[Cryptography] FT explains Facebook's Libra

Phillip Hallam-Baker phill at hallambaker.com
Wed Jun 19 13:30:54 EDT 2019

On Wed, Jun 19, 2019 at 1:18 AM John Levine <johnl at iecc.com> wrote:

> The Financial Times Alphaville column has a snarky but very well
> informed take on Facebook's new electronic-money-like-thing Libra.
> They say, and I agree, that it's actually an ETF (exchange traded
> fund) with a light sprinkling of blockchain pixie dust to make it seem
> cool.  Their long list of partners includes zero banks which is
> significant, since without banks to hold the money that's supposed to
> give it a stable value, it can't exist.
> Libra also say bizarre things like it's a permissioned blockchain now
> but they plan to make it permissionless in the future.
> Lots more here:
> https://ftalphaville.ft.com/2019/06/18/1560848464000/Alphaville-s-Libra-cheat-sheet/
> If anyone can make sense of the Libra white paper and explain in any
> more detail what it is, I'd be interested in hearing about it.

It is basically Disney dollars for the Web. Which does nothing for the folk
who believe crypto currencies are all about destroying governments but is
exactly what the Web actually needs.

The currency isn't going to deflate automatically making early adopters
rich. It is going to be pegged to a basket of currencies which basically
means that it is going to be like trading in an index fund of currencies.
It is going to be like an average of the USD, yen, Euro and GBP. Which is
going to make it a very interesting currency for folk doing international
business. For most it is going to be more stable than any of the
alternative foreign currencies.

They mention the ability to prevent fraudulent activities. Which means that
they must have some sort of chargeback mechanism. So this is not going to
become a new vehicle for ransomware or hard drugs. The interesting part of
course is going to be where they draw the line. BDSM porn? Sexual services?

The big interest I have in it is that it is a backstop for the crypto
industry when BitCoin and the Ponzis collapse. The FB coin will be a
success because it fills a real need for a means of paying for internet
content. It is a better version of Dogecoin. My big worry has been that
when the scams finally collapse, they will take legit crypto with them
because they have created a huge expectations gap. If that were to happen
after FBCoin is on the table, it would look more like succession than proof
that the technology was flawed (even though they are not doing proof of
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