News Bitcoin's Value Passes $11,000 After Libra Announcement

Scams never cease. Companies using crypto-currencies like this are just trying to have greater data collection abilities and control over what you do with your money, practically acting as particularly overbearing banks, but without having to follow many of the rules and regulations that actual banks must follow and without their customers having all the government-backed protections that bank customers have. Make no mistake, this only exacerbates the problems the customers of the banking industry have.

When a bank gets hacked or runs into problems, you have government insurance to protect you. If anything goes wrong with a transaction or wallet with cryptocurrencies, you have nothing. If someone at Facebook (or even the algorithms they use) decides they don't like you and causes problems for you just trying to have and spend money, there is nothing you can do because they haven't broken any laws. If a simple glitch or hack occurs, you still have nothing. Be careful how you use such financial tools because the downsides far outweigh any upsides. Not even a lawyer can help you when something goes wrong for you.

We're even expected to believe they will handle private data responsibly? They have done everything they can to profit from your data and Facebook has gone as far as buying customer financial data from credit companies already. Part of their motivation for this is likely to not have to pay for that data anymore because people will give it to them freely by using libra. Even worse, the users of libra don't even see any of the returns on the interest earned by the assests like you do with a real bank account. Bank account interest rates in the US have plummeted to criminally low levels, but they are still positive. With libra, you get nothing, only the big investers get any of the profit.
 
Last edited:
Reactions: King_V and bit_user

TJ Hooker

Champion
Ambassador
We're even expected to believe they will handle private data responsibly?
I agree in that I have no faith that the Calibra wallet (developed by the team created/spun off by FB, and will integrate into FB products) will keep your data private. But there will likely be other, open source wallet apps that become available that wouldn't have the same privacy concerns as the calibra wallet.
 

bit_user

Splendid
Ambassador
Gamers looking for an upgrade or new build may want to do so sooner rather than later. Before another mining rush and GPU prices double or triple.
Libra will not be mined by the public.

In fact, it's not really blockchain-based. The article I linked below describes it as federated database.
 
Last edited:

bit_user

Splendid
Ambassador
there will likely be other, open source wallet apps that become available that wouldn't have the same privacy concerns as the calibra wallet.
Though Libra is pseudonymous, don't think FB won't try to map Libra IDs to its users' identities, even if it doesn't make use of the explicit identity verification that the wallets will be legally required to do.

This is worth a read:

https://hackernoon.com/libra-a-cyberpunk-nightmare-in-the-midst-of-crypto-spring-5543b6f6e34b

It makes a good point that FB (or its authorized verification processors) can shift their real currency holdings and investments, if they want to flex their muscles.
 
Libra will not be mined by the public.

In fact, it's not really blockchain-based. The article I linked below describes it as federated database.
I'm referring to the current rise in Bitcoin value the article referred to. Along with the subsequent surge in other crypto's can cause another surge in mining. Assuming it keeps going up.
 

bit_user

Splendid
Ambassador
I'm referring to the current rise in Bitcoin value the article referred to. Along with the subsequent surge in other crypto's can cause another surge in mining. Assuming it keeps going up.
Ah, point taken.

To be honest, I'm rather puzzled by the sudden rise in other cryptos, unless it's just coincidence and has nothing to do with Libra.

So, which coins are still profitable to mine with GPUs? Didn't Bitmain or somebody finally build an Ethereum ASIC?
 

TJ Hooker

Champion
Ambassador
Though Libra is pseudonymous, don't think FB won't try to map Libra IDs to its users' identities, even if it doesn't make use of the explicit identity verification that the wallets will be legally required to do.

This is worth a read:

https://hackernoon.com/libra-a-cyberpunk-nightmare-in-the-midst-of-crypto-spring-5543b6f6e34b

It makes a good point that FB (or its authorized verification processors) can shift their real currency holdings and investments, if they want to flex their muscles.
I don't see any mention of alternative, open source wallets in that article. It seems to assume that you need to use the official Calibra wallet (which I admit is what I imagine the majority of 'normies' will do). I guess one could still attempt to map your Libra public key/address/ID to your real world identity regardless what wallet you use, but that's true of any public blockchain.

Can you be a bit more specific about what you're referring to with FB "flexing their muscles"? I skimmed the article (found it kinda long winded to be honest), are you referring to the statement about FB & Co. being better positioned to lobby for policy changes in favor of crypto adoption compared to the Bitcoin community or whatever?
 
Ah, point taken.

To be honest, I'm rather puzzled by the sudden rise in other cryptos, unless it's just coincidence and has nothing to do with Libra.

So, which coins are still profitable to mine with GPUs? Didn't Bitmain or somebody finally build an Ethereum ASIC?
Thankfully it doesn't make much sense yet. With cheap electricity $0.10 per kilowatt hour. You'd make about $0.50 per day profit on an Rx 580.

As prices have been on the rise. The concern would be if Bitcoin prices are set to surge again. As they seem to do every few years after an extended trough. It seems reasonable to assume they could do so again. Once that happens and panic building of new mining rigs occurs. It's too late to get a good price on a GPU or high end PSU.
 

bit_user

Splendid
Ambassador
I guess one could still attempt to map your Libra public key/address/ID to your real world identity regardless what wallet you use, but that's true of any public blockchain.
Yes, but only if you're making purchases via FB. That's the "problem" this new coin "solves" (from FB's perspective).

Can you be a bit more specific about what you're referring to with FB "flexing their muscles"?
If I follow the author's point, it's that you give their verification processors real currency to buy Libra. As a result, these guys are sitting on huge piles of cash (interest-free, as he points out). For one thing, they can invest it where they want. And that's a level of power currently held by only the largest banks, investment funds, and sovereign wealth funds.

Now, it's not clear to me whether this "basket of currencies" means that if I convert $1 into Libra, is there some predetermined ratio of USD, Euros, JPY, CHF, etc. that means the verification entity has to spend fractions of that $1 USD to buy, or does it just mean that the holdings will be in some arbitrary combination of these currencies. Most likely the former, in which case FB is probably the one that controls the mix of different currencies, and you can imagine how much power that gives them over governments.

I skimmed the article (found it kinda long winded to be honest)
Yeah, it seems to be aimed at a particular audience, and the author seems predisposed to a lot of bluster.

are you referring to the statement about FB & Co. being better positioned to lobby for policy changes
That's certainly one way they could utilize their clout.
 

bit_user

Splendid
Ambassador
An interesting thought experiment would be to imagine a "run" on the Libra. The exchange points' cash reserves would be quickly exhausted, forcing them to unwind their investments or convert currency at a loss. Either they have to turn people away, which would basically signal the death of the currency, or maybe try to slow the amount of conversions by charging a fee to exchange Libra for fiat (which would also likely send it into a death spiral).

And what if one of these exchange points makes bad investments and goes under? Would it stress the entire network, as users flock to other exchange points?

With current crypto coins, the risk is distributed. One problem with Libra is that because it centralizes certain rewards, it centralizes risks that come along with them. Perhaps some of this is an inherent problem in having a "stable coin" that's not simply pegged to one fiat currency or asset.
 

bit_user

Splendid
Ambassador
Seems like you would do better with high-frequency stock trading, than you would mining Bitcoin....
Heh, I tried trading bitcoin. I made a little profit, before I got out. But real high-frequency trading is a cut-throat business that has a high-barrier to entry. And I'm pretty sure will break you quickly, if you don't have a very good idea of what you're doing.

What spooked me about bitcoin was learning how much power and control was centralized in the hands of the official software maintainers. That's the point that all these mainstream journalists miss, whenever they write about crypto currencies.

That, and the lack of scalability, in true blockchain-based currencies. I knew Libra couldn't actually use blockchain, because FB engineers are too smart not to see that.
 

TJ Hooker

Champion
Ambassador
Yes, but only if you're making purchases via FB. That's the "problem" this new coin "solves" (from FB's perspective).
I still don't understand what you're getting at here. Yes, if you buy Libra through the official Calibra wallet then it is trivial for FB to link your Libra ID to your real ID. If you buy Libra on an exchange not affiliated with Calibra/FB, or OTC, and hold in a non-Calibra wallet, I don't see how it'd be any easier for FB to link your Libra ID to your real ID than any other crypto. I.e. at that point to link the IDs you'd have to obtain the KYC info from the exchange. Or if you bought it OTC then you'd have to do some real work trying to link your IP address or something to your Libra ID. Either of those basically requires government agency/law enforcement involvement. I mean, I guess FB could try to run some sophisticated analytics on all Libra IDs to analyze what those IDs intereract with/spend money on, and cross reference that info against the profiles they've built on FB members to create probably links that way.
 

TJ Hooker

Champion
Ambassador
That, and the lack of scalability, in true blockchain-based currencies. I knew Libra couldn't actually use blockchain, because FB engineers are too smart not to see that.
Libra still appears to act like a traditional blockchain in the ways that matter (IMO): every transaction is cryptographically linked to all previous transactions, and anyone can verify/audit the chain. I don't believe whether or not the transactions are grouped into blocks is really the operative consideration (despite the name blockchain). The main difference is the consensus algorithm:
For typical Proof of Work blockchains like Bitcoin, there is no limit to the number of validators (miners) that can participate. Everyone is hashing to find a value greater than a certain difficulty (lower than a certain value), the block is created by whoever achieves this first. Throughput is limited as you need to allow time for information to propagate to all nodes, otherwise you risk node finding different valid solutions independently resulting in forks.

Libra will be a permissioned blockchain, where only select pre-approved validators will be able to write to the blockchain (goal is to have 100 validators, at least at the start, I believe). Validators are required to meet certain requirement in terms of networking/computing/storage performance. By only allowing a relatively small number of high performance nodes write to the blockchain, throughput can be much higher. There is no "mining" because they aren't trying to compete and find a particular value. They just execute the transaction(s) and broadcast the results. A Byzantine Fault Tolerant consensus mechanism is used such that the blockchain that 2/3 of validators agree upon is treated as the correct one (meaning up to 1/3 of validators can be malicious/collude before the blockchain is compromised). The downside to this approach is that it is much less decentralized.

Apparently they plan to move to a permissionless blockchain in the future, not sure how/when that would happen though
 

bit_user

Splendid
Ambassador
Yes, if you buy Libra through the official Calibra wallet then it is trivial for FB to link your Libra ID to your real ID.
Really? What was the point about Calibra being a separate entity? Was it not to put some separation between your wallet and FB?

I mean, I guess FB could try to run some sophisticated analytics on all Libra IDs to analyze what those IDs intereract with/spend money on, and cross reference that info against the profiles they've built on FB members to create probably links that way.
If you spend it at a storefront hosted by FB or that runs FB ads or that uses any other infrastructure provided by FB, then their spyware could link your FB account to your crypto ID at the point of sale. And the mapping only needs to be established once.

Facebook has shown time and again that it cannot be trusted to respect users' privacy. I don't believe they can resist the temptation to spy on everyone's Libra transactions, either individually or en masse. All of that economic activity is a data gold mine.
 

bit_user

Splendid
Ambassador
Libra still appears to act like a traditional blockchain in the ways that matter (IMO): every transaction is cryptographically linked to all previous transactions, and anyone can verify/audit the chain.
I think one big difference is in the ability to create and destroy Libra. This is probably key to limiting the scope of transaction clearance, and therefore scaling. The irony would be that they'd need people to convert to/from fiat currency, in order for Libra to remain scalable.

The real problem with blockchain is scalability - as the volume of transactions goes up, so does the cost of verification. And it gets worse over time.
 

bit_user

Splendid
Ambassador
BTW, I heard a funny observation. The Winklevoss twins, who sued Zuckerberg for stealing the idea for Facebook, setup a bitcoin company called Gemini (one of the constellations in the zodiac and representing twins, fittingly).

So, what does Zuckerberg call his crypto currency? Libra, which is another constellation in the zodiac. Almost as if to troll them. If not, quite a coincidence.
 
Reactions: TJ Hooker

USAFRet

Titan
Moderator
Mar 16, 2013
153,465
10,952
175,990
24,027
BTW, I heard a funny observation. The Winklevoss twins, who sued Zuckerberg for stealing the idea for Facebook, setup a bitcoin company called Gemini (one of the constellations in the zodiac and representing twins, fittingly).

So, what does Zuckerberg call his crypto currency? Libra, which is another constellation in the zodiac. Almost as if to troll them. If not, quite a coincidence.
Or, behind the scenes buried in 8 layers of corporate obfuscation....they've buried the hatchet and are working together.
 

bit_user

Splendid
Ambassador
Or, behind the scenes buried in 8 layers of corporate obfuscation....they've buried the hatchet and are working together.
Supposedly, Facebook did reach out to Gemini, but I think nothing came of it.

Either way, it's not really important whether they're collaborating. I think Facebook doesn't need them, in order to succeed in this, and I don't see a huge upside for them to cooperate. FB already secured enough big partners in the form of Visa, Mastercard, ebay, Paypal, etc. to enable it, if it has any chance of succeeding.

I think the main questions around Libra are how it's going to get regulated (including where will it even be allowed to operate) and how much of the public and business community will accept it.

My hope is that it forever remains some quirky sort of funny money for buying stuff on Facebook.
 

TJ Hooker

Champion
Ambassador
I think one big difference is in the ability to create and destroy Libra. This is probably key to limiting the scope of transaction clearance, and therefore scaling. The irony would be that they'd need people to convert to/from fiat currency, in order for Libra to remain scalable.
You can effectively destroy any crypto currency by sending it to an address no one has the keys for. Also referred to as "burning", it's not uncommon. The ability to create seemingly whenever they want is something I'm not aware of in other cryptocurrencies, except for maybe a couple pegged stablecoins such as Tether (pegged to the US dollar, somewhat controversial in its own right). Which is why I would hope that there will be some sort of regular 3rd party audit of the Libra reserve, to make sure that they extra Libra that is created has corresponding additions to the Libra reserve as they claim it will.
 

bit_user

Splendid
Ambassador
You can effectively destroy any crypto currency by sending it to an address no one has the keys for.
Uh, not without also destroying value. In this case, it would be a fairly regular course of the currency's life-cycle.

I would hope that there will be some sort of regular 3rd party audit of the Libra reserve, to make sure that they extra Libra that is created has corresponding additions to the Libra reserve as they claim it will.
Truth.
 

ASK THE COMMUNITY

TRENDING THREADS