>With Libra, anyone with a $40 smartphone and connectivity will have the ability to securely safeguard their assets, access the world economy, transact at a much lower cost, and over time access a whole range of financial services.
Bad actors will lift old exploitative models into Libra's ecosystem: payday loans with huge interest rates, wallet services that force a deposit and allow you to overspend and charge fees when you do, sign up people for accounts and services that they don't want and make commissions. Or maybe just wallet/business services that straight up scam people and disappear with no repercussions. The thing you set out to kill will just come back with a new flavor. Plus it's even easier now since you can do it all with a single click!
Then someone has to decide what to do with bad actors involved with Libra and allocate resources to actually enforce some actions against them (legislative, the cops, server bans, ISP bans, etc.). Now you've got those services paid by tax dollars dealing with a corporate currency and taking time away from other enforcement actions.
All of this is going to happen at the juicy, vulnerable threshold where the technical controls interface with the human element. I probably won't ever hack Libra/Move itself, but the human part is still there. If I can actually manage to get away with the crime and transact with a fake identity, it can't be reversed.
Bonus: that same $40 phone stops getting updated by a phone carrier and some drive-by malware swipes all of your LibraBucks with a corrupt text message and no one can reverse the transaction. Or maybe that Bloomberg supply-chain attack article will finally become a reality once there's enough economy behind Libra.
If this is widely adopted, it's going to have a pretty steep learning curve and plenty of real losses for everyone.
During the initial stages of the invasion of Afghanistan, the US would pay the ANA, just like everyone else, with cash and checks. However, it was soon discovered that the officers were the ones handing out the money. As could be expected, there was a lot of corruption and grift going on, and the grunts weren't getting their pay. Desertion rates went up by a lot. Eventually, the US figured out that you could pay the soliders in phone credits that they could redeem at 7-11 and the like. That went well for a little while, until the officers confiscated all the phones.
Which, actually, went a lot better. A lot of the common soliders would call up their relatives when they went on patrol or a mission so that their relatives knew to either stay away or come around later. A lot of relatives ended up being in the Taliban. As such, OpSec was a lot easier.
Vice news has a mini-docu on this a few years back, but I can't seem to find it online right now.
Point is, bad actors aren't sitting in cyberspace and aren't without authority. Money that you can't hold in your hands or bury in a tin can is worthless if the system you are in is corrupt. I'll wager that Libra is not going to be well adopted people in corrupt police jurisdictions.
That’s a blockchain thing. They can fork, but they aren’t going to do that if I lose $150 in Libra. If they can single reverse transactions, there’s really no point to it being a blockchain.
If it’s refundable then they are just paying for the crime itself out of their own pockets. They will still need a human layer to verify theft has occurred and it isn’t a fraudulent claim of theft where just I stole from myself.
They don't need to form the blockchain to reverse a transaction. Since they control redemption and minting, they can simply refuse to redeem from the "losing" party and mint new units to compensate the "winning" party.
>They will still need a human layer to verify theft has occurred and it isn’t a fraudulent claim of theft where just I stole from myself
Or have something similar to credit cards where you're forced into arbitration.
What are Facebook redeeming? I don't think I'll need Facebook to transact with someone else for goods and services with stolen Libra. Goods can then be exchanged for USD and the theft is complete.
They can mint, and that's not a direct debit from Facebook's wallet, but it would devalue the currency ever so slightly.
But that raises the question of 'How much needs to be stolen before I activate the minting process?' If they mint for low theft values, then I can find a way to steal from myself and that's probably a decent amount of passive income. If they only mint for high theft values, then that only helps rich people who suffer the least from theft (unless they cram all of their life savings into it).
All of this depends on how Facebook works with law enforcement to manage the criminal parts of Libra. Working closely with them means we move closer to a corporate state. Working loosely with them means Libra is more vulnerable.
>What are Facebook redeeming? I don't think I'll need Facebook to transact with someone else for goods and services with stolen Libra. Goods can then be exchanged for USD and the theft is complete.
Right, they would also have to block the funds from being moved, which shouldn't be difficult since they control all the validating nodes.
>They can mint, and that's not a direct debit from Facebook's wallet, but it would devalue the currency ever so slightly.
If the funds are frozen, those funds are effectively out of circulation (similar to cash being destroyed or cryptocurrency wallets being lost), so that would cancel out any devaluing effects.
If they block funds, that'll essentially blacklist the address from doing transactions, so it might be possible to launder it through legitimate services (otherwise Facebook blocks an entire exchange's wallet from moving Libra, thus making that exchange halt and catch fire).
What you'd need is a service that allows you to convert from Libra to an item/currency and then back to Libra, ideally with the ability to trade the intermediate item between users.
This heads off into the unexplored territory. I don't think anyone knows how they're going to handle legit services that launder Libra on the side.
Bad actors will lift old exploitative models into Libra's ecosystem: payday loans with huge interest rates, wallet services that force a deposit and allow you to overspend and charge fees when you do, sign up people for accounts and services that they don't want and make commissions. Or maybe just wallet/business services that straight up scam people and disappear with no repercussions. The thing you set out to kill will just come back with a new flavor. Plus it's even easier now since you can do it all with a single click!
Then someone has to decide what to do with bad actors involved with Libra and allocate resources to actually enforce some actions against them (legislative, the cops, server bans, ISP bans, etc.). Now you've got those services paid by tax dollars dealing with a corporate currency and taking time away from other enforcement actions.
All of this is going to happen at the juicy, vulnerable threshold where the technical controls interface with the human element. I probably won't ever hack Libra/Move itself, but the human part is still there. If I can actually manage to get away with the crime and transact with a fake identity, it can't be reversed.
Bonus: that same $40 phone stops getting updated by a phone carrier and some drive-by malware swipes all of your LibraBucks with a corrupt text message and no one can reverse the transaction. Or maybe that Bloomberg supply-chain attack article will finally become a reality once there's enough economy behind Libra.
If this is widely adopted, it's going to have a pretty steep learning curve and plenty of real losses for everyone.