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Libra Testnet Fails to Impress as New Legislation Looms

A November 15 blog post by Libra project developers detailing testnet developments has apparently failed to impress government regulators and influential voices in the space alike. CEO of blockchain company R3, David Rutter, commented at a London conference last week that “what they did was ridiculously stupid,” going on to call the announcement and approach of the project “naive.” The U.S. Congress is concerned as well, with members proposing a new bi-partisan bill Thursday, which seeks to classify the asset as a managed stablecoin security.

Also Read: Paypal CEO Admits He Owns Bitcoin

Libra Testnet Developments

The most recent Libra developers update notes that the testnet “has logged more than 51,000 transactions since we reset the testnet on September 17, 2019.” The blog post further details that the dev community has launched 10 wallets, 11 blockchain explorers, 2 IDEs, 1 API and 11 clients. “Until we launch mainnet, the best and fastest way we have to demonstrate Libra network functionality and provide early access is through our pre-mainnet. Pre-mainnet, a version of testnet available to Libra Association members, makes it easier and faster to test, troubleshoot, diagnose, and resolve software edge cases,” the update elaborates. Pre-mainnet currently has 7 deployed nodes and 14 in-process nodes, with a goal “to deploy 100 nodes on the mainnet, representing a mix of on-premises and cloud-hosted infrastructure.”

Libra Testnet Fails to Impress as New Legislation Looms
R3 CEO and founder David Rutter

R3 CEO Criticizes Libra’s Actions

For all the developments that seem to be taking place in the Libra camp, some voices remain critical of the project’s bold announcement and entrance onto the scene last summer. Financial News London quotes R3 CEO and founder David Rutter as saying:

I think what they did was ridiculously stupid. The way they rolled it out… Yeah, you know it was just so… It was just so in your face. There’s a lack of understanding.

Rutter goes on to remark “When we saw [Facebook] talking about doing a basket of currencies with weighting, in reality when we want to translate that back to real-world currencies it’s not simple.” The ongoing saga of Facebook’s struggle against regulatory bodies, especially in the U.S., seems to underscore Rutter’s concerns with a series of congressional letters, hours-long hearings, and criticism from top government officials. This trend continued Thursday with a proposal from lawmakers to classify libra as a security, which could undercut the stated aims of the project.

Libra Testnet Fails to Impress as New Legislation Looms

Proposal for Classification of Managed Stablecoins as Regulated Securities

While the head of the Libra project for Facebook, David Marcus, has toyed with the idea of possibly utilizing stablecoins in the past, the newly proposed “Managed Stablecoins are Securities Act of 2019” probably is not what the group had in mind. Sylvia Garcia (D-Tex) and Lance Gooden (R-Tex) introduced the bill on Thursday, which would “establish the treatment of managed stablecoins under the securities laws.” Garcia reportedly named libra in a statement about the bill, affirming that libra and managed stablecoins “are clearly securities under existing law.”

With many highly prominent members of the Libra Association having already dropped out of the project, the proposal presents even more potential difficulty. Marcus has spoken against the notion that Libra should be regulated as a security previously, comparing it loosely to a platform like Paypal, and increased regulatory scrutiny from the SEC would likely make the project’s aim for large scale financial inclusion much more complicated.

What are your thoughts on Rutter’s remarks and the newly proposed legislation? Let us know in the comments section below.


Image credits: Shutterstock, Mark Van Scyoc, fair use.


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Graham Smith

Graham Smith is an American expat living in Japan, and the founder of Voluntary Japan—an initiative dedicated to spreading the philosophies of unschooling, individual self-ownership, and economic freedom in the land of the rising sun.

Graham Smith , 2019-11-25 09:12:35 ,

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NewsBlock © 2019 - 2020. All rights reserved.


While Bitcoin’s price seemingly moves without rhyme or reason — collapsing by dozens of percent and embarking on face-melting rallies on a whim — the cryptocurrency market is filled to the brim with fractals.

Related Reading: Analyst: Bitcoin Price Likely to Fall to Low-$8,000s as Chart Remains Weak

A brief aside: A fractal, in the context of technical analysis and financial markets anyway, is when an asset’s price action is seen during a different time. This form of analysis isn’t that popular, but it has proven to be somewhat valuable in analyzing Bitcoin.

One recent fractal popularized by a well-known cryptocurrency trader is implying that BTC is going to return to the low-$7,000s in the coming days.

Bitcoin Fractal Implies Retracement to Low-$7,000s

A well-known crypto trader going by “Tyler Durden” on Twitter recently posted the chart below, which shows that a Bitcoin price fractal may be playing out. The fractal has four phases: horizontal consolidation marked by one fakeout, a surge above the consolidation phase, a distribution, then a strong drop to fresh lows.

If the fractal plays out in full, BTC could reach the low-$7,000s again, potentially as low as $7,100. This would represent a 20-odd percent collapse from the current price point of $8,800.

It isn’t only a fractal that is hinting Bitcoin has the potential to visit its lows. As we reported on Saturday, Bloomberg believes that if the GTI Vera Convergence Divergence Indicator flips red, a downtrend could push the cryptocurrency back to $7,300.

Related Reading: Stephen Colbert Pokes Fun at Bitcoin in Monologue: Mainstream Gone Wrong?

Can Bulls Step In?

But again, many believe it is irrational to have such bearish interpretations of the cryptocurrency’s chart at the moment. As reported by NewsBTC earlier, Popular crypto trader Mayne recently noted that the “people waiting for $6,000” are irrational. He quipped that Bitcoin retracing and consolidating after its fourth-biggest bull move in history ($7,300 to $10,500, a 42% gain) is perfectly par for the course, but noted that it’s totally possible we can go lower from $8,800.

The medium-term technicals support this.

Trader and CoinTelegraph contributor FilbFilb found that by the end of November or start of December, the 50-week and 100-week moving averages will see a “golden cross,” which he claims is far more significant” for the Bitcoin market that other technical crosses.

Also, a Bitcoin price model created using Facebook Prophet machine learning found that the leading cryptocurrency is likely to end the year at just over $12,000. What’s notable about this model is that it called the price drop to $8,000 months in advance, and forecasted a ~$7,500 price bottom for BTC.

To put a cherry on the cryptocurrency cake, Crypto Thies observed that when Bitcoin bottomed at $7,300, it bounced decisively off the 0.618 Fibonacci Retracement of the move from $3,000 to $14,000, which correlates with the two-week volume-weighted moving average. He added that summer 2019’s consolidation was marked by Bitcoin flipping major resistances into support levels, implying that a bullish reversal and subsequent continuation is likely possible in the coming weeks.

Featured Image from Shutterstock


Nick Chong , 2019-11-10 12:00:38

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