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Bitcoin Facebook

Facebook Crypto Boss: 'I Don't Think of Bitcoin as a Currency' (cnbc.com) 113

Posted by msmash from the act-surprised dept.
David Marcus, the head of Facebook's cryptocurrency projects, says that Bitcoin is digital gold, but it's not a good currency for transactions. From a report: "I don't think of Bitcoin as a currency. It's actually not a great medium of exchange because of its volatility," Marcus said speaking at the New York Times DealBook Conference in New York. "I see it as digital gold." Marcus said Bitcoin is like gold because you can hold on to it as an investment just as people do with actual gold, but the drastic upswings and dips that Bitcoin goes through makes it a bad option for people who need a system to send remittances across borders. That is a key market that Facebook is targeting with its Libra cryptocurrency and Calibra digital wallet. Unlike Bitcoin, Libra's value will be tied to currencies like the U.S. dollar and the Euro, which will help it remain stable. Marcus said a key reason that Bitcoin has not been regulated out of existence is because it is not perceived to be a medium of exchange. "It's an investment class that's decorrelated from the rest of the market," Marcus said. "Why feel threatened by that?"
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Facebook Crypto Boss: 'I Don't Think of Bitcoin as a Currency' More

Facebook Crypto Boss: 'I Don't Think of Bitcoin as a Currency'

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  • ... because it isn't.
  • So bitcoin isn't a currency? Gold at least has an inherent value. Random numbers do not. Bitcoin's value is rooted in being able to conduct semi-anonymous transactions. It is a currency and it would be more valuable without the semi, despite the volatility.

    • Re: (Score:1)

      by Anonymous Coward

      Bitcoin's value is rooted in it being beyond the reach of governments

      FTFY

    • Re: (Score:1)

      by Moryath ( 553296 )
      Bitcoin's value is rooted in being able to conduct semi-anonymous transactions

      So essentially it's good for 2 things then: pump-and-dump scamming of gullible people, and criminal money laundering.

      Neither of which are remotely ethical nor legal.

      • Also, secure international wealth transfers without government, bank, or cartel intervention.

        The thing was invented (or at least marketed) as an end-run around the rapacious fees and restrictions those institutions imposed, and on those grounds it does deliver (or at least it did for a while, I haven't followed it closely in quite a while). If you're working in the U.S., and want to securely send money back to your family in China, Africa, Mexico, etc. without the banks taking a 20-50% cut, or trusting bla

    • Re:Ok... (Score:5, Insightful)

      by Immerman ( 2627577 ) on Thursday November 07, 2019 @12:57PM (#59391136)

      >Gold at least has an inherent value.
      Yeah, but it's price doesn't reflect that at all. Its inherent value is as a conductive corrosion-resistant material, and a soft metal for fine jewelry work without stron tools. It's not worth anything remotely like $1500/oz for that, and it's pretty much worthless for everything else.

      Gold's market price is pretty much based entirely on speculation on a relatively useless thing that people for some reason think is valuable. Just like Bitcoin.

    • Gold at least has an inherent value

      Well, no, it doesn't. It makes pretty jewelry, and it has some manufacturing uses, but those uses don't come close to supporting its market price. Gold is valuable because it's valuable. In fact, you don't want your medium of exchange to have inherent value, because then fluctuations in the market for its substansive uses interferes with its function as an exchange medium.

    • Re: (Score:2)

      by leonbev ( 111395 )

      The value of Bitcoin can fluctuate as much as 40% in a single day. What sane person would use something that volatile for currency? You would be better off bartering with tulip bulbs, as they seem to have a more stable value from day to day.

    • Bitcoin's value is rooted in being able to conduct semi-anonymous transactions.

      Every transaction is recorded publicly. Bitcoin is not anonymous, and was never designed to be.

  • If anybody can just make it up with a "valuation" or "you owe me $x", and it takes trickery and cheating so I have even the samy purchsse power the next day when I wake up, it's not something I'll put my trust in.

    My work will always be worth exactly that amount of work. If a farmer takes n days to grow his potatoes and I take n days to build his house for him, then he can pay me n days worth of potatoes for those n days worth of house building.
    Work is the only valid universal currency.

    (The catch lies in sta

    • Re: (Score:2)

      by spun ( 1352 )

      How do you account for the fact that a person may invest time into developing a skill? If it takes the farmer two years to learn how to farm, but it takes the carpenter five years to learn how to build houses, why would anyone build houses rather than farm, if the income only counts hours worked, and not time invested in learning a skill?

      Honestly asking rather than trying to push a point of view here, as I am interested in ANY alternatives to our current broken system that actually might work in the real wo

      • >why would anyone build houses rather than farm
        Because not everyone wants to be a farmer. And not everyone owns enough arable land to be worth the effort.

        This is a bit utopian and probably wouldn't work in (today's) real world, but... imagine a world where everyone gets paid $X per hour of "hard work equivalent" (to discourage slacking - e.g. if you take four hours to do what the average person does in one, then you still only get paid for one hour of work) . And that includes learning skills for under-

        • Re: (Score:2)

          by spun ( 1352 )

          Fascinating, thanks for taking the time to explain your ideas. Your first idea sounds similar to Time Based Currencies: https://en.wikipedia.org/wiki/... [wikipedia.org] which have been implemented in several forms in many places, dating back hundreds of years.

          As for gift based economies, pairing the idea with some sort of social credit system seems very workable, provided the social credit system was distributed rather than centrally controlled. Something like Doctorow's Whuffie system, maybe. https://en.wikipedia.org/wik [wikipedia.org]

    • Re: (Score:2)

      by Hodr ( 219920 )

      Completely ignores that some work is more difficult than other work, some is more skilled.

      If for every 10 people that can grow potatoes you have only 1 that can build houses, and you want a house build, your probably going to need to offer better than 1 to 1 ratio of labor.

    • Re:Neither do I of the dollar. (Score:5, Insightful)

      by nitehawk214 ( 222219 ) on Thursday November 07, 2019 @12:42PM (#59391074)

      And I am a better programmer than the farmer, but the farmer is way better at growing food that I could ever be. It is more efficient to do the tasks we are best at.

      The farmer doesn't directly need my software, but I do need vegetables.

      If only there was some medium of exchange we could agree upon...

      • The farmer doesn't directly need my software, but I do need vegetables.

        If only there was some medium of exchange we could agree upon...

        Real Programmers don't eat vegetables. If they need a medium of exchange, they can use Proof of Steak.

  • Gold is useful for everything from dentistry to electronics, and it's pretty enough for jewelry too. Bitcoin is useful only for criminals who think it'll help them launder money from their ransomware and drug deals. The latter is is a more valuable use at present, but is subject to technical de-anonymization and legal crack-downs that could eliminate all the value almost instantly.

    • Really? Cause I've bought food and plane tickets with Bitcoin. Seems to have a legitimate use to me.

    • The stock-to-flow ratio is the useful metric of scarcity. Industrial metals are around 1. Gold is around ~55. Bitcoin will be at 50 after the next halving. Silver is not a precious metal anymore; Silver is now at ~3.

  • The goal of the people who own the most Bitcoin is to monetize it into fiat currencies. To do this they need new bagholders (I mean investors). The starry-eyed, true-believing Moonboys who invest a few bucks from their meagre paychecks are the marks. Most volume is faked (bots wash sales and tape painting) so the only way to get real money out of their vast bitcoin holdings and to support miners is to entice new money into the fold.

    Sastohi initially saw it as digital cash (most assuredly a currency). The ti

    • It will become (or has already become) the world's reserve cryptocurrency. The cryptocurrency market has been bullish for at least a decade, so if it's a pump and scheme, it's a very slow burn scheme.

      Another way to put it is all securities seem like pump and dump schemes if you buy and sell at the wrong time.

      • Re: (Score:2)

        by crgrace ( 220738 )

        It will become (or has already become) the world's reserve cryptocurrency. The cryptocurrency market has been bullish for at least a decade, so if it's a pump and scheme, it's a very slow burn scheme.

        Another way to put it is all securities seem like pump and dump schemes if you buy and sell at the wrong time.

        I mostly agree with the first part. Bitcoin is already the world's reserve cryptocurrency. But that's a bit like saying Beanie Babies are the world's reserve plush toy.

        Disagree on the pump and dump. A traditional pump and dump would be a big mistake for the whales. They need so be careful to not take out too much at once and crash the whole thing too hard. They need to bleed the golden geese (hodlers), not kill them.

        Bitcoin is quite different from most securities in that there is nothing securing the asset.

      • Becoming the world reserve cryptocurrency is like being the smartest person with Down syndrome.
    • Masters of the Universe only have cash to buy hookers, blow, and politicians, which Bitcoin is pretty good at. When the dollar is destroyed their debts will be wiped out and they will only be richer. Goldman Sachs supports Modern Monetary Theory

  • David Marcus, the head of Facebook's

    Woah! Somebody from Facebook saying something? Gonna stop reading right there.

  • It isn't. (Score:3)

    by RyanFenton ( 230700 ) on Thursday November 07, 2019 @12:34PM (#59391048)

    In the same way that a cult isn't a religion - time and numbers. It could fit the role eventually - but I honestly don't think it will.

    Why? It's basically got the same issues that company scrip.has.

    https://en.wikipedia.org/wiki/... [wikipedia.org]

    When you have a small organization outside shared governance creating and formulating a token for the sake of matching the description of a 'currency', who does it for the sake of creating a space for themselves in that exchange and managing said currency.... even with the greatest of intentions, the clever limitations placed on it are going to add a 'shape' to the way it trades.

    That 'shape' is to me what makes it unlikely for them to become a general currency. Sure, it's nice for underground markets that want to AVOID general currency - but there's a friction to adaption over time that means its going to either be stuck or subsumed by a better copycat at some point.

    Yes - something LIKE a cryptocurrency will become a future currency at some point. Honestly, I don't expect it will really be a cryptocurrency though - just the same techniques used to tokenize the exchange of other resources.

    Why? Well, all markets have inefficiencies. their own forms of blindness, and biases in the way that manipulation can be done - and indeed, Bitcoin WAS designed to play around much of these. Most markets try to minimize these things. They're all kind of trading on trust.

    Some one's going to connect the dots at some point, and work with a government to make a system of exchange where the ideals of the 'gold standard' (which Bitcoin was trying to tap into), aren't limited to a single token stream - but the tokens are used to represent trust in all the 'hard resources'. Not just in the 'stock exchange' sense, but in the on-the-street hand someone something sense too.

    Who knows how stable that will eventually be - but I think that's the kind of thing that will subsume the same role that BitCoin was formed to play. That 'cowrie shell' role of psuedo-finite trade token.

    https://en.wikipedia.org/wiki/... [wikipedia.org]

    For now though, cash is still king, for being the better portable cowrie shell I can carry without asking permission from a company to do so.

    Ryan Fenton

  • The Gold Standard was the reference; as money, for most of the humankind. Gold and Bitcoin are sound money because you can't increase the supply of Gold or Bitcoin

    Bitcoin is the only digital asset genuinely scarce.

    • Bitcoin is our only change to have sound money again!

    • Yeah, except if I buy something with gold, I receive the purchase immediately.

      If I buy something with bitcoin, I receive my purchase somewhere between "a couple of minutes" up to "almost a week"

      Useful currencies require immediate transactions.

      • Now, we have tungsten filled Gold bars. Nobody accepts Gold as money, and the verification process of Gold is very expensive.

        Bitcoin is not a payment system. Lightning, is the payment layer of Bitcoin, and Lightning adds instant payment.

  • you have to pay taxes with it.

    • A Quote: 'United States of America be one dollar, but did not yet determine its silver content. In 1786, the Congressional Board of Treasury calculated that the "Money Unit or Dollar will contain three hundred and seventy five grains and sixty four hundredths of a Grain of fine Silver,"'

    • you have to pay taxes with it.

      "You can buy things with it" would be more accurate. Until I can actually buy things at the store and pay my bills with a "cryptocurrency" it has no value to me. Yes, there are extremely rare cases where some of those things might be possible for some people, but I'm talking about right now, every day.

      • ... because it already has value. It already has value b/c the government requires you pay them with it.

        It doesn't magically have the trust of people... the concrete value of a currency is that the government takes it for taxes. Everyone needs a basic amount of them greater than zero.

  • Facebook is starting to make the big push to get libre accepted and used. It is an uphill battle for Zuck, and this article seems to be part of the strategy, i.e., plant overt advertising under the guise of semi-informational articles.

  • FIAT money is advantageous for some countries. Because the interest rate can be set to a negative value. This is a way to use the money as a taxation media.

    Bitcoin is genuinely scarce, nobody can increase the supply of Bitcoin. When the supply of a money is constraint, the money is not compatible anymore with negative interest rates.

    • Lagarde: "We Should Be Happier To Have A Job Than To Have Savings"

      The Euro is doomed to extreme negative rates.

      • At the end, people will have unproductive jobs, generously paid using a worthless money... A wonderful future, using central banking to get soviet union v2.0.

  • It's like gold if you couldn't sell your gold without a working Internet connection. Which is to say, it's literally nothing like gold.

    • If you had gold from the first smelting of six thousand years ago in Syria, it would still have value and could be cashed in.

      Guess what bitcoin will be worth tomorrow? who knows...

      • I take your point, but would argue that gold smelting developed first in mesoamerica.

        • No, oldest gold artifacts in Andes are from 2000 B.C. and later

          • Now this is Slashdot. I have no way to counter your boring assertion because all the earlier gold from Monte Alban (and also Olmec Teotihuacan) was melted by the Spanish, and the reference site for North American human habitation (the 130,000-year-old one in California) doesn't include any smelting pits. Regardless, history is hard to establish when you spend hundreds of years eradicating it by papal edict.
  • Comment removed based on user account deletion

  • It's more of a giant Ponzi scheme.

  • Currencies and Social networks share a property. They become more valuable as more people use them.
    Facebook has a proven track record on driving social network adoption.
    If they can make people adopt their crypto in the same numbers it will be the most powerful currency in the world

  • Libra, and KYC/AML requirements, are the ultimate tools to collect a maximum data on users. Using only the facebook main site was not enough. Libra will be the tool to track users, and their online purchasing activities.
  • Gold was money, and the Gold standard is over. Money is a winner take all situation. If you want something that can succeed where Gold failed. You want something without any angle of attack, and no single point of failure. So, you want something fully, and genuinely decentralized, without any company or leader to sue. You want something that can run for decades, and that will resist any kind of attack, internal or external. You will chose a harder monetary policy than Gold. This will give a massive incentiv

    • What nonsense, a gold coin from a thousand years ago will still have value today; bitcoin will not endure. Gold did not fail, I think would be silly to own some but if I did I could still cash it in.

      Bitcoin has plenty of points of failure, ask anyone who lost their wallet or was scammed.

      Bitcoin is a penny stock, trading on nothing but the three H's of hope, hype and hooey. It could go to zero tomorrow on certain types of news. It is illiquid and has a poorly designed architecture. It wastes energy.

      • Indeed Gold has still value. But, Gold can be confiscated and was confiscated - We have to remember the Executive Order 6102 by President Franklin D. Roosevelt.

        The Gold Standard was easily defeated. An article trying to understand the reasons: https://medium.com/@festina_le... [medium.com]

        When you want to be your own Bank, you must take the process seriously. Losing the wallet, or falling for scammers; You need to put yourself in question.

        Bitcoin is sound money, and Bitcoin is a free market money. A free market m

        • Bitcoin can and has been made illegal in places too, effective confiscation.

          Bitcoin is NOT sound money, do you even know the definition of money? It is not liquid, is not a store of value, is not generally accepted nor a legal tender.

          • Bitcoin was already banned in China. But, you can't easily confiscate Bitcoin. The pseudo-antonymous nature of Bitcoin allows to hide in plain sight. And Bitcoin allows to easily cross borders.

            Bitcoin is sound money, because nobody can't increase the supply. Bitcoin is not 'elastic' in supply like our FIAT currencies. Legal tender is for FIAT currencies. Bitcoin is already liquid enough.

            The Gresham's law (bad money drives out good), is a good reason to always use FIAT first. So adaption as a medium of

        • And the "confiscation" of which you speak, citizens were paid the fair market value for their gold. It was not stolen without recompense.

          • Indeed, they were paid, and the full confiscation was achieved through inflation. The same process we have now.

            • inflation is a normal and expected process in any growing economy, see econ 101. That is not confiscation.

              What do we call bitcoin going from $18K to 6K in two months? Confiscation from the bagholders by the pump and dumpers...

              • Indeed, Keynesian Economics demands inflation. And the Austrian school of economics (Gold, and now Bitcoin), doesn't need any inflation at all.

                Bitcoin is volatile, and Bitcoin is still small; This will improve over time. And people like volatility to the upside (not the downside...).

                • there is zero evidence bitcoin volatility will improve over time.

                  It is laughable to compare it with anything used as money; it is merely a gambling game token with unreliable value.

                  • Now we are using stocks, real estate, or anything else like Art as a store of value. This is the direct consequence of inflation, and bad money. Bitcoin covers a vacant niche left by the end of the Gold Standard. Bitcoin is here to stay. The capitalization of Bitcoin is doomed to increase. And Bitcoin is doomed to become as boring as Gold is today.

                    • Nothing as unstable as the gambling token that is bitcoin could possibly fill any niche other than reckless gaming.

                      It can't be here to stay, the fundamentals are rotten. No one has to use it, it is illiquid and is not a reliable store of value. Its days are numbered. When the casino closes, the chips are worthless.

                    • Bitcoin is a money of the free market. Bitcoin is just better than everything else. You are free to use it, or not, your choice!

                    • What nonsense you spew, bitcoin's value is all over the board in short time period, it truly is worse than anything else. You are stupid to use it, your choice

              • A good summary: https://mises.org/wire/bitcoin... [mises.org]
        • Worth reading: https://medium.com/@festina_le... [medium.com]

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