
If Facebook or Google create their own currency, they can control our lives - praveenscience
https://www.theguardian.com/commentisfree/2019/jun/24/facebook-google-currency-libra-financial-transactions
======
skohan
In spite of the numerous problems which have manifested themselves with
cryptocurrency, I find have always found the idea of a monetary system not
owned by the state to be interesting. A monetary system owned by corporations
is downright horrifying.

~~~
mc32
People complain about account suspensions now. Imagine how upset they would be
if their money were tied into this account.

Or, you’re attempting to purchase from an unapproved vendor. This vendor was
suspended for donating to a candidate who voted for breaking up Facebook.

You used unapproved language, that incurs an automatic deduction of $X from
your account.

~~~
aerique
Still, if Facebook makes the currency interesting and convenient enough
(discounts at stores when using ƒ!) a lot of people will lap it up.

The only hope is it will not become popular enough to become too big to fail.

------
ckastner
This current trend of of "disrupting" the market by flouting or circumventing
regulations may have worked for Uber, AirBnB and so on, but Libra might just
be a step _too_ bold.

Unless Libra aims to uphold the same regulations that banks must, then at some
point, I predict that there is a huge amount of trouble coming for them.
Financial services can be both used and _abused_ , and regulators have forced
banks to address the abuse (eg: AML/KYC practices) to protect participants.
Circumventing these regulations is equivalent to rolling back these
protections.

The same could be said about any other industry that might profit from using
Libra, be it investment advisors to casinos to who knows what else.

~~~
JumpCrisscross
> _there is a huge amount of trouble coming for them_

Apparently neither the House Financial Services committee nor Senate Banking
Committee were given a heads up on this launch. From a government relations
perspective, this is a whiff of fresh breeze for those of us advocating for a
break-up.

~~~
ckastner
Thinking about your comment, I've started to become skeptical of my own
position:

Sure, financial regulators are probably extremely upset about this, and are
probably going to fight it. However, the data Facebook would be collecting
here would _extremely_ valuable to _other_ regulators; data they cannot
currently access precisely because it is protected by financial regulation.

If Facebook were to offer access to this data (on National Security grounds,
or 'think of the children' grounds, etc.), agencies could have immediate
access to immense amounts of data from potentially every user, whereas
currently, they'd probably need a court order (or National Security Letter,
etc.) to access the data of just one.

Would any of the committees you listed prevail against these interests?

------
swalsh
I sometimes wonder if Zuck, at some point realized he didn't have the charisma
to become president, but then realized he didn't need it. Facebook could start
using its ability to mint currency as a way to bring in the government
policies not otherwise viable in today's world. Maybe they start a basic
income. It could boost the currency's use... but also be a path to be a world
government without checks and balances. As our government falters, there's an
opportunity for someone else to pick up the responsiblity. Which is
frightening. The unbanked just happen to have less functional governments than
our own, so it's a good test bed.

~~~
amyboyd
Sounds like what happens in Mr Robot, where Zuck = Philip Price.

------
michael-ax
Is this obvious only to Europeans?

~~~
mantap
European countries such as Sweden and the Netherlands are at the forefront of
submitting themselves to a cashless economy, giving control of the payments
infrastructure to Visa and MasterCard. So it's certainly not obvious to all
Europeans.

~~~
the-dude
In NL creditcards are not very popular, but paying 'by PIN' is.

The network is owned by the Dutch banks, which also provide the online payment
platform iDeal.

The fees are low and fixed. Offline, between 15cts and a couple of cents ( I
don't know how low for the big retailers, 5cts ? )

The online fees are a bit higher, starting at 29cts.

There are no variable fees. There is no 'refund' or 'insurance'. Lots of shops
do not accept creditcards ( I know of no big retailer which does ).

~~~
martin_a
The same is true for Germany. We have a vast number of different systems for
cashless payment, with every bank trying to push its own system. It's not like
Visa and Master Card are the two major players.

~~~
the-dude
Except we don't have a vast number of systems. We have 1.

~~~
martin_a
Talking about NL or DE?

~~~
whereistimbo
NL of course. It's the same commenter.

------
rangeofmotion
How crazy is it that we allow companies to take a percentage cut of EVERY
transaction we make? How often do you NOT use a credit card or some other
payment system with a middleman? It's become so commonplace that the idea of
replacing cash entirely seems normal to people. And yet this normal state of
things involves a middleman taking a cut of EVERY transaction!

Jurisdictions literally have to enact laws today to prevent businesses from
going completely cashless, which essentially means jurisdictions have to enact
laws to prevent middlemen from taking a cut of EVERY transaction made.

The cash system does not require middlemen in order to transact. And people
have historically not been denied the ability to handle cash, as they are
denied credit cards or bank accounts today (yes, a sizable number of people
are denied even bank accounts and/or are forced into bank accounts with high
monthly fees in order to just get a debit card, which is arguably the most
basic requirement for purchasing most things today). With cash, people who had
some financial difficulty do not get extorted even more (in the form of having
to pay for "subprime" services) on top of an already existing percentage cut
of every transaction that the middlemen already take.

Unless a new platform can reliably offer a no-fee or at least an absolutely
ridiculously low fee transaction platform that absolutely does not deny anyone
access nor extort anyone for the ability to gain access, AND we can be
reasonably assured that no central organization is using it as a tool to load
people onto its platform for later extortion....essentially unless we can get
almost exactly the same open access as cash...unless we can get that, I don't
support it, and probably neither should you.

(Disclaimer: I admittedly haven't looked into the details of Libra yet)

~~~
chii
cash is legal tender right now, so a business cannot refuse cash as payment.

~~~
dragonwriter
> cash is legal tender right now,

True.

> a business cannot refuse cash as payment.

Or, rather, it cannot collect additional legal penalties for nonpayment of
debt for the time period after a tender of payment in legal tender is made. A
business may refuse payment offered in exchange for goods and services that
have not yet been provided.

------
mrhappyunhappy
Imagine this situation: you sell online courses. FB says hey, users can pay
directly via Libra thus streamlining checkout to a few clicks. Now Facebook
takes a cut of every transaction. If I were PayPal I’d be very scared.

~~~
tshanmu
Paypal is also part of the libra foundation and they operate nodes - so they
might also take a cut. FB has done something clever by coopting most of the
bigincumbents - Paypal, VISA, Mastercard, PayU and even stripe!

edit: corrected typo

~~~
no1youknowz
Exactly. I cannot recall the CNBC video right now. But one of the top guys of
Libra was there and he said although the fee structure hasn't been worked out
yet. Taking a cut on the partners side would be where fees are taken.

So imagine the current status quo is that either paypal or visa/mastercard are
the principle payment methods and they charge the current rates.

But with libra, you still pay with paypal or visa/mastercard but using libra
coin instead of fiat coin and % of the fee also goes to facebook.

What I can't wait for. Is the raft of people who will be denied creating
wallets. How many people have had their accounts frozen by Paypal, kicked off
using Visa/Mastercard and even Stripe! Quite a few I can tell you.

Think the situation will be different from Libra? Doubtful...

------
lm28469
> Facebook will know the people and companies with whom its users have
> financially interacted, and that is likely to only be the start

As if it wasn't already the case.

People simply don't care, they wouldn't be on any of these platforms
otherwise, and governments don't understand, or chose not to understand for X
reasons. They'd sell their soul for more (perceived) convenience or a better
way to fill their narcissistic ego trips. It's like giving chocolate to 3
years old kids, they only stops when they gets sick, and so far "users" aren't
sick.

~~~
skohan
I don't think it's fair to blame users. These corporations hire some of the
smartest people in the world to design their products in such a way that they
maximally retain and engage users. You can't expect a normal individual to
stand against billions of dollars worth of investment in a system designed to
make them act against their own self-interest.

~~~
lm28469
At some point you have to own up your actions. I'm not a super human, I
managed to quit facebook just fine, people are not tools, they know what
they're doing.

You don't have to stand against it, simply don't use it. Just like most people
don't do heroin or control their sexual urges.

~~~
skohan
That's fine for any given individual, but in aggregate you should not be
surprised that systems which are designed to take advantage of human
psychology to achieve a result perform exactly as intended.

You bring up heroin, but heroin is a heavily regulated controlled substance
precisely because it's an example of something which people in general cannot
be reliably trusted to control themselves with.

------
langitbiru
I wonder would it make any better if Apple is the one which creates their own
currency. As we know, the track record of Apple respecting privacy of its
users is significantly better than Facebook/Google.

~~~
inapis
It's not exclusively about privacy. At the end of the day Apple is still a
corporation beholden to its shareholders.

~~~
langitbiru
So if we cannot trust the company, we are left with two options.

1\. Nobody (decentralized), like Bitcoin.

2\. USD cryptocurrency, created by the US government.

~~~
forgone
USD (and all other currencies) are already a tokenised currencies

------
samdung
You do a one time exchange of your Government issued currency for Libra. Then
you start exchanging Libra for goods and services in a p2p way == which means
Governments can't tax these goods and services == which means Governments will
no longer have the power == which means they will not allow it.

(I have not read the Libra papers fully. Im doing a far speculation here.)

~~~
lukevdp
You’re forgetting that governments regulate the companies behind Libra, and
can and will regulate it.

~~~
mschuster91
> You’re forgetting that governments regulate the companies behind Libra, and
> can and will regulate it.

Well... let's say you're a politician wanting to regulate Facebook, and let's
say you have an affair with whom you communicate on Facebook or in Instagram
DMs. If I were Facebook, I'd simply let an investigation team check if any
dirt can be mined out of the troves of data - anything, even the dataset of
GPS or other location pinpoints, can be enough to get a first hint. And now I
discretely contact you and advise that there may be information around and
that it would be a pity if that information were to get public.

This is the ultimate problem with the size and capabilities that companies
such as Facebook have.

~~~
lelima
>> I'd simply let an investigation team check if any dirt can be mined out of
the troves of data

That's Dark and Illegal

~~~
graphGL
Yeah, Facebook would never do anything dark and illegal

------
dalbasal
The idea of a corporate currency is pretty unpalatable.

The idea of a pegged cryptocurrency is interesting though, potentially. We
really need a lot more/bigger/better institutions that aren't companies or
governments.

~~~
ForHackernews
> We really need a lot more/bigger/better institutions that aren't companies
> or governments.

So...churches? What are you proposing?

~~~
hoseja
Hopefully without the imaginary sky friends and child rape.

~~~
dang
You've posted a lot of unsubstantive and even inflammatory (like this one)
comments to HN. We ban accounts that do that. Would you mind reviewing
[https://news.ycombinator.com/newsguidelines.html](https://news.ycombinator.com/newsguidelines.html)
and using this site as intended? We'd be grateful.

~~~
hoseja
I wouldn't say a lot but I suppose I could try to be more civil. Thanks for
your moderation.

------
magwa101
States conquered each other and fight for currency supremacy, withness US
dollars and oil. Crypto would end a lot of wars. It would however introduce a
lot of instability for some time as people adjusted to the freedom.

~~~
skywhopper
This is incredibly naive. Using cryptocurrency changes none of the incentives
nor the power structure. The very network and electricity supplies that
cryptocurrency relies on are ultimately controlled by governments. If
cryptocurrency becomes an actual important source of power, then governments
will fight to control it. There is no freedom in money that relies on the
Internet to exist and freely operate.

