I will revisit this thread in 2021 just to see how wrong everyone was. FB has billions of users that interact with its product everyday. People who make plans, attend events, split all sort of bills.
A borderless stablecoin will be a gamechanger. It can fuel commerce but above that it will kill many middlemen and rightly so.
Every new financal technology tries to kill the existing middlemen, then replace them with new middlemen who promise to be better. Turns out, these new middlemen (1) never fully comprehend how complex modern finance is, which raises costs, and (2) are human and thus become corrupt, whether subtly or unsubtly, over time.
I also have a sneaking suspicion that, in conjunction with point (1), many of these modern finance plays also totally fail to comprehend the vast investment into technology that traditional finance companies have made. They see a shitty iOS app, think "wow Old School Bank is never going to understand computers, let's disrupt them", so they start with an amazing iOS app, then struggle to reliably implement the rest of the stuff that matters (process automation, scalability, government relationships, customer support).
Point being, the world turns, time goes on, the players might change, but the game doesn't.
I don't understand your point. No one is disagreeing about the contribution that big finance has made in shaping our current systems. FB raised money, got listed. There's tons of financial system which helped them and help everyone from invoices to making a trip everyday.
But that doesn't mean something better can't come up. People don't hate banks for the monolith but their monopoly like nature that had stifled innovation and displayed outright criminal behavior. Don't forget 2008 recession was triggered by banks. Recent libor scandal..
About the technology investments. I would argue against this. Banks are more regulatory and defend my turf play than a technology play. Have you ever worked for a bank or any finance facing institution. There's layers and layers of clutter. Whole party is one big monolith, sucking money from places that it doesn't deserve.
Biggest benefit banks provide as in traditional banks is the account and trust that, that money in the account will remain on the name of holder. That trust as well was breached multiple times during withdrawal limits and freezes.
We all need better alternative. May be FB won't be the one. May be bank themselves will become more open and lean. But someone needs to push. There's a lots of money to be made and quite frankly FB deserves it for trying.
> Banks are more regulatory and defend my turf play than a technology play. There's layers and layers of clutter.
Why do you think this is? Do you think its just because "hur hur they're evil"?
I'm not saying there isn't some of that. But I am saying:
1. The big banks have discovered something that the small, modern banks haven't. YET. They will. Its that banking sucks, and we need the regulatory hurdles.
2. If you think these small banks don't have the potential to be just as evil as the big ones currently are, you're delusional. Money corrupts everything. Google and Facebook used to be the darling of the tech community, and look at them now. If they can turn so suddenly, anyone can.
Maybe we need a better system. Maybe we dislike the system we have, but we can't have a better one. Maybe we need better people. But, you can't change human nature.
Healthcare is a similar industry. Its ridiculously huge. Everyone needs it. There's trillions of dollars in it. Plenty of money. Then Theranos comes along and thinks that the old way of doing things is overrated. And then they die. Because, fun fact, agility and leanness works in some industries, but its mostly industries that don't actually matter.
> Maybe we need a better system. Maybe we dislike the system we have, but we can't have a better one. Maybe we need better people. But, you can't change human nature.
Do you have some sort of evidence for that? "We can't have a better (system)" is a pretty bold statement to make without some kind of supporting evidence. Absolute truths require absolute evidence.
Everything is easy when you're small. Look at Simple in the US; they have an awesome iOS app, a few interesting features, they gained customers, became more popular, and... feature development stopped. Their pace of externally-facing innovation has DRAMATICALLY slowed over the past three years. They've done automated expense allocating w/ recurring goals, family accounts, and protected savings accounts with a high interest rate, and that's, like, it. In three years. They don't even have 2FA w/o SMS.
Why is that? I don't know. But I have a suspicion: Banking is fucking difficult. Its insane. There's regulation and red tape everywhere, you make one mistake and you instantly not only lose customers but could ruin their lives. Its fundamentally not an easy industry to operate in. So, they have to allocate a ton of engineering effort into the back-office side of things, which is exactly what every other bank does. Simple even contracts with BBVA to handle the accounts, which should make some things easier.
Crypto doesn't change anything at all. Again, its easy and awesome when its small, and Crypto also has an advantage that regulation has been slow to catch up, so in some ways they can just shrug their shoulders and say "its not real money, you can't have the same expectations." For now. As it gets bigger it'll become subject to the same regulations that fiat is subject to, and years later it'll look exactly the same. The underground networks, including Bitcoin, can maybe escape some of this due to the lack of centralized corporate backing, but Facebook can't.
Simple got acquired by BBVA(a giant 150 yrold banking conglomerate) in 2014. That’s my guess as to why they’ve stopped innovating, it’s a tale as old as acquisitions have existed.
Also, they got acquired because they had no profitable business model.
- you can get transparency (the entire ledger must be public, so you reduce the risk of many kids of internal fraud and manipulation.)
- you can use these coins outside the facebook ecosystem -- I can't think of immediate value here, but I can see a long play where Facebook can turn into a bank
This is the first and only comment I've read that actually gives credence to the idea of FB making it as a cryptocurrency, but it still falls short of a simple idea and gives FB too much credit for being an "open" player. FB is the issuer, why can't they just provide APIs to their ledger and APIs for settlement so it can be used outside of their direct ecosystem, but still allows them full control? FB wants to keep people in their ecosystem.
Biggest benefit of using blockchain and cryptocurrency here is open trust (this term is the best way I can think about describing this). Any internal database is subject to all kind of human and technical errors. But with a network of trusted parties that solves the Byzantine Generals Problem. This becomes secure and trusted as trust is given. No one can hack it at will without taking the 50% of the network down and compromising multiple entities. This is a bizarre technical, social and economic feat. I wish Apple was the one pulling this instead of FB. But quite certainly there are more FB users than iPhone users.
Not true for stablecoins, which aren't really cryptocurrencies. The most important single-point-of-failure in currencies is the supply mechanism, which must be trusted. The supply of centralized stablecoins can't be trusted. It is open to human greed, errors and hacking. Do you trust Mr. Zuckerberg having control of the future money supply?
Centralized stablecoins should be illegal, because the issuer can print money from thin air without collateral, unlike banks which are regulated and the money supply is controlled with interest rates.
A feature of cryptocurrencies like ethereum or bitcoin is they can be anonymous and unregulated which can make small transactions cheap. You can get an ethereum address and I can send you 10c worth of it for maybe 2c in costs and that's it. To do similar in fiat we each need financial institutions which may have to spend a fair bit each to do KYC on us. It remains to be seen where Facebook will fit on the regulated/unregulated spectrum. Somewhere between the two I imagine.
Cryptocurrencies are trustless in principle. You don’t have to trust that FB updated your balance in their database correctly or tampered with historical data when you can simply pull all the transaction history from the blockchain and verify for yourself and with peers from the network.
I agree to the extent that many seem to acknowledge the transfer and remittance use case but seem to think that the market is already filled by niche players -- the fact that FB doesn't have to contend with network effects because everyone already has Messenger and/or WhatsApp is a huge deal.
It is simultaneously the case that FB can't build this and then magically be exempt from each jurisdiction's laws related to cross-border transfers. It's not like a real decentralized coin where there's no real enforcement mechanism, each government will know exactly where to knock and FB will play ball with reporting requirements, etc.
I think the right analogy is that they want to be to the rest of the world what AliPay is to China -- ubiquitious, so that it will very quickly be the case that you know everyone supports it in the world so you don't need to carry around your credit cards. Sort of like what Apple and Google Pay would want to be but with a larger incentive for retailers to adopt it as it has instantly higher penetration among users. It also might be more likely that messaging payments to a retailer becomes the norm instead of NFC (like how everyone in China pays for a restaurant check with AliPay by simply sending payment via message to the address, usually on the table in a QR code).
I'm not sure that it needs to be a blockchain but I assume it's about making the economics work by cutting out middlemen. If FB gets everyone to use this in their daily lives, however, it'll be a huge win for FB even if they don't make money on it directly -- because purchase data is very valuable, but also because you can't feasibly get rid of FB once it becomes your normal payment method.
You might have a good point, but why present it in this way? It is needlessly condescending and makes people want to not believe you. You could have easily stated your case for how much utility and adoption you think this will have without looking down your nose at people who hold a different opinion.
Comments like this devalue the entire conversation being had here by pushing people either towards twitter style shitposting/flamewars, which are terrible ways to have conversations, or simply causing those who would like to comment to not engage. Either way, can you not?
Bingo. I completely agree. Yes, it is kind of a hassle to have FB using this globalcoin rather than just use a standard decentralized crypto but it is a start at least.
Why do they need a crypto currency to achieve that? How is it superior to just a number in a database to represents your balance on facebook? Facebook is centralized what advantage does a decentralized currency have for them?
Venmo/Paypal seem to have no problem achieving this without a blockchain.
If you want global adoption, make it open. That's what Android does. That's what Linux does. That's what cryptocurrency achieves. That's what Facebook wants.
I am all for borderless stablecoins and agree with everything you say except that you imply that we should let Facebook and and control it, which makes no sense.
I don't understand why you're assuming "everyone" here will be wrong. I have yet to see a comment that has detracted from the value this brings to Facebook. What doesn't make any level of sense is why it's being labeled a cryptocurrency. It's a currency controlled by Facebook. That's no different than regular money issued by a central bank.
A borderless stablecoin will be a gamechanger. It can fuel commerce but above that it will kill many middlemen and rightly so.