Yes. They never say it outright, but this is the way their PR statement begins:
"The Libra Association announces the adoption of a new name and the recruitment of key executives, reinforcing its organizational independence. Now transitioning to the name “Diem”, which denotes a new day for the project, the Diem Association will continue to pursue a mission of building a safe, secure and compliant payment system that empowers people and businesses around the world."
Sometimes those names make you wonder. Is it a bad attempt at name squatting? As in diem25? So that all the kids will think of FB currency first, when they hear diem25? Or is it the latin word "diem"? Did they mean to write "dime" and have a typo?
And of course in typical FB fashion, the website will be garbage, if you don't allow all their abusive scripts.
This has been downvoted, but I guarantee that people involved with this process would have read Yanis’ work (he’s one of the most famous economic ministers of the early 21st century) and been familiar with the Diem movement. I wonder what Diem25 will do now that they’ve been either trolled or namesquatted by Facebook, depending on how you want to look at it.
Maybe they’re hoping Diem25 will embrace the collision and ride on their platform?
tbh this non-transparent editing of titles etc. is kind of distracting. It would be much better if they could leave a comment with the change they make.
Pretty scary that there is almost no mention of Facebook on the website (only in the logo of Novi, the wallet app for Diem by Facebook).
I'm wondering if all involvement in Diem at Facebook goes through Novi, and with that the members section is "truthful" (though still obfuscating the involvement), and/or if they will cherry-pick which companies appear on the list of members based on how good/bad their image is.
I'm not sure where this policy is written, but hn modifies titles all the time to reduce clickbait. however in this case I understand where you are coming from. the submission has added context. I think it's harmless.
FB’s brand is suffering. They understand this themselves obviously. It’s best to liberate new products from the word “facebook” and make it appear as a seperate entity. That’s basically what this is.
That "unified" splash screen is menacing. A constant reminder that wherever you turn, it's a FB property.
With Google/Apple/Microsoft it's quite straightforward, everything they make is clearly their style, their brand. This is not the case with Facebook's properties, they don't have a unified design language or branding. So adding a unified splash is a step in "marking it's territory", I just hate the feeling of that.
Interestingly too, I noticed the box for their Oculus Quests only subtly display the FB connection. And on the recent model, using a different/new 'thinner, all-caps' logo.
They're just rebranding to annoy author David Gerard, who recently published a great book "Libra Shrugged" looking into Libra and Facebook's bad ideas: https://davidgerard.co.uk/blockchain/libra/
Libra was interesting. With their basket of currencies and easily programmable contracts, it was a semi-unique project in crypto space.
Over the months, their ambition has been cut a lot by regulators. No more basket of currencies, now just US Dollar. At this point I'm not sure there's any benefit to it being on the blockchain either.
Was there ever any benefit to using a blockchain - other than marketing BS, of course? It was always Facebook (or their chosen partners) who controlled the coin, so the blockchain was pointless - there never was any decentralized trust, as I understand it?
There were some interesting ideas about decentralized management of "treasury" (and issuing/burning of Libra coins), mostly related to the "basket of currencies" model. I think that will stay even with value only being pegged to the US Dollar, but there is less need for that.
> mostly related to the "basket of currencies" model. I think that will stay even with value only being pegged to the US Dollar, but there is less need for that
Indeed, that was their most unique feature.
A stablecoin pegged to a basket of fiat (say just USD, CAD, EUR, GBP, JPY, SGD), using traditional crypto tools (burning, pegging) definitely has a place and a bright future ahead.
However, there's no need for facebook - defi may be able to do that with smart contracts over wrapped stablecoins (say USDC for the USD, etc.)
Hell, even USD, EUR, JPY would still be EXTREMELY valuable and useful.
"Blockchain" in some sense can also be seen as a programming framework where you have a common set of functionality that people know how to work with and can gain a transferable skill set with. Similar to how MVC knowledge is to some degree transferable between Rails and Django.
So in that regard I wouldn't immediately dismiss a usage of a blockchain as pointless. Given that PoA chains are usually pretty efficient, there also doesn't seem to be an immediate downside to it.
An API would only be the _interface_, which just like with MVC isn't the same between a lot of different implementations of the same model and doesn't cover additional assumptions, like e.g. having a chain of blocks with a consensus mechanism to decide which chain of blocks to prefer over a diverging chain of blocks.
If you want to argue for an alternative to a chain of blocks you could of course do that, but in my personal experience if you consider all the requirements (multi-party, auditable, etc.) the usual argument of "you could just use a normal centralized database" falls apart and you end up with something that in some form or another resembles a blockchain (or something equally complex), so why not use a blockchain?
The standard definition of "blockchain" presumes that there is zero-trust between nodes and that anyone on the Internet can join the network. These properties are probably not what you want for most practical applications.
For most practical applications a git repo where you have some set of trusted notaries and at least M of N notaries must sign each commit is probably closer to what you want. (Or something that is similar logically but still does not fit the standard definition of blockchain, which again is trustless.)
I also prefer zero-trust blockchains, as they are more interesting ideologically and intellectually. I disagree however that the "standard" definition presumes zero-trust. In my opinion the only thing that is presumed is some form of consensus mechanism, which can also be a trusted one like PoA (proof of authority).
> git repo where you have some set of trusted notaries and at least M of N notaries
There isn't really much difference between a PoA blockchain and what you describe on a data structure level. The main differences here will be the mode of operation (active node vs. passive repository) and builtin support and optimizations for currency transactions.
If you were really inclined, you could probably implement a optimized git client/server that could achieve that (and I wouldn't be surprised if someone has done that already). What's the point in doing so tough, if you could just as well use an existing implementation of a PoA blockchain?
I would rather people learned the basics of RDBM's and concepts like "primary keys", "indexes". The kids these days depend on that stuff being hidden from them by CPU/disk speeds and ORMs. If they can't get the concepts of a technology they are most likely to encounter in their day jobs, what chance do they have with Blockchain, considering that it is NOT a trivial thing.
Blockchain has a zinger name, but it's useless when real-world applications are in play. It is slow and energy inefficient. Considering that it got "reset" by the owners once after a divergence, it's not that "decentralized". It has a group that controls it.
Secondly, it's definitely not secure in the sense that is advertised. Aside from regular social engineering and old-school hacks to get people's tokens, governments have been successful in tracing transections in investigations. That's how SilkRoad got got, and recently Japan did it as well.
Don't opine about things you don't understand. Its not necessarily slow, energy inefficient or trackable. There are solutions to all if these problems which are available today.
Completely different property rights enforcement (programmable and decentralized). Sure a theft may still have to be resolved via the courts, but it significantly reduces many overheads.
Thefts on the blockchain can't be resovled by the courts, that's the entire point. Billions of dollars worth of bitcoin, eth, and other coins have already been stolen through hacks of exchanges, fraudulent exchanges, and buggy smart contracts, and none of it can ever be returned because the transaction history is immutable and new transactions require digital signatures.
> Libra was interesting. ..., it was a semi-unique project in crypto space.
I think It was mostly interesting, because It had a potential of going real mainstream if FB really pushed it to it's millions of users that are not technical in one way or the other.
Technically, there is so many ambitious projects going on in crypto space anyways.
> Over the months, their ambition has been cut a lot by regulators.
I don't see how this is a surprise. Facebook basically wanted to take monetary sovereignty away from states and give control to private companies. What did they expect? Especially when right now people are noticing the reach Facebook has into our lives and how irresponsibly they're acting with it. Why would any sane person give Facebook any more control over their lives?
The website still says "The Diem payment system will support single-currency stablecoins (e.g., ≋USD, ≋EUR, and ≋GBP) and a multi-currency coin (≋XDM)."
Is that no longer true? I'm not sure if the website is up to date.
Libra was never interesting. A centralised fiat currency run by arguably one of the most unethical, unscrupulous, invasive surveillance capitalists in the world was never going to be interesting, at least not in any technical or socially useful sense. Adding the ever-popular "but blockchain" into the mix still didn't make it a real cryptocurrency, never will. Rebranding it changes nothing.
Can someone give me a quick rundown of Facebook's involvement? I get that they are the driving force behind it but what does it mean in practice? Do they have any power over the currency and its flow? Is Facebook governing the currency? Are there privacy concerns and if so, how do manifest in practice? Is it tied to Facebook stock or something, if not then what's the point?
They started the whole thing, were the only member of the Libra Association (now Diem Association) for several months, and still fund the staff and almost all of the engineering effort.
Diem is deeply and fundamentally a Facebook project.
Currently a deeply Facebook project, like Kubernetes was a deeply Google project until RedHat joined in. This rebranding and the association in general makes that kind of a transition smoother.
Are any crypto currencies widely used for transactions these days? ie the classic coffee shop purchase. BTC had a start but now seems only useful for people buying as an asset.
Today's Bitcoin's average transaction fee is $6.34. For "coffee shop purchases" that is horrendous. Ethereum is better, at $1.43, but still not usable for coffee. Only highly-centralized cryptocurrencies, such as Stellar, have reasonable transaction fees.
I think for the time being it's meaningful to think of cryptocurrency transactions as stock purchases / fees to the stock exchange.
There are decentralized crypto currencies that have sub 1 cent fees - where the fee even gets smaller as the blocksize automatically adjusts larger to accommodate more transactions.
Edit: Monero. It's currently 15th on Coin Gecko by market cap at $2.3 billion. It's 3rd in the number of most developers behind Bitcoin and Ethereum.
I agree with you that the fees for some of the cryptocurrency’s make them impractical, and this certainly will hinder mainstream adoption. I do not think that I will try to pay for coffee with some of my antique gold coins any time soon, but that does not render them any less valuable. bitcoin plays a similar role in the context of digital assets for the moment. It frustrates me when I read other comments here dismissing cryptocurrency out of hand without taking the time to understand it. As you rightly point out, some tokens are better at certain tasks depending on the situation In the same way that some fiat currencies are circumstantially better than others... I think a number of people in Lebanon would prefer BTC to LBP right now regardless of the fees. For my part, I am more concerned with micro transaction fees for running applications, and I will leave the speculation to someone else.
Not at all. I suppose that I am just trying to point out that every asset has its pros and cons depending on the situation. The Euros at the bottom of my travel case are just as useful to me as my gold coins at the moment, and the pennies under my couch cushions, though easily more liquid, are much less valuable than either. Bitcoin is obviously far more accessible and convenient than gold, but I just cannot see anyone using it for small transactions... at least while the network fees are as high as they currently are.
Right now crypto is being mainly used for decentralized finance involving larger transactions for lending and savings with actual yield. See https://defipulse.com for some of the largest dapps in the space (has grown to have $14 billion in assets in less than one year).
LTC is often the cheapest mainstream coin for moving stuff around on chain, and has faster confirm times. They seem to be focusing more on transactions as opposed to storing value like BTC.
US has a culture that knows that resisting the change isn't way to stay as #1, and you better innovate and disrupt yourself. However, state's innovation might not end up being what crypto advocates are looking for.
I wish the US still had that culture. Our federal legislature has been intentionally deadlocked by a single man for years, without any hope of that changing.
And yet here I am on the internet, an invention of government-funded researchers.
But seriously: I didn't innovation originates from the government, but our elected officials are certainly a reflection of the culture of our country.
In fact, one of our major political parties rages against the things that made the US innovative: creating a haven for immigrant scientists and entrepreneurs, excellent research universities, and social programs that acted as a safety net for anyone taking a risk on an innovative business.
I’m not saying that I feel that it’s a likely event. I’m saying that Facebook thinks it’s one. On a related note, when it seems like Ray Dalio is saying the same thing (the US dollar will be replaced as a reserve currency), there’s more credence to the idea
Why would Facebook care? As a huge multi-national they have billions in all kinds of currencies across different banks. They already are prepared to exchange in any freely traded currencies.
There are some within that realize the U.S is in an unsustainable path of devaluing, borrowing, and excess spending in pursuit of failed policies. There is still hope!
Technically, avalanche is a US coin. It was also the first proof of stake crypto currency but I have not seen it picking up much traction in the US. https://www.avalabs.org
*EDIT
Avalanche was not the first proof of state crypto currency.
Avalanche is not the first PoS coin. You could make an argument that the first was Tezos but there are PoS like instruments that predate it significantly.
Cryptocurrencies are being used by so-called cybercriminals (cybercrooks) as we speak. Because it is decentralized, its more difficult to close down illegal transactions, and they consider themselves anonymous after mixing.
I don't find cryptocurrency interesting at all for a free society. I don't see any purpose of it, if you live in a free society. And I do live in one.
Good riddance but im not sure how. The entire idea of Libra as a cryptocurrency was more ludicrous than any state adopting btc. It essentially was the western Union / paypal with same contributors but with a shiny new word, crypto.
My question. What is the "benefit" of using Libra when you can just as easily transact with xrp ? Dictatorship by Facebook first, tracking of spending for MOAR ADS.
Who benefits from Libra ? Not the end user at least. Oh and fees. If there are no fees on Libra,why is PayPal investing money in this model ?
The whole “unbanked” thing is really unconvincing, because there's no way Libra/Diem will be usable for people who don't have identity documents and the evidence needed for KYC/AML forms, and that excludes most unbanked people.
As for international money transfers: TransferWise and the like are already providing better solutions in that space without forcing you to use Facebook Coins. Now you might say that mostly caters to the rich world, and that's true, but the people who can't use TransferWise are probably not going to be able to use Libra/Diem either for the same reasons they can't use TransferWise: ID documents, KYC/AML, plus capital controls and sanction regimes which aren't magically going to disappear for this new currency.
It won't provide one of the few benefits of Bitcoin etc either, namely the ability to make illegal transactions more easily.
> The whole “unbanked” thing is really unconvincing, because there's no way Libra/Diem will be usable for people who don't have identity documents and the evidence needed for KYC/AML forms, and that excludes most unbanked people.
Who says the countries this will be used in have KYC/AML? The unbanked people this would be for aren't in countries that have those laws.
> As for international money transfers: TransferWise and the like are already providing better solutions in that space without forcing you to use Facebook Coins. Now you might say that mostly caters to the rich world, and that's true, but the people who can't use TransferWise are probably not going to be able to use Libra/Diem either for the same reasons they can't use TransferWise: ID documents, KYC/AML, plus capital controls and sanction regimes which aren't magically going to disappear for this new currency.
Can't use transferwise, so can't use something else.
This isn't aimed at people who can use banking where KYC or AML apply. It's for people who are curently using other unbanking payment methods.
Says who? Who is going to enforce some random African country that is in the middle of a civil war to have those?
Also, lots of drug deals are settled in US dollars, they don't have that. So your point that anything settled in dollars will have those laws is way off the mark and easily disproven.
That's not how finance works. If you don't follow the rules, you get cut off from the rest of the ecosystem which is tightly controlled by the US. So if diem wants to operate at all, they must adhere to the rules regardless of which countries they are operating in.
This is meant to be a completely different ecosystem, no? An ecosystem not controlled with the US. This isn't a normal financal service, it's not banking, it's outside of banking hence why it's aimed and people without banks.
And other companies are already in this space providing basically the same service.
It seems to me, people applying how companies 1st world countries + the US operate to how companies in 3rd world countries (except the US) have to operate.
> Now if it's a local exchange for a local currency, not USD then is fine.
They can exchange in physical currency which would be acceptable in most third world countries and with the amount physical currency floating around they wouldn't need to get any from the US, no?
I don't think you could do that at any scale and escape the wrath of the US.
That runs afoul of most money laundering regulations, so if you have any presence in the US they'll go after you, and they'll prosecute anyone with any serious connection to it and extradite those people to the US where possible.
Moving money across international borders is not a problem you can just engineer around. You have to play by the rules.
> If you don't play by the US's rules you can't withdraw in USD.
The dollar is traded so much that I don't think they need to actually get dollars from the US to be able to use the dollar. If it's going into banks, yea, but if you're just giving people the notes, you're good to go.
It's extremely difficult to facilitate USD money movement if you're blacklisted by the US treasury. Just ask Iran. I suppose technically possible (again: ask Iran) but somehow I doubt Facebook is playing that game.
> This is meant to be a completely different ecosystem, no? An ecosystem not controlled with the US.
There is no such thing as an ecosystem not controlled by the US. You have any ties with the States (and Facebook, clearly, does), you gonna comply with whatever rules they come up with. If you don't believe me, ask Huawei's top manager. Or lots of other people like him.
>>> Says who? Who is going to enforce some random African country that is in the middle of a civil war to have those?
> This is meant to be a completely different ecosystem, no? An ecosystem not controlled with the US. This isn't a normal financal service, it's not banking, it's outside of banking hence why it's aimed and people without banks.
Last I checked, Facebook is a US company, with a US headquarters, publicly traded on a US stock market, and with an American CEO and controlling shareholder. So, unless they all want to relocate permanently to "some random African country that is in the middle of a civil war", they're going to have to deal with US regulations.
You may want to update your world view for the 21st century - there is no “wild west” left, every country where this matters will have financial regulations.
> Imagine having to use Facebook to access any money - not just Diems.
I don't think this can happen in practice. For any such system to work at all, the vast majority of the entire society needs to be using it and be satisfied with it, and then there'll always be cash anyway for which there can't be access control enforced by any one entity.
Even if those hurdles could be crossed, there's the hurdle of actually converting the unbanked to use their service. Unbanked people are unbanked because it's not profitable for local banks to convert them to customers, generally because they live in cash economies and don't have very much of it, and WU/Moneygram or the hawala service is difficult to beat on the last mile of remittances. M-PESA filled some gaps because it used a existing network of mobile phone stores and people's confidence in the value of their dumbphone credit in local currency. All rely heavily on shops in villages to attract and serve customers.
But Diem doesn't have any advantages over any of these entities: it's a foreign foundation with no local infrastructure to help people spend their cash and no local knowledge talking about immutable ledgers and cash equivalent reserves, as if the reason the unbanked were unbanked is because the local banks don't write whitepapers rather than because exchanging cash in developing world villages is a very expensive problem to solve relative to the size of the transactions they unbanked might like to make
I don't agree, my step parents (in Romania) are unbanked and they have ID documents. A lot of people are in a similar situation there. Yet they all have smart phones.
As EU citizens with ID documents and smartphones they can open a full EU bank account in a few taps if they want to. They don't need Diem if they want bank accounts surely?
A bunch of people who bought Oculus Quest 2's are being locked out of their hardware because it requires a Facebook account and they'll automatically close new accounts with low activity (playing Quest doesn't count apparently) - so it seems that if you create a Facebook account purely to use the Quest 2, you'll be locked out if you don't share enough pictures/make enough friends.
I will NEVER use a currency that requires a connection to my facebook account.
Wow. They really want to get away from the facebook brand. Zero mentions of Libra or facebook, despite the fact it was renamed only a few days ago. Not even in the FAQs.
Ok, so let's focus on the underlying idea, without the "Facebook is trying to rebrand their evil brand" cruft.
Basically, I think the underlying idea is valuable - low-cost, fast, reliable, accessible money transfers - clearly something missing right now in this world, even for the "global rich" (citizens of first-world countries), let alone for the "unbanked". It could even scale even more to a money store but that's basically being a bank, which is related but somewhat orthogonal (e.g. both Revolut and TransferWise started as mostly money-sending services and are now moving towards the "bank" stage).
So, my thoughts / questions are the following:
1) Is there a reason this is tied to the blockchain? For most purposes, blockchain without proof of work is just a glorified git repository, and I'm pretty sure that not even the most law-abiding citizens want all their transactions to be public.
2) Is there a reason this would be tied to a company, instead of being run by e.g. a charity? I understand why Facebook / Apple might be more successful with launching this than e.g. TransferWise (they can utilize their platform to push this (or any other) idea to a massive userbase), but really there's no underlying reason why you'd want this to be run by a non-financial company (and an ad ("use people's data to manipulate them") company) and many reasons why you wouldn't want to comingle your financial data with the likes of Facebook / Google / Apple.
3) Why a "new currency" ("stablecoin")? I understand that it might have some desirable properties but I'm pretty sure that most people would be negatively surprised if their "stable" coins started losing value (in terms of their local currency). Also, I'd say that most people don't even care/think about "FX rates" etc. and those that do are mainly currency traders / "speculators". So I envision the "ideal" system to be basically just an app displaying "sending 100EUR to person A in country Z will cost you 0.3% and the payment will arrive in 20 minutes" and the other person seeing "person B sent you 8919 INR".
4) I'm sure there are many issues with fraud/reversible transactions/KYC/anti-terrorism/anti-money-laundering that would need to be resolved somehow.
I think this is an ideal case scenario for a charity - an almost-government (non-profit, "for the people") organisation handling an area of "social tech" that global governments aren't tackling (because they aren't incentivized to) but fundamentally all the pieces of technology are there.
If anyone is interested in funding / founding such an organization, let me know.
I think Zuck's mission wasn't really about empowering the unbanked, but it's: fight WeChat. WeChat already has an effective digital payment system, with the tasty tasty analytics and surveillance capabilities (which yeah, Zuck also probably wants).
As to blockchains, that's because this is the hype of the last few years, is it not?
As to currencies, IMO the vision of the people hyping bitcoin was that your pizza place would accept BTC (and not after converting their USD price to BTC) because their supplies would be happy to do as well. A single currency for the world would be interesting, but as economists have pointed out, devaluing your currency is a way to escape economic crises, but e.g. Euro countries can't do this any more, hence the problems the PIIGS countries had.
Blockchain or not blockchain is perhaps the least interesting part of all the so called "blockchain" projects.
It's a term without an accepted definition. A lot of useless branding is expected. Just you wait until IBM gets their hands on .. oh, they already did.
Both the Bitcoin-like zero trust ledger and the m-of-n trusted notaries model have useful use cases. While more descriptive terms would have been great, arguing definitions only goes so far.
No part of the Libra/Diem plan required or requires a blockchain.
The reason for the blockchain: Libra was founded by four bitcoiners (Morgan Beller, David Marcus, Kevin Weil, Christian Catalini) who wanted something like bitcoin, but not volatile, and run by sensible people, i.e. them.
Facebook Messenger can already transfer money between people. They could just expand that into a fully featured digital wallet to compete with WeChat, Apple Pay, Google Pay, Samsung Pay, Cash App, PayPal, etc. It's actually astonishing they didn't do this a decade ago.
I get the VC appeal of blockchain, but Facebook already has the money to fund it. Outside tech circles I don't think slapping a blockchain label on a product will make it more appealing.
I agree. I don't quite understand what overall benefit something like Diem brings. It seems like an extraneous amount of technical overhead and yak shaving just to do something other companies have been doing for years. It just strikes me as some convoluted marketing ploy to attract VCs. All Facebook needs to do now is figure out how to throw AI into the mix and they'll win tech buzzword bingo.
I'm not sure I agree. First of all, it's not "Europe" but rather "Euro-accounts" (so no cross-currency transfers). Also not that fast - don't work overnight, on the weekends, payments might take a day to arrive.
I just checked - paying 10EUR from my UK account to the EUR area takes 2-4 days (I'd need to pay 15GBP for an "urgent" next-business-day transfer) (same rate as TransferWise) whereas if I want to send 10kEUR I'd pay 250 GBP (!) for a "no-fee" (!!) transfer than with TransferWise (a.k.a. scam). Paying from EUR to EUR account (cross-border) costs about 0.1% (0.38 EUR fee to send 350EUR) which isn't too bad.
I’m hearing about mostly instant SEPA payments but I’ve never seen them personally. DBank to DKB takes a few days, DKB to ING, the same, to bunq or N26... First direct in the UK to a EUR account. My limited anecdotal experience is “mostly delayed by at least a day.” am I really an outlier?
I've used them a few times for personal transfers. Each took less than 30 seconds until the money was booked out of my account and booked into the receivers account.
SEPA in my experience has never taken longer than 1 day unless it's SOFORT-related, which in my experience takes a bit to confirm (but the merchant knows you issued a transfer so they can rely on that).
The 250 GBP must be the exchange fee? If your account is in GBP and the destination is in EUR, the bank gets to charge you for the exchange. 2.5% is a typical rate. That's unfortunate, but is unrelated to the cost of transfer.
Euro transfers have become instant and 24/7 thanks to the SEPA Instant Credit architecture:
I don't mind the fee per se I just object to obfuscating it (which I term "fraud" thought that might not be the legal definition).
NatWest app says £0.00 fee and some FX rate but when I compare with TransferWise, the difference is £250, which means that the "FX rate" implicitly contains the fee.
Maybe not "fraud" legally but I don't want to support such non-transparent business practices.
Yes banks charge commission (where TW usualy has a cost advantage but anyway, it's a money maker for banks and calculation of the fx rate to be used at a given moment is not something simple)
TransferWise also supports instant SEPA payments. The first time I transferred money to my bank in a different country and I received immediate confirmation I was mindblown.
My Revolut account is moving to Lithuania though. Are UK customers keeping their UK ones?
From experience with bank accounts from 4 different European countries those instant transfers definitely don't work everywhere and are often accompanied by an extra fee.
Edit: And this is 2020. I highly welcome some innovation in this field - five years ago..
> "If your account is in GBP and the destination is in EUR, the bank gets to charge you for the exchange. 2.5% is a typical rate."
2.5% is a rather expensive fee for a GBP-EUR transfer, especially on £10,000! Some banks offer as low as 0.4% (on top of the real mid-market rate), probably even less on large transfers.
I think that is mainly UK banks bring bad. Here in Sweden which is also not a euro country the exchange fee is roughly 0.5% at my bank and they charge 3 euro for non-SEPA transactions and 0.15 EUR for SEPA transactions. So I would need to pay 50 EUR to transfer 10k EUR from my SEK account and just 0.15 EUR to transfer from my EUR account.
The answer is: even if any of the above held, Facebook are doing it to:
(1) build a giant sucking data-miner atop all consumer commerce;
(2) print their own money in such quantities that governments can't tell them what to do any more;
(3) establish themselves as providers of the digital identity standard for the world, so that you need to go through Facebook to use money at all.
There are those who have proposed Libra-like basket currencies seriously; Yanis Varoufakis seriously proposed that the Libra 1.0 plan would be a great idea - if done by a public institution such as the IMF, and not by a private company. https://archive.is/YKgQ9
In the UK, I have low-cost, fast, reliable, accessible money transfers. Basic bank accounts are free, and come with reliable free instant transfers to any other UK bank. That may not be reality in all countries, but it is in many.
That's quite a high bar for rival payment methods to clear, but I think the main problem for corporate currencies like this will be rivalry from government issuers. Governments jealously guard the right to issue currency, as they rightly perceive it as one of their biggest holds over citizens. Any sufficiently powerful currency would attract their scrutiny.
I do think payments are ripe for disruption though - when money is sent over a free global network between pre-vetted partners (i.e. bank customers) there is no reason the transaction fees should be high, even internationally. I'm not clear how a blockchain based currency is going to help facilitate that, but would love to see a revolution in payments which made them simpler and not tied to archaic concepts like sort codes and account numbers, and reduced the fees charged to customers and merchants for payment networks or card issuers which don't do the hard KYC work (banks and payment processors do that).
The problems here are in verified identity tied to real people, not how to perform transactions quickly, or things like anonymous trust-free transactions which nobody actually wants.
> In the UK, I have low-cost, fast, reliable, accessible money transfers. Basic bank accounts are free, and come with reliable free instant transfers to any other UK bank.
As an EU citizen living in the UK, it boggles my mind that "EU Faster Payments" was not implemented as part of the eurozone, if not the EU as a whole.
As far as I know there's nothing technically preventing this, anyone has an insight into why it isn't a thing?
In France banks charge a small fee for instant transfers (around €1). Some banks include free instant transfers in some of their offers, but usually not for their free accounts. I think it’s just a matter of time for it to become free and universal. Just like some banks use to make you pay to use their app or website (!).
> In the UK, I have low-cost, fast, reliable, accessible money transfers. Basic bank accounts are free, and come with reliable free instant transfers to any other UK bank. That may not be reality in all countries, but it is in many.
It is also a reality in Brazil. Last month the government and the banks released a standard money transfer protocol (PIX) which superseeds the other protocols (similar to ACH in USA). Cheap, instant payments 24h a day regardless of the bank are a reality here today.
Hence I don't see FB having much success in Brazil with this product.
Any person with a CPF, our individual taxpayer registry identification, can use PIX. Non-permanent residents of Brazil are included in this category.
As for international transfers, the Central Bank is looking at simplifying existing regulations in order to allow international transfers as late as 2023
Odd thing given the UK context - the major banks and many smaller let you pay someone with just their mobile number (it’s called PayM). Although given its bank payments, account numbers are far from archaic, and new things like confirmation payee help make the whole system more secure.
Now it you want to talk about archaic, how about MT103 and friends?
I quite like the inversion of account control in systems like bitcoin to put the user in charge, though this is not without problems. It would be nice if uk banking systems were not stuck in this odd world of accounts tied to physical branches by a sort code, or indeed if we just moved to global identifiers that were portable between banks and owned by a person, not a gov or bank.
even in the countries where you do have this, what about cross-border transactions...those usually again become messy. Even between two countries which each have a good internal system as you describe.
> Basically, I think the underlying idea is valuable - low-cost, fast, reliable, accessible money transfers - clearly something missing right now in this world
You could also mandate that wires are free as part of necessary banking structure. I don't see why this needs a new currency at all; our financial system is shitty because there's little political control exercised on behalf of consumers.
Still, papering over the mismanagement of government with predatory private services is the theme of the future of the US. We may as well accept that we have no control.
1) think of it as a centralized database that needs replication, you’d be a bit worried if this central place got attacked, so then you need some gossip-based protocol in place to allow some users to police the system. Consensus is a simple one because it allows most users to trust that consensus was agreed on correctly, as opposed to systems like transparency protocols that require users to more willingly engage in policing.
2) it is tied to non profits as well! The whole point is to fund this project by companies, no a company
3) we will support single currencies (a USD coin, for example)
2) Does Facebook (or any other for-profit company) get access to the data (now or ever in the future)?
3) So if I want to send money (from say GBP) to someone in Japan, what would happen? Is the FX exchange seamless or will I need to use some intermediary coin?
They have declared that they will not access the data.
However, Facebook makes extensive use of shadow profiles of people who aren't even Facebook customers. They could certainly add Diem blockchain data to those, as they will have access to said blockchain via Novi, their Diem wallet.
David Marcus and Mark Zuckerberg have both stated that data from Novi will not go to the Facebook advertising engine. However, Zuckerberg and Facebook's track record on such promises is that they consistently do this anyway. Then Zuckerberg apologises, then he does it again.
Just by looking at Facebook's past behaviour, you can assume that an important purpose for Diem is to collect personal information. Because everything they do is to collect personal information.
As I said elsewhere this is not related to Novi. Novi is just a wallet using DIEM, and will have its own users (like any wallet or bank or trading platform has).
That being said, there is a lot of work being put in making sure that FB doesn't have access to Novi user data. Of course, sometimes one employee's mistake can lead to infringement of a claim, so to avoid that good frameworks have to be put into place.
What other Diem Association members have even announced plans to issue a wallet?
As I understand, that number is presently zero. (Please correct me if I'm wrong on this.) And unhosted wallets won't be allowed - all consumers will need to transact via a Diem Association member. So Diem usage really is 100% Novi for the known future.
2) It's a transparent payment network, so everybody (even you) gets access to the data on the network
3) That's a complicated answer that involves more than just the blockchain (as you need to convert fiat from/to digital currency) so it depends on the VASPs (the wallets) not on DIEM.
If a sufficiently large nation state orders the companies involved to deny or override a transaction, is the gossip protocol/blockchain useful at all in denying this? Or is this one of those mechanisms only used for keeping out low level/underfunded attackers?
The system is governed by an entity in Switzerland that must follow regulations, so such a scenario would not be an attack on the system (and thus not be in scope for consensus). That being said, I don't know much about laws and regulations so that's the extent of my understanding :)
Since one of the major audiences is emerging economies, what happens if one of them goes to war with another? Can one side get their superpower patrons to order Diem to freeze the accounts of the other?
I think that's a problem not just for Diem, but for current banks too. I remember reading about HSBC having to shut down Carrie Lam's accounts due to the US putting her a bunch of other government people in HK on some sanctioned list. I think HSBC actually did not freeze the accounts due to the consequences this would lead to for them and the Chinese market? It's unclear to me what happened and what will be the consequences.
I like your thoughtful breakdown. Thanks for that.
The video shots of small merchants and everyday people, with voiceover "what if everyone is invited to global economy" was bothersome to watch. I don't like their underlying characterization that the lack of frictionless banking and payment systems are what's holding back Africa and poorer parts of the world. It's just not true.
> Basically, I think the underlying idea is valuable - low-cost, fast, reliable, accessible money transfers - clearly something missing right now in this world, even for the "global rich" (citizens of first-world countries), let alone for the "unbanked".
For most of the "banked" in the US, doesn't Zelle cover all that for transfers within the US?
It's still absurd that you need additional services just to do transfers. I can't understand why an IBAN-like system can't seem to get off the ground in the US.
Zelle is owned by several major banks, and partnered with many other banks and credit unions. It is incorporated into most of their mobile apps and online banking websites.
From a user point of view, it doesn't look like an additional service.
I moved from Europe to US via UK, so I’ve experienced banking systems in Eurozone and GBP.
Zelle doesn’t feel as convenient as regular bank transfers in Europe or UK. Some problems I experienced:
- You have to sign up separately. There’s no guarantee a recipient has enabled it.
- It’s tied to an email address for some reason. (Euro/UK bank transfers just use the regular IBAN.)
- There was a long delay in receiving and sending money when one of the Zelle accounts was new. (My transaction was stuck for at least 24h in a “pending” state.)
- The daily transaction limits are very low. My NYC rent doesn’t fit even in two Zelle payments! (In Europe, the standard limit for an instant SEPA bank transfer is 100k, and it costs nearly nothing.)
For these reasons Zelle feels very unbaked, and doesn’t replace a proper interbank fast payment system like SEPA in Eurozone.
Zelle, Venmo, PayPal, Square, Apple Pay - there are a ton of companies that all do this same thing in the US because the bank software is terrible and expensive.
I thought stellar was similar to what the parent comment describes, but it’s also not proof of work (which makes need for blockchain unclear).
> Zelle, Venmo, PayPal, Square, Apple Pay - there are a ton of companies that all do this same thing in the US because the bank software is terrible and expensive.
For all intents and purposes, Zelle is the bank software, and it’s free. Zelle is backed by a bunch of banks - the majority of US checking accounts have access to use it at no cost.
I just checked out Stellar... sounds really interesting actually, very much in line with what I described (except blockchain - I can't see if it's public (not good) or private (not much point in it then) but I'm open to being convinced otherwise), there's just one problem... how do I even use it?? There's no app, no nothing. Ideally, I'd like something like TransferWise "I'd like to send money to X" just non-profit.
fwiw, Stellar integrates directly with Keybase.¹ I remember they did an airdrop when they launched and deposited ~100$ worth of XLM into every Keybase users' wallet.
Not sure how interesting Keybase is now, but it does allow sending money to other Keybase users directly through chat.²
I doubt that. The main issue you're trying to solve is, that the current payers of ads, corporations, have much more money available than consumers (the payers of ads in the "microtransactions" concept).
But in any case, that's at most the "next" step. First one is, literally replicate what banks do right now (possibly including minimum transaction fee on small transactions - depends on local banks / regulations) except with non-backwards tech.
If Facebook thought that a global payments network was going to make them more money than advertising, then they would have invested in this ten years ago, and we would now all be heartily sick of FBcoin and all the unexpected consequences it engendered.
I don't understand why people don't revisit DigiCash (https://en.wikipedia.org/wiki/DigiCash) for this kind of usecase. It seems like a really good fit for this type of usecase where you are giving up on the proof-of-work aspect of bitcoin, but want all the other cool properties of cryptocurrency, and has better anonymity properties.
GNU Taler seems to not let people receiving payments be anonymous, which to me seems like a rather random design choice that has nothing to do with the underlying technology and severely limits Taler.
These are great questions. Here are my thoughts / answers:
> 1. Is there a reason this is tied to the blockchain
For FB, you're 100% right. FB could have likely just used a relational DB in the short term. However, if you don't want to tie this to a single company (your second question), then a blockchain does make it easier for multiple entities to agree on the state of the db. I would argue that modern Proof of Stake protocols are starting to be competitive with Proof of Work in terms of security, in large part because unlike Proof of Work, they allow for both positive _and_ negative incentives for incentivizing behavior. For example, we've yet to see the types of double spend attacks on newer PoS chains (e.g. Cosmos) like the ones we saw on Ethereum Classic a few years ago.
> 2. Is there a reason this would be tied to a company
No, and in fact, this is what makes most permissionless blockchains so valuable. The problem is that most of them are not useable enough for what Facebook wants to accomplish. I say most because, in my view, Celo (https://celo.org and https://valoraapp.com) does. It's permissionless, programable, highly scalable, has a built in stablecoin and identity protocol, and most importantly, uses new zk-SNARK cryptography to let mobile apps sync trustlessly and near instantly. It also offsets 100% of its carbon emissions by buying carbon credits using block rewards.
> 3. Why a "new currency" ("stablecoin")?
I agree 100% and already the market is starting to tell us that USD pegged stablecoins are the most interesting of stablecoins.
> 4. I'm sure there are many issues with fraud/reversible transactions/KYC/anti-terrorism/anti-money-laundering that would need to be resolved somehow
> Is there a reason this is tied to the blockchain?
The only legitimate reason I can think of would be cynically drafting on the hype cycle. But I've been reading David Gerard's book Libra Shrugged [1] and it looks like the actual answer is that "blockchain" has a quasi-religious belief system built up around it, and the people involved are members of the faith.
One of the stunning things for me about "blockchain" revolutionary hype is how long it has gone on without significant accomplishment. It started only a bit after the iPhone, which has had a huge impact on things, including payments. It's hard now to imagine a world without the internet in one's pocket. But if every blockchain stopped working tomorrow, few would notice. Contrast this with M-Pesa [2], a different approach to digital money. It started at around the same time but has had huge uptake. A recent report in Kenya [3] says M-Pesa has 30 million accounts, which is approximately the number of people in Kenya age 15 or over. To me, that's what successful digital money looks like.
Could just be thanks to technology office politicking. Some senior engineer or manager says "I want to work on blockchain projects", invents a reason to do that within Facebook, or maybe their boss really wants to keep them there, and somehow they get enough buy-in to create Libra. Now they have a blockchain project.
This seems more likely to me than someone at Facebook saying "We need a our own money system," evaluating blockchain against a centralized design, and deciding for technical reasons that Facebook Money should be a blockchain project.
> Some senior engineer or manager says "I want to work on blockchain projects", invents a reason to do that within Facebook, or maybe their boss really wants to keep them there, and somehow they get enough buy-in to create Libra. Now they have a blockchain project.
This is pretty much how it happened. A Bitcoin fan started at Facebook, started from "how do we use a blockchain here" then came up with something to use a blockchain for, and recruited some executives who thought similarly.
Most of what's weird and dumb about Libra/Diem is because it was started by four bitcoiners, from bitcoin ideas. It turns out that ideas from a cryptocurrency that was started in order to evade government control don't play well in the heavily regulated environment of Other People's Money.
> One of the stunning things for me about "blockchain" revolutionary hype is how long it has gone on without significant accomplishment.
I think that there is a lot more money in the world right now than 20 years ago and definitely than 400 years ago.
A lot of it is just dumb (people inheriting money or getting it for other reasons than intelligence or financial acumen: singers, athletes, etc.) and some it is exploratory/inherently risky (VC) or both. So a bubble can last much, much longer and be much, much bigger.
We're probably going to see more of these.
I guess at this point I should probably just say that I regret not being smart/connected enough to be at the collecting end of one of these hype trains :-)))
> low-cost, fast, reliable, accessible money transfers - clearly something missing right now in this world
The reason it isn't free is that there are loads of anti-money laundering laws that require paperwork on both ends. Sure Cryptos avoid this problem, but just means it'll get regulated or banned.
You need an all digital currency to keep transaction fees cheap, and to speed up transactions especially accross countries.
Just think about it, today's currencies are backed by physical paper. At some point, if A paid B, B should receive the physical paper money for the exchange. This is known as liquidity, and it's the major reason why money transfers over the internet today are expansive and slow.
> Is there a reason this is tied to the blockchain?
Yes, blockchain is key. Look at what all modern currencies in use have in common? They are backed by a very powerful entity, mostly governments with real power (weapon and authority on actual land and people). This isn't a coincidence, whoever controls the currency has huge power, imagine being able to make money as you please and give it to yourself or others.
You can't trust any single party with such power. Governments are the closest thing people can trust today, often because they have no choice, and sometimes because there's ton and ton of scrutiny, checks and guards in place around them.
And still, when currency is physical, it is also slightly harder to make more for yourself without trail.
Now if currency was digital, it be so easy to abuse, so anyone who had single central control could easily cheat everyone else. You'd not just be in control of the currency like the government is, you'd also become in control of the ledger. That means, that single central entity does not only control the digital currency (how much of it and who it gives it too), but it also controls the exchange of it (keeps track of who has how much of it and who transfer it to who else). That's incredible power, they could just seize your money without scrupule for example.
Blockchain is about solving this issue. If the currency and ledger is controlled by a distributed blockchain, then you don't have a single central entity with all this power. Instead the power is distributed to whoever wants to participate in it.
Now this is still an area of research in some way. Proof of work was one way, and it suffers from the fact that compute majority wins, and the compute majority could actually be owned by a single entity (which owns a ton of compute resources making up the majority).
Proof of stake is the new idea, it says that everyone who wants to be a part of controlling the currency and ledger has to put a deposit amount of their own money. If they are found to have cheated or acted wrongly, they never get that money back, otherwise they get it back and a little bonus for their effort.
In this scheme, you could still have a single actor taking full control, but they'd need to have a ton of money, more money then everyone else's combined stake. So it's much harder to do so.
> Is there a reason this would be tied to a company, instead of being run by e.g. a charity?
To some extent, it doesn't matter who starts it, if it ends up being a distributed open source piece of software, that is run by people from all around the world on different machines not all controlled by one entity, then it has become something out of the hand of whoever started it. Charity or Company, neither in my opinion could be trusted with a single central solution, but they can both try to kickstart an open source distributed blockchain ledger and currency, as long as it does in fact distribute control in a way that single or minority can't control it fully.
> I'm sure there are many issues with fraud/reversible transactions/KYC/anti-terrorism/anti-money-laundering that would need to be resolved somehow
This is probably one of the biggest issue currently, in a weird way, trying to solve the problem of no single central authority also makes it difficult for the government of any country to enforce rules and regulations over it.
> Basically, I think the underlying idea is valuable - low-cost, fast, reliable, accessible money transfers - clearly something missing right now in this world, even for the "global rich" (citizens of first-world countries), let alone for the "unbanked".
I can send money to friends via PayPal or Venmo completely free. What’s missing?
I don't understand why people just can't use Ethereum for this with a little more polishing on the UI end from the devs. It has the added benefit of being decentralized, something Facebook or any other company or charity will never be. It even recently implemented proof of stake rollout so it isn't using massive environmental resources for proof of work in the future.
Of course Bitcoin was ideal for this but it went off the rails for the banking the unbanked dream when it refused to scale from a blistering 7 transactions per second and the associated high fees. Ethereum fees aren't great either, but my understanding is that massive increases in throughput are coming with sharding etc. in Ethereum 2.0. Monero would be perfect for this, but I don't know if the world is ready for true privacy and fungibility in their e-coin.
Of course Bitcoin was ideal for this but it went off the rails for the banking the unbanked dream when it refused to scale from a blistering 7 transactions per second and the associated high fees.
You can check any bitcoin dashboard (such as https://bitbo.io); the current transaction fee is 1 satoshi/vByte for a transaction. The average bitcoin transaction is ~250 bytes. 1 satoshi = $0.00019273. A transaction that can wait an hour costs about $0.05.
The "bitcoin doesn't scale" thing really isn't a thing. Lyn Alden addresses this in her "7 Misconceptions about Bitcoin" article [1]:
"In other words, suppose that the Bitcoin network is limited to 250 transactions per minute, which is low. Those transactions could average $100 or $1 million, or any number. If they average $100 each, it means only $25,000 in transaction value is performed per minute. If they average $1 million each, it means $250 million in transaction value is performed per minute. If Bitcoin grows in use as a store of value, the transaction fees and inherent limitations prioritize the largest and most important transactions; the major settlement transactions.
Additional layers built on top of Bitcoin can do an arbitrary number of transactions per minute, and settle them with batches on the actual Bitcoin blockchain. This is similar to how consumer layers like Visa or Paypal can process an arbitrary number of transactions per minute, while the banks behind the scenes settle with larger transactions less frequently."
Lightning Network is a layer 2 protocol on top of bitcoin; transactions settle in seconds and the fees are tiny—about 1 satoshi—(a fraction of a penny) per hop. Not only are they cheap, they're private as Lightning runs over Tor.
The UI/UX of the current crop of Bitcoin/lightning wallets for iOS and Android, such as BlueWallet (https://bluewallet.io) is quite good.
Digital value transfer is a oligopoly of a few US companies that can effectively exclude anyone in the world from the digital economy in general, any innovation and any competition by anyone at all is a very good thing. It's too bad that fb listened to the US politics and made their project much worse, but its still very good in terms of cyrpto adoption by the non-technical people which can in turn make way for other, better projects.
My general impression after reading between the lines over last years about Libra is they are targeting in-app micropayments and more like a competition to something like Paysafecard.
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[ 3.0 ms ] story [ 278 ms ] thread"The Libra Association announces the adoption of a new name and the recruitment of key executives, reinforcing its organizational independence. Now transitioning to the name “Diem”, which denotes a new day for the project, the Diem Association will continue to pursue a mission of building a safe, secure and compliant payment system that empowers people and businesses around the world."
https://www.diem.com/en-us/updates/diem-association/
And of course in typical FB fashion, the website will be garbage, if you don't allow all their abusive scripts.
[1] https://en.wikipedia.org/wiki/Per_diem
Maybe they’re hoping Diem25 will embrace the collision and ride on their platform?
> Diem - A rebrand of Facebook Libra
Understanding who is behind this is extremely relevant.
> Facebook Diem (Facebook's Libra has rebranded)
https://i.imgur.com/nS9FaV5.png
I'm wondering if all involvement in Diem at Facebook goes through Novi, and with that the members section is "truthful" (though still obfuscating the involvement), and/or if they will cherry-pick which companies appear on the list of members based on how good/bad their image is.
With Google/Apple/Microsoft it's quite straightforward, everything they make is clearly their style, their brand. This is not the case with Facebook's properties, they don't have a unified design language or branding. So adding a unified splash is a step in "marking it's territory", I just hate the feeling of that.
Although, that splash has helped me reduce my usage of FB apps, so maybe that's a positive.
"Your honor, we can't possibly spin off Instagram, it's now part of the core Facebook product!"
Also, since they didn't bother to s/Libra/Diem that white paper is this just the same scheme with a different name? It's somewhat unclear.
Over the months, their ambition has been cut a lot by regulators. No more basket of currencies, now just US Dollar. At this point I'm not sure there's any benefit to it being on the blockchain either.
Indeed, that was their most unique feature.
A stablecoin pegged to a basket of fiat (say just USD, CAD, EUR, GBP, JPY, SGD), using traditional crypto tools (burning, pegging) definitely has a place and a bright future ahead.
However, there's no need for facebook - defi may be able to do that with smart contracts over wrapped stablecoins (say USDC for the USD, etc.)
Hell, even USD, EUR, JPY would still be EXTREMELY valuable and useful.
So in that regard I wouldn't immediately dismiss a usage of a blockchain as pointless. Given that PoA chains are usually pretty efficient, there also doesn't seem to be an immediate downside to it.
If you want to argue for an alternative to a chain of blocks you could of course do that, but in my personal experience if you consider all the requirements (multi-party, auditable, etc.) the usual argument of "you could just use a normal centralized database" falls apart and you end up with something that in some form or another resembles a blockchain (or something equally complex), so why not use a blockchain?
For most practical applications a git repo where you have some set of trusted notaries and at least M of N notaries must sign each commit is probably closer to what you want. (Or something that is similar logically but still does not fit the standard definition of blockchain, which again is trustless.)
> git repo where you have some set of trusted notaries and at least M of N notaries
There isn't really much difference between a PoA blockchain and what you describe on a data structure level. The main differences here will be the mode of operation (active node vs. passive repository) and builtin support and optimizations for currency transactions.
If you were really inclined, you could probably implement a optimized git client/server that could achieve that (and I wouldn't be surprised if someone has done that already). What's the point in doing so tough, if you could just as well use an existing implementation of a PoA blockchain?
Secondly, it's definitely not secure in the sense that is advertised. Aside from regular social engineering and old-school hacks to get people's tokens, governments have been successful in tracing transections in investigations. That's how SilkRoad got got, and recently Japan did it as well.
Tracing transactions on the BTC public ledger did not lead to the downfall of the Silk Road.
I think It was mostly interesting, because It had a potential of going real mainstream if FB really pushed it to it's millions of users that are not technical in one way or the other.
Technically, there is so many ambitious projects going on in crypto space anyways.
I don't see how this is a surprise. Facebook basically wanted to take monetary sovereignty away from states and give control to private companies. What did they expect? Especially when right now people are noticing the reach Facebook has into our lives and how irresponsibly they're acting with it. Why would any sane person give Facebook any more control over their lives?
Is that no longer true? I'm not sure if the website is up to date.
https://www.diem.com/en-us/vision/
Diem is deeply and fundamentally a Facebook project.
1. Speculation on highly manipulated markets.
2. Illegal transactions.
3. Ransomware.
4. Innovative new kinds of fraud using smart contracts.
I think for the time being it's meaningful to think of cryptocurrency transactions as stock purchases / fees to the stock exchange.
Edit: Monero. It's currently 15th on Coin Gecko by market cap at $2.3 billion. It's 3rd in the number of most developers behind Bitcoin and Ethereum.
It's a gameable metric. How do you track it anyway- by github contributors? By number of people submitting patches?
Also, not all contributors are equal...
And roll-up transactions are currently sitting at less than a penny.
But seriously: I didn't innovation originates from the government, but our elected officials are certainly a reflection of the culture of our country.
In fact, one of our major political parties rages against the things that made the US innovative: creating a haven for immigrant scientists and entrepreneurs, excellent research universities, and social programs that acted as a safety net for anyone taking a risk on an innovative business.
Are you kidding? This is the country that avoids the Metric system remember. https://en.wikipedia.org/wiki/A_Metric_America oops.
Perhaps the ratio of exceptionalism to gridlock as the excuse for stasis has changed, but the stasis itself hasn't.
If it's being spent in the US, they have control. They can make it illegal, tax it to hell, or just start mining it themselves.
Let me know if they ever did stop music and video sharing, did RIAA lawsuits work? How’s that cute FBI logo at the start of movies working out?
*EDIT Avalanche was not the first proof of state crypto currency.
https://en.wikipedia.org/wiki/Peercoin
https://en.wikipedia.org/wiki/Tezos
I don't find cryptocurrency interesting at all for a free society. I don't see any purpose of it, if you live in a free society. And I do live in one.
My question. What is the "benefit" of using Libra when you can just as easily transact with xrp ? Dictatorship by Facebook first, tracking of spending for MOAR ADS.
Who benefits from Libra ? Not the end user at least. Oh and fees. If there are no fees on Libra,why is PayPal investing money in this model ?
As for international money transfers: TransferWise and the like are already providing better solutions in that space without forcing you to use Facebook Coins. Now you might say that mostly caters to the rich world, and that's true, but the people who can't use TransferWise are probably not going to be able to use Libra/Diem either for the same reasons they can't use TransferWise: ID documents, KYC/AML, plus capital controls and sanction regimes which aren't magically going to disappear for this new currency.
It won't provide one of the few benefits of Bitcoin etc either, namely the ability to make illegal transactions more easily.
Who says the countries this will be used in have KYC/AML? The unbanked people this would be for aren't in countries that have those laws.
> As for international money transfers: TransferWise and the like are already providing better solutions in that space without forcing you to use Facebook Coins. Now you might say that mostly caters to the rich world, and that's true, but the people who can't use TransferWise are probably not going to be able to use Libra/Diem either for the same reasons they can't use TransferWise: ID documents, KYC/AML, plus capital controls and sanction regimes which aren't magically going to disappear for this new currency.
Can't use transferwise, so can't use something else.
This isn't aimed at people who can use banking where KYC or AML apply. It's for people who are curently using other unbanking payment methods.
Also, lots of drug deals are settled in US dollars, they don't have that. So your point that anything settled in dollars will have those laws is way off the mark and easily disproven.
And other companies are already in this space providing basically the same service.
It seems to me, people applying how companies 1st world countries + the US operate to how companies in 3rd world countries (except the US) have to operate.
If for example you require a third party exchange to sell to fiat currency, that should work.
But that exchange has to do the KYC stuff and the unbanked are still cut out.
Now if it's a local exchange for a local currency, not USD then is fine.
They can exchange in physical currency which would be acceptable in most third world countries and with the amount physical currency floating around they wouldn't need to get any from the US, no?
That runs afoul of most money laundering regulations, so if you have any presence in the US they'll go after you, and they'll prosecute anyone with any serious connection to it and extradite those people to the US where possible.
Moving money across international borders is not a problem you can just engineer around. You have to play by the rules.
Which is the only fiat currency Diem supports conversion into right now.
The dollar is traded so much that I don't think they need to actually get dollars from the US to be able to use the dollar. If it's going into banks, yea, but if you're just giving people the notes, you're good to go.
There is no such thing as an ecosystem not controlled by the US. You have any ties with the States (and Facebook, clearly, does), you gonna comply with whatever rules they come up with. If you don't believe me, ask Huawei's top manager. Or lots of other people like him.
> This is meant to be a completely different ecosystem, no? An ecosystem not controlled with the US. This isn't a normal financal service, it's not banking, it's outside of banking hence why it's aimed and people without banks.
Last I checked, Facebook is a US company, with a US headquarters, publicly traded on a US stock market, and with an American CEO and controlling shareholder. So, unless they all want to relocate permanently to "some random African country that is in the middle of a civil war", they're going to have to deal with US regulations.
You may want to update your world view for the 21st century - there is no “wild west” left, every country where this matters will have financial regulations.
You mean like Somalia? Even Somalia has KYC/AML laws: https://frc.gov.so/aml-cft-law/ (Customer due diligence is Art. 5)
Are there any countries that don't have similar laws?
https://davidgerard.co.uk/blockchain/libra/
This is something that's been widely advocated. But imagine a private company creating one, particularly one with Facebook's track record.
Imagine having to use Facebook to access any money - not just Diem Dollars.
(my book on Facebook's Libra/Diem plan goes into this, particularly ch 8 on privacy)
I don't think this can happen in practice. For any such system to work at all, the vast majority of the entire society needs to be using it and be satisfied with it, and then there'll always be cash anyway for which there can't be access control enforced by any one entity.
But Diem doesn't have any advantages over any of these entities: it's a foreign foundation with no local infrastructure to help people spend their cash and no local knowledge talking about immutable ledgers and cash equivalent reserves, as if the reason the unbanked were unbanked is because the local banks don't write whitepapers rather than because exchanging cash in developing world villages is a very expensive problem to solve relative to the size of the transactions they unbanked might like to make
> as if the reason the unbanked were unbanked is because the local banks don't write whitepapers
Made me chuckle.
I don't agree, my step parents (in Romania) are unbanked and they have ID documents. A lot of people are in a similar situation there. Yet they all have smart phones.
I will NEVER use a currency that requires a connection to my facebook account.
Basically, I think the underlying idea is valuable - low-cost, fast, reliable, accessible money transfers - clearly something missing right now in this world, even for the "global rich" (citizens of first-world countries), let alone for the "unbanked". It could even scale even more to a money store but that's basically being a bank, which is related but somewhat orthogonal (e.g. both Revolut and TransferWise started as mostly money-sending services and are now moving towards the "bank" stage).
So, my thoughts / questions are the following:
1) Is there a reason this is tied to the blockchain? For most purposes, blockchain without proof of work is just a glorified git repository, and I'm pretty sure that not even the most law-abiding citizens want all their transactions to be public.
2) Is there a reason this would be tied to a company, instead of being run by e.g. a charity? I understand why Facebook / Apple might be more successful with launching this than e.g. TransferWise (they can utilize their platform to push this (or any other) idea to a massive userbase), but really there's no underlying reason why you'd want this to be run by a non-financial company (and an ad ("use people's data to manipulate them") company) and many reasons why you wouldn't want to comingle your financial data with the likes of Facebook / Google / Apple.
3) Why a "new currency" ("stablecoin")? I understand that it might have some desirable properties but I'm pretty sure that most people would be negatively surprised if their "stable" coins started losing value (in terms of their local currency). Also, I'd say that most people don't even care/think about "FX rates" etc. and those that do are mainly currency traders / "speculators". So I envision the "ideal" system to be basically just an app displaying "sending 100EUR to person A in country Z will cost you 0.3% and the payment will arrive in 20 minutes" and the other person seeing "person B sent you 8919 INR".
4) I'm sure there are many issues with fraud/reversible transactions/KYC/anti-terrorism/anti-money-laundering that would need to be resolved somehow.
I think this is an ideal case scenario for a charity - an almost-government (non-profit, "for the people") organisation handling an area of "social tech" that global governments aren't tackling (because they aren't incentivized to) but fundamentally all the pieces of technology are there.
If anyone is interested in funding / founding such an organization, let me know.
As to blockchains, that's because this is the hype of the last few years, is it not?
As to currencies, IMO the vision of the people hyping bitcoin was that your pizza place would accept BTC (and not after converting their USD price to BTC) because their supplies would be happy to do as well. A single currency for the world would be interesting, but as economists have pointed out, devaluing your currency is a way to escape economic crises, but e.g. Euro countries can't do this any more, hence the problems the PIIGS countries had.
It's a term without an accepted definition. A lot of useless branding is expected. Just you wait until IBM gets their hands on .. oh, they already did.
Both the Bitcoin-like zero trust ledger and the m-of-n trusted notaries model have useful use cases. While more descriptive terms would have been great, arguing definitions only goes so far.
The reason for the blockchain: Libra was founded by four bitcoiners (Morgan Beller, David Marcus, Kevin Weil, Christian Catalini) who wanted something like bitcoin, but not volatile, and run by sensible people, i.e. them.
I get the VC appeal of blockchain, but Facebook already has the money to fund it. Outside tech circles I don't think slapping a blockchain label on a product will make it more appealing.
I kind of hope the word "blockchain" should soon make it less appealing especially in tech circles.
Missing in the US.
At least Europe has had those for a long time already, using normal banks.
I just checked - paying 10EUR from my UK account to the EUR area takes 2-4 days (I'd need to pay 15GBP for an "urgent" next-business-day transfer) (same rate as TransferWise) whereas if I want to send 10kEUR I'd pay 250 GBP (!) for a "no-fee" (!!) transfer than with TransferWise (a.k.a. scam). Paying from EUR to EUR account (cross-border) costs about 0.1% (0.38 EUR fee to send 350EUR) which isn't too bad.
Suffice to say, room for improvement.
There's sometimes a nominal fee across countries (mandated to be "no more than a local transfer"), but in many cases they are free.
SEPA in my experience has never taken longer than 1 day unless it's SOFORT-related, which in my experience takes a bit to confirm (but the merchant knows you issued a transfer so they can rely on that).
Euro transfers have become instant and 24/7 thanks to the SEPA Instant Credit architecture:
https://www.europeanpaymentscouncil.eu/what-we-do/sepa-insta...
You can transfer up to 100k EUR in less than ten seconds; works overnight and during weekends and holidays.
In the UK, at least Revolut supports this already:
https://blog.revolut.com/sepa-instant-euro-transfers-now-ava...
NatWest app says £0.00 fee and some FX rate but when I compare with TransferWise, the difference is £250, which means that the "FX rate" implicitly contains the fee.
Maybe not "fraud" legally but I don't want to support such non-transparent business practices.
Yes banks charge commission (where TW usualy has a cost advantage but anyway, it's a money maker for banks and calculation of the fx rate to be used at a given moment is not something simple)
From experience with bank accounts from 4 different European countries those instant transfers definitely don't work everywhere and are often accompanied by an extra fee.
Edit: And this is 2020. I highly welcome some innovation in this field - five years ago..
2.5% is a rather expensive fee for a GBP-EUR transfer, especially on £10,000! Some banks offer as low as 0.4% (on top of the real mid-market rate), probably even less on large transfers.
Unless you count cryptocurrencies nobody actually uses.
(1) build a giant sucking data-miner atop all consumer commerce;
(2) print their own money in such quantities that governments can't tell them what to do any more;
(3) establish themselves as providers of the digital identity standard for the world, so that you need to go through Facebook to use money at all.
There are those who have proposed Libra-like basket currencies seriously; Yanis Varoufakis seriously proposed that the Libra 1.0 plan would be a great idea - if done by a public institution such as the IMF, and not by a private company. https://archive.is/YKgQ9
And has recently come out with a book on Libra. I haven't finished it yet, but it's great so far: https://davidgerard.co.uk/blockchain/libra/
That's quite a high bar for rival payment methods to clear, but I think the main problem for corporate currencies like this will be rivalry from government issuers. Governments jealously guard the right to issue currency, as they rightly perceive it as one of their biggest holds over citizens. Any sufficiently powerful currency would attract their scrutiny.
I do think payments are ripe for disruption though - when money is sent over a free global network between pre-vetted partners (i.e. bank customers) there is no reason the transaction fees should be high, even internationally. I'm not clear how a blockchain based currency is going to help facilitate that, but would love to see a revolution in payments which made them simpler and not tied to archaic concepts like sort codes and account numbers, and reduced the fees charged to customers and merchants for payment networks or card issuers which don't do the hard KYC work (banks and payment processors do that).
The problems here are in verified identity tied to real people, not how to perform transactions quickly, or things like anonymous trust-free transactions which nobody actually wants.
As an EU citizen living in the UK, it boggles my mind that "EU Faster Payments" was not implemented as part of the eurozone, if not the EU as a whole.
As far as I know there's nothing technically preventing this, anyone has an insight into why it isn't a thing?
Banks wanting to make more money?
Most/all Dutch banks have adopted it already.
https://www.europeanpaymentscouncil.eu/what-we-do/sepa-insta...
It is also a reality in Brazil. Last month the government and the banks released a standard money transfer protocol (PIX) which superseeds the other protocols (similar to ACH in USA). Cheap, instant payments 24h a day regardless of the bank are a reality here today.
Hence I don't see FB having much success in Brazil with this product.
As for international transfers, the Central Bank is looking at simplifying existing regulations in order to allow international transfers as late as 2023
Really?! They just need to tie whatsapp payments with a novi wallet, perhaps offer a few bucks as bait and suddenly they get millions of users.
Never underestimate the power of a monopoly position.
What are the problems with sort codes and account numbers? Are you after binding the account to your identity like Australian PayID?
You could also mandate that wires are free as part of necessary banking structure. I don't see why this needs a new currency at all; our financial system is shitty because there's little political control exercised on behalf of consumers.
Still, papering over the mismanagement of government with predatory private services is the theme of the future of the US. We may as well accept that we have no control.
2) it is tied to non profits as well! The whole point is to fund this project by companies, no a company
3) we will support single currencies (a USD coin, for example)
4) that’s what we’re working on!
3) So if I want to send money (from say GBP) to someone in Japan, what would happen? Is the FX exchange seamless or will I need to use some intermediary coin?
However, Facebook makes extensive use of shadow profiles of people who aren't even Facebook customers. They could certainly add Diem blockchain data to those, as they will have access to said blockchain via Novi, their Diem wallet.
David Marcus and Mark Zuckerberg have both stated that data from Novi will not go to the Facebook advertising engine. However, Zuckerberg and Facebook's track record on such promises is that they consistently do this anyway. Then Zuckerberg apologises, then he does it again.
Just by looking at Facebook's past behaviour, you can assume that an important purpose for Diem is to collect personal information. Because everything they do is to collect personal information.
Are you really really sure that some of the things Facebook (and Google) does aren't done just to spite us ;-)?
That being said, there is a lot of work being put in making sure that FB doesn't have access to Novi user data. Of course, sometimes one employee's mistake can lead to infringement of a claim, so to avoid that good frameworks have to be put into place.
As I understand, that number is presently zero. (Please correct me if I'm wrong on this.) And unhosted wallets won't be allowed - all consumers will need to transact via a Diem Association member. So Diem usage really is 100% Novi for the known future.
3) That's a complicated answer that involves more than just the blockchain (as you need to convert fiat from/to digital currency) so it depends on the VASPs (the wallets) not on DIEM.
The video shots of small merchants and everyday people, with voiceover "what if everyone is invited to global economy" was bothersome to watch. I don't like their underlying characterization that the lack of frictionless banking and payment systems are what's holding back Africa and poorer parts of the world. It's just not true.
For most of the "banked" in the US, doesn't Zelle cover all that for transfers within the US?
From a user point of view, it doesn't look like an additional service.
Zelle doesn’t feel as convenient as regular bank transfers in Europe or UK. Some problems I experienced:
- You have to sign up separately. There’s no guarantee a recipient has enabled it.
- It’s tied to an email address for some reason. (Euro/UK bank transfers just use the regular IBAN.)
- There was a long delay in receiving and sending money when one of the Zelle accounts was new. (My transaction was stuck for at least 24h in a “pending” state.)
- The daily transaction limits are very low. My NYC rent doesn’t fit even in two Zelle payments! (In Europe, the standard limit for an instant SEPA bank transfer is 100k, and it costs nearly nothing.)
For these reasons Zelle feels very unbaked, and doesn’t replace a proper interbank fast payment system like SEPA in Eurozone.
I thought stellar was similar to what the parent comment describes, but it’s also not proof of work (which makes need for blockchain unclear).
https://www.stellar.org/
For all intents and purposes, Zelle is the bank software, and it’s free. Zelle is backed by a bunch of banks - the majority of US checking accounts have access to use it at no cost.
Not sure how interesting Keybase is now, but it does allow sending money to other Keybase users directly through chat.²
[1] https://keybase.io/blog/keybase-stellar-launch
[2] https://book.keybase.io/wallet#chat
Yes, this could help us to faster get rid of ads as a monetization model.
But in any case, that's at most the "next" step. First one is, literally replicate what banks do right now (possibly including minimum transaction fee on small transactions - depends on local banks / regulations) except with non-backwards tech.
https://www.coindesk.com/billion-dollar-returns-the-upside-o...
> 1. Is there a reason this is tied to the blockchain
For FB, you're 100% right. FB could have likely just used a relational DB in the short term. However, if you don't want to tie this to a single company (your second question), then a blockchain does make it easier for multiple entities to agree on the state of the db. I would argue that modern Proof of Stake protocols are starting to be competitive with Proof of Work in terms of security, in large part because unlike Proof of Work, they allow for both positive _and_ negative incentives for incentivizing behavior. For example, we've yet to see the types of double spend attacks on newer PoS chains (e.g. Cosmos) like the ones we saw on Ethereum Classic a few years ago.
> 2. Is there a reason this would be tied to a company
No, and in fact, this is what makes most permissionless blockchains so valuable. The problem is that most of them are not useable enough for what Facebook wants to accomplish. I say most because, in my view, Celo (https://celo.org and https://valoraapp.com) does. It's permissionless, programable, highly scalable, has a built in stablecoin and identity protocol, and most importantly, uses new zk-SNARK cryptography to let mobile apps sync trustlessly and near instantly. It also offsets 100% of its carbon emissions by buying carbon credits using block rewards.
> 3. Why a "new currency" ("stablecoin")?
I agree 100% and already the market is starting to tell us that USD pegged stablecoins are the most interesting of stablecoins.
> 4. I'm sure there are many issues with fraud/reversible transactions/KYC/anti-terrorism/anti-money-laundering that would need to be resolved somehow
Yes! This is an interesting read on the topic: https://www.coincenter.org/how-i-learned-to-stop-worrying-an...
The only legitimate reason I can think of would be cynically drafting on the hype cycle. But I've been reading David Gerard's book Libra Shrugged [1] and it looks like the actual answer is that "blockchain" has a quasi-religious belief system built up around it, and the people involved are members of the faith.
One of the stunning things for me about "blockchain" revolutionary hype is how long it has gone on without significant accomplishment. It started only a bit after the iPhone, which has had a huge impact on things, including payments. It's hard now to imagine a world without the internet in one's pocket. But if every blockchain stopped working tomorrow, few would notice. Contrast this with M-Pesa [2], a different approach to digital money. It started at around the same time but has had huge uptake. A recent report in Kenya [3] says M-Pesa has 30 million accounts, which is approximately the number of people in Kenya age 15 or over. To me, that's what successful digital money looks like.
[1] https://www.amazon.com/dp/B08M8DGKY4/ [2] https://en.wikipedia.org/wiki/M-Pesa [3] https://ca.go.ke/wp-content/uploads/2020/07/Sector-Statistic...
This seems more likely to me than someone at Facebook saying "We need a our own money system," evaluating blockchain against a centralized design, and deciding for technical reasons that Facebook Money should be a blockchain project.
This is pretty much how it happened. A Bitcoin fan started at Facebook, started from "how do we use a blockchain here" then came up with something to use a blockchain for, and recruited some executives who thought similarly.
Most of what's weird and dumb about Libra/Diem is because it was started by four bitcoiners, from bitcoin ideas. It turns out that ideas from a cryptocurrency that was started in order to evade government control don't play well in the heavily regulated environment of Other People's Money.
I think that there is a lot more money in the world right now than 20 years ago and definitely than 400 years ago.
A lot of it is just dumb (people inheriting money or getting it for other reasons than intelligence or financial acumen: singers, athletes, etc.) and some it is exploratory/inherently risky (VC) or both. So a bubble can last much, much longer and be much, much bigger.
We're probably going to see more of these.
I guess at this point I should probably just say that I regret not being smart/connected enough to be at the collecting end of one of these hype trains :-)))
Could you expand on that?
> and I'm pretty sure that not even the most law-abiding citizens want all their transactions to be public.
I believe some blockchain provide anonymous transactions (based on zero-knowledge proofs for instance).
Yes: so that Facebook can do as it wishes and not have to follow government financial regulation.
The reason it isn't free is that there are loads of anti-money laundering laws that require paperwork on both ends. Sure Cryptos avoid this problem, but just means it'll get regulated or banned.
You need an all digital currency to keep transaction fees cheap, and to speed up transactions especially accross countries.
Just think about it, today's currencies are backed by physical paper. At some point, if A paid B, B should receive the physical paper money for the exchange. This is known as liquidity, and it's the major reason why money transfers over the internet today are expansive and slow.
> Is there a reason this is tied to the blockchain?
Yes, blockchain is key. Look at what all modern currencies in use have in common? They are backed by a very powerful entity, mostly governments with real power (weapon and authority on actual land and people). This isn't a coincidence, whoever controls the currency has huge power, imagine being able to make money as you please and give it to yourself or others.
You can't trust any single party with such power. Governments are the closest thing people can trust today, often because they have no choice, and sometimes because there's ton and ton of scrutiny, checks and guards in place around them.
And still, when currency is physical, it is also slightly harder to make more for yourself without trail.
Now if currency was digital, it be so easy to abuse, so anyone who had single central control could easily cheat everyone else. You'd not just be in control of the currency like the government is, you'd also become in control of the ledger. That means, that single central entity does not only control the digital currency (how much of it and who it gives it too), but it also controls the exchange of it (keeps track of who has how much of it and who transfer it to who else). That's incredible power, they could just seize your money without scrupule for example.
Blockchain is about solving this issue. If the currency and ledger is controlled by a distributed blockchain, then you don't have a single central entity with all this power. Instead the power is distributed to whoever wants to participate in it.
Now this is still an area of research in some way. Proof of work was one way, and it suffers from the fact that compute majority wins, and the compute majority could actually be owned by a single entity (which owns a ton of compute resources making up the majority).
Proof of stake is the new idea, it says that everyone who wants to be a part of controlling the currency and ledger has to put a deposit amount of their own money. If they are found to have cheated or acted wrongly, they never get that money back, otherwise they get it back and a little bonus for their effort.
In this scheme, you could still have a single actor taking full control, but they'd need to have a ton of money, more money then everyone else's combined stake. So it's much harder to do so.
> Is there a reason this would be tied to a company, instead of being run by e.g. a charity?
To some extent, it doesn't matter who starts it, if it ends up being a distributed open source piece of software, that is run by people from all around the world on different machines not all controlled by one entity, then it has become something out of the hand of whoever started it. Charity or Company, neither in my opinion could be trusted with a single central solution, but they can both try to kickstart an open source distributed blockchain ledger and currency, as long as it does in fact distribute control in a way that single or minority can't control it fully.
> I'm sure there are many issues with fraud/reversible transactions/KYC/anti-terrorism/anti-money-laundering that would need to be resolved somehow
This is probably one of the biggest issue currently, in a weird way, trying to solve the problem of no single central authority also makes it difficult for the government of any country to enforce rules and regulations over it.
I can send money to friends via PayPal or Venmo completely free. What’s missing?
Of course Bitcoin was ideal for this but it went off the rails for the banking the unbanked dream when it refused to scale from a blistering 7 transactions per second and the associated high fees. Ethereum fees aren't great either, but my understanding is that massive increases in throughput are coming with sharding etc. in Ethereum 2.0. Monero would be perfect for this, but I don't know if the world is ready for true privacy and fungibility in their e-coin.
https://bitinfocharts.com/comparison/transactionfees-btc-eth...
You can check any bitcoin dashboard (such as https://bitbo.io); the current transaction fee is 1 satoshi/vByte for a transaction. The average bitcoin transaction is ~250 bytes. 1 satoshi = $0.00019273. A transaction that can wait an hour costs about $0.05.
The "bitcoin doesn't scale" thing really isn't a thing. Lyn Alden addresses this in her "7 Misconceptions about Bitcoin" article [1]:
"In other words, suppose that the Bitcoin network is limited to 250 transactions per minute, which is low. Those transactions could average $100 or $1 million, or any number. If they average $100 each, it means only $25,000 in transaction value is performed per minute. If they average $1 million each, it means $250 million in transaction value is performed per minute. If Bitcoin grows in use as a store of value, the transaction fees and inherent limitations prioritize the largest and most important transactions; the major settlement transactions.
Additional layers built on top of Bitcoin can do an arbitrary number of transactions per minute, and settle them with batches on the actual Bitcoin blockchain. This is similar to how consumer layers like Visa or Paypal can process an arbitrary number of transactions per minute, while the banks behind the scenes settle with larger transactions less frequently."
Lightning Network is a layer 2 protocol on top of bitcoin; transactions settle in seconds and the fees are tiny—about 1 satoshi—(a fraction of a penny) per hop. Not only are they cheap, they're private as Lightning runs over Tor.
The UI/UX of the current crop of Bitcoin/lightning wallets for iOS and Android, such as BlueWallet (https://bluewallet.io) is quite good.
[1]: https://www.lynalden.com/misconceptions-about-bitcoin/
the main point is that Bitcoin is decentralized, there are many nodes in China, Iran, etc. that is why it has so much value
/s