
Regulators Have Doubts About Facebook Cryptocurrency, and So Do Its Partners - lordbtc
https://www.nytimes.com/2019/06/25/technology/facebook-libra-cryptocurrency.html
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lammalamma25
Call me dumb for saying this, but I can go to a casino or chuck e. cheese and
trade in USD for chips I use at their location. I could take those chips
somewhere else if I wanted to and use them with anyone willing to take them.
Why is Libra so upsetting? Isn't it the same thing? It seems to me like
criticizing Facebook is just the fashionable response to it right now.

~~~
CPLX
You actually can't. Nevada law is explicit that casino chips are not allowed
to be used "for any monetary purpose" and federal law prohibits the creation
of currencies. Casino chips are highly regulated and only permitted to be used
as a stand in for gambling funds where it is permitted.

In real life if a casino doesn't think you got a chip from them directly as
part of gaming at that casino they won't pay out on it. That actually happens
with some regularity.

~~~
lammalamma25
Well I learned something new today. But I'm meaning there are many examples of
business that will take your money and give some other form of "currency."
Like if Libra where called a "facebook gift card" would it be a significant
different thing. (Joking)

~~~
wil421
A lot of times when you exchange money for chips or coupons there are signs
everywhere saying “no monetary value” or something like that.

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ses1984
Can anyone imagine laundering dirty money through purchasing apps and stickers
that are just fronts? Suddenly Facebook becoming complicit in the drug trade,
terrorism, human trafficking, like HSBC.

~~~
dageshi
This has been happening for years with Valve videogames, so far as I know it
hasn't been limited or cracked down on.

~~~
ryanlol
I think you’re misrepresenting things. Credit card fraud is not terrorism.

There’s a plenty of illegal activity related to Valve games, but it’s not the
kind mentioned in the parent (drug trade, terrorism, human trafficking). Not
at any meaningful scale anyway.

~~~
dageshi
I'm not talking about credit card fraud.

Drug dealer has cash, drug dealer buys Steam gift cards from local 7-11 (or
physical stores that carry them) and uses it to load into Steam.

Steam has a marketplace, dealer buys hats/skins and then sells them for real
money transferred by paypal e.t.c. via the various 3rd party sites that do
that kind of thing.

Cash is now converted to money in a bank account without ever going into a
bank itself.

~~~
ryanlol
So you’re personally aware of drug dealers who are doing this?

Why wouldn’t they just use some of the many cheaper and simpler methods of
getting cash into digital currency?

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fredgrott
Gee what could go wrong? I mean did not facebook just agree to the biggest 3
billion dollar fine in history?

I do not think Mark Z's and facebook's past actions bode well for their
cryptocoin venture

~~~
lupire
What was the smallest 3 billion dollar fine in history?

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ilaksh
Libra is the best way for payment middlemen and governments to combat
cryptocurrency -- by creating something that looks like it and provides some
convenience, but removes all of the teeth and allows them to continue to
control and profit from it.

I am sort of hoping they won't figure that out. But it seems likely that
eventually they will.

Maybe I should stop saying it's not a real cryptocurrency and stuff, because
perhaps if they think it's real or could turn into a real cryptocurrency then
many will be afraid of it and kill the project. And that could give time for
Bitcoin and Ethereum scaling efforts to be deployed.

By the way, what are they all planning to do if the scaling efforts of real
cryptocurrencies succeed and the dream of digital cash becomes a reality?

~~~
djpr
India, Indonesia, and China are already using WeChat, GoPay, PayTM. I'm not
sure what Bitcoins or Libra can offer that e-wallets don't already provide.
And these e-wallets, unlike crypto, work well with existing gov't regulations.

Some of them, like GoPay works with the Indonesian gov't to provide loans for
micro-small businesses. Since they have the data of business transactions they
can forecast loan repayments.

> By the way, what are they all planning to do if the scaling efforts of real
> cryptocurrencies succeed and the dream of digital cash becomes a reality?

My fear is WeChat and GoPay will get there first well before cryptos.

~~~
ilaksh
The differences between digital cash and an e-wallet are as follows:

Digital cash is a public system. It is not run by a monopoly company. It is
auditable by all. Fees are reasonable. Wallets are entirely in your control.
Wallets are private. Companies and governments can't control your money. The
system is secured by strong crypto.

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sudoaza
If they want to comply with the law they will probably need KYC like other
crypto platforms require, and i dont see most facebook users (the ones still
using it...) uploading their id to FB.

~~~
carrja99
And yet folks show their ID to their camera to get into their Facebook account
all the time.

[https://m.facebook.com/help/314201258613998](https://m.facebook.com/help/314201258613998)

------
writepub
"Your Libra wallet and funds have been permanently banned for violating
Facebook code of conduct" read an email notification. Her crime? Clicking the
"like" button on ...

~~~
CaptainZapp
What do you expect from a "currency" with the ethics of Uber, the censoring
ability of PayPal and the customer service quality of Vodafone?

~~~
arethuza
Regarding Vodafone - I think it takes some special kind of talent to be so
utterly and consistently awful across all channels for customer service.

I even tried complaining through their website about my miserable failures in
trying to buy stuff from them and their online complaints form returned an
error when I submitted it - meaning that I ended up emailing them complaining
about their complaints process!

Edit: Apologies for the off topic rant - but I saw "Vodafone" and "customer
service" together and couldn't stop myself.

~~~
ehnto
I wonder what priority that ticket got when it found it's way into the
backlog.

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klobb
Predicting it will be what AOL might have created if it tried to compete with
PayPal. Maybe worse.

When I go on Facebook, the site is so bad, the app is so dishonest that it is
disgusting and intractable to use. Everything is a lie. Nothing works in one
normal way. You can tell that it's this tangle of effort hoisted up into
service with maximum effort to slime people.

It's like when wholesale clubs move the products around the warehouse so that
you have to wander around and look for the thing you wanted to buy. Where is
that thing I need? Why can't I find it?

Oh right. The system is designed to suck me in and waste my time. I can't
delete anything because deleting data isn't real anyway. I have to prove the
revenge porn is me by posting nudes. Riiiiiight...

Yeah, trust Facebook. They won't play games, because they care about you, and
they take your money seriously.

The best part about Facebook is that, when push comes to shove, they're
helping you see more relevant ads.

------
DigitalTerminal
So does it's general public.

~~~
Kurtz79
The general audience of Facebook has very little overlap with HN commenters.

~~~
mtnGoat
Average HN commenter is bright enough to close their account year ago?

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Kurtz79
Correct. But the general FB audience cares much less (if at all) about their
privacy than the general HN audience.

If you were to estimate FB's health as a company based on HN comments only, it
should have been dead and buried long ago.

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sedeki
Given that Libra is not a real cryptocurrency (it requires trust), is this a
way for them to plant FUD around bitcoin?

~~~
codesushi42
_> is not a real cryptocurrency (it requires trust)_

Trustless is not a requirement for a cryptocurrency. PoS requires trust, but
still would be a viable consensus mechanism for a cryptocurrency.

~~~
davidnoble12
eh. This is an oversimplification. I dislike the concept of trustless anyhow.
It seems to be misunderstood and misused. Libra is not censorship resistant.
This is the major problem with Facebook controlling a large swath of
corpokleptocurrency.

~~~
codesushi42
Agreed on both points. The oversimplification was intentional, PoS is mostly
theoretical right now.

Regardless, Libra still qualifies as a cryptocurrency, even if it's not
trustless.

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jbverschoor
Regulators won't do anythings against facebook. Not in the data leaks, the
gdpr, so I have no reason to believe they'll do something against libra.

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raxxorrax
Give me something to pay anonymously with and I would be very happy.

~~~
mobilemidget
Some people accept a chicken as payment, those are pretty untraceable...

Nothing on the internet is anonymous

~~~
raxxorrax
Most things on the internet actually are anonymous for the most practical
purposes. I wouldn't know your name for example.

The chicken example is nice and all, but why not just offer the same
advantages as good old cash? Would be a far more appropriate comparison, don't
you think?

Most internet transactions are not anonymous of course, but there are options
and I like to keep them. I regularly use non-anonymous transactions myself,
but that is not the issue.

~~~
mercutio2
Not knowing how to map a digital identity to a meatspace identity is _really_
not anonymity. It’s pseudonymity.

And pseudonymity is good! We should allow for lots more of it.

But anonymity is a different thing. It’s not clear to me that anonymity is
worth trying to achieve, anymore; instead we should be fighting for judicial
oversight of when pseudonymity can be pierced, combined with dramatically
_less_ anonymity for the misdeeds of the powerful.

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kreetx
Perhaps mildly off-topic, but it looks like Google is not in on the project?

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LunaSea
Why would they want to be in it?

~~~
kreetx
Well, it seems like if the biggest social network is initiating currency
project then rather have a foot in than out, no?

More broadly, it seems that yet another media campaign to push Facebook's bowl
over somehow is going on. Not a fan of the company by any means, but it does
look like this project has merit and will happen whether the naysayers want it
or not. Given this I would just assume that any big tech company would like to
participate with their knowhow.

And yes, maybe it won't succeed, but it's hard to see how it wouldn't. I guess
the regulators are the biggest possible obstacle.

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bdastous
It’s the New York Times. You don’t even need to read their Facebook-related
stories to know what they will say.

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tasubotadas
Since "people are excited about the project and cheering for it" is not
newsworthy material, we get articles like this.

An absolute waste of time.

~~~
benj111
We do get those articles, and _they_ are a waste of time.

What's a waste of time about this? It seems reasonably well balanced, facebook
have an incredibly narrow line to walk launching this currency. Finance unlike
the internet actually has regulation, and a negative view from a regulator has
the potential to scupper the project. Everyone is cautious as a result. Its a
chess match at this point.

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Mengkudulangsat
Why not we all just... let them launch and see what happens?

Libra is nothing more than the latest iteration of a long line of stablecoins
a-la Tether, USDC, GUSD etc. I find the industry and regulatory overreaction
puzzling, surely these issues have been explored before?

The "But it's Facebook!" argument disingenuous, any one of the popular chat
app has, or can replicate this experiment (Wechat, Telegram, Slack, Kakao,
Line, Twitch, Discord).

~~~
Barrin92
> Why not we all just... let them launch and see what happens?

because more often than not when we do that our data happens to end up in the
hands of private companies that try to steer public elections. Facebook is a
private company and we should not let it attempt to displace the financial
system. The same scrunity should be applied to wechat or telegram should they
ever attempt to do the same. As it stands wechat has no relevance on the
western markets though. Control over financial transactions and the monetary
system directly impacts national security.

>Libra is nothing more than the latest iteration of a long line of stablecoins
a-la Tether, USDC, GUSD etc.

the difference is that facebook exercises control over 2.4 billion users, so
everything it does, by definition, is in a very different ballpark than a
community project.

~~~
jdhn
>we should not let it attempt to displace the financial system

Why do people think that this will shove our existing financial system aside?
The second something comes close to having too much of an impact (stepping on
the toes of banks, displacing the dollar, etc), the regulators will crack down
on it. What I can see happening is that it becomes an alternative payment
method at best.

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StavrosK
This is semi-unrelated, and I've kind of lost hope of cryptocurrencies ever
achieving popularity (since all everyone seems to do with them is speculate),
but I recently came across a page explaining Stellar and it seems to me like
it's the best of all worlds (decentralized, fast confirmations, inflationary,
no mining, etc).

Does anyone know what the downsides are? I haven't been able to find any
posted anywhere, but I don't trust something until I've seen the cons, so I'm
wondering if anyone here has looked into it.

~~~
woah
The whole network got taken down a couple months ago when a server run by the
Stellar company crashed. Not very decentralized.

[https://cointelegraph.com/news/stellar-node-outage-causes-
tw...](https://cointelegraph.com/news/stellar-node-outage-causes-two-hour-
complete-transaction-freeze)

~~~
StavrosK
Oh wow, that's terrible. Yeah, that's not decentralized at all, too bad...

EDIT: It looks like it _can_ be decentralized, just nobody is running any
nodes apart from the foundation. I wonder if that's because there isn't enough
incentive, or that people just don't trust them. Either way, it's bad.

~~~
JaleDarvis
Check out Hashgraph

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sbhn
Could someone please create a curupto coin that can be easily forged, and easy
to make disappear, just like that time tested USD paper that flows so freely
around the whole worldwide criminal world. Criminals they are absolutely
everywhere, and they use USD. Think about, if facebook coin can disappear and
be forged as easily as USD, well then, and only then is it threat.

