Thread by @Excellion

Finished watching the entirety of the Senate Banking Committee hearings today.

@Libra_ is so screwed.

Let's ignore the funny parts for now, like "we're really really a non-profit because we'll figure out how to make less money later" or "we want to keep America competitive by setting up shop in Switzerland."

The crux of the issue is that Marcus has no idea what he is building, while also conflating FOSS with open permissionless systems. @Libra_ can't be everything for everyone, and it can't be both open and closed at the same time.

"We open sourced it (Libra Network) and as a result it doesn’t belong to us anymore. It is now belonging to the community and they will help build the code and we will relinquish control over both the codebase and network through the process."

If this statement is really true, then a dev team will be able to remove the KYC/AML components in a non-Calibra wallet, and still be able to interact freely with the network aside from on and off ramps.

Which would effectively render this statement void: "Wallets will enforce the sanctions that are led by our national security apparatus and treasury." The senators were so close in their questioning. If they connected these two points, it would have been much more interesting.

The only way for Libra to guarantee compliance in all areas is for it to be in complete control. You can't have only Calibra wallets requiring authenticated government ID's but not others. Only way it would work is with two pools of currency that are not allowed to intermingle.

But then you would end up with a very non-fungible currency that definitely isn't a "simple global currency and financial infrastructure that empowers billions of people."

"Sorry, I only accept clean Libras in this store." 🙄

"We wanted to ensure people, as long as they have a legitimate use of the product, can do what they want with their money."

Then you have the the problem of what is legitimate use, which is the same problem all centralized systems like PayPal already have.

Anytime you open the "legitimate use" door, it's all over. If the Libra Association decides x is not legitimate use, your money gets frozen or you get de-platformed. The senator concerned about center-right usage was so close to the mark.

It's good though that Marcus said "we will take the time to get this right." Once Libra is compliant with every jurisdiction, it will just be a more complex PayPal governed by an association.

Should've just used #Bitcoin.