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.
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!).
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.
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.
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.
Or if they had been owned by Disney for that matter...
It's been around for a long time.
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.
Indeed, this is currently done. For example:
Please appropriate your logic on that.
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.
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 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?
If following the principles leads to a degradation of the rule of law what would you do?
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.
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.
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.
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
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.
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.
zuckcoin isn't cryptocurrency, it's digital currency, like gold in WoW
Anything which is not official digital currency will be liable for action.
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.
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.
It's not about censorship, it's about taxation.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.)
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.
The line no one can disagree with.
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.
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.
The world reminds me more and more like the world in the book(s) of shadowrun, minus the magic stuff..really facinating...