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Facebook said the problems for some people Friday were unrelated to the global outage Monday, which left more than 2.9 billion internet users unable to access Facebook, Instagram, WhatsApp, Facebook Messenger and other tools for roughly six hours.

From Facebook Says Access to Products Is Fixed After Latest Outage – WSJ:

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The Facebook outage has interesting ramifications that go way beyond people sending stupid pictures of cats to each other. In large parts of the world Facebook, And in particular WhatsApp, our national infrastructure. They are vital to business.

 

As I have repeatedly pointed out, a digital currency that is to function at population scale in both developed and developing countries must be able to work off-line. If it cannot work off-line then it is not a viable cash replacement and not a viable strategic platform for for new financial services. Suppose that Facebook’s wallet, navy, becomes as important to the economies of countries around the world as banking networks are today? In that environment a six hour outage could be completely catastrophic and damage the economies. As the British economist John Kay pointed out recently, payments are the only part of the financial infrastructure that are actually critical.

 

It doesn’t particularly matter if the stock exchange goes down for a few days or if bond issues are delayed by a day or two. But if the payment system goes down the real economy grinds to a halt.

 

This is why the central bank digital currency retail infrastructure must be constructed from a new set of building blocks that sit in parallel to the electronic money infrastructure to bring diversity and resilience to the payments network. Even in the most advanced economies, and more frequently scratch that. Even in the most advanced economies, the payment networks go down from time to time and cause real problems. Therefore, building the digital currency infra infrastructure on top of the existing networks would therefore lead to a reduction in overall availability and would, as far as I can see, be completely unacceptable in the mass market. Since the Digital currency would have to function off-line as well as online, neither can it be built on the existing Cryptocurrency infrastructure. It makes no sense to talk about bitcoin or Ethereum as either national currencies of the future or as platforms for central bank digital currency is of any kind.

 

Note that this is not true of course for wholesale digital currencies that will operate in financial markets to carry transactions between institutions using the full panoply of distributed leisure technology’s and so-called smart contracts

 

 

 

The Facebook outage has certainly done us a favour in reminding us that vague talk about networks and clouds and block chains is no substitute for the kind of planning that is required to create vital national infrastructure

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Individuals and households without bank accounts are largely excluded from digital forms of payment, according to a report from the Federal Reserve Bank of Atlanta. Many digital platforms like Venmo, PayPal and Cash App require funds to be transferred from bank accounts, creating a last-mile problem for the unbanked,

From Digital Currency and Payments, and the ‘Last Mile’ for the Unbanked:

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almost all contemporary games contain some mimetic elements of work and market exchange. They don’t offer fantasies of escape, of imaginative play for its own sake; they offer a fantasy of rules—a rationality otherwise missing from the contemporary wage labor process. Vicky Osterweil has called this type of game a “utopian work simulator”;

From All Work and No Play | Dissent Magazine:

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Requiring that banks verify the identity of participants in a transaction is a cornerstone of AML/CTF policies, but when applied to CBDCs, this policy could essentially force the creation of a national identity system that might include personal data, credit history, financial transactions and other sensitive information. This presents obvious opportunities for intelligence collection and surveillance by states and would remove the existing barrier between states and personal finance.

From International Security Implications of Central Bank Digital Currencies – Lawfare:

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Swift Go, a service that enables consumers and small businesses to send near real-time payments anywhere in the world direct from their bank accounts.

Seven global banks – BBVA; Bank of New York Mellon; DNB; MYBank; Sberbank; Société Générale, and UniCredit – which collectively handle 33 million low-value cross-border payments per year, are already live with the service.

Using tighter service level agreements between institutions and pre-validation of data, Swift Go enables banks to provide their end customers a fast and predictable payments experience with upfront visibility on processing times and costs.

From Swift takes on low-value cross-border payments:

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From this month, any wristwatch sold for more than £2,000 on eBay UK must first be sent to this lab so that experts can verify if it is genuine. Only then will it be sent to the buyer.

From Time’s up for the fake wristwatch merchants of eBay | News | The Sunday Times.

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Data for today’s episode is provided by Mercator Advisory Group’s Report: 2021 Small Business PaymentsInsights: Business Operations – In the Midst of a Pandemic

Mobile Point-of-Sale Features Small Businesses Rank as Most Important:

27% of small businesses say that the initial cost of hardware is the most important feature within their mobile POS solution.
22% of small businesses say that no monthly fee or contract is the most important feature within their mobile POS solution.
12% of businesses say that a fee structure that is easy to understand and plan for is the most important feature within their mobile POS solution.
11% of small businesses say low processing/settlement fees are the most important feature within their mobile POS solution.
8% of small businesses say that Bluetooth enabled (wireless hardware) is the most important feature within their mobile POS solution.
6% of businesses say a small/portable hardware device is the most important feature within their mobile POS solution.

From Mobile Point-of-Sale Features Small Businesses Rank as Most Important: –.

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Around half of UK parents admitted they had been bemused by payments on their bank balance, only to later find out it was their child who had made the purchase.

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“We don’t need to break them up; we need to break them open,” said Tom Wheeler, former chairman of the Federal Communications Commission during the Obama administration.

From Can Facebook Be Regulated? – The New York Times:

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“If total factor productivity had continued to grow at its 1957 to 1973 rate then we today would be living in the world of 2076 rather than in the world of 2014.” Sadly, the future is continuing to recede.

From The Future is Getting Farther Away – Marginal REVOLUTION.

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