[ei8htyfi5e]

I put this in another thread but I've been shouting it far and wide today.

I've lived in China and seen how this plays out. Facebook's new Libra Blockchain will be a centralized bank but way more dangerous.

It will allow for a worldwide social credit system. If Facebook decides to remove you for wrong speak or wrong think, your money and many services will be inaccessible.

Further, they have no mandate like the central bank does to increase employment. Their mandate is to make money for corporations. This will lead to global social unrest.

This will put some third-world countries in complete control by Facebook. I mean, whoever runs the currency, is the country. But in this case, it will be completely controlled, as it's also many of those countries main source of communication. Therefore, if Facebook's Libra is a countries main currency and social network, that country will be owned by Facebook.

Finally, the regulations on crypto and blockchain are still new. This is in Facebook's advantage as they can start lobbying to have these laws in their favor. They can argue for less transparency, as they are a bank, and this fits with their new privacy marketing message.

This is extremely subversive and Europe is already rightly pushing back. America will be next. On one hand, I love seeing the existing financial system panic when new technology comes out. On the other hand, under no circumstances will I accept a world where Facebook started the one world currency.

[dang]

Please don't repeat comments in multiple threads. Repetition destroys curiosity and is therefore off topic here.

[ei8htyfi5e]

If the same comment is relevant to a similar story posted twice, and this rule of yours is listed nowhere in the guidelines, how can you justify taking down my comment? I'm honestly curious? This wasn't a comment that was incorrect or that the community felt was inappropriate. They highly voted it up in both stories.

[bouncycastle]

It is founded by Facebook, but they will only have a %1 stake in it as far as I understand. Ultimately, it will be still controlled by existing governments, as they plan to back it by government issued currencies & the organisations that participate still have to respect government regulations. Besides, Visa & Mastercard already has this kind of dominance, except Libra makes it more transparent. So really, there's nothing to fear, at least if you already accept and abide by the existing financial system...

Btw, Libra is not a blockchain, but a distributed database. Think of it as Visa, Mastercard and friends coming together to create one database that they can update individually yet have the changes available to everyone while maintaining data integrity. Much better than the existing "black box" system, the new system is easier to audit.

[codesushi42]

>It will allow for a worldwide social credit system. If Facebook decides to remove you for wrong speak or wrong think, your money and many services will be inaccessible.

How is this different than what we have today with banks and credit card companies? The government can already freeze your funds. And now there are examples of people being censored online by being dropped by PayPal, which sets a scary precedent no matter how terrible their beliefs are.

>Further, they have no mandate like the central bank does to increase employment. Their mandate is to make money for corporations. This will lead to global social unrest.

That made me chuckle. The Fed has shown no concern for those who save by keeping interest rates so dangerously low for so long. The Fed is also here to make money for huge banks and corporations by making credit so cheap. In the long run this may not be the best for employment. Even if it is, it won't be for wages and wealth disparity.

>This will put some third-world countries in complete control by Facebook. I mean, whoever runs the currency, is the country.

Not much different than the role USD and the Euro play in developing nations today.

>Finally, the regulations on crypto and blockchain are still new. This is in Facebook's advantage as they can start lobbying to have these laws in their favor. They can argue for less transparency, as they are a bank, and this fits with their new privacy marketing message.

And what laws does Facebook plan to propose that are worse than the regulation (or lack thereof) that exists for the financial industry today?

>On the other hand, under no circumstances will I accept a world where Facebook started the one world currency.

I agree. I hope it is not Facebook that wins this game. But your other comments are very reactionary.

[TomMckenny]

While the grandparent post may have misstated the threat, there is a real danger here.

It is not just a new style of credit card. And while it will act like a bank, it appears it will dodge regulation and consumer protection (limited as it is) under the word "cryptocurrency" or some other neologism poorly understood by the public and legislators.

Will Libra deposits be covered under FDIC? Will it be subject to closures when there is a panic? What rights do depositors have in the event of wrongful transactions?

So it's great if it allows people under repressive or kleptocratic governments more security and freedom. It's fine if it's just a toy to send money to friends. But it's another thing if it's just a bank with an unstated "depositor beware" philosophy. It'd also be a lot less worrisome if the company implementing it had a bit better reputation.

[codesushi42]

>Will Libra deposits be covered under FDIC?

That's not Libra's use case. It is pegged to other assets; it is meant to be transactional, not held as a store of value.

>Will it be subject to closures when there is a panic?

Why do you consider that a good thing? Would you really rather have your money held by some bank in Argentina then?

Besides, the idea of cryptocurrency is that the money supply is not governed by policymakers, which will help to avoid the conditions leading to those kind of panics. In the case of Libra, it's pegged and its monetary policy is more decentralized than that of a central bank.

>What rights do depositors have in the event of wrongful transactions?

What rights do you think that you have today? You're being subject to wrongful transactions all of the time in the form of outrageous banking fees. Make no mistake, the cost of "wrongful transactions" is being foisted upon you, plus much more in the bank's own interest of making money.

[GoblinSlayer]

"always beware" philosophy is universal: there's no silver bullet, including insurance.

[pathseeker]

>the Fed has shown no concern for those who save by keeping interest rates so dangerously low

There is no such thing as a dangerously low interest rate. The atmosphere won't suddenly catch on fire if you don't get a certain percent of risk free money. Additionally, "those who save" is not part of their mandate. They target unemployment and inflation.

>The Fed is also here to make money for huge banks and corporations by making credit so cheap.

Cheap credit isn't good banks anymore than it's good for individuals. Low interest means low mortgages, etc. If it's good for businesses, it's good for people for the same reason.

>In the long run this may not be the best for employment.

There hasn't been evidence otherwise so far. There has been plenty of evidence of money shortages causing lots of unemployment (see all busts of the early 1900s).

>Even if it is, it won't be for wages and wealth disparity.

High interest is absolutely terrible for wealth disparity. It's literally free money for people with money.

[codesushi42]

>There is no such thing as a dangerously low interest rate. The atmosphere won't suddenly catch on fire if you don't get a certain percent of risk free money.

You are completely delusional. There is a huge risk to global liquidity. We won't be able to rely on printing money to get us out of the next downturn.

>There has been plenty of evidence of money shortages causing lots of unemployment (see all busts of the early 1900s).

As Edward Thorp would tell you, bubbles thrive during times of cheap leverage (read: credit). Look at the crises of the last century.

>High interest is absolutely terrible for wealth disparity. It's literally free money for people with money.

You seem completely unaware that low interest rates are a tax on you in the form of inflation. The wealthy have enough to hold other assets that can more than offset this, and they can hold much more leverage. The average person, not so much.

[bamboozled]

On the other hand, is a social media platform and private company with a fairly bad track record of respecting human rights to privacy and democracy the best group to solve these issues?

[ei8htyfi5e]

Also, to be up front, some of these points I found on a thread early this morning and I copied it to a note pad for later, then went to sleep. When I woke up, the page had refreshed and I have no way of crediting the original author. But I think it's important to share, so I did. If you are the author, or know who wrote parts of this, please tell me and I will credit you/them.

[nabakin]

Cant you google some of the text to find the original comment? Or are you saying the original comment was deleted?

[ei8htyfi5e]

Not sure. It's on a facebook group and I couldn't find it in search and I looked in the group I thought it was posted in, but I can't find it.

[nabakin]

Ooh Facebook. By thread I thought you meant reddit or HN.

[on_and_off]

After seeing paypal screw small companies for years just as a payment system/not quite a bank (In practice it is, but it is not regulated as such); I really don't want a company that is just as scummy with even more power.

[themagician]

Don't worry so much. You can stop shouting. This will lead to nothing because no one will use it.

Every attempt Facebook has made at commerce has failed miserably. No one trusts Facebook enough to purchase on Facebook, let alone use a Facebook currency.

Facebook, Snapchat, Twitter, et al. have all tried over and over again to get people to transact on their platform. Shop on Facebook, Buy on Twitter, Snapcash have all failed. Shopping on Instagram is a failure in progress.

All these companies want to feel like they are more influential than they are. They are really good at getting people to waste their time. Money, not so much.

[Lordarminius]

> This will lead to nothing because no one will use it. Every attempt Facebook has made at commerce has failed miserably. No one trusts Facebook enough to purchase on Facebook ...

I live in the "third world". People are not so discriminatory or probing about FB and friends as the west. In fact,(and regretfully), I daresay FB is viewed positively.

So don't be too sure.

[yumraj]

That is a very wrong way of looking at it.

It is the same as people deciding not to vote and then realizing that the wrong candidate had won with devastating consequences.

[jeromegv]

It’s not the same. The point, which is a valid point, is that this might never get traction because all their attempts at handling payment/transactions on behalf of other vendors on their platform has been nothing but failures. This isn’t far fetch to think that they are doing all this work and nobody will care to use it.