Facebook’s Libra White Paper, adnotated.

It’s been a minute since we did some honest-to-goodness-“crypto”-lambasting on these pages, so without further ado, for your enlightenment and entertainment, let’s do Facebook’s new “Libra White Paper” :i

An Introduction to Libra White Paper • From the Libra Association Membersii

Libra’s mission is to enable a simple global currency and financial infrastructure that empowers billions of people.

This document outlines our plans for a new decentralized blockchain, a low-volatility cryptocurrency,iii and a smart contract platform that together aim to create a new opportunity for responsible financial services innovation.

Problem Statement

The advent of the internet and mobile broadband has empowered billions of people globally to have access to the world’s knowledge and information, high-fidelity communications, and a wide range of lower-cost, more convenient services. These services are now accessible using a $40 smartphone from almost anywhere in the world.(1) This connectivity has driven economic empowerment by enabling more people to access the financial ecosystem. Working together, technology companies and financial institutions have also found solutions to help increase economic empowerment around the world. Despite this progress, large swaths of the world’s population are still left behind — 1.7 billion adults globally remain outside of the financial system with no access to a traditional bank, even though one billion have a mobile phone and nearly half a billion have internet access.(2)iv

For too many, parts of the financial system look like telecommunication networks pre-internet. Twenty years ago, the average price to send a text message in Europe was 16 cents per message.(3) Now everyone with a smartphone can communicate across the world for free with a basic data plan. Back then, telecommunications prices were high but uniform, whereas today, access to financial services is limited or restricted for those who need it most — those impacted by cost, reliability, and the ability to seamlessly send money.

All over the world, people with less money pay more for financial services. Hard-earned income is eroded by fees, from remittancesv and wire costs to overdraft and ATM charges. Payday loans can charge annualized interest rates of 400 percent or more, and finance charges can be as high as $30 just to borrow $100.(4) When people are asked why they remain on the fringe of the existing financial system, those who remain “unbanked” point to not having sufficient funds, high and unpredictable fees, banks being too far away, and lacking the necessary documentation.(5)

Blockchains and cryptocurrencies have a number of unique properties that can potentially address some of the problems of accessibility and trustworthiness. These include distributed governance, which ensures that no single entity controls the network; open access, which allows anybody with an internet connection to participate; and security through cryptography, which protects the integrity of funds.

But the existing blockchain systems have yet to reach mainstream adoption.vi Mass-market usage of existing blockchains and cryptocurrencies has been hindered by their volatility and lack of scalability,vii which have, so far, made them poor stores of valueviii and mediums of exchange. Some projects have also aimed to disrupt the existing system and bypass regulation as opposed to innovating on complianceix and regulatory fronts to improve the effectiveness of anti-money laundering. We believe that collaborating and innovating with the financial sector, including regulators and experts across a variety of industries, is the only way to ensure that a sustainable, secure, and trusted framework underpins this new system. And this approach can deliver a giant leap forward toward a lower-cost, more accessible, and more connected global financial system.

The Opportunity

As we embark on this journey together, we think it is important to share our beliefs to align the community and ecosystem we intend to spark around this initiative:

  • We believe that many more people should have access to financial services and to cheap capital.
  • We believe that people have an inherent right to control the fruit of their legal labor.x
  • We believe that global, open, instant, and low-cost movement of money will create immense economic opportunity and more commerce across the world.
  • We believe that people will increasingly trust decentralized forms of governance.xi
  • We believe that a global currency and financial infrastructure should be designed and governed as a public good.
  • We believe that we all have a responsibility to help advance financial inclusion, support ethical actors, and continuously uphold the integrity of the ecosystem.

Introducing Libra

The world truly needs a reliable digital currency and infrastructure that together can deliver on the promise of “the internet of money.”

Securing your financial assets on your mobile device should be simple and intuitive. Moving money around globally should be as easy and cost-effective as — and even more safe and secure than — sending a text message or sharing a photo, no matter where you live, what you do, or how much you earn. New product innovation and additional entrants to the ecosystem will enable the lowering of barriers to access and cost of capital for everyone and facilitate frictionless payments for more people.

Now is the time to create a new kind of digital currency built on the foundation of blockchain technology. The mission for Libra is a simple global currency and financial infrastructure that empowers billions of people. Libra is made up of three parts that will work together to create a more inclusive financial system:

  • It is built on a secure, scalable, and reliable blockchain;xii
  • It is backed by a reserve of assets designed to give it intrinsic value;xiii
  • It is governed by the independent Libra Association tasked with evolving the ecosystem.xiv

The Libra currency is built on the “Libra Blockchain.” Because it is intended to address a global audience, the software that implements the Libra Blockchain is open source — designed so that anyone can build on it, and billions of people can depend on it for their financial needs. Imagine an open, interoperable ecosystem of financial services that developers and organizations will build to help people and businesses hold and transfer Libra for everyday use. With the proliferation of smartphones and wireless data, increasingly more people will be online and able to access Libra through these new services. To enable the Libra ecosystem to achieve this vision over time, the blockchain has been built from the ground up to prioritize scalability, security, efficiency in storage and throughput, and future adaptability. Keep reading for an overview of the Libra Blockchain, or read the technical paper.xv

The unit of currency is called “Libra.” Libra will need to be accepted in many places and easy to access for those who want to use it. In other words, people need to have confidence that they can use Libra and that its value will remain relatively stable over time. Unlike the majority of cryptocurrencies, Libra is fully backed by a reserve of real assets.xvi A basket of bank deposits and short-term government securities will be held in the Libra Reserve for every Libra that is created, building trust in its intrinsic value. The Libra Reserve will be administered with the objective of preserving the value of Libra over time. Keep reading for an overview of Libra and the reserve, or read more here.

The Libra Association is an independent, not-for-profitxvii membership organization headquartered in Geneva, Switzerland. The association’s purpose is to coordinate and provide a framework for governance for the network and reserve and lead social impact grant-making in support of financial inclusion. This white paper is a reflection of its mission, vision, and purview. The association’s membership is formed from the network of validator nodes that operate the Libra Blockchain.

Members of the Libra Association will consist of geographically distributed and diverse businesses, nonprofit and multilateral organizations, and academic institutions. The initial group of organizations that will work together on finalizing the association’s charter and become “Founding Members” upon its completion are, by industry:

  • Payments: Mastercard, Mercado Pago, PayPal, PayU (Naspers’ fintech arm), Stripe, Visa
  • Technology and marketplaces: Booking Holdings, eBay, Facebook/Calibra, Farfetch, Lyft, Spotify AB, Uber Technologies, Inc
  • Telecommunications: Iliad, Vodafone Group
  • Blockchain: Anchorage, Bison Trails, Coinbase, Inc., Xapo Holdings Limited
  • Venture Capital: Andreessen Horowitz, Breakthrough Initiatives, Ribbit Capital, Thrive Capital, Union Square Ventures
  • Nonprofit and multilateral organizations, and academic institutions: Creative Destruction Lab, Kiva, Mercy Corps, Women’s World Banking

We hope to have approximately 100 members of the Libra Association by the target launch in the first half of 2020.

Facebook teams played a key role in the creation of the Libra Association and the Libra Blockchain, working with the other Founding Members. While final decision-making authority rests with the association, Facebook is expected to maintain a leadership role through 2019. Facebook created Calibra, a regulated subsidiary, to ensure separation between social and financial data and to build and operate services on its behalf on top of the Libra network.

Once the Libra network launches, Facebook, and its affiliates, will have the same commitments, privileges, and financial obligations as any other Founding Member. As one member among many, Facebook’s role in governance of the association will be equal to that of its peers.xviii

Blockchains are described as either permissioned or permissionless in relation to the ability to participate as a validator node. In a “permissioned blockchain,” access is granted to run a validator node. In a “permissionless blockchain,” anyone who meets the technical requirements can run a validator node. In that sense, Libra will start as a permissioned blockchain.

To ensure that Libra is truly open and always operates in the best interest of its users, our ambition is for the Libra network to become permissionless. The challenge is that as of today we do not believe that there is a proven solution that can deliver the scale, stability, and security needed to support billions of people and transactions across the globe through a permissionless network. One of the association’s directives will be to work with the community to research and implement this transition, which will begin within five years of the public launch of the Libra Blockchain and ecosystem.xix

Essential to the spirit of Libra, in both its permissioned and permissionless state, the Libra Blockchain will be open to everyone: any consumer, developer, or business can use the Libra network, build products on top of it, and add value through their services.xx Open access ensures low barriers to entry and innovation and encourages healthy competition that benefits consumers.xxi This is foundational to the goal of building more inclusive financial options for the world.

The Libra Blockchain

The goal of the Libra Blockchain is to serve as a solid foundation for financial services, including a new global currency, which could meet the daily financial needs of billions of people. Through the process of evaluating existing options, we decided to build a new blockchain based on these three requirements:

  • Able to scale to billions of accounts, which requires high transaction throughput, low latency, and an efficient, high-capacity storage system.
  • Highly secure, to ensure safety of funds and financial data.
  • Flexible, so it can power the Libra ecosystem’s governance as well as future innovation in financial services.

The Libra Blockchain is designed from the ground up to holistically address these requirements and build on the learnings from existing projects and research — a combination of innovative approaches and well-understood techniques. This next section will highlight three decisions regarding the Libra Blockchain:

  • Designing and using the Move programming language.
  • Using a Byzantine Fault Tolerant (BFT) consensus approach.
  • Adopting and iterating on widely adopted blockchain data structures.

“Move” is a new programming language for implementing custom transaction logic and “smart contracts” on the Libra Blockchain. Because of Libra’s goal to one day serve billions of people, Move is designed with safety and security as the highest priorities.xxii Move takes insights from security incidents that have happened with smart contracts to date and creates a language that makes it inherently easier to write code that fulfills the author’s intent, thereby lessening the risk of unintended bugs or security incidents. Specifically, Move is designed to prevent assets from being cloned. It enables “resource types” that constrain digital assets to the same properties as physical assets: a resource has a single owner, it can only be spent once, and the creation of new resources is restricted.xxiii The Move language also facilitates automatic proofs that transactions satisfy certain properties, such as payment transactions only changing the account balances of the payer and receiver. By prioritizing these features, Move will help keep the Libra Blockchain secure. By making the development of critical transaction code easier, Move enables the secure implementation of the Libra ecosystem’s governance policies, such as the management of the Libra currency and the network of validator nodes. Move will accelerate the evolution of the Libra Blockchain protocol and any financial innovations built on top of it. We anticipate that the ability for developers to create contracts will be opened up over time in order to support the evolution and validation of Move.

To facilitate agreement among all validator nodes on the transactions to be executed and the order in which they are executed, the Libra Blockchain adopted the BFT approach by using the LibraBFT consensus protocol. This approach builds trust in the network because BFT consensus protocols are designed to function correctly even if some validator nodes — up to one-third of the network — are compromised or fail. This class of consensus protocols also enables high transaction throughput, low latency, and a more energy-efficient approach to consensus than “proof of work” used in some other blockchains.xxiv

In order to securely store transactions, data on the Libra Blockchain is protected by Merkle trees, a data structure used by other blockchains that enables the detection of any changes to existing data. Unlike previous blockchains, which view the blockchain as a collection of blocks of transactions, the Libra Blockchain is a single data structure that records the history of transactions and states over time.xxv This implementation simplifies the work of applications accessing the blockchain, allowing them to read any data from any point in time and verify the integrity of that data using a unified framework.

The Libra Blockchain is pseudonymous and allows users to hold one or more addresses that are not linked to their real-world identity. ((This will be a fascinating story to watch unfold : how Facebook handles AML/KYC between parties and countries with varying and perhaps non-existent approaches to identity documentation. Using pseudonymous identities works perfectly well online but isn’t what you necessarily want when renting out your Airbnb apartment. Facebook appears to be taking a more “crypto-like” approach rather than a “fiat-like” approach, priviledging its users over their respective states of residence. Hard not to like that if it does what it says on the tin. )) This approach is familiar to many users, developers, and regulators. The Libra Association will oversee the evolution of the Libra Blockchain protocol and network, and it will continue to evaluate new techniques that enhance privacy in the blockchain while considering concerns of practicality, scalability, and regulatory impact.

For more details, read the technical paper on the Libra Blockchain. Detailed information is also available on the Move programming language and the LibraBFT consensus protocol. We’ve open sourced an early preview of the Libra testnet, with accompanying documentation. The testnet is still under development, and APIs are subject to change. Our commitment is to work in the open with the community and hope you will read, build, and provide feedback.

The Libra Currency and Reserve

We believe that the world needs a global, digitally native currency that brings together the attributes of the world’s best currencies: stability, low inflation, wide global acceptance, and fungibility. The Libra currency is designed to help with these global needs, aiming to expand how money works for more people around the world.

Libra is designed to be a stable digital cryptocurrency that will be fully backed by a reserve of real assets — the Libra Reserve — and supported by a competitive network of exchanges buying and selling Libra. That means anyone with Libra has a high degree of assurance they can convert their digital currency into local fiat currency based on an exchange rate, just like exchanging one currency for another when traveling. This approach is similar to how other currencies were introduced in the past: to help instill trust in a new currency and gain widespread adoption during its infancy, it was guaranteed that a country’s notes could be traded in for real assets, such as gold. Instead of backing Libra with gold, though, it will be backed by a collection of low-volatility assets, such as bank deposits and short-term government securities in currencies from stable and reputable central banks.

It is important to highlight that this means one Libra will not always be able to convert into the same amount of a given local currency (i.e., Libra is not a “peg” to a single currency). Rather, as the value of the underlying assets moves, the value of one Libra in any local currency may fluctuate. However, the reserve assets are being chosen to minimize volatility, so holders of Libra can trust the currency’s ability to preserve value over time. The assets in the Libra Reserve will be held by a geographically distributed network of custodians with investment-grade credit rating to provide both security and decentralization of the assets.

The assets behind Libra are the major difference between it and many existing cryptocurrencies that lack such intrinsic value and hence have prices that fluctuate significantly based on expectations.xxvi Libra is indeed a cryptocurrency, though, and by virtue of that, it inherits several attractive properties of these new digital currencies: the ability to send money quickly, the security of cryptography, and the freedom to easily transmit funds across borders. Just as people can use their phones to message friends anywhere in the world today, with Libra, the same can be done with money — instantly, securely, and at low cost.

Interest on the reserve assets will be used to cover the costs of the system, ensure low transaction fees, pay dividends to investors who provided capital to jumpstart the ecosystem (read “The Libra Association” here), and support further growth and adoption. The rules for allocating interest on the reserve will be set in advance and will be overseen by the Libra Association. Users of Libra do not receive a return from the reserve.xxvii

For more on the reserve policy and the details of the Libra currency, please read here.

The Libra Association

To make the mission of Libra a reality — a simple global currency and financial infrastructure that empowers billions of people — the Libra Blockchain and Libra Reserve need a governing entity that is comprised of diverse and independent members. This governing entity is the Libra Association, an independent, not-for-profit membership organization, headquartered in Geneva, Switzerland. Switzerland has a history of global neutrality and openness to blockchain technology, and the association strives to be a neutral, international institution, hence the choice to be registered there. The association is designed to facilitate the operation of the Libra Blockchain; to coordinate the agreement among its stakeholders — the network’s validator nodes — in their pursuit to promote, develop, and expand the network, and to manage the reserve.

The association is governed by the Libra Association Council, which is comprised of one representative per validator node. Together, they make decisions on the governance of the network and reserve. Initially, this group consists of the Founding Members: businesses, nonprofit and multilateral organizations, and academic institutions from around the world. All decisions are brought to the council, and major policy or technical decisions require the consent of two-thirds of the votes, the same supermajority of the network required in the BFT consensus protocol.

Through the association, the validator nodes align on the network’s technical roadmap and development goals. In that sense, it is similar to other not-for-profit entities, often in the form of foundations, which govern open-source projects. As Libra relies on a growing distributed community of open-source contributors to further itself, the association is a necessary vehicle to establish guidance as to which protocols or specifications to develop and to adopt.

The Libra Association also serves as the entity through which the Libra Reserve is managed, and hence the stability and growth of the Libra economy are achieved. The association is the only party able to create (mint) and destroy (burn) Libra. Coins are only minted when authorized resellers have purchased those coins from the association with fiat assets to fully back the new coins. Coins are only burned when the authorized resellers sell Libra coin to the association in exchange for the underlying assets. Since authorized resellers will always be able to sell Libra coins to the reserve at a price equal to the value of the basket, the Libra Reserve acts as a “buyer of last resort.” These activities of the association are governed and constrained by a Reserve Management Policy that can only be changed by a supermajority of the association members.

In these early years of the network, there are additional roles that need to be performed on behalf of the association: the recruitment of Founding Members to serve as validator nodes; the fundraising to jumpstart the ecosystem; the design and implementation of incentive programs to propel the adoption of Libra, including the distribution of such incentives to Founding Members; and the establishment of the association’s social impact grant-making program.

An additional goal of the association is to develop and promote an open identity standard. We believe that decentralized and portable digital identity is a prerequisite to financial inclusion and competition.

An important objective of the Libra Association is to move toward increasing decentralization over time. This decentralization ensures that there are low barriers to entry for both building on and using the network and improves the Libra ecosystem’s resilience over the long term. As discussed above, the association will develop a path toward permissionless governance and consensus on the Libra network. The association’s objective will be to start this transition within five years, and in so doing will gradually reduce the reliance on the Founding Members. In the same spirit, the association aspires to minimize the reliance on itself as the administrator of the Libra Reserve.xxviii

For more on the Libra Association, please read here.

What’s Next for Libra?

Today we are publishing this document outlining our goals for Libra and launching libra.org as a home for the association and all things Libra. It will continue to be updated over the coming months. We are also open- sourcing the code for the Libra Blockchain and launching Libra’s initial testnet for developers to experiment with and build upon.

There is much left to do before the target launch in the first half of 2020.

  • The Libra Blockchain: Over the coming months, the association will work with the community to gather feedback on the Libra Blockchain prototype and bring it to a production-ready state. In particular, this work will focus on ensuring the security, performance, and scalability of the protocol and implementation.
    • The Libra Association will construct well-documented APIs and libraries to enable users to interact with the Libra Blockchain.
    • The Libra Association will create a framework for the collaborative development of the technology behind the Libra Blockchain using the open-source methodology. Procedures will be created for discussing and reviewing changes to the protocol and software that support the blockchain.
    • The association will perform extensive testing of the blockchain, which range from tests of the protocol to constructing a full-scale test of the network in collaboration with entities such as wallet services and exchanges to ensure the system is working before launch.
    • The association will work to foster the development of the Move language and determine a path for third parties to create smart contracts once language development has stabilized — after the launch of the Libra ecosystem.

Together with the community, the association will research the technological challenges on the path to a permissionless ecosystem so that we can meet the objective to begin the transition within five years of the launch.

  • The Reserve:
    • The association will work to establish a geographically distributed and regulated group of global institutional custodians for the reserve.
    • The association will establish operational procedures for the reserve to interact with authorized resellers and ensure high-transparency and auditability.
    • The association will establish policies and procedures that establish how the association can change the composition of the reserve basket.
  • The Libra Association:
    • We will work to grow the Libra Association Council to around 100 geographically distributed and diversexxix members, all serving as the initial validator nodes of the Libra Blockchain.
    • The association will develop and adopt a comprehensive charter and set of bylaws for the association on the basis of the currently proposed governance structure.
    • We will recruit a Managing Director for the association and work with her/himxxx to continue hiring for the association’s executive team.
    • We will identify social impact partners aligned with our joint mission and will work with them to establish a Social Impact Advisory Board and a social impact program.

How to Get Involved

The association envisions a vibrant ecosystem of developers building apps and services to spur the global use of Libra. The association defines success as enabling any person or business globally to have fair, affordable, and instant access to their money. For example, success will mean that a person working abroad has a fast and simple way to send money to family back home, and a college student can pay their rent as easily as they can buy a coffee.xxxi

Our journey is just beginning, and we are asking the community to help. If you believe in what Libra could do for billions of people around the world, share your perspective and join in. Your feedback is needed to make financial inclusion a reality for people everywhere.

  • If you are a researcher or protocol developer, an early preview of the Libra testnet is available under the Apache 2.0 Open Source License, with accompanying documentation. This is just the start of the process, and the testnet is still an early prototype under development, but you can read, build, and provide feedback right away. Since the current focus is on stabilizing the prototype, the project may initially be slower to take community contributions. However, we are committed to building a community-oriented development process and opening the platform to developers — starting with pull requests — as soon as possible.
  • If you want to learn about the Libra Association, read more here.
  • If your organization is interested in becoming a Founding Member or applying for social impact grants from the Libra Association, read more here.

The association will work with the global community in the coming months and continue to partner with policymakers worldwide to further the mission.xxxii

Conclusion

This is the goal for Libra: A stable currency built on a secure and stable open-source blockchain, backed by a reserve of real assets, and governed by an independent association.

Our hope is to create more access to better, cheaper, and open financial services — no matter who you are, where you live, what you do, or how much you have. We recognize that the road to delivering this will be long, arduous, and won’t be achieved in isolation — it will take coming together and forming a real movement around this pursuit. We hope you’ll join us and help turn this dream into a reality for billions of people around the world.xxxiii

1 Best Buy. “AT&T prepaid Alcatel CAMEOX device purchase.” Bestbuy.com. Available: https://www.bestbuy.com/site/at-t-prepaid-alcatel-cameox-4g-lte-with- 16gb-memory-cell-phone-arctic-white/6008102.p?skuId=6008102 (Accessed: May 15, 2019).
2 A. Demirgüç-Kunt, L. Klapper, D. Singer, S. Ansar, and J. Hess. The Global Findex database 2017: Measuring financial inclusion and the fintech revolution. World Bank Group, 2018. Accessed: May 15 2019. Globalfindex.worldbank.org. [Online]. Available: https://globalfindex.worldbank.org/sites/globalfindex/ files/2018-04/2017%20Findex%20full%20report_0.pdf
3 OECD. Mobile phones: Pricing structures and trends. Paris, France: OECD Publishing, 2000, p. 67. [Online]. Available: https://books.google.com/books?id=p- cP84M_GBeoC&pg=PA6&lpg=PA6&dq=1999+price+SMS+europe&source=bl&ots=TIbwgZWCmj&sig=ACfU3U2Z_yRawxW78qVSVO_wHCtRupoqoA&hl=en&sa=X- &ved=2ahUKEwjOmeG9tMHiAhVVFzQIHU8eBEMQ6AEwD3oECAkQAQ#v=onepage&q=SMS&f=false
4 Consumer Federation of America. “How payday loans work.” Payday Loan Consumer Information. Available: https://paydayloaninfo.org/facts (Accessed: May 19, 2019).
5 A. Demirgüç-Kunt, L. Klapper, D. Singer, S. Ansar, and J. Hess. The Global Findex database 2017: Measuring financial inclusion and the fintech revolution. World Bank Group, 2018. Accessed: May 15 2019. Globalfindex.worldbank.org. [Online]. Available: https://globalfindex.worldbank.org/sites/globalfindex/ files/2018-04/2017%20Findex%20full%20report_0.pdf 

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  1. Let me just start by saying how much I fucking despise Mark Zuckerberg. He’s a spineless snake who self-righteously sells opioids to the masses. If Merck’s CEO old sold oxycontin and fentanyl directly to the streets, using pushers and predatory practices to gain market share, buying-up smaller would-be competitors and either absorbing them or burying them, and then dressing himself up in the garb of the most humble plebeian, spouting empty platitudes about “fairness,” “equity,” “privacy,” and “security” or whatever else keeps the media off his back for another day, would he be Time’s Person Of The Year ? Of course not. But Zuck is a little bitch so he gets a pass. He has no optimism, no vision, and no passion, just a vile and contemptible pursuit of absolute monarchical power, which he maintains with 57% of voting power despite only owning 13% of shares, and which of course leads us neatly to his latest efforts to establish something resembling sovereignty and absolute rule, id est currency. Now that Facebook has such an enormous user base (in no small part thanks to acquisitions, most notably Instagram), having his own private money is the only thing between Zuck’s power on terra firma and his power on the Internet. This “Libra” effort can therefore be viewed as a hybrid compromise between fiat and Bitcoin befitting his firm’s position at exactly this juncture, and one that we’d be unwise to completely underestimate despite the several and numerous problems it will surely encounter in the years ahead, even if it’s really PayPal/USD that should be quaking in its boots, not Bitcoin.
  2. No less than 53 authors penned their name underneath the title of this White Paper. Compared to Satoshi’s singular name and singular vision, we can see just how top-down and bureaucratic the Libra effort is at its core compared to the bottom-up Bitcoin protocol.
  3. This “low-volatility” aspect is firmly in the “stablecoin” vein, which I predicted about a year-and-a-half ago would be the foundation of the next “ICO“-like craze that would propel the next flurry of public interest in the space. “Tether” was just the canary in this coal mine. Sure enough, BTC is trading at CAD $14,500 $15,500 $16,500, up from $5,000 six months ago… Though of course there’s also the matter of the next block reward halving about 10 months from now!
  4. It’s kind of funny (and telling) that the definition of “empowerment” here is access to a traditional bank, as if the two were synonymous! Tell that to the millions of Americans (and billions more around the world) who would take “predatory” payday lending over bureaucratic tentacles of corruption any day of the week and twice on Sunday. It’s so “obvious” in theory and yet we see such a different story play out where the rubber hits the road.
  5. Remittances were one of the early “killer apps” that Bitcoin was supposed to leverage. It didn’t end up working out terribly well, mostly because, as it turned out, Bitcoin didn’t need a “killer app” in the first place. Of course, this doesn’t mean that the remittances industry aren’t ripe for disruption. They are. Maybe Libra will be able to make a dent in that universe. I wouldn’t underestimate this application.
  6. “If only gold ownership were mainstream, oh the problems we’d fix!” Not sure how that’s supposed to work but ok.
  7. Ethereum tried the “scalable” blockchain-based cryptocurrency and it’s been an abysmal failure. You want scalability ? Use PayPal, or Libra, fine.
  8. Yes, “poor stores of value” that only increase 100%+ p.a. on average relative to fiat. So poor! So, so poor!
  9. “Innovating on compliance” sounds like lecturing birds how to fly, or begging for regulatory capture.
  10. Yumm! Rights!! Choo choo motherfucker!!!1
  11. This is well underway…
  12. As Lopp points out in his analysis, Libra doesn’t really use a “blockchain” as we know it today, at least not for anything other than marketing purposes. Libra doesn’t actually “chunk” transactions for the purposes of timestamping them. It just includes an unsigned hash of the database state with every transaction. Why not signed ? If you’re fussed about cryptographic signatures with Libra, you’re barking up the wrong tree, my friend.
  13. “Intrinsic value” will forever be one of those beaten-to-death misnomers that has literally never made sense to me and probably never will. Do you have things like that on your list ?
  14. The Libra Association is “independent” like the Federal Reserve is “independent.” 
  15. I’d skip reading the original technical paper (archived) and head on straight over to Jameson Lopp’s analysis (archived). The latter will give you much better context.
  16. Implying that Bitcoin isn’t backed by “real assets,” and in turn that CPUs and hydroelectric dams aren’t “real assets,” and therefore that a basket of artificially constructed and artificially scarce paper promises is superior, is a giant house of sand, exactly like imagining that your online friends are more real than your real friends, which come to think of it is pretty fitting here. 
  17. Some of the most powerful and successful companies in the world wrap themselves in flags other than “for-profit” but alotta difference that makes when the rubber hits the road. Rolex, for example, is a “charitable trust.” The Rockefeller Foundation is, well, you get the picture. The point is that “not-for-profit” isn’t some kind of moral get-out-of-jail-free card no matter how hard it tries to be.
  18. What a nice idea! On this point we must remain deeply skeptical. As you’ll have noticed with his shares of Facebook, Zuckerberg doesn’t give up power quite so easily. Nor is power truly relinquished for the sake of appearances, although it might appear to be.
  19. Don’t hold your breath if this “temporary” position of a permissioned blockchain, like “temporary” taxes, turns into a long-term status quo.
  20. This “open-for-all” philosophy couldn’t be more different from Bitcoin, at least in the TRB vein.
  21. Low barriers to entry… how very globalist!
  22. I swear that I must’ve jotted down my go-to example of the idiocy of even basic “smart contracts” on these pages before but it’s probably buried in the footnotes somewheres so here it is again : two blokes half-a-world apart want to bet on the hockey game the next day. One’s from Edmonton, one’s from Calgary, and they both want to put their money where their mouth is for the upcoming Battle of Alberta. Because they can’t trust each other not to be snakes but still want to bet against each other (an obvious stretch of the imagination but bear with me), they create a slick new “smart contract” to act as escrow service until the game is complete. They point the “smart contract” resolution input field to TSN’s URL for the game (http://tsn.ca/hockey/nhl/07/10/19/oilersflames.html) so that the bot knows where to get the score when it’s all said and done. Unfortunately, the fine folks in the IT dept at TSN don’t give a hoot about some hockey nerds’ “smart contract” and so, during their biennial refresh of the website, just so happen to move the URL for the game to http://tsn.ca/nhl/07/10/19/oilersflames.html just moments after they enter into the “smart contract,” entirely unbeknownst to the betting blokes. The game takes place the next day, EDMONTON WINS! and all of a sudden the blokes discover that their monies are stuck in crypto-limbo because the “smart contract” is still waiting for the game to take place based on the results of the original, and now 404’d, URL. If only they’d provided the contract with a back-up URL at ESPN and a second back-up at NHL.com or whatever. But they didn’t. And now they’ve made an expensive mistake that can’t be unwound because no one has authority and no one can unwind the blockchain cost-effectively relative to the size of the wager. At least this is how even basic “smart contracts” are likely to fail with conventional blockchains.

    Now, Libra might be able to offer a real market advantage here! Since they don’t really have a blockchain as such, and since they’re highly centralised and “permissioned” and whatnot, it could be that they’d have a body capable of unwinding “stuck” transactions in the few percentage points of cases (or even fractions thereof) that they occur. I mean, Facebook already has a Supreme Court (as does Amazon, and surely the Chinese tech giants too) so it’s hardly inconceivable. This could actually be a very meaningful feature in the “smart contracts” world that would lead to significant adoption : having actual humans with the authority to resolve sticky situations every now and again. But then again, 0, 1, infinity… y’know ?

    Hey, no one said building the future would be easy or obvious.

  23. This sounds like an awfully cumbersome and resource-intensive solution to the “double-spend problem” but without mining and with such a high degree of centralisation this sorta makes sense.
  24. Here’s a good drinking game : take a drink every time the Libra White Paper refers to the elephant in the room (Bitcoin) with a dismissive hand-wave and a euphemistic reference. You’ll be licked lickity split! “Some other blockchains” indeed.
  25. At first glance, this “single data structure” approach would appear to lead to problems where “simultaneous” transactions are concerned, what with the resulting potential for “orphaning” but with the actual incorporation of orphans into the chain, in which case is it really a chain or is it a web of sorts ? but it appears that special nodes called “Validators” actually clump transactions together, the validity of which is voted on my other nodes before the ledger history is confirmed and built atop. This is obviously open to all kinds of malicious attacks were Libra an open system where anyone could become a Validator but it’s not. Not yet. And not really. 
  26. Significantly… up! That’s what he said!
  27. Are you tired of your savings account only paying you 2% and your chequing account only 1% ? Well join Libra now and you’ll get 0% on your money, for life! Toldja to buy some 17% Russian Savings Bonds
  28. This is like the whore aspiring to virginity but ok.
  29. Oh gee golly I really hope Libra’s Galactic Leader is black. That would just be so Fifth Element! And if they’re going that far, they’d better have Jean Paul Gaultier design them a solid 1`000 outfits!!
  30. Ahem what about zher ??!
  31. Why is it always about buying coffee ? I mean really why ? Maybe it’s because roasted coffee occupies a morally unassailable position in our culture despite it being a skin-burning stimulant that’s even served to minors ? What’s wrong with this world ??!!! Gaahhh!!11!

    Just jokes. I heart coffee. Though apparently my puritanical-as-fuck GP thinks that 2-3 cups a day is “a lot.” Fuck off eh ?

  32. The myriad tax implications that will result from Libra’s floating rate to the dollar/euro won’t be a headache for tax collectors, despite the early grumblings of “experts,” so much as another nail in the coffin of income taxes and capital gains taxes in general, as initially precipitated by Bitcoin. This is a good thing! For the freed funds will allow us to indulge our many vices! As Bernard Mandeville remarked in 1732 in the lines of his poem “The Fable of the Bees” :

    The root of evil, avarice,
    that damned ill-natured baneful vice,
    was slave to prodigality,
    that noble sin; while luxury
    employed a million of the poor,
    and odious pride a million more:
    envy itself, and vanity,
    were ministers of industry;
    their darling folly, fickleness,
    in diet, furniture and dress,
    that strange ridiculous vice, was made
    the very wheel that turned the trade.
    Their laws and clothes were equally
    objects of mutability;
    for what was well done for a time
    in half a year became a crime;
    yet while they altered thus their laws,
    still finding and correcting flaws,
    they mended by inconstancy
    faults, which no prudence could foresee.
    Thus vice nursed ingenuity,
    which joined with time and industry,
    had carried life’s conveniencies,
    its real pleasures, comforts, ease,
    to such a height, the very poor
    lived better than the rich before,
    and nothing could be added more.

    Of course, there’s always more…

    [...] Then leave complaints: fools only strive
    to make a great an honest hive
    to enjoy the world’s conveniencies,
    be famed in war, yet live in ease,
    without great vices, is a vain
    Utopia seated in the brain.
    Fraud, luxury and pride must live,
    while we the benefits receive:
    hunger’s a dreadful plague, no doubt,
    yet who digests or thrives without?
    Do we not owe the growth of wine
    To the dry shabby crooked vine?
    Which, while its shoots neglected stood,
    choked other plants, and ran to wood;
    but blest us with its noble fruit,
    as soon as it was tied and cut:
    So vice is beneficial found,
    when it’s by justice lopped and bound;
    nay, where the people would be great,
    as necessary to the state,
    as hunger is to make them eat.
    Bare virtue can’t make nations live
    in splendour; they, that would revive
    a golden age, must be as free,
    for acorns, as for honesty

    So basically, if there’s anything to blame for the frankly painful unemployment rate in the USSA at the moment, it’s regulation and taxes. Whodathunk ?!!

  33. Socialism was noble too. It was also a blood bath. How will Libra fare ? Best case scenario (from Facebook’s perspective) is that it’s a check-out option when online shopping alongside Visa/MC/PayPal that’s accepted in even more countries and disrupts Western Union a smidge in the process while also filling some of the governance gaps of “smart contracts” what with their inevitable edge cases. Worst case scenario is that it’s another WoW Gold or Air Miles that is only of narrow utility. As ever, place your bets, gentlemen.

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