[Cryptography] Our leader opines on cryptocurrencies

Peyman Razaghi peymanr at gmail.com
Thu Jul 18 20:40:40 EDT 2019

On Thu, Jul 18, 2019 at 5:19 PM Phillip Hallam-Baker <phill at hallambaker.com>

> On Mon, Jul 15, 2019 at 7:27 PM Rick Smith <me at cys.me> wrote:
>> Perhaps I’m overanalyzing, but it doesn’t look like his writing style,
>> nor do those words look like ones he’d use. If someone on his staff
>> provided this as something to talk about, why? And how did they get 45 to
>> think it worthy of a tweet?
> Trump is probably just upset about Facebook not using USD as the basis for
> their Libre coin.
> Libre is a cyptocurrency only in name. It is essentially nothing more than
> Disney dollars for the Web. Mickey Mouse money. Only that is exactly what
> the Web needs - a low friction way to pay for Web content that is universal.
> If Libre was denominated in USD, people in Europe would be constantly
> exposed to exchange rate risk both as providers and consumers. Using a
> weighted basket of currencies mitigates that exchange rate risk. So if an
> article is 1 Libre it will cost roughly $1 / €1 / £1 / 100¥. But I don't
> need to know the dollar / yen exchange rate when I am buying an article on
> a Japanese site. I will know the USD/Libre exchange rate from last time I
> topped up my Libre account.
> This is what we needed all along and the cost of running the system will
> be addressing all the hard problems that BitCoin ignores by refusing to
> acknowledge them as problems.
> This is good news for crypto because one of the biggest reputation risks
> the field faces is general disillusionment with crypto after BitCoin goes
> the way of Gold Age/eGold and all the dozens of Ponzi schemes that preceded
> it. Instead of the press saying the collapse of Tether proves BTC was a
> scam start to finish, they will be saying that BTC failed because the big
> boys took over and did the job properly.
> Trump is upset because Facebook will be launching a new international
> reserve currency in place of the dollar right when he is trying to chest
> thump his way to re-election.

Libra is way more than a Disney money for web IMO. Libra’s reserve takes
USD OUT of circulation, and (if they are honest) parks it away from
economic activity involving any type of risk.

I think of their stablecoin approach ias a proof of burn protocol that will
gradually brick USD as a form of payment. The massive global network of
Libra means that comparing 100 Libras to 100 USD will be analogous to
comparing a $100 bill to 10,000 pennies (the connection being that it’s a
lot easier to move a $100 bill around relative to 10,000 pennies).

So, Libra is indeed a massive threat to USD as the dominant currency of the
world. Right now, USD is the easiest currency to move around the world,
accepted almost anywhere at face value with the best exchange rates. Libra
is a massive threat to this status, and also remember that it is backed not
just by USD but a combination of currencies, which gives it even more
transactional power.

Aside from politics but related, the technical problem to me is their use
of BFT in an association with closed membership. Nash equilibrium for human
groups is the two party system, until then, smaller viewpoints keep
aligning with one of the top two parties.

Now, what happens when Libra has its Bitcoin/BTC fork moment?  Since Libra
BFT requires 2/3rd majority, it means the Libra blockchain will essentially
HALT sometime in the future when they have a sizable internal conflict,
with people’s money stuck in their reserve.   Such conflicts are very easy
to surface if you look at the history of any standardization process, being
BlueRay vs DVD, or more relevant here, small blockers vs large blockers ...
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