The problem for Facebook is that these people can't buy anything online, because they don't have a bank account. If Libra launches successfully and remains stable, those same places selling X MB of data for cash, could easily start selling Libra too.
That's what so many people here are missing. Facebook isn't targeting this at people who have credit cards, Paypal accounts, and know what Bitcoin is, they're targeting the day laborer in a rural, 3rd world country, who might be enticed to part with some of their spending money for some Chinese plastic trinket that they never could have bought before, because none of the few stores in a 100 mile radius stock stuff like that.
Why couldn’t they sell prepaid Visa cards, or Venmo/PayPal (or whatever is the local equivalent) top-ups?
I get that having access to brokers that will sell a globally recognized hard currency for local cash is super useful, especially if it’s in electronic form.
I don’t get why it’s useful for it to be a blockchain, or why Facebook is the most likely company to run it successfully. When I ask people this the answer seems to be some hand-waving about regulation, but if this is hard for Venmo and PayPal to offer because of regulation, why would throwing around the word “blockchain” magically make it any easier for Facebook?
Whether or not it will work I have no idea, I don't know the markets that well. But their motives are transparent, the rest of the spiel is just "change the world" drum beating and cleaning the dialogue.
It's also not so much that it's impossible, but the markups are crazy.
But what surprises me is the extent of penetration of these wallets despite not being cash based. To a large extent, this success is probably attributable to the "glue" between these disparate wallets - the government-launched UPI or Unified Payments Interface (https://www.npci.org.in/product-overview/upi-product-overvie...), which allows you to link any of these wallets directly to your bank account.
Deposits, moving money in various ways, checking balances or statements, bill pay, customer service, etc etc. What exactly is missing that is important that American banking desperately lacks? The larger banks are borderline obnoxious with the options ('features') they try push on you, for what their mobile banking offers now.
The only thing I can think of, is easy & instant account funds transfer from one person's bank account to another person's bank account (which is a structural flaw in the US system, and which PayPal & Co. fill).
I think that's exactly what they're talking about.
Yeah, if that's what they're thinking they don't know too much about "3rd world countries"
I use it a lot. It’s never been easier to collect expenses from board game nights, and when I recently bought the first Harry Potter book (in Danish for my daughter) I didn’t have to enter my credit card information.
I think that’s what Libre will be, only global. I don’t like Facebook, but if they actually succeed at this, they’ll become the easiest way to pay for things on a global scale.
Remember that most of those small stores are able to do this by breaking the terms of service. Accepting MobilePay is NOT free for business, it's not even cheap. As a customers is pretty easy to spot, if the stores MobilePay number is just their phone number, they're breaking the terms of service, and you should pay cash.
I never said it was free, but depending on the service you want, it is significantly cheaper than having a credit card terminal. One of the reasons it’s cheap is because it tells your bank about everything you buy. We worry about social media, but it’s the banks that know what brand of hemorrhoid medicine I purchased last week.
I’m not advocating either solutions, by the way. I’m just pointing out a use case. I mean, I care enough about privacy to not use google or Facebook, and I still use mobile pay because it’s really, really convenient.
Not sure about the last one though because Visa/Mastercard seem to be extremely entrenched in the industry, as far as I can tell they have completely replaced any other debit card system.
EDIT: To your last point. I think the problem with fee's is rather that you need to convert currencies when you do global transactions. Banks could offer this at a loss but nonetheless libra has an edge here.
Copying credit card numbers all over the place is tedious and risky and people are kind of nervous about it for valid reasons. Swiping cards like a caveman is already a thing of the past and also not that safe. There's a huge amount of friction around payments for both users and merchants both online and offline. Even cash has a cost for merchants.
Contact-less payments with cards or phones are rapidly replacing cash payments (more convenient). But of course online you basically still get to copy credit card details around or deal with middle men like paypal or one of the many direct debit systems in many countries.
BTC is nice as a gold alternative and similarly tedious to transact with. It's useless for payments as transactions are extremely slow and rate limited to a ridiculous ~5 transactions per second globally. Price volatility means that it is hard to price things in it because you have to update the prices continuously. Ethereum is useless for the same reasons (in its current form).
Libra will require a bit of selling and educating obviously but actually comes with all the tools needed to make that easy. E.g. micro payments and tipping are very easy to implement on it and you could use that to incentivize users with e.g. bonuses, tiny refunds/rebates, etc. Integrating payments into chat removes a lot of friction for the user. And once there are enough merchants adopting this that incentivize users to use this, adoption could be quite rapid. Having low transaction fees will make this very interesting for merchants.
* Have 25 separated accounts or savings goals
* Share any bank account (or savings goal) with anyone (using bunq)
* On the fly couple my passes to any of the accounts
* Use NFC on my Android phone to pay
* Have a website where people can transfer me money coupled to any account
* Make payment request that are (when accepted) in my account in seconds
* Make 5 virtual MasterCard to route online payments to different accounts
* Choose what they do with my savings to generate interest (I have it set to "invest in green companies")
They are mobile first (the app is first class) but they have an API (and an open source desktop client as a result). All this is more expensive than traditional banks (I pay 8 euro a month) but they do not invest in shady things and promise to respect my privacy. I imagine Libra will do the same and more (but for the privacy part). It will be more like an ecosystem.
Not that I want it. I completely agree with all the sentiments here. I chose bunq because they have the same ideology as I do.
But there is btc and qr code scanning. I'm not saying we should ditch cash entirely.
I don't understand what you mean by this?
So presumably you link to your beer money account on a night out, expenses account on a work trip, etc, etc, but its all on one physical card.
For work I do the same, create a dedicated account and after a trip I can easily export an overview to get the money back from the company.
In the Netherlands one pays with Maestro cards but for international travel I can couple a (debit) MasterCard, or the new TravelCard which is a real credit MasterCard but backed by your own money. bunq does not do debt.
Similarly, cross-border payments in general are a huge PITA and affect enough people that stuff like Transferwise exists. If Libra can help assuage that there's a nice market there.
It might not be a resounding success but it could be enough to sustain an ecosystem.
The lower fees enable micro transactions which is something that I believe the internet needs in order to move away from ads. I'd happily pay a fraction of a cent per page view, there is no good way to do that right now.
That's because the person controlling the flow of money hasn't taken enough away from them. History has plenty of examples where a centralized controller went "too far", causing a mass exodus.
This is very hyperbolized, but consumerism and society today is truly reminiscent of a rat inside a cage with infinite sugar water, cocaine, and a steady supply of new mates.
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As for Libra, what is Facebooks plan? The only way I can see them winding up on top is if they make the "next Bitcoin" where they own like ~10% of the supply, kinda like Satoshi. I don't see Libra working if it's centralized.
Money laundering. You'd no longer need to buy a condo in New York to get your rubles into dollars.
Of course that only describes one "hypothetical" case but the mechanism is the same everywhere and for all pass through commodities.
This reference in context has the virtue of being slightly humorous IMO.
I see how buying a condo helps to launder corrupt Russian money, but it is unrelated to the currency, it works the same regardless of what the currency is, dollars or libra. I don’t think Facebook (or whichever libra provider is) would allow users sending a million dollar worth of libra to another wallet without any explanations just using a phone app.
Because the article literally says they plan "gradually transitioning to a permissionless state" and "Facebook will not control the network".
And, not that this is their plan anyway, but how could they prevent Libra's from crossing borders if it is permissionless?
And even if there were a limit on transfers somehow. A limit, by the way, on an automated system that presumably will involve large sellers with large volume. A limit which the word "permissionless" makes impossible. How will they prevent multiple wallets?
For laundering generally: you buy a thing with cash or the like from an incurious seller and sell it again. To grease the wheels, you could buy at over market value and sell under. Realestate is very popular, even driving up urban prices. But Persian rugs work just as well[1]. It's not currency change that is interesting but the erasing the origin of the purchasers money and replacing it with a legitimate origin: the sale of a condo.
[1] https://www.newyorker.com/news/news-desk/paul-manafort-and-t...
Same ways banks connected to Visa deny certain transactions.
> Because the article literally says they plan "gradually transitioning to a permissionless state"
I must admit I don’t understand what permissionless means. It’s not possible to be truly permissionless if you a member of the network prints money.
> Facebook will not control the network
Other members of the network can do the same transaction moderation.
Exactly, it certainly appears the claims can't all be true. This is a bit disturbing from a company with a questionable track record.
Extra step can be very simple: your libra wallet can be auto topped up from credit card.
> Only vendors, not customers, see those fees directly.
A lot of small shops around the world (like one next to my home) do not accept Amex because of higher Amex fees. And require cash if total cost is less then several bucks. Maybe these shops will eventually stop accepting Visa and MasterCard and/or allow libra on even smallest transactions.
> Facebook REALLY makes people nervous.
Are you talking about common people or people who visit HN frequently? I doubt common people really care about their data shared with advertisers. Even I don’t really care.
And again, Facebook will be not the only provider of libra.
> Why would anyone want to use Libra?
To be able to send money to your parents living abroad. To pay on vacation and don’t worry about conversion rates. To be able to send small debts to your friends easily. And so on.
If they are paid in Libra, and can pay in Libra, they become part of the global economy.
I know Brexit has taken its toll, but its not quite that bad.
Or they can ban Facebook.
Considering that most of those have countries have trouble enforcing the most basic tax laws, I'd like to see them try banning digital money that can be transferred over encrypted channels.
The protocol may be open, but the permissioning participants are (as of writing) large multinational corporations. If a country tells them that they have credible reasons to believe Libra is being used for money laundering, tax evasion, or gasp funding terrorism, they will be more than happy to close those channels down.
From the article, we also have this quote (h/t 'Lucadg)
> At the core, we believe that a network that helps move more cash transactions — where a lot of illicit activities happen — to a digital network that features regulated on and off ramps with proper know-your-customer (KYC) practices, combined with the ability for law enforcement and regulators to conduct their own analysis of on-chain activity, will be a big opportunity to increase the efficacy of financial crimes monitoring and enforcement.
I don't intend to speak to various other merits (or the lack thereof) of Libra, but to this: yes?
Of course! Transaction fees are huge. If you are operating in a razor-margin business, which more and more businesses are these days, then it adds up.
FasTrak, the Bay Area toll processor, charges your card when you drop below a certain balance, and also charges you what they think your average monthly rate will be. Why? To avoid excessive transaction fees on every toll eating into their coffers.
If the only way to buy something is Libra, or if merchants prefer Libra, then folks will be using Libra. Just look at how much market share PayPal has conquered, and they're arguable garbage.
If you can substantially beat PayPal, you win.
Libra's selling point will be FB's onboarding of users. It would not be unreasonable to expect dark patters there.
Sending money internationally takes several days currently and comes with high fees.
If Facebook implements Libra into their platforms such as Whatsapp, Facebook Messenger, Instagram etc. this brings less familiar people in contact with Cryptocurrency.
People might start to use it because of way faster international money transfers and (most likely) less fees. I know I will because of that reason.
Like Google did(doing?) with Visa/Master card data.
Closest related statements I could find in the blog,
>while Facebook, Inc. owns and controls Calibra, it won’t see financial data from Calibra
>More commerce means ads will be more effective, and advertisers will buy more of them to grow their businesses.
everyone seems to think crypto is for the first world, it's not, it's for the third worlds. will it empower the citizens like they claim? i don't know, but they definitely have a more valid use case.
Let's say a consumer wants to buy something. They can either pay with "normal" money in one step or they can use their phone to convert their money into Libra and then make the purchase with Libra. Why would they go through the extra step(s)? Am I to believe that the benefit is "lower transaction fees"? Because if so, Libra doesn't have a chance. Only vendors, not customers, see those fees directly. Even if the customers did see them, they aren't big enough to sway the inertia of the way things are.
In the real world, the vast majority cares very little about things like decentralization. They don't care about how the banking system works and who controls the flow of money. They want to swipe their card and get what they want. Anything more than that is just an obstacle. At least BTC has the benefits of pseudo-anonymity and speculative appreciation. Libra has neither.
Beyond all of this, people like to have control over their money. To feel they have control, people need to have understanding. Paper is easy to understand. Cryptocurrency makes people nervous. Facebook REALLY makes people nervous. Put the two together and it will feel like a big risk to users.
I'm an open minded guy, but I don't see it. Someone please enlighten me as to why this won't be Facebook's biggest failure. Why would anyone want to use Libra?