Libra deemed a security, and privacy coins get a wakeup call in November

Maybe the privacy promised by cryptocurrencies isn’t so secure after all. That’s what many people are left thinking after the privacy protocol Mimblewimble was unraveled by a cryptocurrency researcher who was able to trace 96% of the protocol’s transactions.

Still, according to the researcher who found the vulnerability, this is to be expected from new technologies which are still in their infancy:

Crypto bug

“Bitcoin is now 11 years old, but cryptocurrencies are still in their infancy. It wasn’t that long ago that devastating bugs were uncovered in both Zcash and Monero. This is to be expected — most of the interesting technologies are still in the realm of basic science.

But this is how science always advances: we propose new theories, and then repeatedly knock them down, until what’s left standing has stood the test of time.”

The cryptocurrency industry has advanced in many ways over the past decade, but still has a long way to go before it can truly be taken seriously as a viable market. Unfortunately, such innovation is not linear, and is therefore difficult to predict. But as long as there is enough resources dedicated to advancing blockchain solutions, there is hope that cryptocurrencies will revolutionize the world.

Slowly but surely the traditional finance industry is seeing cryptocurrencies as valuable assets. In November, another step was taken in this direction as Yahoo Finance, one of the largest news sites in the United States, announced it would integrate directly with CoinMarketCap, one of the industry’s leaders in cryptocurrency data. One of the new functions will allow Yahoo Finance users to track 118 cryptocurrencies while accounting for data from 200 digital asset exchanges. As part of the relationship, CoinMarketCap will also provide cryptocurrency educational resources for Yahoo Finance.

According to Yahoo:

“By partnering with CoinMarketCap, a trusted global cryptocurrency data provider, we can provide timely and reliable crypto information to meet our audience demand.”

Yahoo finance

This is another step in the process of Yahoo Finance fully integrating digital assets to their site. Earlier in 2018 the company began to allow its users to purchase Bitcoin, Ethereum, and Litecoin on its platform.

Cryptocurrency investors continue to be baffled by China’s impact on the cryptocurrency market. Just as the country’s government said it would explore blockchain technology further, it turned around in November to announce it would crack down further on cryptocurrency trading and initial coin offerings (ICOs) to combat fraud. This announcement was a big factor in Bitcoin dropping in price below $7,000.

Analyst Brian Kelly said on CNBC that China’s position on cryptocurrencies has negatively effected investor sentiment in the cryptocurrency market:

China cryptocurrency

“This caused speculators to start selling… and here we are, down 16% for the week,” Kelly said during CNBC’s Power Lunch. As a result, some of the high-cost miners are at the break-even point or have begun to capitulate. This has caused even further downward pressure on Bitcoin’s price, he claims.

Interestingly, cryptocurrency mining was not mentioned as an activity that the Chinese government is looking to ban, giving miners a small victory and the feeling that their businesses won’t be disrupted anytime soon.

If Facebook still plans on moving forward with its cryptocurrency, the Libra, it may have to do so knowing that Libra will be classified as a security. A recent bill introduced in US Congress called the “Managed Stablecoins are Securities Act of 2019” is set to classify many of the industry’s tokens as securities based on how they act in the market.

Congresswoman Sylvia Garcia highlighted the importance of bringing clarity to the industry in order to protect investors and other stakeholders:\

US Congress

“Bringing clarity to the regulatory structure of these digital assets protects consumers and ensures proper government oversight going forward,” Garcia said in the statement. Gooden said the bill is necessary to help consumers understand the financial assets they are buying.

“In what are called ‘managed stablecoins’, we have trusted brands marketing digital assets to consumers as secure and stable,” Gooden said in a statement. “Everyday investors need to know they can trust the issuers behind their financial assets. This bill would bring them the security they deserve by applying the laws we use to regulate financial securities to this new breed of digital currencies.”

Facebook has constantly pushed back against this notion, claiming the Libra will not resemble a security, and instead be used to facilitate digital payments. However, the currency does resemble a stablecoin as it will be backed by a basket of fiat currencies to maintain price stability.

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