libra

So, early thoughts on Libra and Calibra, the cryptocurrency and overseeing structure announced today from Facebook. Not Financial Advice and I am stupid, but here are my two Satoshis. tl;dr - Can Facebook do open source better than Bitcoin and banking better than JPMCoin?

Most of the reporting so far has been pretty high level, but we can read between the lines in some of the pull quotes. Namely; "...transfer [Libra] to anyone else on the planet for a fee many magnitudes lower than current international money transfer rates." They don't consider Bitcoin, Bitcoin Cash, Ripple, other existing low-fee cryptos or Venmo/Square Cash their major competitors as these have negligible fees to the end user already. They're somehow targeting the remittances area, while also acknowledging that people will have to transact in Libra. This is obviously only useful if someone on the other end accepts Libra, otherwise you're going to have extremely mismatched trading pairs.

Also of note, “We want to make sending money as easy as sending a text message.” Again, that has been a feature of Bitcoin for a long time, as well as invoicing, time delay, and soon oracles. Nothing Facebook is proposing is revolutionary, except for the fact that a major company thinks they can literally print money. But...

"...Facebook intends to make money off Libra, a digital currency it says it does not want to control, despite having created it." By open sourcing the software itself, does Facebook remove legal liability from themselves? Do they skirt money-printing laws? KYC? AML? Methinks not, but Facebook surely has many lawyers working on these issues. In fact...

"Of course, many Facebook users can already send money using Venmo, PayPal, or even Facebook Messenger’s built-in peer-to-peer transfer feature. But for that you need a credit card or a bank account, a financial tool not accessible to roughly 1.7 billion people. Weil says Calibra will be available to anyone with a cheap Android smartphone." So you intend to REPLACE bank accounts and local currencies? And how do the local banks and governments feel about this? How do you exchange when you need to pay taxes? Does your landlord accept Libra? I realize these are arguments against Bitcoin, but we're talking both the platform itself and the currency exchange (if that is where Facebook hopes to make money).

"Calibra will require you sign up with a government-issued ID, and Facebook’s digital wallet will ... never share your financial details or transaction history with the social network’s advertising divisions." lol, Facebook, who profits off consumer behavior and advertising data, super duper swears to not use any of the data it's collecting to make money. Facebook doesn't want to know what consumers actually spend money on? This is at best a failure of fiduciary duty to their stockholders, and at worst just a lie.

Most telling, there is NO mention of mining, node verification, or price fluctuations. Bitcoin has a shitton of people who just want to get rich who now just buy and hodl, and that helps prop up the price. My last reading said Libra was a stablecoin, meaning it should be a weighted average of international currencies, i.e. there's no potential for buying it to make you rich.

But let's head back to JPMCoin; if someone truly wanted to bank the unbanked... why wouldn't a bank do it? Especially if you have an open source base for transferring value, isn't JPMC way better positioned to attempt something like this than Facebook?

My prediction would be that this is the newest way to get Grandma or the less technologically advanced onto a payment platform (Facebook touts it will automatically roll out to its 2B users). But... is that a good thing? The real winners here might be scammers, who rather than iTunes gift cards can now get Grandma to send Libra payments to an open source wallet address. Once a few of these bad press stories pop up, no one will trust Facebook (lol like they do already), and the debate over how to do open source transactions continues.