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Montoya

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  1. The error I see in your reasoning is conflating a stable coin with a pegged currency. As far as I can see, Libra is not pegged at all but instead has a floating exchange rate, even against the currencies backing it. This is key. Backed doesn't mean pegged. Stable coin is a misnomer in my opinion, more aspirational than descriptive. All it means is that it will likely be somewhat stable because of the more established forms of wealth that are backing it. But unless it can be exchanged 1:1 with any given currency (correct me if I'm wrong) then your criticism is irrelevant. A good analogy might be to think of the value of an ETF share. Each share is backed by real world capital assets formed by a basket of companies, but the ETF shares still have a floating value against the underlying shares that form it, this is because both are highly influenced by speculation and are each subject to differing speculative forces, even while one may make up the other. So while the overall value of an ETF share may be rising, the relative value of one of the stocks making it up may be falling. In other words the sum is greater than the parts. Your criticism concerning custodianship and risk however, seems spot on. This is the big problem with Libra that I can see. There is still risk because it cannot be cashed out in any sensible way, as OP pointed out, other than simply selling it. Which begs the question, can a currency even be called backed if you can't cash out? My concern though is that the market will not care. Look at tether. How many people really actually tried to cash it out? Even when people doubted the veracity reserves, they still treated it as if it were fully backed.
  2. I agree with the sentiment. But......to play devil's advocate, when you buy XRP, don't you usually need to supply copious amounts of personal data to often skeezy exchanges?
  3. Not sure what FB's game plan is, but to answer your question: yes, it could eliminate traditional nostro accounts as well. Any crypto can do this in theory. XRP has enjoyed some advantages over others due to speed, a corporate structure pushing adoption, and a clear use case. But the issue of pre-funding is still faced by any token standing in for value. XRP based remittances, like any other crypto, still require "pre-funding". It is simply the traders and speculators who assume that burden instead of the banks/remittance companies. Someone, somewhere, will still have to have their value tied up in either XRP or the local currency or both in order to solve the last mile problem (getting your money in and out of crypto). What XRP, and any sufficiently liquid crypto for that matter, does is disperse it among many traders and render the time the money is required to be "dead" far, far less. These traders however, will technically still need to "fund accounts" but they do not need to do so in huge amounts. Funding accounts is simply buying and selling crypto for currency. The more people buying and selling, the smaller each account needs to be to supply the necessary liquidity to the market. But there is nothing special about XRP in this regard other than they have a big head start in pushing liquidity and/or an advantage in speed. But at the end of the day, liquidity means everything. FB having a potentially massive ready-to-go market for their crypto is very concerning to me. Hopefully, no one using FB has any interest in buying/investing in Libra and it simply becomes another marketing stunt in the vein of "new coke".
  4. Those ******** on people for voicing their concerns sound more like fundamentalist acolytes than unemotional gamblers. I have been involved with XRP for a long time, but in my opinion Libra could indeed compete with XRP. In fact, if done correctly it could be superior to XRP because it could have a far wider liquidity base. People keep concentrating on what they see as differing use-cases: ie. facebook targeting consumers and XRP targeting institutions. But this is an illusion. Both ultimately are consumer dependent. And both will hinge completely on liquidity. Whoever has the greater liquidity will win. Period. Both tokens will by necessity rely on forex to ameliorate imbalanced flows of capital between remittance pairs, eg. US-Mexico. XRP only works to lower costs if it has sufficient liquidity in both countries. But which is better: having a few thousand forex traders? or a billion? The only difference I see in use cases is that XRP will be aligned to process cash remittances through MG, something Libra will not, at least initially. But this could be easily remedied and may not even need any action on the part of FB to do so. If Libra is usable by FB members and has even moderate usage, local markets will likely develop on their own.
  5. I doubt that a government's promise to police itself will be much consolation to someone from Russia, China, Venezuela, or any number of countries, who runs afoul of the regime. I stand by my claim that political minorities in particular, have much more to lose than they have to gain by anonymous money being banned. But I realize this is likely a topic on which we will not come to much agreement.
  6. To be sure, anonymous money is not without its own social costs, as you point out. All I'm saying is that trusting a government to never screw you over is one gamble I don't wish to take. Anonymous cash is simply one way in which the people can keep their governments in check and protect themselves in the case that an unscrupulous regime gets elected or seizes power. This is especially important for groups that represent a minority in their respective countries, whether ethnic, religious, cultural, or even ideological. Trusting the government not to abuse the ability to track and locate every dollar is akin to those who say you should give permission to the police to search your car if you have nothing to hide. In fact, this brings up a good example. In the U.S. asset forfeiture has been abused massively for the last thirty years of so, destroying many peoples lives. It is legalized theft by the government. Even if you are found not guilty the government can keep all cash, vehicles, etc. if they suspect you were up to no good. It shouldn't be surprising that it is mostly black and brown people who are victimized in this way. This has led to small business owners, foreigners remitting cash back home, and many other victims, convicted of no crime, having had their life savings taken away with no legal recourse. Now imagine if all cash were trackable, how much worse would this practice be? How many more weak people would be victimized by the strong? Hell, Trump himself has suggested the outright theft of remittances of Mexican-Americans to relatives back in Mexico. Plain and simple, in my opinion, anonymous money helps offer some protection for the weak and disenfranchised. Just food for thought.
  7. Not sure I understand the difference between private and anonymous money. Call it what you will, but history has shown that governments have a convenient knack for finding "serious crimes" when someone opposes them. If you give them the tools to oppress, they will eventually use it.
  8. They may be correct; cash may be doomed. But I pray that there is a ubiquitous, anonymous stand-in ready to replace it. Governments have wanted to ban cash for a long time, and it has nothing to do with what is good for individuals and everything to do with what is good for politicians. Hiding money and transactions from bureaucrats has a long and noble tradition throughout human history. I hope it continues in one form or another.
  9. If I were FB I would distribute a crap ton of these tokens as rewards, similar to how Ripple did with XRP and WCG in the early days. This would get the token in the hands of a lot of users quickly without having to sell them. I would let the token be traded on exchanges, wherever. After the tokens are in the hands of a critical mass of users, I would start charging tiny amounts of the token for certain services, slowly ratcheting it up and up. People could choose to either earn tokens by watching ads, doing the WCG thing, or some other task, or if they didn't wish to perform any of these tasks, they could buy them from someone else on an exchange. Since Paypal is integrated already with messenger, perhaps those who have a paypal account as well as FB could even buy them directly from another user, assuming some type of escrow mechanism in the "FB messenger wallet". In this way, you could have lots of users buying and selling these tokens and giving them to FB in exchange for services, but FB never has to touch fiat. For remittances, Paypal would then act for FB essentially as moneygram would for XRP. The difference would be that there would plausibly be a far larger market for those wishing to buy FB token than XRP, letting paypal lose less money in slippage when trying to offload tokens for any given currency. IOW, there may be very slim markets for buying XRP in Egypt, but there could be a massive market for those wishing to buy FB token.
  10. So long as they let other entities worry about the cash-token pinch point, then they could forgo the KYC/AML question. For example, I believe you can send payment through messenger right now via paypal. If paypal decided to act as an exclusive "gateway" for FB token they would already have KYC info ready to go for a lot of users. This is all theoretical of course. But I do believe FB is going to change their business structure to become a pay service due to the thrashing they are taking over privacy concerns. I think that is the whole reason behind FB token rather than remittances. That being said, if it does become a pay service the FB token will have immediate demand globally. If that occurs, it will be a natural choice for sending value overseas. Ripple had better get on their horse to get there first.
  11. Contrary to most people here, I actually think a Facebook coin could be a competitor to XRP, although indirectly. As correctly noted, XRP is targeting institutions. However, if a Facebook token gains mass adoption, it could make the entire business model of institutions even being involved in remittances obsolete.
  12. Every body said it: counter party risk. And historically nations are about the riskiest counterparty one could have. How will they determine a rational exchange rate of any given currency against the token without active forex markets between the token and the various currencies? You need markets to determine price. Two thousand years of economic history has taught us that. Say I'm Mexico and I have five billion "settlement tokens", but I want 5 billion more. How do I go about that? If I buy them from another country, how does the seller of these tokens determine how many pesos should be paid? Do I pay in gold? In oil? In goods? In current markets that price is determined by forex. Furthermore, if it is backed by fiat, what is to stop a central bank from simply printing more of their backing currency to give the illusion of GDP growth? But I'm sure countries neeeeeevvvvvveeerrrrr do that. So long as the printed money is only going into the account reserved for backing or purchasing the tokens, then the inflationary shell game will be hidden from the seller or other holders of the "settlement token" until it is too late. The only way such a system would work is if it is backed by the actual goods and assets of the nation, ie. things that are not debt instruments. But, absent having to actually ship tons of gold, oil, or etc. to another country to get more tokens, how can other users of the tokens be sure that the fiat another country is using to either buy of back their token purchases actually represent the value of their economy and isn't simply printed out of thin air? There is no way that I can see with a "settlement coin". However, as it just so happens, there is practical way to do it by creating an unbacked crypto and letting individuals hold and trade it, and having forex markets to protect against inflationary tactics by countries. By creating a massive value network in which the token can be traded nearly anywhere for nearly anything, the market will provide the de facto backing on its own. For example, you don't need the assurances of the US government that the dollar is valuable...you can simply look around you at people using it and see that it has value. And forex markets are a watchdog of sorts on the issuers, they signal to the network if the US government is devaluing the currency, thus keeping them (somewhat) honest. This is why i see XRP as superior. It has the forex markets to keep the people holding it honest. Think about it, would you trust selling me a million XRP if I pay by personal check? From what I can see, that's essentially what these settlement token schemes are. This is not to say that they wont introduce such a settlement coin, I actually find it likely. But it will not be anything new. It will still be a trust based system with massive counterparty risk.
  13. Why not post your reasons for feeling it is credible?
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