"What you send is what they get. You can add, send, receive, and withdraw money from your wallet without worrying about hidden charges. Novi is cutting fees to help people keep more of their money."
What a weird evading answer. "Cutting fees"? That doesn't sound like 0.
Then why didn’t they just say “zero fees”? Marketing around financial products is usually pretty clear when the answer is simple. They’re definitely leaving an opening here.
If anyone is wondering why this is a big deal, let me explain. All major payment systems currently (PayPal, Venmo, FB Messenger, etc) are still based on government currencies. Libra is different as it is a cryptocurrency, so no government can easily control it. This might seem fine since everyone likes Bitcoin and such, but those cryptocurrencies are controlled by the community, not by a central organization. Libra is controlled by a group of major corporations and organizations, not by the community. Meaning that if those corporations decide to do something with the currency, no person or government could stop them.
That might not sound too bad. They own platform, so they should be able to control it, right? However, you need to consider that if someone controls the economy of a country, they control the government of that country as well. They would be able to control inflation and therefore the boom/bust cycle. If Libra is used by the majority of citizens and businesses in a country, then the group of corporations ruling Libra will be able to manipulate that country's government to do their bidding. I imagine countries with unstable governments will be the first heavy adopters of Libra and those governments are the easiest to manipulate. Libra could spawn the age of global corporatism.
Libra may turn out fine and improve the world, but that is only if its administration remains uncorrupted. Take a look through the list of entities that have joint control of Libra. I doubt you would trust most of them to control the world economy.
But this is the exact reason that Libra is controlled by a diverse group of organizations, right? I don't believe that's going to have much effect. Facebook and similar corporations already bully smaller businesses and organizations, so what prevents them from bullying or deceiving the smaller organizations in the Libra Association to vote for manipulative changes?
Any crypto-currency that is not controlled by the community using it is a red flag by definition in my book. It defeats the purpose of a crypto-currency and opens you up to a lot of risk, which is unacceptable for any financial solution.
Who is more important, a small unstable government, or the citizens of the country they govern? I feel like if people are switching from their country's currency to Libra, then that country has proven they shouldn't be in control of their currency in the first place.
Very true, but the point is that Libra has the potential of being just as corrupt as an unstable government. The country should switch to a cryptocurrency that can't be controlled, not one controlled by corporations.
Depends on your definition of a cryptocurrency. Libra is a blockchain distributed across multiple separate entities. That fits the definition of a cryptocurrency for most people. If your definition of a cryptocurrency requires community control, then no, it's not a cryptocurrency.
It's a distributed ledger "distributed" among a permission group of owners.
The real test is if you can just replace it with a database is it still relevant? In this case, you change nothing by just removing the "blockchain" and replacing it with a database server. Same thing with XRP, it's not distributed consensus in any meaningful way and thus is not a cryptocurrency by any accepted definition.
It's a sad state of affairs, but I would honestly trust Facebook more than your average cryptocurrency startup or exchange. That is still not enough trust for me to use their product though.
I’m almost certain that no country in the world wants to loose control over their currency. Especially not the US. The only thing that could happen is that they underestimate it and it becomes too big to fight it. Also, FB will probably bribe - eh, I mean - lobby some politicians. It works for Intuit :)
> no country in the world wants to loose control over their currency
You're free, in America, to settle transactions in whatever currency you please. When it comes to taxes or settling debt, U.S. dollars have primacy. But if you want to sell your house in Euros or Bitcoins or bags of glitter, that's always been permitted.
I think it's a misunderstanding that countries lose control. With the introduction of the digital dollar (Libra seems to be only a stable coin == a digital dollar), cash payments will become less popular and at one point governments will abandon cash. With all dollars being digital, governments will be in full control of consumer spending by influencing interest rates that are charged by the Libra system. Without being able to leave the Libra system, you'll be forced to buy goods when interest rates decrease.
> governments will be in full control of consumer spending by influencing interest rates that are charged by the Libra system
How can governments be in full control if there's a private partner/consortium/whatever that controls the technology? This seems akin to the whole "drive for Uber and be your own boss" argument.
That’s just it though, I disagree that governments will have “full control” in that situation, they can only lose control as this technology becomes adopted.
They gain nothing while taking on a private partner, one that has an abhorrent history of privacy abuse. It’s so hard to see the benefit for anyone other than Facebook in this
Please consider that just because Facebook is allowed to trade dollars in a digital way, it doesn't mean that they can produce dollars. Production is still in the hands of governments. Privacy wise I'm full on your side. But I still think it's also a benefit for governments - they'll lose on one side but gain on the other. Cash is a burden for them.
Maintaining cash currency will cost the US roughly $877M[0], out of the Federal Government’s $4.7T budget, or 0.01% of the Federal budget.
So in your view, sacrificing people’s privacy by giving this sensitive data to Facebook and ceding the government’s distribution control for what amounts to minuscule savings is worth it? Just for scale, if you were operating a $100k budget, you’d be saving $10 while giving a private company immense control of the financial system.
Correct...in parts. Afaik, this is primarily a platform for zero-cost transactions (and if you live in an emerging market, a way to stop your govt stealing from you).
But you wouldn't need to charge rates on the Libra system...you still implement monetary policy as before because Libra is just a currency backed by other currencies.
Given the currency shares announced though, it would potentially make monetary policy harder for non-US nations (i.e. EUR/GBP/JPY). My sense is that wouldn't be catastrophic but it would reinforce the position of the dollar/US monetary policy (as an example: if I am the ECB, I try to cut rates to zero then everyone just buys Libra until banks run out of money and force me to hike...this can work in reverse too where a big shock to the US economy can transmit through Libra globally...so functionally I think it would be very like a gold-exchange standard i.e. 1920-1970 but with USD as the exchange currency).
Btw, this is why you saw European nations come out so strongly against this. SDRs are basically the same thing but the IMF overvalued the EUR in the basket...this is why central banks don't really use SDRs. Libra is kind of the opposite where you have a realistic weighting of EUR which is obviously less good for the EUR (although, again, no-one uses SDRs and they haven't helped the EUR become less of a bad currency).
...but yeah...it definitely is complex because the needs of consumers/corporates for low-cost transactions runs counter to the needs of monetary policy. I can see why govts oppose this and the likely end point is some better solution to reduce transaction costs (which Libra essentially is...but trying to create a reserve currency was...not a good idea...ppl have been trying this for centuries).
> I’m almost certain that no country in the world wants to loose control over their currency.
Isn’t that already the case with EUR currency?
My understanding of the debt crisis in Greece is that it was partly due to the fact that Greece couldn’t print their way out of debt because only ECB can create EUR.
Maybe before we rush to adopt <Libra> we should stop to consider the consequences of blithely giving this technology such a central position in our lives.
> title="The great thing is, the sentence is really just a reminder to the listener to worry about whatever aspects of the technology they're already feeling alarmist about, which in their mind gives you credit for addressing their biggest anxieties."
Well, you would be worse if you put your money there and then be kicked-out by some AI rule. And ofc vague notification, no refund, no way to appeal, just a /dev/null form to send complaints.
I already see these HN headlines: "FB cut me out of my money".
Given that this is an implicit rebranding of Libra since the name was dragged into the mud after sponsors kept dropping out, that should answer your question.
It's rebranding of Calibra, the website still shows Libra name proudly. Perhaps FB wants to create even more distance between their project Novi and "not" their project Libra.
It's going to be really hard to get people to trust this organization. I think it's going to be an uphill battle, one they could win, but there's room for a more trusted company to swoop in.
I think the avenue for this to get traction would be for Facebook to sneak it into people's online lives without them really consenting to it. For instance, some type of activity starts giving you Libre as a reward, and you can use it to buy things on the site. Then certain essential things might start coming with a Libre price tag attached.
Similar logic to how premium currencies in mobile games work.
I think a lot of people use it WHILE distrusting it because they think the impact is low and the threat vector limited. When you start talking money I think that changes.
Zero traction? It seems to be a Google+ style project championed from the top which serves no purpose that can't already be done by existing products. It faced immense opposition from the US government until they dropped the decentralised aspect, so making it even more pointless. I wonder how many years before it is quietly dropped.
Shopify was a supporter of their currency, and they most likely are going to integrate it into their ecommerce tech stack, which basically provides the backend for many FB and Insta shops.
If it's cheaper/more comfortable to use than other payment methods, users/influencers will use it. And why wouldn't it be more usable considering that they basically own the entire stack, including the attention of users on those platforms? One big hurdle could be the EU though..
I was skeptical when I first heard about this. Now, seeing every screenshot showing USD values and nowhere having to worry about conversions, or weird money transfer junk... yeah it’s going to be huge.
IMO banks have sat back and let themselves be replaced. Bit of a bummer to have to be rescued from bad banking interfaces by big Fintech.
Maybe I’m just ignorant about the industry. But there’s plenty of digital money transfer apps in the market, why would this win over others like a zelle, cashapp, venmo, mondo etc? Facebook’s brand will be plastered on Novi/Libra so just name alone might make people slightly distrustful anyway. Although I could see for the sake of convenience regular people accepting centralization for the sake of convenience. Someone tell me otherwise.
>Facebook’s brand will be plastered on Novi/Libra so just name alone might make people slightly distrustful anyway.
By that logic, Facebook wouldn't have any users right now, Instagram wouldn't be growing, WhatsApp shouldn't exist... should I go on? Facebooks digital grasp is enormous. That alone is why I think this will be a huge player.
Of all the areas where banking is in need of FinTech rescuing, UI should be absolute least of our worries. And Facebook should be the absolute last company trusted to do the rescuing.
Still think "Libra" was a badly chosen name. In (at least) spanish and portuguese languages, the word "Libra" is most of the times used to refer to the british pound. So "50 pounds" is actually literally translated to "50 Libras" in those languages.
So, if this thing ever takes off, there will be around 700 million people that will be calling it "Facebook Libra" and not just "Libra" in order to make the distinction. Not sure if this was what they intended in the first place, but I don't see why.
For my understanding, is it possible this could actually be a decent thing for the rest of world? Not ideal, but an improvement? Or is the argument they should just be using <cryptocurrency> ?
It's possible that it's a good thing for certain parts of the world as a non-volatile alternative to the domestic currency. However, with all centralized things - it'll be good up until the moment that it's not.
Other commenters have mentioned the moral hazard that could occur if a region finds its economy priced on a corporate group's currency versus a country or country group's currency.
I guess now the discussion goes back to would you rather trust <insert name of depostic country with history of ignoring certain rights> or <insert names of multinational corporations with history of ignoring other types of rights>.
They should just be using a decentralized cryptocurrency like Bitcoin but there's myriad reasons why they wouldn't want to/be able to.
True. I couldn't believe it. I actually disabled NoScript to get it to work but even with the relatively conservative Firefox security settings it still doesn't load.
Sounds like PayPal, but owned by Facebook and initially peer to peer payments. I presume it's initially intended as a method of payment for Facebook Marketplace.
Is there an easy way to convert libra to bitcoin? I don’t have objection to centralised initiatives like Libra so long as people can convert cryptocurrencies easily.
I mean using decentralised exchanges to convert libra to bitcoin, do their architecture permit such stuff or is it a totally closed ecosystem? Anyway I can’t say I’m very interested about libra as I’m not a Facebook user but it makes sense for their business area.
Those two companies are having absolutely no trust from my side, they have abused the trust so often, that they no loger know what the term means. I dont care what they do, I dont care how usefull their "gifts" are. Just NO.
p.s.: people downvoting, you just dont understand what you are against with. Educate yourself, please, this is no longer the time of cheering for your favorite coorporation, the things have gone over the edge.
Zuckerberg’s original aspiration with Libra before he had to walk it back was enough for any reasonable person to nope out: a world currency controlled by a cartel of multinational corporations accountable not to the citizens of their constituent countries, but to shareholders and capital owners.
If anyone seriously thinks this sounds like a good idea I’m truly curious to hear your reasoning.
In my view this was always a cynical ploy by Zuckerberg. He would love to control a huge piece of the world economy, but I believe he knows that the outcry from real governments would never allow that - so he could hedge by trying to have his project regulated out of existence and taking decentralized tech with it. Decentralized tech is the greatest long term competitive threat to Facebook. Zuckerberg knows it and would love to see it incidentally banned as a casualty of taking down Libra, but his mistake was overplaying his hand too early.
I think the thought process is that paper money is already controlled by world governments, so this isn't meant to be a replacement for paper money, but rather just an intermediary so the transfer of money can be done more easily and cheaper.
I think another point is that if you want a truly decentralized, no government involved, cryptocurrency, those still exist, go buy and use some bitcoin.
>If anyone seriously thinks this sounds like a good idea I’m truly curious to hear your reasoning.
I generally feel positive about something like Libra and I'm not in favour of decentralised currency. Decentralised currency is hard to tax, threatens the sovereignty of nation states, the ability to enact sanctions, enables crime and I'm not really on board with that.
Libra (or something like it) looks like a way to built a cheap, frictionless payment that in any practical sense mostly seems to illemininate costs of transaction if it scales up well enough, and I think that's where most utility comes from in a currency. I don't see the value in some slow network that changes its value twenty times per month for the average person just so that you can stick it to the man or whatever.
As to 'controlling the world economy'. I've never really understood how this is supposed to be the result of Libra. At the end of the day it's basically a Paypal without the middleman. The Libra owners will at some point earn some money on interest but otherwise I don't really see how this confers any monstrous powers to them. As far as that goes I'm more concerned about the Facebook platform itself.
The precaution for control seems the custodial operations, where currency cummulates under the operators' trust, ie. in FB&col.
The little step for keeping what you obtain in the platform inside it for further use within it is what agregates significant risk.
"If anyone seriously thinks this sounds like a good idea I’m truly curious to hear your reasoning."
I don't know if it is a good idea, but I don not share the view that being a private entity makes it lesser than government entities.
I see governments and private entities as being built by people, and those are flawed just the same, governments even more so, since they are the perpetrators of the greatest evils of modern times.
This isn't a vote of support for FB, but I've said it before and it bears repeating: you are naive if you think you _can't_ do this today. There are companies doing this pretty well (ex: DMP's, or "data management platforms.")
Agreed, but DMPs aren't perfect, they aren't considered source of truth, and are used largely for targeting for advertising. However in this case there can be serious implications outside of simply advertising and the data integrity issues with DMPs now begins to lessen.
To add to this, with the argument of fighting terrorism, since a while Governments around the world have been requiring phone numbers to be only given to people who identify themselves by their government issued ID.
And guess what Facebook etc. are requiring at login. Phone numbers. For security they claim, yet they send spam messages to the number.
If you are giving them your PII to verify your identity, doesn't that means they already have a PII database to compare you against?
Id be pretty shocked if anybody here had a FB account, under a pseudonym, and they actually believed they were keeping their true identity hidden from FB. If you have an account, they know who you are. Verifying your ID is a due diligence on their part to CYA.
How many people, saying they would never give info over to FB, willingly hand it over to the fintechs like Robinhood?
I think you could have gotten your point across without the rudeness. Talking to people like that creates a toxic environment.
I fully agree that there is no way I'm giving that info to FB. I noped out of running ads with them because they wanted my ID. My privacy is invaded enough by them, no thanks.
> I think you could have gotten your point across without the rudeness. Talking to people like that creates a toxic environment.
Thank you for calling this out. To some, this may seem like over-reaction, but only by calling even minimally rude statements out can we ensure that HN doesn't become Reddit.
FWIW - GP here, it wasn't intended to be rude, but more of an agreement that KYC exists but is totally besides the point. I'm sorry if it came off any other way than that.
It kind of depends on what financial products you are talking about right?
You can, today, do high margin longs and shorts (dYdX), collatoralized loans (Maker, Compound), buy and sell derivatives (Synthetix), and buy into funds run by fund managers (Set Protocol) without any KYC. Even as an American, though these services will be more important to South Americans, Africans, and Southeast Asians.
KYC will still be used by old firms in rich countries, but it's not a given for the future of finance and most people will likely opt out as it's more trouble than it's worth and exposes you to identity theft when one of those firms is hacked and your personal data is stolen by criminals. It's just easier, faster, and safer to not use KYC.
This statement is not correct. Southeast Asia and South America are highly focused on KYC, and while in the past, you could opt out, increasingly opting out is not a option. If anything, they are going in the other direction. I can't speak to Africa, but I can tell you that India, China, Vietnam, Thailand do not treat KYC as "optional" and are planning on only tightening restrictions past what the US and EU require.
Source - work with Asian and American banks on KYC.
Well, yeah. That's my point. People in those countries not only have to deal with the friction of KYC when even identity documents can be a problem sometimes but they also have to deal with corrupt banking systems and governments where their money and information might not even be safe to give out.
These people always have the option of using the services I listed. Anyone can. They are free and unstoppable for anyone who needs them regardless of nationality, race, status, etc.
I'm still having a hard time figuring out how this whole Facebook as a gatekeeper thing fits into the anonymous privacy-first blockchain project that is Libra. As I see it, it's either centralized with a KYC check when you sign up, OR it's decentralized with anyone being able to generate a key pair and be a part of the system. So which one of those is Libra, after all?
Oh. So at this point the blockchain part is only kept to be able to brag about it being a blockchain. Otherwise it's your ordinary payment system, complete with all the annoyances and limitations that come with it being that.
Facebook doesn’t want Libra to be a Facebook project, because of the negative connotations associated with the Facebook brand.
So the main goal of the blockchain part is to have friends (the Libra association) between which the responsibility is shared. It dilutes concerns and deflects issues: the headlines won’t be “Facebook faces regulatory sanctions” but “The Libra association (Facebook, Uber, Spotify, …) faces regulatory sanctions”.
Or at least that was their hope initially. The press, or the regulator, may have pushed scrutiny on Mastercard had they stayed involved, but I doubt they will assume that Spotify is responsible if something wrong happens in the Libra association.
But fundamentally, the creation of consensus on transactional history merely elects a leader, and other companies’ servers only record the leader’s blockchain.
Additionally, the assets backing the payment system are the real meat behind enabling this technology. And unlike traditional banking, Facebook & cie maintain control over those assets regardless of which company handles the Libra account.
Banks can handle your payments because they have ownership of your deposits, but funds do leave the bank when performing a transfer (ACH, SWIFT, etc.) to another bank.
In Libra, the assets remain controlled by the Libra association even when making a transfer from one Libra app to another, eg. from Novi to Spotify.
It would be nice to have KYC using a certificate system, where organizations could publish that they have performed the check. At its core, that would be optional, and it would be up to the parties to a given transaction whether they care.
Yes, but not US-based KYC for non-US based persons, i.e. in the EU.
My country (Serbia) that's not in the EU had quite a bit of drama due to sending personally identifiable private citizen data (i.e. first and last name, specific personal info, ID card number, unique personal identifier) over Cloudflare which does not currently have a legal representative according to the Serbian Data Protection Regulation, which makes it illegal for the government or any other data processor to send ANYTHING to Cloudflare because Serbia is not in the EU and even though GDPR and ZZPL (our version) are literally identical (to prepare for EU-integrations), GDPR only applies to citizens of countries that are right now in the EU.
So, I don't think some people or [all] governments will like this. At all.
edit: And yes, SHARE Foundation did sue Google, Facebook, and all other tech giants (including infrastructure providers) in Serbia for ZZPL but apparently only Google appointed a legal representative in Belgrade, and even that seems like a "PR stunt", given how weakly GDPR is being enforced, and it is backed by the whole of EU. No other company replied or appeared in court.
Even for decentralized ones, there are legal requirements for any entity that wants to let you buy or sell. Anyone who buys or sells bitcoin from you without doing KYC is breaking US law.
This is essentially what wechat and alipay and the entire social ID-based auth in almost all China domestic apps (they link mobile phone number, which requires a national ID to get in the first place).
Yes, because I'm sure you're the exact same person you were in high school / college, and that everything you did 15 years ago will be held as an unwavering standard of who you are as a person.
/sarcasm
(Nevertheless you might be in hs / college now...but hopefully you understand the point I'm making.)
[1] https://about.fb.com/news/2020/05/welcome-to-novi/