Facebook veteran interprets Libra, how does the blockchain realize Zuckerberg’s unfinished payment dream?

On June 20th, at Cobo's event, Cobo co-founder, former Facebook senior research scientist Jiang Changhao, founder of Linear Capital, and Wang Huai, the second Chinese engineer with the best-selling book "Building Facebook", and Sophon Tech founder and Facebook star employee Yu Chao, read Libra from Facebook's encrypted digital currency program from an internal perspective.

Recalling the past | Zuckerberg’s unfinished payment dream

First, they reviewed the time they used to work on Facebook, the first time they saw Zuckerberg's feelings, and the perception of the company's culture and ambitions.

Jiang Changhao: In 2007, I saw Zuckerberg for the first time at an offline event on Facebook. The little man, smiling, looks like a leader, more like a lively college student. At that time, Facebook was very small, only about 100 people, but Zuckerberg had a big dream. The vision he described at that time was to build a platform to attract more developers to develop based on Facebook and make users more Good to discover the value of social relationships. Time flies, I still have a similar feeling today, the Libra white paper is released, it still describes a great vision to promote the transformation of the entire human race.

Wang Huai: When I joined Facebook in early 2007, Zuckerberg was still a person who would blush in public speech. But 10 years later, he answered the questions in Congress when he was questioned. I was involved in Facebook's earliest attempt to pay, when Facebook spent hundreds of millions of dollars, but ultimately did not succeed. What I couldn't do in the Web era, Libra is now cutting in from another dimension, and is ready to work with 100 alliances. I find it very imaginative.

Yan Chao: I joined Facebook in 2011. At that time, the company had more than 2,000 people. I started doing Facebook Phone, which was the CTO-led project at the time, and then I hang it. For the first time, I realized that such a strong bunch of people are together, and there is also a time to do a project. At that time, WeChat's development in the day, whether in terms of payment or friends, the gap between Facebook is very big, we have been catching up. In the first half of the year, David Marcus was dug up by Zuckerberg. Later, this person became the boss of Libra. I worked with him for half a year and experienced what he said Libra made to pay.

Focus on the moment | 6 things Libra has to do

At the sharing meeting, Jiang Changhao took us back to some of the points in the Libra white paper.

Libra's slogan is "Building a simple global currency and financial infrastructure that serves billions of people."

Its launch is based on such a background: 1. At least 1.7 billion people worldwide do not have a bank account; Cross-border transfers require an average of 3-5 working days; 3. The average handling fee for cross-border transfers is 7%; The proportion of cash used in global trade is 85%; The US retail industry loses $40 billion annually due to the use of cash theft; People who do not have a bank account will pay an extra $4 per month for their living expenses; If Facebook implements digital financial services worldwide, it can generate $3.7 trillion in incremental growth for the global economy.

Libra hopes to achieve six things: First, anyone with an entry-level smartphone and a data connection can use Libra at any time, which greatly reduces the threshold for basic financial services. Second, Libra is backed by asset reserves. To ensure the stability of its price; third, whether it is a transfer or payment, must be done quickly and promptly; Fourth, Libra is a cryptocurrency for the world, not limited to a specific country; fifth, it is an extensible Ecology, Libra hopes to create an ecosystem that encompasses a wide variety of goods and services, and promotes people to use this cryptocurrency in all aspects of their daily lives. Sixth, as a cryptocurrency, security must be guaranteed;

Therefore, Libra has three core components. One is based on blockchain technology; the second is to provide stable value through pledge assets; the third is to manage and promote ecological development through the independent autonomous organization Libra Association.

Looking to the future | Facebook global currency ambition

Why should Facebook send money? What impact will this move have on the current digital currency industry? What challenges will the Chinese Internet giant bring? How to advance with the supervision of governments in various countries? At the round table of the conference, the three guests gave an exclusive interpretation of the five key issues.

Question 1: Interpretation of the reasons for Facebook's currency

Jiang Changhao: The scene of the combination of social and financial in China has given Facebook a lot of inspiration.

Libra's official explanation is worldwide, and many developing countries have very poor infrastructure, with 1.7 billion of them even without a bank account. Libra hopes to build a simple global monetary and financial infrastructure that will serve billions of people. This is a background and a big reason why Facebook launched this project.

From Facebook itself, it does have the motivation to do this. With Facebook's development over the past decade, it has built the world's largest social network, connecting people to information, including sharing photos, updates, and social entertainment news. But it still has a larger application scenario that has not been implemented, especially in the case of WeChat payment in China, which combines social and financial. I think it has a great inspiration for Facebook, and it should be very motivated to promote similar things.

However, Facebook faces the challenge of WeChat payment. Its 2.7 billion users are located in many countries. The development stages of financial infrastructure vary from country to country. The regulatory environment varies from country to country, so it is necessary to achieve cross-border in the world's largest virtual country. Transfers are very difficult. The blockchain opens up an idea for it, and the decentralized technical architecture can solve many problems. Facebook has a strong motivation to make up the infrastructure through technical means and implement more application scenarios on the upper social networking sites. Wang Huai: Facebook wants to do this thing, and the idea of ​​making a payment ten years ago is in the same line.

Facebook has so many users and always wants to make payments. But the Web era has failed. In the Mobile era, it is difficult to learn from China. American traditional payment is very good, and the credit card system has basically achieved that everyone has a card, which is difficult to fight against existing payments.

Facebook has three advantages based on blockchain:

First, 2.7 billion users across borders; Second, Zuckerberg's pattern, he is not in the money, but Fintech. He won't go harvesting at a point, it will definitely produce a business model, and he is willing to make a long-term effort for this vision. In my opinion, Zuckerberg can do better than most of the world's top entrepreneurs. . Third, the benefits of the blockchain, as long as it is Facebook-driven payment, the first thing you think about is the word Facebook, which means that people who recognize it are willing to use it, and those who do not recognize it are unwilling to use it. The benefit of the blockchain is open source, pulling everyone in and reducing the cost of trust. If you don't believe me, you can trust 100, and this may be just the beginning.

Many people actually pay attention to regulation and may not let it go. My overall attitude is Libra's use value, which will promote Facebook's expansion and application, which in turn will promote regulatory power in many places. The final situation must be mutual game, and it is not a family, it may be 100, 1000, the world's top companies to do such efforts. Yan Chao: This is a global trend and a small trend within Facebook.

The megatrend has just finished the two guests, and the small trend is like this. David Marcus sold a payment startup to PayPal on eBay in 2011, and soon he became the CEO of PayPal. Later, because the non-competition agreement did not pay, he joined Facebook in 2014 and was responsible for the Messenger project. Then in 2017, he went to the coinbase and had a deep understanding of the blockchain. He had a good relationship with Zuckerberg. , also established trust, equivalent to lobbying Zuckerberg to do this project. In fact, this project started last year, recruiting soldiers, because there are many people, technical temptations spent a lot of time, has not been online yet, and now released a white paper, next year Q1 will go online, but it may be postponed.

Question 2: What impact and impact will Libra have on the existing blockchain industry or digital currency?

Jiang Changhao: Facebook launched Libra for bitcoin, the blockchain industry is hugely positive and positive.

Now digital currency is still a very small circle, with a magnitude of 30 million to 50 million. Compared with Facebook's 2.7 billion users, only 2%. Facebook launch may allow hundreds of millions of users to use digital currency through Facebook to help the mainstream. The crowd knows more about the industry.

Technically, Facebook may have a little overlap with the existing public chain in the scene, but the whole plate is large and there will be a different development trend.

Facebook will also face great challenges, mainly from regulation, because different countries have different views on digital currencies across borders, and the process of Facebook communication may not be smooth.

Facebook's wallet and cobo wallet will not compete, but will work together for a win-win situation. In the future, there will be diversified needs to be met. Libra's wallet is a model of Facebook's ecology, more of an educational ecology, but certainly not the main purpose. If it does everything, it is not an ecological, further mining of user needs, and localization services, it is impossible for Facebook to complete. Wang Huai: In the future, the alliance stable currency such as Libra will become mainstream, but Bitcoin will not die.

When new things come out, they have made the previous ones traditional. If the taxonomy is analogous to traditional currencies, from shells, bones, metals to banknotes, the digital field has experienced such a process. At the beginning, the company itself issued coins, but found Not feasible; then the nature of Bitcoin becomes an investment; then the stable currency is a meaningful attempt, but there are problems with the formation of trust, such as USDT; libra is a coalition stable currency, a coalition, anchor Set a basket of currencies.

Such a stable currency has greatly enhanced its credibility. It does not target assets such as Bitcoin, nor does it trust the underlying logic. The advantage of the digital age is that there is a physical world to learn from, and it is aimed at the physical world equivalent to gold. I think this is only the beginning. Looking back, there may be no such target, such as the state of the dollar today. Human society is to repeat itself to varying degrees, but depends on technological innovation.

I think that in the future, the digital currency world will form a differentiation, and the alliance stable currency such as Libra becomes the mainstream, and its characteristics are usable. Bitcoin will become an antique character for collection. I don't think Bitcoin will die, it will definitely find its own space. Just as gold is not available today, most of it is used as an asset reserve to hedge risk. Yan Chao: There is no impact on the digital currency of the investment, but it is good.

Because of Facebook's reasons, everyone continues to pay attention, get more exposure, and the price is good. But for other stable coins, it is more dangerous. However, I think the impact on the USDT is not too great, because the USDT is barbaric. But for other regular forces, such as PAX, USDC, and Ruibo, there will be some negative effects.

Question 3: Libra's impact on global clearing, the impact of national regulation and monetary policy.

Jiang Changhao: I don't think Libra is playing the role of the Fed or the central bank.

First of all, it does not create money out of thin air. All virtual currencies have equivalent legal currency as collateral. Second, it will have an impact on some sovereign currencies in the future, but now it is still small. When it was first launched in 2020, there would be only $1 billion in plates, which is a small amount for any national sovereign currency. If everything goes in the direction of positive feedback, users are increasingly using Libra to complete payments, transactions, transfers, and slowly extend to life scenarios on the Facebook platform. For example, when they are lightly settled, they have already begun to impact to a certain extent. Legal or sovereign currency status. Therefore, from the perspective of the government, it will certainly be more sensitive and there will be supervision.

Relatively speaking, the countries with relatively large impacts are countries with relatively poor financial infrastructure or weak supervision. For example, Zimbabwe, whose national currency is questioned by its residents, prefers to hold cryptocurrencies such as Bitcoin and Dash. If Facebook has such a globally influential enterprise, the stable currency of their alliance endorsement will gradually assume the role of a legal currency transaction in a country or region, and it will have a certain impact.

Supervision is also a big topic for Facebook, how to communicate with various countries. However, I think mainstream countries, such as the United States and China, regulate Facebook mainly from the perspective of the impact of legal currency, because their economies are too large and their financial infrastructure is perfect. The main motive of these countries' supervision is to resist financial crimes. From the perspectives of money laundering and counter-terrorism, they also need very strong supervision. This is also a big challenge for Facebook. Wang Huai: I think this is a game process, and the impact may be just beginning.

The starting point of Libra's impact is that from the perspective of commercial value, some countries will certainly ban, some countries may seek cooperation, some countries do not do their own financial infrastructure, and a new era of business organizations to provide a better. The public service ultimately depends on whether it has a value to the user. It is easy for us today to underestimate the transformation of the future life form because of the inertia of history. This is a game. If the value can be reflected and can be regulated, many governments in the United States and Europe are still willing to communicate. So I maintain a cautiously optimistic attitude and look at the way it interacts with regulation.

Yu Chao: will strengthen the dollar hegemony.

First, I personally feel that the legal currency anchored behind it undoubtedly enhances their position in the international arena. Second, it does not have much impact on the United States itself. Instead, it will strengthen the dollar hegemony, but it will have a certain impact on banks. . Those who do not have a bank account, rather than open a bank account, use Libra and wallet directly, so it is weakening the bank; third, for small countries, their sovereign currency is weak, there will be a greater impact. Everyone who has been to Southeast Asia will know that some wealthy families in Southeast Asia hold US dollar debt or overseas real estate. Cambodia is mostly using more dollars than domestic currency. This is not a bad thing. Do business in Cambodia and use the dollar directly without worrying about the local financial system. So each has its own advantages and disadvantages, see how to adapt to such a trend.

Question 4: Which scenes will be opened first?

Jiang Changhao: Cross-border remittance and online payment

First, cross-border remittances, this is a big pain point, a big market. Each year, cross-border remittances have at least trillions of dollars in transfers, with an average of 7% of the fee, and a light commission of $70 billion. Facebook’s revenue last year was only $40 billion. This is of course the first scene where Facebook will go to the ground or want to land.

Second, if cross-border remittances are going well, it is based on Libra's payment. First of all, online digital goods services, such as virtual goods, e-commerce, reading, entertainment, rewards, advertising, this is also a big market. Facebook's advertising revenue is tens of billions of dollars, and it is worth billions of dollars for Chinese advertisers to launch their promotions on Facebook. If this piece of application that pays online through Libra is also a big market opportunity. Wang Huai: Anchoring Libra's investment category

Talk about my imagination and add a category. The various functions of money, including payment, stored value, investment, and assets that may be anchored in libra in the future, are also an imaginable category.

Question 5: The constant entry of the giants, the impact on the Chinese Internet giants? Imagination for the future.

Jiang Changhao: Facebook's landing will stimulate Chinese Internet giants still in the water test stage

It will definitely have an impact on the Internet giant. Before Ali and Tencent also had a lot of experiments, but Facebook's landing is a stimulus for the Chinese Internet giants still in the water test stage. The biggest challenge in this field is not technology. The biggest challenge of ToC is supervision. ToB's biggest challenge is to integrate the industry. Blockchain technology itself is not difficult, but from the first day, there must be an ecological construction perspective.

Wang Huai: For Chinese entrepreneurs and the government, we need to think about it.

After I watched Libra, the attitude of friends in the big coffee was neutral on the first day, optimistic on the second day, and pessimistic on the third day. I am more optimistic. I think it is more important for Chinese entrepreneurs and governments. What is the reference? This is the most important thing we should think about.

Yan Chao: China may also use blockchain technology to solve the trust problem on the “Belt and Road”.

I will first say a pre-condition. I said that 1.7 billion people do not have a bank account. This is the result of 2017. In fact, the most bank accounts are not in China, followed by India, Pakistan, Indonesia, Nigeria, Vietnam, Brazil. Philippines and so on.

Two companies in China have done a good job, WeChat payment and Alipay. They let a lot of people open a bank account in order to send and receive red packets. If you have stayed in the United States, it is stronger than a capitalist country like the United States. It takes two days to transfer funds between banks. If it is Saturday and Sunday, they still have to rest and experience badly. Therefore, China UnionPay has already achieved the world's forefront. It is.

But China has a big problem and is not trusted by other countries at the international level. If you want to be a “Belt and Road”, the better opportunity is technological innovation. When Zuckerberg accepted the congressional question, he was asked that you are so poorly protecting user data. Now who is engaged in such a currency, who believes in you? Zuckerberg said this, and now is the best time to do this, because Libra is not all led by Facebook, we only account for 1%. His original words are that this is a decentralized governance mechanism that all stakeholders work together to maintain. Perhaps in the "Belt and Road" strategy, we can also based on the blockchain, so that the country is launched, this is one of the ideas.