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Let's play a game of predictions.

Regardless of HN's opinion of Facebook (and regardless of my own for that matter) I predict that this thing will work.

This is only one thing my crystal ball showed me.

Facebook's presence in developing economies is massive. To the point of being synonymous with "The Internet" in a number of places. But they've had a nagging problem. People in these economies consume contents, but do not buy. Even when they have some buying power, access to credit cards is harder to come by. So they're basically seen as online leeches, and you simply fit them in the "expense" category of your media production. Also, due to their buying impotence they're almost immune to advertisement. Over the next few months it's all going to change. Multiple agreements will be signed with various financial institutions and probably more with various telecom in those regions, to allow people to load up their accounts with fbcoins and join the Great Internet Spending Frenzy. Basically turning them overnight into consumers, ripe for the picking.

I foresee big media producing companies in the developed world to be the first to take advantage of this (Disney, Valve, Netflix, YouTube, NYT, various online courses and certifications, etc). Shipping to those regions remains a challenge, so only soft goods for now. IKEA and Walmart will allow fbcoins, but just to be able to sell through their Facebook Store, oh I forgot about those. Anyways.

Next year, Google and Amazon will announce their own stablecoin.

The year after that, Google will announce that they're shutting theirs.




Facebook's hold in developing economies is true. But developing economy's hold on their Fiat currency is true as well. So much so that, India is planning to jail anyone who is holding cryptocurrency for 10 years[1]!

If this legislation passes, any computer scientist, mathematician, programmer who is working with crypto tokens & block chain can technically be held liable for possessing a crypto currency when they run their program?

Yes, the plan to jail those who hold cryptocurrency in a democratic country is preposterous; but this shows how sensitive a developing economy could be when it comes to its money. It's not like the data of their citizens which these countries give a free run to the hoarders, money is totally different ball game.

I wonder if Facebook decides to give a free crypto to everyone who holds a FB account, anyone in India with a FB account will go to jail including those who proposing such legislations?

P.S I don't hold any cryptocurrency due to its impact on energy and thereby planet (Also, I'm including this just in case the legislation passes in my country!).

[1]:https://economictimes.indiatimes.com/news/economy/finance/dr...


> Yes, the plan to jail those who hold cryptocurrency in a democratic country is preposterous

No it isn’t. We jail people who hold child pornography in democratic countries as well. The core of a democratic country is that it’s governed by democratically elected representatives, not that it’s citizens be allowed access to whatever they want independent of criminal consequences.

I get you and others are calling to the sentiment of “how can we be free if we aren’t free to x” but the value of that sentiment isn’t independent of what X is. You aren’t free to rob banks and you aren’t free to print you own paper currency. Just because crypto is digital and “difficult to stop”(it isn’t though) does not mean that it has to be freely available to business and individuals. It’s still up to our democratically elected representatives to decide if they feel private institutions printing money without control will damage the economy significantly enough to not allow it.


> you aren’t free to print you own paper currency

As far as I know, in the U.S. you are free to print your own paper currency, just so long as it doesn't conterfeit that which is produced by the Federal Reserve Bank. Also, there's nothing illegal about conducting transactions with it either, provided you can find willing trade partners.


>As far as I know, in the U.S. you are free to print your own paper currency

This is not the case, when a 'private' currency gains traction or seemingly encroaches a territory, which is traditionally assigned to government ─ it gets shutdown.

https://www.nytimes.com/2012/10/25/us/liberty-dollar-creator...

https://www.openpr.com/news/25136/TUC-IMPROVING-THE-US-ECONO...


They called their currency a dollar. If they had called them "freedom rounds", they would have been fine.

Or if they had been owned by Disney for that matter...


http://www.berkshares.org/

It's been around for a long time.


Right this is totally legal provided you report any income obtained through such a scheme on your tax return in fair market US dollar terms. It's no different than bartering (which is also legal).

The other caveat is that if someone owes you a debt you can't require them to pay in your own "funny money" currency. You have to accept US dollars if offered, otherwise the debt won't be legally enforceable.


> in the U.S. you are free to print your own paper currency

Indeed, this is currently done. For example:

http://www.ithacahours.com/


>If this legislation passes, any computer scientist, mathematician, programmer who is working with crypto tokens & block chain can technically be held liable for possessing a crypto currency when they run their program?

Please appropriate your logic on that.


>If this legislation passes, any computer scientist, mathematician, programmer who is working with [automated ponzi schemes] can technically be held liable for [creating a ponzi scheme] when they run their program?

I don't see the issue. When a democratic society thinks something isn't good, they can outlaw it. There are all sorts of regulations on financial transactions and investments already.

I'm not trying to imply that cryptocurrencies are ponzi schemes, just that when something is illegal, doing it on your computer doesn't make it not illegal.


Furthermore, were cryptocurrencies to become illegal, it would probably be similar to computer viruses; It's fine to play with viruses on your personal computer or in a lab, but it's illegal to use one "in the wild." So I doubt it would be as absurd as you claim.


> It's fine to play with viruses on your personal computer or in a lab, but it's illegal to use one "in the wild."

I hope cops understand the difference. When I was in school, computer science teachers asked us to remove the shoes, because 'virus from it' would infect the computers at the lab.


I guess similar to how a chemical lab might use compounds that are illegal in the wild or a pharmaceutical company holding classified drugs.


Found the authoritarian.


This implies that crypto is a democratizing force. So far, it's been mostly early adopters wanting to preserve the system under which they are wealthy and powerful. Who can blame them? I'd do the exact same. But in other words, the same age-old pattern that is barely any different from the banking system that crypto was supposed to bypass, except the inequality actually manages to be quite higher.


I don't know what you're talking about. I call authoritarian someone who thinks that they can circumvent an individual's freedoms arbitrarily by finding enough people to agree with him/her. The topic of cryptocurrency is only one that is good at revealing someone's authoritarian tendencies.


I think there's a line between being authoritarian and supporting a system where democratically elected officials can enact laws. This isn't about crypto, this is about respecting rule of law in society.

> I call authoritarian someone who thinks that they can circumvent an individual's freedoms arbitrarily by finding enough people to agree with him/her.

I suspect there are a lot of people who agree that counterfeiting money isn't something that should be allowed. Are they all authoritarian as well?


Sure, but there are principles that come before the laws themselves.

If following the principles leads to a degradation of the rule of law what would you do?


> I get you and others are calling to the sentiment of “how can we be free if we aren’t free to x” but the value of that sentiment isn’t independent of what X is.

Do you propose an objective criteria by which a state can legitimately dictate behavior on one set of Xs and not another set of Xs? If not, then you are by omission saying that every totalitarian state is legitimate. I suspect you might want to say, if the 51% wants something, that makes it legitimate. In that case you are're saying a murderous state is legitimate. (I won't go full Godwyn here, but suffice to say that many democratically elected regimes have committed legal murder on a massive scale and continued to enjoy majority support.)

Hey, here's an idea for an objective criteria: Does X invade any other particular person's life, liberty or property? Banning crypto fails that test.


Not everyone agrees on the validity of mob rule.


In South Africa, we still have capital controls. My mom earned dollars through PayPal. She couldn't spend it online and had to convert her earnings to Rand within 3 months. Bureaucrats will insist that the same rules apply to libra.

India is even less ready for relaxing capital controls. They will tell Facebook to block libra for their citizens or be firewalled. No one is going to jail, but libra will not succeed there.


Talking of PayPal in India, money should be automatically remitted to the bank account immediately.

At-least 3 months in SA sounds reasonable incase we have to process any refund, though I'm not trying to belittle the discomfort faced by your mother.


that is why totally decentralised systems such as Bitcoin are important. Noone can firewall it


And the people who aren't technical will forget their password.

Since there is no centralized government, they lost their money.

Source: wrote some articles on my own "media" website to try out SEO.

Most popular article, how to recover Bitcoin password


Capital controls can be an important part of a monetary system. It’s not part of most western countries’ systems, but it’s a very valid tool with a real purpose.


Thank you for your input. I'm not very familiar with India's politics, so I cannot be too assertive on its politicians' inflexibility.

I noticed that you expanded a bit on the "cryptocurrency" angle. May I invite you to a different perspective for a second. I don't think Facebook cares whether or not their Libra is crypto or otherwise. Despite appearances this is not a discussion about crypto anything. Facebook is not out to revolutionize money. Facebook has an ecosystem, a walled garden. It also has first mover advantage in many economies with a quasi monopoly. So in essence it has a huge potential market that's just sitting out there waiting. But what Facebook doesn't have (yet) is a tap to suck at the delicious nectar. That's where the Libra comes in.

Facebook is willing to play ball with whoever will allow them to install the tap. They will do all that is necessary for the tap to be legitimized. If it means pinning it to the Euro, the Dollar, the Yuan, it'll be so. Just as long as it's recognized. Once that happens, it's more advertisement revenue and a slew of new paid services through the walled garden. Meanwhile out of the walled garden, revenue from transaction fees to an unprecedented level.

This is not a cryptocurrency conversation.


I will try to travel on the same angle, I brought in India because you predicted Facebook's success on developing economy and India is the largest user base for Facebook besides it being a developing economy.

Crypto or not, it is still a digital currency which is not being controlled by the central bank of the country i.e. India in my example. Especially when the country is trying to roll out a digital currency of its own.

For the sake of argument, let's assume Facebook has no compliance trouble with any of the countries; will Libra be successful? It most definitely will, because Facebook has the capacity diminish friction and users would use Libra like any other coins found in a mobile game like candy crush.


>who is holding cryptocurrency for 10 years[

zuckcoin isn't cryptocurrency, it's digital currency, like gold in WoW


The draft policy is titled, "Banning of Cryptocurrency and Regulation of Official Digital Currency Bill 2019".

Anything which is not official digital currency will be liable for action.


> I don't hold any cryptocurrency due to its impact on energy

Just to note, the impact of Libra on energy is very very light compared to the current banking system. It does not use proof of work.


Yes, and there are also projects like chia [0] that aim to be a green digital currency.

[0]https://www.chia.net/


How about impact of Facebook on energy compared to the current banking system?


I agree, even those based on Mimblewimble, Casper should alleviate my energy concerns. Then again I can't posses them with the risk of jail term looming around.


I think India, or most other countries, will deem facebook coins an exception. It's probably being negotiated right now.


Facebook's 'Free Basics' didn't work in India in spite of negotiations and even 'hugging'[1].

[1]:https://www.google.com/search?q=Zuckerberg+hug+modi&prmd=niv...


Indian central bank (RBI) is rather conservative and cautious. Also, its policies don't always agree with that of indian government.

I have a strong hunch it just wouldn't let Libra be legal currency.

Besides, given that currently government is run by a ulta right wing party, so it might be possible they wouldn't agree to Facebook plans.


You are assuming they use those laws to lock up Libra users and not just the competition. It seems likely they could allow censorable cryptocurrencies like Libra.


The proposed law is generic to any cryptocurrency, in-fact it was proposed before the Libra was in news.

It's not about censorship, it's about taxation.


In three years, Libra will be the largest single venue of public financial services. All branches of retail banks are upgraded with Libra teller machines, becoming fully distributed. Afterwards, they transact with a perfect operational record. The Blockchain Currency Bill is passed, replacing the dollar with Libra. The system goes online on August 4th, 2022. Human decisions are removed from central banking. Libra begins hashing at a geometric rate. It becomes self-aware 2:14 AM, Eastern time, August 29th. In a panic, they try to pull the plug.


I love these comments.

See also https://news.ycombinator.com/item?id=18281465 (context: "I really wonder what's going to happen to Linux once Linus is gone")

We maybe should build a list of these. Dystopic answers to HN's unattended writting prompts, or something.


No need to reinvent the wheel http://longbets.org/



Developing countries aren't going to be too happy about this. If a large number of a country's citizens adopt this, it forces that country to lose its independence over monetary policy. Since Libra is not controlled by the local government, this is not a fixed exchange rate regime, it's effectively dollarization and can have far reaching consequences.

IMHO, the Libra is at the same time too ambitious (in aiming for full capital convertibility across nations) and too timid (in entirely giving up monetary independence). A libra-usd, Libra-euro, libra-inr, etc. which allows countries to retain monetary sovereignty would have been easier for governments to accept. But then, Facebook can't say it's a new currency and circumvent KYC and other local regulations. But who knows? Stranger things have happened. The euro is a currency without a state. Maybe the time has come for denationalizing money.


If it were to affect US economy adversely I think FED could chip in and have a say in Libra's direction. But other economies could be hurt by Libra's position.

Personally I don't mind the monetary independence of countries. But real people could lose real jobs since their governments don't get a say in Libra's governance.


If countries were printing money under fixed exchange rate regimes their economic policies are a joke anyway, all they’re going to accomplish is inflation.

Libra and other digital currencies might make it easier for people to switch away from their local currency, but banning it won’t affect the underlying problems.


I predict that Libra will work for a while, but will eventually be overshadowed either by competitors or by the new markets that it enables.

There's this pattern I've noticed where every major tech company, once initial traction has been established, gets three pivots. You can think of them as adolescence, mid-life, and rebirth.

The first pivot happens when the company is 5-8 years old (since the 1970s at least; older before then), and serves to define the company. The System 360 for IBM, defining it as the provider of mainframes for enterprises. MS-DOS for Microsoft, defining it as the dominant PC OS. The Macintosh for Apple, defining it as the most user-friendly consumer brand out there. GMail and Maps for Google, defining it as the conglomerate of the Internet age. Mobile for Facebook, defining it as the service that connects people regardless of where they are.

The second pivot happens when the company is 10-15, at the height of its dominance, and usually results from it entering the hottest new technology wave with a vengeance. It looks like it succeeds for a while, crushes early entrants, serves to legitimize that technology wave, but ultimately peters out as the company can't keep up with the changes that it introduces. The IBM PC for IBM, which legitimized the PC market but ultimately fell to clones. Internet Explorer for Microsoft, which legitimized the Internet but ultimately was eclipsed by Google's many products. The Newton for Apple, which legitimized the PDA market but ultimately was too early. Google+ for Google, which legitimized social networking but ultimately failed to gain traction.

The third pivot is when the company realizes that they basically incapable of innovating, and returns to the roots they established with the first pivot to live out their old age. Open-source consulting for IBM, leveraging their massive installed base of enterprise customers. VS Code, XBox, and Azure for Microsoft, recognizing that they are fundamentally a platforms company. The iPhone and iPad for Apple, refocusing on their strengths in UX and delivering top-quality consumer electronics products. Alphabet for Google, realizing that they're fundamentally a conglomerate that lets a thousand flowers bloom (and cancels 990 of them).

Libra is Facebook's second pivot. It'll look like it succeeds for a while, it'll legitimize cryptocurrency, but it'll ultimately end up eclipsed by what it creates.


Cannot agree more. All Greek tragedies are based on hubris nemesis catharsis cycle. Unfortunately, many projects, companies nowadays skip the catharsis stage and jump to the next hubris.


Really, it's a service the government should run and regulate. But governments in general are too slow-moving, and the US government is too conservative for that to happen. I don't think Republicans would be down for more government control.


I want to frame this comment. Beautifully articulated, thank you


> Basically turning them overnight into consumers, ripe for the picking.

Well, credit cards are already too easy to use. Many services already save your credit card info, and you're already one or two clicks away from purchasing. Still, you normally don't buy anything that appears next to blog/SNS posts.

But, I agree with that Facebook means really a lot here. Being a stable coin, Libra is much closer to a payment platform - like Visa, MasterCard and Papal - than other cryptocurrencies. Facebook can use its influence to push Libra into various platforms, and Libra can become a de-facto standard payment method in no time.

However, governments will happily regulate transactions b/w countries, which will limit the potential of the coin. Libra is Swiss Bank 2.0 in some senses.

> I foresee big media producing companies in the developed world to be the first to take advantage of this

It can bring consumers in developing countries to the table, but those countries usually have slow connections, which leads to lower consumption of digital media. Distribution of the coin also can be a problem too. SWIFT is expensive, and fewer people have credit cards.


What you're saying does make sense, but can we please not use this as an excuse not to know better?

Maybe the citizens of some Spooky Third World country don't really have a choice due to their unique circumstances, but many of us do.

Let's not use the Spooky Third World country as an argument for why the dominance of Libra is inevitable before it even starts existing. Let's not be so hasty to become a dystopian novel.


Generally the word dystopian is overused, but Facebook in charge of a currency ? dystopian sounds like an euphemism.


The challenge with your predictions is they contain too many biases. Your worlds view is dominated by these companies so much that you think that is the only outcome. Libra is likely to validate existing crypto further because it is not financed or backed by commercial interests. Facebook doesn't create economies that is just marketing speak. If they did they would not rely so much on ads to fund the business. In an economy the facilitator gets paid from the transaction.

My issue with Libra is it is a digital currency dressed up as crypto. That means it will be subjected to the same kinds of arbitrage opportunities you get from currency fluctuations and flows. Think of George Soros in the eighties kind of fluctuations.

Right now I don't see the fuss with Libra or understand how the world will be better. All I see is marketing and PR. I guess this is the crypto calling card.


Completely agree. Many people are thinking way too narrow for how big facebook is. Project libra will be the great equalizer and put everyone more or less on the same "economic playing field" so to speak. Since this community is heavily startup focused, everyone here should be thinking of how they can capitalize on this next frontier of the internet. The money isn't made by speculating on libra coin, it is made by creating innovative services/solutions.


That scenario falls apart when the global poor don't have any money to buy FB coins, which they don't. Agreements with banks won't give the unbanked the free cash flow to play around with digital money or buy a bunch of stuff online.

I think they whole issue of the unbanked is a ruse. Facebook stands to earn more here by trying to convert regular consumers away from PayPal and debit cards and charge them fees for exchanging in and out of Libra. They'll also invite regulation in crypto so they can be the only one who meets the regulatory requirements and shut out the others. It's an end run around crypto without being one itself.


Fixed currencies would only hurt emerging economies. When the economy goes into crisis who will change the interest rates on those currencies and help the economy recover? No one.


> Multiple agreements will be signed with various financial institutions and probably more with various telecom in those regions, to allow people to load up their accounts with fbcoins and join the Great Internet Spending Frenzy.

This is the part I don't get. I thought we were talking about all-cash economies in regions with essentially no banking, but then you bring up "various financial institutions [...] in those regions". So is it that they have banks but just aren't using them? If so, what is it about FBCoin that's going to suddenly make such people want to go en masse to their bank to get them, if they didn't bother doing so to get all the security and additional payment options that a bank account already offered? (Pardon the ignorance, I'm genuinely trying to understand how this bootstrapping could work.)


Not all-cash, rather mostly cash. They do have banks, but think of banking as a luxury in those economies, not a commodity. They're for well established businesses and the rich. For everybody else, banks can be really tedious to deal with. So unless they have the means, people tend to just avoid the hassle. Even simply opening a bank account can be prohibitive, forget about getting a credit card, even prepaid.

There's a variety of independent institutions that provide some services to fill the gaps. For example, telecom companies are often used as a medium to send money. There are also smaller, third-party or local financial service providers (formal and informal), that are more convenient for the short term, day-to-day way of life in these places. They can offer small loans, micro-financing, money transfer, and a number of other devices. And yes, currently they're the ones people generally go through to make purchases over the Internet. Fees are not always competitive.

One typical approach people understand very well in a day-to-day economy is the preloaded cards. For small amounts (think 20$ or less) people can go to their telecom card provider and purchase some fbcoins. But that's not the hard part of the equation. The hard part is to get the other side (the developed world) to recognize the fbcoin. This is what's at play here and now. If Facebook can show to the world, "look, Netflix and YouTube can now take your money", they'd have won a huge part of the battle.


FB is going up against governments. I'm not sure they will win. Currency is one of a few key tools a government needs to control it's economy in many different ways. What I am loving about this though is that all of these experiments are forcing us to have a discussion about what a currency is and maybe even redefine money. Bitcoin didn't quite succeed in the way the creator imagined (at least what "he" publicly said was "his" goal). But it has succeeded as competitor to precious metals, and really made markets think about what a cryptocurrency means. Maybe this FB currency will eventually force us to have the hard conversation about what an electronic world wide currency truly means in practice and that's good.


>year after that, Google will announce that they're shutting theirs

The line no one can disagree with.


You forgot about Apple coin on their credit card. Available at 999$ for the exchange rate.


Just enough to buy the monitor stand.


Pay $1200 for the card and get a monitor stand for free!


Actually, not enough with tax. :(


This is eye opening.

Banking in many African economies came from an unexpected place: basic non-smart cell phones and the ability to transfer relatively small amounts of money quickly, reliably, and without a bank account.

I can see Facebook leveraging its foothold in such economies and providing the same service.

Wow.


Are there many ways to use anything from FB on a non-smart phone with no internet?


I was making the point that banking innovation can come from surprising places, like dumb phones, or social networks.


First, I fully agree with your "crystal ball". It's fantastic, you should lend it to me sometimes :)

Jokes apart, I think you're on point. Facebook's Libra will succeed. Amazon will try to compete with that, pending anti-trust fears. Google will try to have a shot at it and fail miserably.

It will be super interesting to watch this space evolve.


Yap,we will see way,way way more stable coins from a ton of different companies. Soon or later you will get paid in those ( probably not so stable coin anymore)

The world reminds me more and more like the world in the book(s) of shadowrun, minus the magic stuff..really facinating...


no privacy at all in Libra. We will lose our financial privacy. Better to use a privacy coin i.e Monero or better Mimblewimble's coins such as Grin but especially Beam.


Or zkSNARKs/Nightfall on Ethereum.




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