Libra

[KarlHungus 330]

I’ve been posting here for about two years, give or take.  I’ve never been one for spreading fud or concern trolling but I’ve had my doubts and asked questions from time to time.  I bring this up preemptively because I just have new concerns about Libra and I’m genuinely just looking for an answer (answers?) without wasting time fending off attacks for my motives.  Most of the community here has always been informative and gracious in their responses in the past but I know how doubt can also been seen as intentional subversion.

Very recently a number of high profile companies have dropped out of the Libra project.  Good.  I assumed it would put to rest the latest ‘xrp killer’ idea as the project seems to be DOA.  However, there have been other recent developments that still make me question the overall picture.

- The head of Calibra was onstage with the IMF and Mark Carney recently.  I know BoE is assumed to be tied to Ripple, but Carney apparently spoke very highly of Libra.

- US Congressmen have attacked the Libra project but recently a sitting Senator offered encouragement for the project.

- The founder of Foxconn expressed support for Libra and floated the idea of connecting Libra to the new Chinese coin in Taiwan to link up a new global system.

- Brad Garlinghouse has been attacking or at least deriding Libra recently in his public appearances.  This could just be confidence on his part, but people often attack the things they’re afraid of.

That’s not to say everything is going Libra’s way, obviously not.  France’s financial minister has said that Libra is not welcome in Europe and we have the aforementioned (huge) defections from the project.  The general public has a revulsion to allowing Facebook to have access to even more of their lives.  However, Libra still pushes forward.

I’m just looking for guidance from the community on the whole picture here.  Is it posturing?  Part of the show?  Is this still a potential threat?  Maybe something else entirely is going on?  I’m obviously missing something and I’m hoping some of you can help me see it.

[peanut56 1,030]

I think the main thing to consider is that Libra does not exist. Right now it is an idea. The push against Libra stems from the behaviour  of facebook regarding privacy, the mismanagement of Data, and being the go to site utilized by the KGB. In a way facebook is in trouble for having a lot of power and as a result being a target of a nation influencing another nation's election (so it seems). So, I think as a result the idea of trusting a company with a asset derived of a basket of currencies puts the independence of National currency at risk.

Just my opinion, Facebook can't be trusted with information, they can't be trusted with data, why trust them with currency. Maybe Libra is a great idea, but should it be placed in the hands of a company that has come under a lot of scrutiny over the years.

You can argue that facebook is protected under freedom of speech and that argument is fine. Personally I think that the intelligence community knew damn well what was going on and choose not to inform the people of election meddling for one reason or another. If they did not know then they suck at their jobs.

That said Libra isn't independent, but it relies on the value of nations, which easily creates conflict of interest.  

[XRPboi 507]

I've noticed all the back and forth you've mentioned as well. If I were to speculate, I would say that a lot of it is posturing and part of the show. I don't think Libra is (or ever was) a threat to XRP or crypto in general. If anything, it solves the 'last mile' problem very well.

I think that if Libra does launch, it will likely only be beneficial for Ripple. Several members of this board have noticed the shuffling of executives between Ripple and Facebook dating back to 2013. I think this has all been planned out for quite some time, and is being executed as planned.

I'm sure nearly everyone is aware of the repo's taking place recently. Combine that, along with the recent increase in XRP wallet holdings across all tiers, and the quote from the article below:

"Libra is going to be different than other cryptos because it will be backed by a basket of TREASURY BONDS and currencies."

https://finance.yahoo.com/amphtml/news/fintech-stocks-portfolio-future-221710534.html
 

I think there are plenty of clues as to where this all could be headed. If Libra does launch, then it will no doubt be interoperable with the XRPL (if not built directly on it - which would be my first guess). But the one thing that still confuses me is the animosity Libra has received from the press as well as Ripple. Brad has mentioned his (negative) thoughts regarding Libra on numerous occasions.. So it would be really weird to see Ripple turn around and support Libra at this point. But anything can happen.

I look forward to hearing everyone else's opinion on this

[KarlHungus 330]

Thank you everyone for the responses so far.

[IAmATroll 201]

You mean the whitepaper? 

[Julian_Williams 8,838]

XRP is without counter-party and this makes it a flexible apolitical token that can be cashed in any currency where their is a market maker set up.  So you set up a market maker in Mexico and you are directly linked into every other country on the system as an equal partner. Added to that XRP is integrated within the regulatory framework of central banks with their AML and KYC.  Add to this you have the XRP ecosystem which is supported and funded at arms length by Ripple Labs to grow in all directions - micropayments, money streaming, Mojoloop, XPring projects, Coil projects....

Libra is a white paper product tied to a basket of leading currencies.  It is a complicated stable coin.  The idea does not have the simplicity and elegance of the Ripple/XRP ledger and it would not integrate well with currencies outside the basket. Added to that it is controlled by big American Silicon Valley giants which will make it very unattractive to countries like China or any country that wants to challenge American/Western hegemony over international finance and trade. 

[XRPboi 507]

This is a great read on Libra as well:

https://medium.com/@colin_/libra-reserve-for-crypto-bozos-ea97f73f61fc

[Duke67 1,864]

1. Libra is actually another fiat. Who would like to see a new one to compete with?

2. RippleNet+ODL is a technology enabling superfast value transfers within the current fiat world.

I believe this case is closed...

 

[tulo 3,056]

Everyone answering here never read the whitepaper nor spent 5 minutes reading the idea behind Libra.

• Libra is not controlled by Facebook, nor they'll control and sell/share you publica data or information about you bank account
• Libra is not a FIAT. It's a crypto regulated by a consensus exactly as XRP. Consensus is reached by mean of decentralized entities exactly as validators. Validators are all over the world and belong to different backgrounds (private companies, FIs, universities). Comparing it to FIAT only shows a lack of understanding.
• Libra is also without counterparty.

[invest2lose 1,858]

13 minutes ago, tulo said:

Everyone answering here never read the whitepaper nor spent 5 minutes reading the idea behind Libra.

• Libra is not controlled by Facebook, nor they'll control and sell/share you publica data or information about you bank account
• Libra is not a FIAT. It's a crypto regulated by a consensus exactly as XRP. Consensus is reached by mean of decentralized entities exactly as validators. Validators are all over the world and belong to different backgrounds (private companies, FIs, universities). Comparing it to FIAT only shows a lack of understanding.
• Libra is also without counterparty.

thanks, what are your thoughts on it then? competition for xrp, but overall a positive impact due to bringing crypto the masses?

[tulo 3,056]

2 minutes ago, invest2lose said:

thanks, what are your thoughts on it then? competition for xrp, but overall a positive impact due to bringing crypto the masses?

My thoughts are that:

• Neat idea and technology
• On paper better possible performances than XRP
• It's still on paper, so they are years behind XRP, where the network is already deployed and working since years without any major fault
• Unfortunately it's having lots of attacks because people are ignonant (all people claiming that Facebook will sell private data) or jealous of their markets (all the FIs are attacking it because they risk to lose huge shares of their marker, see comments of bank of england and co.)
• I love the general concept and the idea of creating a world currency that is decentralized.
• Probably we won't see it before 2021

[Julian_Williams 8,838]

4 hours ago, tulo said:

My thoughts are that:

• Neat idea and technology
• On paper better possible performances than XRP
• It's still on paper, so they are years behind XRP, where the network is already deployed and working since years without any major fault
• Unfortunately it's having lots of attacks because people are ignonant (all people claiming that Facebook will sell private data) or jealous of their markets (all the FIs are attacking it because they risk to lose huge shares of their marker, see comments of bank of england and co.)
• I love the general concept and the idea of creating a world currency that is decentralized.
• Probably we won't see it before 2021

I am challenging what you say; if it is tied to the value of a basket of fiat how can it be without counter-party?  It is redeemable against fiat at fixed prices? It must be underwritten?

Edited October 19, 2019 by Julian_Williams

[Julian_Williams 8,838]

Further investigation seems to contradict what you have said about Libra not having counter party.  I guess the it is probably leveraged from assets.  I don't get who covers losses in the system when the values in basket of currencies do not add up with currency fluctuations in the real world.  They must have covered this aspect somehow, but I cannot imagine how.

https://ftalphaville.ft.com/2019/06/18/1560848464000/Alphaville-s-Libra-cheat-sheet/

Quote

it's a glorified exchange traded fund which uses blockchain buzzwords to neutralise the regulatory impact of coming to market without a licence as well as to veil the disproportionate influence of Facebook in what it hopes will eventually become a global digital reserve system.

It will be centralised with a limited number of nodes distributed between investor who each contribute 10 million

Quote

Each $10m investment entitles an entity to one vote in the council, but the same entity cannot present itself twice. But the Libra protocol is expected to have a limitation on the number of active validator nodes (and thus on the number of council members for several years).

To me this sounds like Libra is not an open system.  It is a Stable Coin backed by assets (Counter party) and controlled by a closed group of  businesses who will make money out of their ownership of  assets
 

Quote

 

5) The underlying assets of the Libra fund will be made up of bank deposits (representing a basket of currencies) and other low risk government securities. Customers who transfer value into the system will in effect give up their right to collect interest on their capital. Instead, the interest earned from their deposits and securities will be used to pay the system’s operating costs and, if left over, dividend payments to founder members.

 

 

 

 

At first the currency will be under the centralised control of Facebook and Facebooks friends although they have something called Calibra which is supposed to keep Facebook at arms length from getting the data.

Quote

 

4) To protect users from data-based conflicts of interest, Facebook has created a subsidiary called Calibra through which all its Libra related financial services will be offered.

Alphaville take: Calibra is the only part of the organisation seeking to be licensed, and the license it is going for is only a money transmission license. This is odd given the system’s ETF-like structure and grander deposit taking aspirations. Calibra promises only to use users’ personal financial data for cross selling purposes if users give them permission to do so. This possibly means Calibra will do everything in its power to incentivise that consent box is clicked.

 

https://www.spglobal.com/en/research-insights/articles/the-future-of-banking-regulators-to-decide-if-the-crypto-stars-align-for-libra

Quote

he white paper indicates that coins are minted when authorized resellers purchase them from the association, with fiat assets (in state-issued legal tender) that fully back the new coins. Similarly, coins are burned when the authorized resellers sell them to the association in exchange for their equivalent in fiat assets. Therefore, we understand that the current intention is not to create Libra without a specific fiat counterparty. This means that the Libra's value will depend on the assets held in the reserve and not on supply and demand dynamics. How conservatively these reserve assets will be managed will be critical to the stability of the Libra's value. Nonetheless, it is important to note that the Libra will not be pegged to a specific currency, but will still fluctuate as the value of the assets changes.

I do not really understand finance at this level, it just all looks opaque, closed, incestuous and hidden in a labyrinth of unanswered questions that are hard to pin down

Edited October 19, 2019 by Julian_Williams

[jabit 198]

The G20 will not allow “libra” to be issued for the time being. G20 closing

https://www.nikkei.com/article/DGXMZO51176920Z11C19A0MM0000/

Google Translate

https://translate.google.co.jp/translate?hl=ja&sl=ja&tl=en&u=https%3A%2F%2Fwww.nikkei.com%2Farticle%2FDGXMZO51176920Z11C19A0MM0000%2F

 

 

Edited October 19, 2019 by jabit

[Roaring_Twenties 2,383]

I think the Libra white paper has been a blessing and that we’ve likely experienced it’s best use case to date.

I don’t see the Libra proposal much helping or hurting XRP going forward.