduced their own currency.

~~~
thefounder
How is their platform different in practical terms than libra? Libra itself is
not a new currency. I believe it's pegged to the US dollar. In the real world
you really pay with visa/mastercard, paypal or swift, not with "real" money.

~~~
bertil
Libra is pegged to a basket of values. I suspect that this could lead
companies to prefer to store liquidity and report on Libra as it could be more
stable than any individual currency, including USD.

------
kall1sto
I just watched the official launch video for Libra and it's just disgusting
how silicon valley is abusing the image of "poor" people or people from
developing countries to sell a philanthropist idea while their true intentions
are just more money and more power.

~~~
throwmex
I do hope all those developing countries with a democratic government will ban
this one.

------
2T1Qka0rEiPr
As someone somewhat out of the crypto-loop, would someone be able to
explain/posit/cite why Facebook are entering this market, and why traditional
payment providers are also getting involved? On the face of it, this suggests
it aims to essentially reduce transaction costs (which would be to the
detriment of the status-quo)?

~~~
bitxbit
Put it differently, banks have failed to implement something more efficient
and the “bitcoin” innovators have also failed on practical aspects. As a
result we have a void and it’s anyone’s game right now. Facebook is throwing
money at it. A small chance it works but public trust is a big factor in
currency isn’t it?

Here’s what I think: any alternative currency tied to the USD (meaning a
currency without intrinsic value) is DOA. The next generation currency cannot
be tied to resource constraints.

~~~
CaptainZapp
_Put it differently, banks have failed to implement something more efficient
and the “bitcoin” innovators have also failed on practical aspects._

That, once again, is a very America centric view. A place where banks must be
even worse than taxis.

Within the Euro area (and associated coutries, like Switzerland), at least,
SEPA transfers are quick and cheap, if not free.

Edit to add: Even the developing world has fast and efficient money transfer
schemes. Look up M-PESA, for example.

~~~
JumpCrisscross
> _SEPA transfers are quick and cheap, if not free_

FedWire transfers are instantaneous and cheap if not free at many
institutions. The “bank transfers are slow and expensive” argument is
financially illiterate.

------
FridgeSeal
You couldn’t pay me to touch a crypto currency built by Facebook. They’re the
king of shifty behaviour, dark patterns and unscrupulously harvesting all the
data they can get their hands on.

There’ll be no privacy from overlord FB and everything will be more or less at
their behest.

------
bencollier49
"Libra". Clearly still has a beef with the Winklevoss twins (and their company
"Gemini").

------
DanFau
Initial performance in the technical part: \- Throughput: 1000 transactions
payment per second \- Latency: 10-second for validating a payment

~~~
dx034
10 seconds sounds longer than current credit card payments? I could imagine
that to be a barrier in some situations.

~~~
dr_win
This will be the base layer. They expect custodial wallets and payment
channels on top (in Bitcoin terms exchange wallets and lightning network).

See the Libra blockchain paper, section 8:

> We anticipate that many payment transactions will occur off-chain, for
> example, within a custodial wallet or by using payment channels [45]

------
zxcb1
_We believe that a global currency and financial infrastructure should be
designed and governed as a public good_

And social infrastructure?

------
samdung
_A basket of bank deposits and short-term government securities will be held
in the Libra Reserve for every Libra that is created, building trust in its
intrinsic value._

A global federal reserve in the making

------
rahulkapil
A fair financial system is one which I am comfortable giving to my worst enemy
to run.

This is not it.

~~~
josh2600
If you don’t feel comfortable letting the nsa run a node and not care, is it
really secure?

I’m not sure we can push the envelope that far, but it’s worth trying to get
there.

------
LyndsySimon
So... I’ve not had time to read the whole paper, but my initial impression is
that this is not really worth consider as a “cryptocurrency” - instead, it’s a
limited application of “blockchain” to what amounts to a multi-party private
currency.

That in and of itself isn’t a terrible thing necessarily, but I guess I’m
failing to see the utility it provides.

OTOH, Facebook is big enough to push this into much larger adoption than
existing cryptocurrencies have managed. If they do that, and if Libra is
eventually opened enough that it can be traded on the open market without a
“trusted” intermediary, then we might at least see the infrastructure, public
acceptance, and public understanding of what cryptocurrencies are
significantly improve. That could lead to a stronger ecosystem in general.

Personally, I’m trying to figure out if I can have an “account” that is truly
anonymous. If so, then I’ll pay attention and study it more. If not... well,
then I’ll ignore this unless and until that is possible.

------
wslh
I just skimmed through their documents and I saw they use BFT. BFT algorithms
are slow (and slower when more nodes are added) so are they using another
layer for gaining performance?

Currently the fastest BFT implementation is BFT-SMaRt:
[https://github.com/bft-smart/library](https://github.com/bft-smart/library)

~~~
bellajbadr
BTF is slow depending on how many nodes you're running. generally it can't
support more than 100 validators

------
IlegCowcat
I remember someone saying something along the lines of “Facebook will try and
copy and crush us, but not this time- by the time they work out what’s
happening, it’ll be too late”. Facebook seem to have noticed what’s happening
and are moving like the wind to try and crush us. Are they too late or are we
too late? Or neither?

~~~
glitchc
Depends on who that someone was, doesn’t it?

------
Dwolb
I’m super curious how the initial governance framework evolves over time.

From the looks of it, it’s not anything completely new and relies on standard
human voting and management structures.

>A Founding Member that does not comply with the Founding Member eligibility
criteria can be removed by a supermajority vote of the council. The recording
of this vote on the Libra Blockchain will remove the member's node from the
consensus algorithm.

So given this, the things working in Libra’s favor are an immediate, global
social network for distribution.

Against it would be lack of innovation on the governing front (i.e. prone to
internal politics) but this is probably more of a long term problem.

[1] [https://libra.org/en-US/association-council-
principles/#asso...](https://libra.org/en-US/association-council-
principles/#association_executive_team)

------
mulmen
The problem with the financial industry is not currency. Hyping
cryptocurrency's benefits to actual humans is like criticizing Facebook for
releasing personal data to Cambridge Analytica using tab delimited files
instead of JSON. It's completely missing the point.

------
Bombthecat
I still think,that this coin could replace a lot of African ( unstable )
currencies ...

~~~
masternda
Definitely, I agree with you about this, given their high volatility.

------
shrikant
I find it interesting that Facebook banned cryptocurrency ads last year,
citing safety from “financial products and services frequently associated with
misleading or deceptive promotional practices.”

[https://www.vox.com/2018/1/30/16950926/facebook-mark-
zuckerb...](https://www.vox.com/2018/1/30/16950926/facebook-mark-zuckerberg-
bans-crypto-advertising-bitcoin-james-altucher)

~~~
thefounder
The ban was a good thing because the currencies were promoted as investments
which is not the case with stable coins/fb coin. Let's separate payment
platforms from gambling-like investments, shall we?

------
dreit1
So we’ve from government issued inflationary currencies to multinational scrip
backed by government currencies. Sounds like bitcoin is a better hedge than
ever against today’s economic environment.

------
megous
So the only thing this has going for it over cash is that it may ease exchange
online (to be seen). And this depends on how easy it will be to join this as a
merchant or user, how nice APIs will be, and how well fraud will be handled,
etc., etc.

And the value will fluctuate based on the trust in the ability to convert it
reliably to cash/other currencies. So there's no real peg to anything, as
described previously.

~~~
aembleton
Stripe are involved so I expect they'll make it easy to be a merchant.

------
fiala__
Anyone who still has doubts about the extent of Facebook's undemocratic power
is clearly about to be fully convinced.

------
samdung
_A basket of bank deposits and short-term government securities will be held
in the Libra Reserve for every Libra that is created, building trust in its
intrinsic value._

Soon 'The Libra Reserve' will hold only a 10th of the total Libra Coins in
circulation (fractional reserve). A global federal reserve in the making.

------
doubleorseven
during the ICO era i used to read 2-3 whitepapers per day. It usually was all
about decentralization and "how we are going to change the world", and then
right after the sale it will be like "well the world is not ready and
blockchain is not there yet so we are starting with centralization" ( in the
few cases the product was not fraud). now, since all the fiat is coming in
without a need for an ICO it looks like facebook is not even trying to hide
their true intents. They are just saying it to my face, "We are trying to
increase your dependency in our products and on the way creating a new
financial device for the big guys to earn more money on your behalf". I truly
hope this initiative will get blocked by the people who FB think they can fool
again.

------
alangibson
I propose that a blockchain with mutually trusted gatekeepers is
indistinguishable from a replicated RDBMS.

~~~
cujic9
Agreed. Though it seems like the consensus protocol does protect against
malicious or compromised gatekeepers.

It seems that by dialing up the trust in their validator nodes (to something
significantly greater than the trust you might have in a bitcoin node, but
also significantly less than 100% trust), they are able to decrease the work
involved in the consensus protocol, reducing energy usage.

------
mimixco
The suggestion that this is a way to help the "global unbanned" is also
disingenuous. If people don't have enough money to put any in a bank, making
up a new centralized currency isn't going to change that.

~~~
cujic9
Typically people are unbanked not because they are completely broke but
because of one or more of the following:

1) They do not live near a bank 2) They don't meet some minimum threshold of
money 3) Discrimination - The are part of some social or ethnic group that the
banks won't touch

------
magnamerc
Since Libra is secured via BFT PoS it'll be feasible to integrate it into
Cosmos Hub, and thus you'll be able to communicate directly with Ethereum
which is interesting.

------
m3kw9
I just need to know all the “what’s in it for FB” first, then I can tell if
they are really opening it up, or just makes them a much bigger monopoly

------
neetodavid
So this is it

Is there a German word for thinking something is trite and gross on one hand
while investing with the other? I'm that German Word

~~~
cujic9
I think that's just called "investing."

------
m3kw9
This shit may fail because of too many cooks in the kitchen issue. They have
30 members with equal say

------
armanini_io
I can't find on white paper, transaction are immutable or are reversible?

~~~
berbec
This question is subject, like all others, to capricious changes to Libra
Terms, Conditions and Implementation. Facebook values its bottom line and is
taking that, and only that, into consideration determening actions to protect
your privacy, the security of your wallet, the fiat it is based on, the value
of its coin and which Trusted Partners™ to allow to control Libra.

------
bitxbit
It is sad that Zuckerberg chose to squander all that capital on frivolous
endeavors at Facebook. He could have done so much.

This is what gets me the most: "We believe that a global currency and
financial infrastructure should be designed and governed as a public good."
It's very rich coming from Facebook who could have made itself a public good a
decade ago.

~~~
fiala__
Yeah, that bit is bonkers. A huge privately-owned tech corporation talking
about 'public good'. We truly are entering the era of global corporate
despotism.

------
paulluuk
Witness the birth of a monster.

------
micksabox
Can anyone TLDR; the smart contract capabilities outlined in the first
paragraph?

~~~
skilesare
It is kind of confusing. They have their own language that will let you create
various kinds of structured modules. Initially, they are going to limit it to
their native modules. The modules have some properties that make the contracts
safer and less prone to duplication bugs. They haven't finalized the syntactic
sugar version of the language yet.

