I feel like I’m missing something. How is this system any different than a centralized system like PayPal or any other traditional payment system, where users have a USD balance and can withdraw it to their bank accounts?
If the company secretly removed the cryptocurrency backend and replaced it with a centralized database, would anything at all change for the users? Or would it be functionally identical?
Disagree with the notion they won't be shutting people out of the network when needed, that's not grounded in reality.
Facebook is the only one with access to write to this chain correct? If so, they can shut people out of their chain by just disabling their Facebook, WhatsApp, or meta accounts. That’s grounded in reality
PayPal doesn’t have any fees if you send money as a “gift” (that is, forgo any fraud protections) and you don’t use a credit card.
This isn't a grammar-nazi criticism because I frequently make similar mistakes with pluralization.
It strikes me that there must be some cognitive explanation for why some plurals seem to need an apostrophe when other plurals don't.
WhatsApp has to play by the same banking rules as PayPal, so they’re not automatically exempted from the same regulations around prohibited transactions. These rules are still enforced at the bank layer.
To make this sound a bit less like mad conspiratorial ravings, could you flesh out how Whatsapp would allow Russian banks, government agencies, companies and oligarchs to move large quantities of money if they're disconnected from SWIFT?
For example, how would Russia get around the fact that Whatsapp is only offering this in the United States? How would Russians get fiat currency in and out? How would Russians circumvent the very low transaction limits?
Addendum: Not that I'm a huge fan of the idea of crypto payments in Signal – I am not. But if the market (and especially the network effect of messaging apps) dictates it, what can they do? Moreover, I'm sure the Signal people looked into whether it'd be better/possible to move the payments feature into a second, optional app but there might have been architectural or security reasons not to do so(?)
Facebook Messenger already has this feature using fiat, Apple lets you send money via iMessage, Telegram already has this feature. Seems like adding payments is staying competitive with features other messaging utilities has. It might also be a money grab, but something can be two things at once.
I fully agree with you here but I'm 50-50 on your other statement:
> [There is] zero expectation that this is something users want, or will use.
It's not when you're invested in cryptocurrency.
As they say, cui bono?
So given that Facebook is also now mining data on every user of Whatsapp, should we reconsider Signal's stance on privacy? Or should the fact a horrible company is further ruining a once great app be irrelevant to what Signal should or shouldn't do?
Is this true? I thought they still had minimal insight into the data on the app.
Facebook has been trying to get payments into WhatsApp for a long time. This is just the latest experiment to try to find something that would be acceptable to local regulators while simultaneously extracting some value from the smoking ruins of the Libra/Diem/Calibra/Novi fiasco.
> "When you add money to your Novi account, we convert it to USDP (Pax Dollar), a stable digital currency issued by Paxos Trust Company, a regulated financial institution. USDP is designed to have a stable value relative to the US dollar. So on Novi, 1 USDP is equal to 1 US dollar."
To me that implies it's done on chain...I guess it could just be in their centralized database though.
Curious what the Whatsapp UI does for moments when USPD hits $0.99 like December 1 2021 when it hit $0.989.
Source: https://www.novi.com/WhatsApp
This is fundamentally a centralized system like wechat pay, an app you can't see in the West. If it's allowed it will be hugely successful.
The cultural/regulatory differences between china and western (free) countries means that (1) different models thrive differently and (2) pressure to centralize delivery through WeChat is there from the gov in china but not for the rest of the world. I think FB would love to be WeChat to avoid the App Store, but i'm not sure users would actually prefer that.
also, why didn’t libra/the likes work out?
The use of crypto in here just makes it more difficult to understand for the end user, or am I missing something?
1. Their own Paypal-like system
2. Partner with a Paypal
3. Their own cryptocurrency (ie Libra)
4. Partner with a cryptocurrency
Do I have that right? And for some reason #4 allows them to be global and not face antitrust concerns in the USA.
Had you told me in the 1980s that anonymous individuals would create thousands of new currencies backed for the most part by nothing at all, with the stated intent of evading all government regulation (what I would have called "crime" back then), and that the regulatory agencies would simply pretend it didn't exist, I would have laughed.
Plausible claims to being exempted from the rules for a while?
Assume the goal is global wechat-like commerce. IMHO this is huge.
The regulatory interactions will be formidable because every country will want to get its fingers into this, money and who gets it is ultimately politics.
The crypto bit lets you work around locally broken financial systems, but a lot of negotiating with governments will still be required.
Privacy will necessarily be nonexistent, to get to global reach all transactions will have to be at least as legible as current bank transfers to involved governments. This is not "WhatsApp's fault" per se, it's just the world we live in.
"Some challenges" is doing a lot of work there. That's like saying that a hurricane's "a bit of water". If you're in Montana and don't have any family in Florida, you can blindly ignore the hurricane as it won't affect you. But realize that's a position of great privilege. For everyone else that can't get Paypal or Venmo or even US bank account in many case, or anyone who's Internet access is solely WhatsApp and not Venmo (due to Facebook providing free access to their properties and only their properties in certain countries), this is a total game changer.
Whatsapp has 2 billion users, PayPal and Venmo probably only small fraction of that.
On Whatsapp you already have your friends in the list, on PayPal I personally have nobody. It's an additional hurdle, I've never actually sent money to friend/family through PayPal.
With crypto under the hood, it becomes quite easy for competitors to build a remittance product.
They make it easy because they abstract away the underlying mechanics. Novi for WhatsApp does the same, but for a much, much larger audience, and does so instantly. While it isn't shackled by the baggage of the financial industry born in an era far removed from the current one, the pace of improvements and deployments can be much faster in face of changing regulations, jurisdictions, and technology itself.
However, I'm a total rookie when it comes to crypto, blockchain etc. and giving a company that permabans via ai with no human fallback control of payments seems like a bad idea to me.
It's a long-shot, I know but I thought I'd chuck it out there. I wanted to find out if there is a potential genuine benefit to this system without all the anti-FB stuff getting in the way.
Considering that to this date blockchains and cryptocurrencies have not solved a single problem better than their "legacy" counterparts, I'd say the former.
20x larger scale means 20x more clout to bribe/lobby lawmakers and to get around the KYC/AML rules that are the main obstacle in these sorts of things.
Transactions can be either off-chain, or on-chain. With former it’s not much different than a database, with latter it’s becomes scammer/terrorist/drug dealer dream.
Also on-chain transfer costs ~$20 in a quiet hour, e.g here is a transfer of ~$250 for a fee of $20: https://etherscan.io/tx/0x7d366b14c99ca6eb457109000f637e59bb...
USDP whitepaper: https://insights.paxos.com/hubfs/USDP-whitepaper.pdf
Contract source: https://github.com/paxosglobal/usdp-contracts
Etherscan: https://etherscan.io/token/0x8e870d67f660d95d5be530380d0ec0b...
Interesting how this is being promoted.
