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Libra VS XRP


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1 hour ago, JA8 said:

Not sure why you say this. Libra is going after the same market as XRapid, ultimately. It’s just that XRapid adds the extra step of interacting with banks. Libra is p2p. 

Libra is a threat to banks. It is therefore a threat to XRP. It aims to handle the full gamut of transactions from microtransactions up. Therefore it is also a threat to BTC. How big a threat remains to be seen.

Competition might be a good thing. Lots of potential positives here regardless. Legitimises crypto and may steer regulators and banks towards favouring options which pose less existential threat.

Libra avoids banks, Ripple works with banks. Libra is a stablecoin, XRP is not. Unlike XRP which transfers value, Libra transfers liability, like Tether. I would like to know how fast Libra can be exchanged for fiat if you would want that. 

I agree with you that Libra may be a threat to some banks, but I don't believe Libra is going to be a threat to XRP. Ripple aims at working with banks and so Facebook's move may actually stimulate banks to start using Ripple/XRP. 

Libra can be inflated, XRP can't. Similar to the disconnection of the dollar from the gold reserve standard in the 70s, Libra could theoretically even be disconnected from the basket of currencies backing it, altogether. In addition to that, as fiat goes down in value, so does Libra. 

My thoughts, please correct me if I'm wrong.

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52 minutes ago, codiusrex said:

 

 

are you referring to this tweet?

 

"I normally don’t comment on other projects, but my first thought about #Libra after reading the docs was that many of their design choices really validate the model pioneered by the XRP Ledger.

With that said, some of their decisions seem… let’s be polite and just say curious."

 

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1 hour ago, Danny said:

Libra avoids banks, Ripple works with banks. Libra is a stablecoin, XRP is not. Unlike XRP which transfers value, Libra transfers liability, like Tether. I would like to know how fast Libra can be exchanged for fiat if you would want that. 

I agree with you that Libra may be a threat to some banks, but I don't believe Libra is going to be a threat to XRP. Ripple aims at working with banks and so Facebook's move may actually stimulate banks to start using Ripple/XRP. 

Libra can be inflated, XRP can't. Similar to the disconnection of the dollar from the gold reserve standard in the 70s, Libra could theoretically even be disconnected from the basket of currencies backing it, altogether. In addition to that, as fiat goes down in value, so does Libra. 

My thoughts, please correct me if I'm wrong.

Finally someone who knows what they're talking about

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16 hours ago, jcdenton said:

He made some good points about balancing the flows being difficult.

I dont understand why they need to buy "securities", bank deposits should be sufficient.  Although I guess they want a bunch of free cash to earn interest on.

Also, is the price of the Libra supposed to be free floating? Or is it just pegged to 1 fiat? How are the FX rates determined?

One last thought, with XRP 2 parties are transacting accross a counterparty free + jurisdiction-less asset. This alleviates the risk exposure of each party to the other jurisdiction's fiat.

Is there a link to the Libra "white paper", or did they put out any official documentation yet?

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16 hours ago, Montoya said:

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?

I use Bitstamp, they are not controlling my information stream in any way.

The problem is the full loop:

Facebook is providing you a news and advertisement feed on your mobile device, this feed is constructed by "clever" algorithms. These algorithms can very precisely measure your response to that feed (what do you click, where do you pause, where do you continue to swipe down, when do you engage). This data can be combined with billions of other users, so that the self learning algorithms can optimize your information feed to maximize your screen time and engagement.

This already works perfectly. Young people are literally glued to their screen. Even when walking, or biking, the phone is in their hand, and they have to watch every 60 seconds, or even non-stop. They are completely hooked. If you ask them, they will actually tell you that. There is nothing they can do about it: the algorithms are just too clever. They must stare at the device, and swipe through the endless stream of messages, infested with "promoted content" (content over which the algorithms have full control: they can literally change your view of the world with seemingly harmless "advertisements").

The only thing that was still missing: connecting this addictive device to your wallet. And connect the self learning algorithms to your spending behavior, so that the information feed can now be even better adjusted to maximize money sucked out of your wallet, and turn you into swiping and consuming zombie.

Edited by Guest
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2 hours ago, Danny said:

Libra avoids banks, Ripple works with banks. Libra is a stablecoin, XRP is not. Unlike XRP which transfers value, Libra transfers liability, like Tether. I would like to know how fast Libra can be exchanged for fiat if you would want that. 

I agree with you that Libra may be a threat to some banks, but I don't believe Libra is going to be a threat to XRP. Ripple aims at working with banks and so Facebook's move may actually stimulate banks to start using Ripple/XRP. 

Libra can be inflated, XRP can't. Similar to the disconnection of the dollar from the gold reserve standard in the 70s, Libra could theoretically even be disconnected from the basket of currencies backing it, altogether. In addition to that, as fiat goes down in value, so does Libra. 

My thoughts, please correct me if I'm wrong.

> Libra avoids banks, Ripple works with banks.

True. Ripple works with banks because people need to use banks at the moment. Libra stands to disrupt that. BTC also stood to disrupt that before it became relatively useless as currency. As such, Libra is pretty darn disruptive to BTC’s currency aspirations as well. 

> Libra transfers liability 

Libra aims to be so ubiquitous that cashing out to fiat is perhaps never required. The Libra ecosystem will enable it to be used for a very wide range of products and services. This probably won’t eliminate the need for fiat completely, but it reduces the requirement for fiat. Over time, this reduction could be substantial, and this is one of the reasons there has already been some political backlash against it.

> Facebook's move may actually stimulate banks to start using Ripple/XRP. 

Yes, I agree. And this would be because Libra poses some degree of existential threat to banks as I mentioned.

> Libra can be inflated, XRP can’t.

True. But would this fact alone stop users from transacting with Libra? No. Joe Average gives tacit approval to Keynes every time he uses dollars or sterling or any other fiat currency, so he’s not going to be too concerned.

Edited by JA8
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Interesting. This could play to Ripples advantage  and may move banks to XRP faster.  

Depending on this plays out.  

May move regulations along faster. 

Edited by Guest
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5 hours ago, JA8 said:

> Libra avoids banks, Ripple works with banks.

True. Ripple works with banks because people need to use banks at the moment. Libra stands to disrupt that. BTC also stood to disrupt that before it became relatively useless as currency. As such, Libra is pretty darn disruptive to BTC’s currency aspirations as well. 

> Libra transfers liability 

Libra aims to be so ubiquitous that cashing out to fiat is perhaps never required. The Libra ecosystem will enable it to be used for a very wide range of products and services. This probably won’t eliminate the need for fiat completely, but it reduces the requirement for fiat. Over time, this reduction could be substantial, and this is one of the reasons there has already been some political backlash against it.

> Facebook's move may actually stimulate banks to start using Ripple/XRP. 

Yes, I agree. And this would be because Libra poses some degree of existential threat to banks as I mentioned.

> Libra can be inflated, XRP can’t.

True. But would this fact alone stop users from transacting with Libra? No. Joe Average gives tacit approval to Keynes every time he uses dollars or sterling or any other fiat currency, so he’s not going to be too concerned.

Sure, Libra will be used and is going to be disruptive. I don't deny that. I only tried to explain 'apples and oranges', because you said you were unsure why I used those terms.

Hodor just published an article about it, which you may find helpful @JA8
https://coil.com/p/Hodor/David-Schwartz-and-Facebook-Coin-/UiNoDHA-J

Edited by Danny
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On 6/18/2019 at 11:13 PM, jcdenton said:

FB doesn't need a single bank to sign on as a validator and Libra will still work. XRP does not have that luxury. Ripple must build out a network of existing payment providers who will resist by all means, because XRP puts limits on money creation that are not imposed by their central banks.

Because they are the network, FB has everything they need already, they can buy the banking licenses themselves through hidden subsidiaries to connect to the central banking payment systems. Ripple can buy those licenses, but without a pre-existing networt of users, its more diffcult to complete the circle. FB also isn't imposing a fixed supply settlement asset on anyone, so the system is still fully flexible and impacted by state monetary policies. 

FB pulls in fiat reserve deposits globally to these banking entities with an account at each central bank, and operate as 100% reserve backed narrow banks. They buy gov bonds (we will ignore negative rates and bonds in the EU for simplicity for now), and have zero risk of domestic non-convertibility because they are 100% backed. I am interested in how they determine convertibility, as there will be FX risk, I don't see how exactly they get away from runs on a particular currency. But this is no different than the system functions today, so we can't exactly call this a drawback. An XRP system on the other hand has the same FX risk and domestic risk, because it's supply is fixed, banks simply can't get more of it when the need it in a domestic system. 

25 years from now, FB's network could de-couple Libra from all fiat, declare non-convertibility, and have a network with validators from the existing social structure today who will determine global monetary policy in the future for a single global currency that is fully elastic. They can actually do this, because the size of their current closed network today can start the machine.   

It's Beta vs VHS, Train tracks of various sizes, QWERTY keyboards, etc. The path dependent outcomes we see today have almost nothing to do with what works best at the time they become adopted. It just ends up happening a certain way and then poof, its a standard we can't escape. I'll say again this is a serious threat to XRP, Ripple is already rich, they can always just go home and retire, so they may not even care :crazy:.

Edited by Wandering_Dog
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@jcdenton

From the FT article:

Quote

On that basis, the Libra system — much like China — has the capacity to gobble up a huge swath of global spare foreign exchange liquidity while setting up its float. It seems logical that due to the liquidity implications on the global economy (again the reason why the SDR system does not require prepaid funds) that float will eventually have to be transformed from fiat cash deposits at banks into something more durable, like short-dated government securities.

I'm not sure I'm following the author's statement here. When a bank deposit of a customer is used to purchase Libra, the bank destroy's that liability, the customer destroys the bank deposit asset, the central bank transfers the reserve deposit from the customer's bank to the Libra participant bank's account, but this reserve deposit is then immediately destroyed and the central bank gives the Libra bank participant a bond. So, the bank and reserve deposits are removed from the system, which I'm hoping is how he's using the language "gobble up".

But he's talking about FX liquidity and float, which I'm not following. As the payment would be from domestic to Libra to foreign. If there is a net outflow from Country A to Country B, then we are talking about the destruction of reserve deposits in Country A, and the creation of reserve deposits in Country B. When a recipient of Libra in Country B converts libra, the process is reversed in the new currency, so the Libra bank participant creates a bank deposit then destroys it and transfers a reserve deposit (will borrow at the overnight rate) to the destination bank who creates a bank deposit for the end recipient. This is exactly how the system performs now, except it eliminates correspondent banking (or rather it replaces it with "Libra banking", but as any bank can join the network with a pay-in, borrowing from the CB, it means any bank can be a correspondent bank). 

 

Quote

The more people that use Libra, the greater the shortage of safe assets in the global system and the greater the negative pressure on interest rates.

This is a false statement. The number of reserves in the system is determined by each central bank. The quantity of gov bonds in the system is determined by the same gov. If a system wants to hold more safe assets, the gov just issues those assets. This is what QE is, you need reserves, here you go. You want bonds, here you go. The gov has total control over the composition, and can meet demand at any time, at any interest rate it wants. 

 

Quote

Alarmingly, the notion that there might not be enough safe securities to make the model work without exposing the system to the risk of negative interest rates seems not to have crossed the minds of the founders.

This guy is going to have to demonstrate the phenomenon he's describing, because it sounds like he's operating within a theoretical framework that doesn't reflect reality. 

 

Quote

Debt from stable governments with low default probability is already pushing the zero bound, while any diversification into riskier realms introduces default exposure and makes it harder to match value in the basket with actual commercial flows.

Here's he introducing an argument based on a constraint that is self-imposed. This is a classic tactic of Neoclassicals: no you aren't allowed to spend! Oh now look, we don't have enough German bunds, so obviously we can't implement narrow banks! This is a load of ********.  

 

Ok, I've read the whole piece, it's hate mail from the FT, which has a sizable dependence on the neoclassical order never changing. 

Edited by Wandering_Dog
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23 minutes ago, Wandering_Dog said:

FB doesn't need a single bank to sign on as a validator and Libra will still work. XRP does not have that luxury. Ripple must build out a network of existing payment providers who will resist by all means, because XRP puts limits on money creation that are not imposed by their central banks.

Because they are the network, FB has everything they need already, they can buy the banking licenses themselves through hidden subsidiaries to connect to the central banking payment systems. Ripple can buy those licenses, but without a pre-existing networt of users, its more diffcult to complete the circle. FB also isn't imposing a fixed supply settlement asset on anyone, so the system is still fully flexible and impacted by state monetary policies. 

FB pulls in fiat reserve deposits globally to these banking entities with an account at each central bank, and operate as 100% reserve backed narrow banks. They buy gov bonds (we will ignore negative rates and bonds in the EU for simplicity for now), and have zero risk of domestic non-convertibility because they are 100% backed. I am interested in how they determine convertibility, as there will be FX risk, I don't see how exactly they get away from runs on a particular currency. But this is no different than the system functions today, so we can't exactly call this a drawback. An XRP system on the other hand has the same FX risk and domestic risk, because it's supply is fixed, banks simply can't get more of it when the need it in a domestic system. 

25 years from now, FB's network could de-couple Libra from all fiat, declare non-convertibility, and have a network with validators from the existing social structure today who will determine global monetary policy in the future for a single global currency. They can actually do this, because of the size of their current closed network today can start the machine.   

It's Beta vs VHS, Train tracks of various sizes, QWERTY keyboards, etc. The path dependent outcomes we see today have almost nothing to do with what works best at the time they become adopted. It just ends up happening a certain way and then poof, its a standard we can't escape. I'll say again this is a serious threat to XRP, Ripple is already rich, they can always just go home and retire, so they may not even care :crazy:.

We can discuss whether libra is a threat or opportunities. What Facebook can probably achieve is a very unique opportunity in human history. They owned the largest social network built on Earth today. This is also a life line to facebook as their network is shrinking and dying as reported by Time Magazine. I see this as an opportunity to the whole crypto industry. People can finally see what blockchain is supposed to do, whether Ripple can survive this new wave, nobody knows as superior technology does not always win. 

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