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JesusMachine

Cryptocurrency

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Back when I got in 2016 China would regularly manipulate the price of bitcoin via positive/negative announcements regarding it's legality. They eventually shut down Chinese exchanges in 2017-18, thus eliminating their influence over it's price and driving bitcoin onto the black market where it does it's work best.

 

Bitcoin mining is concentrated in China more-so than other places for two non-threatening reasons, 1) subsidized electricity 2) The ASIC manufacturer's are in China. ASIC stands for application specific integrated circuit, basically a highly specialized chip who's architecture can only run a single application, in cryptocurrencies case it's the mining algorithms like SHA256 for bitcoin. Keeping up with the latest hardware is the name of the game in this highly competitive business, China just happens to have an advantage here specifically in "first dibs" to ASICs. 

 

Some of the smaller cryptocurrencies, like the ones mined on graphics cards for example are vulnerable to 51% attacks. That's where most of the network is taken over by nodes that will validate invalid transactions. The hashing power alone behind bitcoin would require a massive (realistically unaffordable) coordinated effort to achieve. Most people there mine bitcoin semi illegally. China has several more legit large scale mining organizations as well, but realistically coordinating all of them to execute a 51% on the network (even if they were willing/able to) is technically unfeasible.

 

 

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In a big reversal, Libra reportedly could peg its cryptocurrencies to national currencies

Libra Association 21 Members 1

 

Facebook is willing to reverse course on its plans to tie its digital currency project to a synthetic currency tied to a basket of global currencies.

 

Reuters is reporting that Facebook’s head of the Libra project, David Marcus, told a group of bankers that the company’s main goal was to create a better payments system and was open to alternative approaches to the original structure of the project.

 

Facebook and its partners had intended to create its cryptocurrency by pegging it to a basket of national currencies whose holdings would be set by the Libra Association.

 

National banks considered the plan part of a dangerous end-run around their regulatory authority and have been holding up the project until they could assume tighter control over how the Facebook-architected cryptocurrency and payment technology would operate.

 

The scrutiny from regulators proved too much for some of Facebook’s largest, and earliest, partners in the Libra Association, whose members would determine how the cryptocurrency would operate.

 

In the past month seven of the Libra Association’s founding members dropped out including: PayPal, Mastercard, Visa, Ebay, and Stripe. Those seven represented a big chunk of the strategic value and commercial heft of the planned association, with Stripe, Mastercard, Visa, and Ebay standing in for a huge number of payment processors and merchant touchpoints that the new cryptocurrency would need were it to dramatically scale to the size Facebook wanted right out of the gate.

 

Now, in another strategic reversal, Marcus is conceding the synthetic currency in favor of stablecoins tied to the local currency in each market that Libra would operate.

 

“We could do it differently,” Reuters quoted the Libra Association chief as saying. “Instead of having a synthetic unit … we could have a series of stablecoins, a dollar stablecoin, a euro stablecoin, a sterling pound stable coin, etc.”

 

All of this is happening against the backdrop of Facebook’s stated launch date of June 2020 for the Libra cryptocurrency. Marcus told Reuters that the June launch was still the goal, but that the association would not move forward unless it had addressed the concerns of regulators and received the proper approvals.

 

Those approvals are becoming harder to come by as the regulators who overseen global monetary policy cast a more skeptical eye at on stablecoins as well.

 

Reuters reported that the G-20 financial overseers wrote in a statement that money laundering, illicit finance and consumer protection need to be evaluated before any stablecoin projects can “commence operation.”

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The Party will not be a fan of blockchain as it will undermine its ability to conduct surveillance on currency flows and its citizens and thus will challenge WeChat Pay.

 

Tencent Says Libra Would Pose Serious Threat to Alipay, WeChat Pay

 
news

Tencent, the Chinese internet giant and parent of messaging app WeChat, said the proposed launch of Facebook’s Libra cryptocurrency would pose serious risks to existing digital payment systems.

In a blockchain whitepaper published in Chinese this week, Tencent said Facebook’s Libra initiative seems “bold and radical” but is actually a “prudent and rational” move for the Silicon Valley giant.

The Libra coin could quickly win market share in countries that do not have a credible local currency of their own, or in places where people do not have access to basic financial infrastructure, it continued. But that would be direct competition the Chinese companies could not replicate.

“Any internet company that has a relatively mature digital payment system, such as WeChat Pay and Alipay, would be threatened by the stablecoin if it is ever launched,” the whitepaper reads.

China’s central bank has been working on its own national digital currency for the past few years, while banning any fiat-to-crypto trading activities in the country since 2017. Neither Tencent nor Alibaba, which operates WeChat Pay’s competitor Alipay, is involved in any known cryptocurrency or trading projects.

With more than 1 billion active daily users on Tencent’s social media WeChat, its digital payment spinoff WeChat Pay is one of the two leading companies in the industry, along with Alipay, the mobile payment affiliate of Alibaba Group.

Both WeChat and Alipay have insisted on a firm stance against crypto exchanges using their payment services as a gateway for Chinese customers’ fiat on-ramp in a peer-to-peer fashion through over-the-counter trading.

“WeChat Pay does not support crypto trading, and the platform has never been open to any crypto category,” the company’s official account said in a post on Weibo.

“We welcome users to report on any crypto trading on our platform and proactively collaborate with authorities to crack down on such activities,” WeChat added in the post.

Alipay also reiterated its ban on crypto trading in a recently tweet directed at Binance when the exchange enabled over-the-counter trading that would allow Chinese users to exchange crypto assets with a counter-party and settle payments via peer-to-peer transactions on Alipay.

Alipay said in the tweet:

“If any transactions are identified as being related to bitcoin or other virtual currencies, Alipay immediately stops the relevant payment services.”

And yet while both Chinese companies share the official stance on crypto assets, they are heavily investing in blockchain and cloud computing technologies.

WeChat parent Tencent has been building a suite of blockchain services since they released their first white paper in 2017.

The company’s new TrustSQL platform is designed as a three-part system with the core chain layer, a product and service layer, and an application layer to provide digital asset management and authentication.

Tencent led a $20 million Series A round in blockchain provenance startup Everledger, also participated in by asset manager Fidelity Investments, in September.

The company also partnered with Intel to develop a blockchain for internet of things applications, while starting to test blockchain financial applications with the Bank of China in 2017.

In 2018, Alipay’s parent Alibaba Group actually topped the list with a total of 90 patent applications focused on blockchain-related technologies, even more than other multinational companies including IBM, Mastercard and the Bank of America.

“The launch of Libra would significantly affect the course of global expansion for digital payment companies, especially for those who are not in the Libra consortium,” Tencent’s whitepaper said.

Tencent, with a market cap of nearly $400 billion, has been a communications and internet leader in China since the very beginning. Founded in 1998, the company’s name echos the prior decade’s favorite technology, the belt clip beeper, or pager. Known across China as “cent,” that suffix was added to the last character “teng” of the founder’s name, Huateng Ma, according to Shenzhen tech lore. Tencent’s first product was online software to send messages from computers to pagers.

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I'll be amazed if Libra ends up going anywhere. The name alone, is a bad move in terms of the US market and I can't imagine how low the metrics on trust in Facebook must be, even with how oblivious / distracted / uncaring most of our population is. Honestly, its fascinating how arrogant Facebook is that they think they can step into a space like this. But I've been saying all along they're allowed unfair competitive advantage by our government, so I wouldn't be surprised if they can leverage the same to pull it off. I do believe that more likely as it evolves, the underlying tech becomes further abstracted by simple and intuitive UI and tools and that it'll be awfully hard to fend off the advantages of going with a more traditional crypto that isn't issued / regulated by the establishment. Looking forward to seeing the Fed becoming irrelevant along with most, if not all, of the middle men that make up the banking system.

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I know little about the tech, but what I do know makes me agree with what you're saying.

 

FB has around 1B users, even if only 5% of their users take up Libra it will be enough to cause huge shifts around the world.

 

I understand your feeling towards the Fed - I don't have a position either way on that, but I do have a deep dislike of "big banking". I appreciate the benefits of removing their power, but there are also some serious risks that come up as well in terms of tracking money flows. I'd reckon you and I would be on the same page in that we don't want our activity tracked and neither that of the general public. But I DO want the money flows of Hezbollah, the North Korean government, ISIS/AQ, purveyors of kiddie porn and whatnot tracked. It's the age old question of balancing security with liberty, always an impossibly difficult line to draw.

.

Edited by Hua Guofang
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16 hours ago, Hua Guofang said:

I understand your feeling towards the Fed - I don't have a position either way on that, but I do have a deep dislike of "big banking". I appreciate the benefits of removing their power, but there are also some serious risks that come up as well in terms of tracking money flows. I'd reckon you and I would be on the same page in that we don't want our activity tracked and neither that of the general public. But I DO want the money flows of Hezbollah, the North Korean government, ISIS/AQ, purveyors of kiddie porn and whatnot tracked. It's the age old question of balancing security with liberty, always an impossibly difficult line to draw.

Freedom comes with consequences. Not that you're expressly saying it, but I'm not okay with them tracking the entire world under the premise that its required in order to keep us safe. Evil is a part of the human condition and will always exist. Only thing we can hope to do is confront it when it presents. Can't be legislated away and its a very slippery slope when you start implementing systems that are intended to be 'for the greater good'.

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Still listening to podcasts here and there. Mainly crypto 101. I understand about 65%. Lol. Too much of a financial drought to pick up anything new. But I’ve been wanting to grab that ethereum which has been sitting at under 200 for months and months. I heard something about Facebook signing on a while back towards beginning of summer which could potentially fuck a lot of things up. Not exactly sure how or wtf I’m talking about because raven said it right, “you gotta understand how the hardware works” to really get any of this shit. 

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