The first sign that a computer company is about to go down the tubes is: their management no longer concentrates on their core technology and concentrates instead on financial services. It's what happens when the bean-counters take over all the top management spots.
That's what happened to Control Data Corporation in the 1980's, when they stopped innovating new computers, and began concentrating on their Commercial Credit Corporation.
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Negotiation 101
All this affairs goes exactly like all Negotiations use to go. Reluctancy, cowardice and sheer incompetente are at the order of the day.
This actually speaks bigger of the coercive power Facebook has. The Partners will be sucked in Facebook typhoon.
Even if the new coin works only in Facebook I would still be miles away of what bitcoin was.
This has been in development for about a year. Isn't FB already allowing commerce through credit cards on it's site? I think this was an idea to get around tariffs/sanctions due to the trade wars more than anything. WHO would attempt to engage in illegal activity, such as buying/dealing illegal contraband through Facebook? However, enforcement of policing so many Amazon-like shoppers trying to avoid rising prices on the foreign goods they buy would be impossible! All Facebook would have to do to avoid enforcement against it is bribe a few opportunistic politicians who could profit from buying former military bases on the cheap to make beaucoup $ on the imports, like McConnell's wife, Elaine Chao's, family does. Meanwhile, continue ranting and raving as if looking out for the working people while laughing all of the way to the bank about how easy it is to get one over on their base.
The Feds should come down on cryptocurrencies like a ton of bricks under the Rico laws.
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The other players are skittish for an additional reason: Right now Cryptocurrencies are Free- Free of pesky Government/Banking rules and regulations.
But Facebook is already under the Spotlight. And the people holding that spotlight also hold the power to regulate.
The irony of Crypto currencies is that for their dream of world wide economic acceptance to come about, they have to gain the inherent TRUST (All Capitals) that the average person knows exists in that folded set of government issued bills they can hold in their hand, be they pounds, dollars, what-have-you.
I often read the sneered negatives about 'Fiat' money and that you don't need Banking regulation for Crypto because all you need to do is 'Read the Code'...
I can't 'Read the Code'. I shouldn't NEED to be able to 'Read the Code'. But it's reasonable for me to ask: "How can I trust the Programmers who CREATED the Code?"
Mt Gox and other sorry past events have basically resulted in lots of ordinary folk's Hard-earned money just disappearing without even a whiff of smoke. And even the people who could afford Lawyers to chase the money being told: "So sorry. You should have been more careful. Ciao!"
There's a Reason why we have this thing called the FDIC.
Code is all well and good..but if we're talking about my MONEY...I need to have the TRUST (All Capitals). And that means OVERSIGHT.
That's why these guys are skittish. Facebook has OVERSIGHT looking over its shoulders.
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It makes more sense for Amazon to start a currency than Facebook. If I could start an account at Amazon, where I actually purchase things and there was an incentive to use Amazon coin, like saving money on transaction fees or something, that would make way more sense than trusting Facebook with something unrelated to their business (not to mention their poor record).
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"You don’t have the best track record from a data privacy perspective..."
That is a massive understatement. What data privacy?
Whatever Mark Zuckerberg has repeatedly promised Facebook users, Facebook's attorney Orin Snyder argued in court that sharing with just one other person on social media is enough to abrogate any legal right to privacy. https://www.nytimes.com/2019/06/18/opinion/facebook-court-privacy.html
To avoid money laundering, Facebook will have to be able to verify the identities of those making transactions -- but promises to keep that data separate from Facebook's social media and advertising businesses.
As Barry Eichengreen pointed out, a Libra is "a monetary unit backed by the full faith and credit of Mark Zuckerberg..." and his partners. https://www.washingtonpost.com/opinions/2019/06/24/facebooks-venture-into-cryptocurrency-is-terrible-idea/?utm_term=.a1b1ba21ae6f
And isn't this the company that somehow failed to notice it got paid in rubles for political advertisements during the 2016 election?
Would I trust Facebook with $10 million? No. Not $1. Just say no.
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Interesting take, but I think this article is overly dramatic and largely misses the mark. When responsibly investing in crypto and blockchain at this stage in the life cycle an investor should view the investment as the same risk profile as venture investing.
Venture investors are wary by nature, they drag their feet to close and invest small sums in each deal they do. This is all normal behavior and is exactly how the Libra partners are acting.
None of this should be concerning to the potential success of Libra, this is all typical.
What is atypical, however, and exciting about Libra, is that the Federal Reserve and Chairmen Powell feel the need to review the project. How many venture deals does the Federal Reserve conduct diligence on?
The establishment powers that be know the potential of Libra and crypto in general, this has never been more evident. Regardless, of the to be expected behavior of a few wary venture investors.
https://www.victoriacapital.us/newsletters
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This won't last long. Despite the effort to be democratic, this will be a Facebook-branded currency, and Facebook will feel the pressure to support a minimum exchange rate with the dollar, else be known as "that social media company that stole its users' life savings".
Unfortunately for Facebook, there are armies of Russian cryptocurrency experts (the side conversations at cryptocurrency conferences and educational events are almost all in Russian) and others (arbitrageurs, FX traders, etc.) who are fantastically skilled at exploiting that sort of market inefficiency.
If Facebook and their partners are smart, they'll start tiny and leave an escape hatch that allows them to turn it into an e-wallet or other, safer, thing.
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A congresswoman, Maxine Waters, told Faceook to stop development work on the project!? Did I miss an amendment to the Constitution? When did individual congressional representatives acquire the power to issue mandates and commands to private companies?
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@BD
When they acquired the right to express an opinion about a policy issue.
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