Jump to content

Facebook launching its own currency


Recommended Posts

The Verge has more.

 

Don't like those big evil banks controlling your money? Great! Just let an association made up of trustworthy tech companies like Uber, Lyft, Ebay, Paypal, Facebook, financial service companies, and venture capitalists handle your cash instead.

 

Want to embrace crypto to get out from under the heel of burdensome regulations? Great, just put your financial transactions in the hands of a merciless megacorp with no particular need to service you as a customer and no system of recourse should anything go wrong.

 

Think middlemen companies like Visa and Mastercard provide no value and are just sucking money out of the system? Don't worry, they're already partners leading the charge.

 

Don't trust Facebook? Great, they really promise to keep your transaction history separate from your advertising profile. Their word is their bond! 

 

The thing is, there is a real need for a lot of unbanked people to be able to safely secure and transfer money, and mobile based system makes a lot of sense. It's why things like M-Pesa have been so successful in places like Kenya. At the same time, I have a hard time imagining that's where Facebook's real intentions lay. They're looking for the "meaningful side effects" of billions of people transacting directly over Facebook. I doubt their real driving incentives have to do with helping out the unbanked African folks move around a couple bucks. If they're able to provide a useful service to that population, great. (and I mean that sincerely) 

 

There's also a potential use case for a solid digital currency to move money across countries regularly. If you're living in the states and sending money back to your family elsewhere, something like this could be safe, stable, and easy enough to be useful. I'd still tell such a person to be wary and not store money there if at all possible, but there is a real need there that could genuinely help a vulnerable population.

 

For everyone else that already has access to any kind of banking infrastructure, the people that I think Facebook actually wants to make money from, I wouldn't touch this with a ten foot pole. The potential consequences of giving Facebook even nominal control over financial transactions is mildly horrifying, and nothing about their incentive structure makes me think much good can come from this. 

Link to comment
Share on other sites

An interesting bit from Wired's piece:

Quote

Despite Facebook’s emphasis on the “decentralized” aspects of Libra blockchain, the Calibra experience will be more Venmo than Bitcoin. Calibra will store your Libra coins and hold the cryptographic keys required to access them—a user-friendly move, in the sense that you can lose your password or phone and know your money will remain accessible. That also allows Calibra to easily intervene in cases of fraud or other disputes. But Calibra’s custody of the keys and coins means the company can move money between its wallet’s users without relying on the blockchain itself; the only time the blockchain gets involved is when a customer wants to send money outside of Facebook to a wallet or service developed by another company.

So Libra is the currency that is run on a public blockchain, and Calibra is Facebook's Libra based financial services company. If you're using Calibra to move money within the Facebook ecosystem (WhatsApp, Messanger, etc.), it's working more like a standard financial authority, keeping internal records and not writing them to the public blockchain. Only when you move Libra outside of Calibra that it writes to the blockchain. 

 

I've long argued that financial services companies from Banks to credit card companies do provide a valuable service, and that crypto's abandonment of those institutions is as much a liability as a strength, but in no world would I think that replacing those institutions with Facebook or simply having those same companies use crypto solves the problems that anyone is actually trying to solve.

  • Thanks 2
Link to comment
Share on other sites

4 hours ago, SFLUFAN said:

If "The Zuck" and company were not expecting such a reaction, then they are far too stupid to be involved in a cryptocurrency.

 

I dunno, that seems like exactly the kind of stupid I'd expect to be involved in cryptocurrency. 

  • Haha 1
Link to comment
Share on other sites

  • 4 weeks later...

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

  • Recently Browsing   0 members

    • No registered users viewing this page.
×
×
  • Create New...