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1/ I have, to date, been a huge blockchain skeptic. It's mostly been a solution chasing a problem, built on a particular ideal of decentralization that doesn't match with most people's trust models.
2/ does Facebook Libra change that? I'm not sure. It would be silly to immediately wave away such a giant effort by such a powerful company and its allies. So let's think it through.
3/ at first glance, the main reason for decentralization is Facebook knows no one would trust them alone. But Libra is only mildly decentralized, with claims it will open up later. It's a permissioned blockchain. So like an upgraded ACH.
4/ that's interesting because no significant user-level application starts out decentralized successfully. If decentralized money is going to work, it's definitely first centralized, then de-. So maybe they're on to something here.
5/ but I keep coming back to "what is the problem being solved?" I think there's two.
6/ one: lower fees on money transfers. This is a laudable goal between people who trust each other. Between folks who have less trust, e.g. a person and a business, it's less clear: credit cards are popular cause they insure against badness on either end. Will Libra do this?
7/ but again, the goal here is cheaper money transfers. Feels like something that could be solved without blockchain. So blockchain is incidental. And surely existing tech (wires, "Zelle", ...) will start to compete on price.
8/ two: the set of players in the money-transfer-and-banking game is relatively stable and it's hard to enter this game without changing the rules. Libra changes the rules and lets Facebook be a player almost overnight. That's a pretty significant thing.
9/ key point: it's not clear to me the outcome here is anything different than the banking system we already know. Maybe some things are cheaper. And certainly the companies controlling the system might change: FB might suddenly become a big player.
10/ now what is the cost? The cost is the introduction of a brand new currency. Holy crap, that still feels like a really big hurdle for most folks. And to what end? Is the cognitive and arbitrage overhead of a new currency worth the lower fees? Maybe. But .... Questionable.
11/ after all of that rambling, the one thing that seems clearest to me is that this doesn't feel like a paradigm shift for *users*. New boss, different protocols, same system of financial oligarchs.
12/ I could be wrong. Maybe in a few years I'll eat my words. Still, as best as I can tell, this is mostly a dramatic Facebook entrance into banking. I don't see this realizing the blockchain vision, which I continue to believe is misguided for most use cases.
