NuBits: Discussion round

hey,

I just finished the whitepaper! great work guys.

The whole thing reminds me of BitsharesX. Nubits and BitUSD are both pegged against the usd dollar. But this peg is motivated by different mechanisms.

While the marketpeg mechanism in BitsharesX is based on collateral funds, you are trying to hold the marketpeg by attracting new customers by interest funds.
One advantage of Nubits might be that custodians might hold the market peg better (lower spread) than it is hold in BitsharesX.(Just a guess)
But I am worried by the fact that new buyers of Nubits are attracted by interest rates. Who pays for these interest? I think interest rates must be very high, if there is a huge selling pressure for Nubits. These high interest rates might worsen the situation as they inflate Nubits even more.
I would change the system. If there is huge selling pressure, custodians should be allowed to create new Nushares and sell these Nushares in order to buy Nubits and counter the selling pressure.

These are just first impression after reading the white paper. I am keen to hear other ones.

[quote=“josojo, post:1, topic:2902”]hey,

I just finished the whitepaper! great work guys.

The whole thing reminds me of BitsharesX. Nubits and BitUSD are both pegged against the usd dollar. But this peg is motivated by different mechanisms.

While the marketpeg mechanism in BitsharesX is based on collateral funds, you are trying to hold the marketpeg by attracting new customers by interest funds.
One advantage of Nubits might be that custodians might hold the market peg better (lower spread) than it is hold in BitsharesX.(Just a guess)
But I am worried by the fact that new buyers of Nubits are attracted by interest rates. Who pays for these interest? I think interest rates must be very high, if there is a huge selling pressure for Nubits. These high interest rates might worsen the situation as they inflate Nubits even more.
I would change the system. If there is huge selling pressure, custodians should be allowed to create new Nushares and sell these Nushares in order to buy Nubits and counter the selling pressure.[/quote]

Not sure if selling NuShares is the solution. But I agree that there is a problem if the system doesn’t make USD to back up the dividends, grants (except for the NBT to be sold), and parking interest.

I think the question is who pays for the interest which is printed into the economy instead of bought by someone then spent.

The (very) bright side of the problem is that the system should have many profitable investment opportunity to generate revenue.

Thank you for this link. I quote

However, the system can handle even multi-year dips in demand gracefully and recover. All that is required is for some people to believe there is some chance that total demand will reach a new peak. This is a nominal peak, not inflation adjusted peak. So in a case where NuBit demand declined for three years and there was 13% inflation over those three years and an average of 4% annual interest was required to create sufficient demand for NuBits during those three years, then the amount of real value stored would not even have to quite reach its previous peak in order to push interest rates down to zero, signaling a healthy system.

I think more is required than some people, who think there is a chance that the total demand will reach a new peak. We need many people, since some would not be able to provide the needed liquidity, and these people must “be certain” that the demand gets a new high, since otherwise their investment would not generate profits.
In a fast developing cryptocurrency world, with ever-changing moods, the risk that the demand of Nubits is not getting a new high is relatively high. I think annual interest rates of just 4 % will not be sufficient in order to cover this risk.
But it is an experiment, we will see whether it works.

That is my bottom line. It might be more productive if this discussion is moved to discuss.nubits.com . There have already been some discussions there
Where Do Dividends & Network Revenue Come From? - NuShares - NuBits Forum

I’ll try to put some points to check if my understanding is correct.

Pros:

  • stable value
  • distributed
  • standard btc-like client/wallet
  • legally tied only to standard crypto rules (unlike Ripple’s IOUs)
    Cons:
  • high human factor in ‘protocol’
  • an IOU nature

In relation to Peercoin:
Pros:

  • demand from real business
  • promotion as a good backing currency
    Cons:
  • none (not counting yesterday’s market confusion and disappointment)

Questions:

Thoughts:
Value of such currency is obvious- it’s v. high. It’s an IOU but IOU of a good corp is better than unproven X-coin. This corp is distributed which is also a +. From storage perspective we’re talking about an equivalent of $0.1-1M mkt cap coin at a start. It’s great $ transfer medium, even if it will be a ‘hot potato’ IOU first it should test your solution enough - fast and cheap $ transferring is a blessing for crypto-world. If deposit-withdrawal time will be low it will effectively counter user’s concerns about corp default risk and create a good demand(even if nubits will be exchanged immediately). With a time, nubits ‘caching’ will grow, giving nu-mechanism fuel to close economic cycles and gain more trust - and increase demand further. BTC-like client/wallet and legal status will make it best available $ IOU in crypto-world.
We’ll be able to track corp’s health through nushares price ( however, users can be ‘tricked’ with such indicator). I’m looking forward for atomic cross-chain transfers w/ Peercoin. I’ll wait with NuBits promotion until I gain more knowledge and some NuShares :slight_smile:

Excuse me guys, are Nubits the responsible for killing PPC coin? I liked this coin and believed in it, I thought would have potential as btc and ltc, but seeing that nubits regulate the price to $ 1, who will want to mine ppc? or am I wrong? ppc could be worth more than $ 1 in the future? if not i think this a die coin…

@chapinmaster NuBits are $1 per coin. NuBits does not regulate the price of Peercoin in any way.

Thank you very much for your answer, so that’s the recomendation, hold the ppc or buy nubits?

chapinmaster,
NuBits will not increase in price and will stay at $1 - use it for spending
If price appreciation is what you want, stay with PPC (but bear in mind PPC can go down, as well as up)

allrigth, i have clear this point now, thank you so much.