In Hayek design, both revenue and backing asset will support anti-inflation.
Do you believe a successful private business profit ratio is just 3% per year?
If singapore deposites 100Billion USD, it is because our profit/revenue per year is more than 3 billions. Economics is mutual activity, our customers are not fool. Meaningless assumption is meaningless, just like you cannot assume all human beings suicide in one day.
Even if our official revenue is less than 3 Billions, the liquidity providers(NBT borrowers)will pay the 3Billion bill, otherwise they will lose 200Billion NSR to protocol. And decentralized LP make their living by spread trade, donât tell me their profit ratio is less than 3% per year, even ticket scalpers can earn more. And if some of them are really less than 3% annually, they washed out by free market. In the end, the LP free market gets stabilized at something like 10% profit ratio. The âsingapore dumping eventâ did lower LPâs profit level, but they are far from bankrupt.
I invest 1000 USD buying 1000 NBT and set up buy/sell wall at OKpay NBT/USD pair, my trade volume(sell and buy) is 20,000 USD per year, i.e. turnover rate is 10. If I set 1% spread: 0.99buy 1.00sell, whatâs my gross profit? 100USD, it means 10% profit ratio per year!
Can I pay my Okpay fee with revenue?
The more turnover rate, the higher revenue.
E-gold was a digital gold currency operated by Gold & Silver Reserve Inc. (G&SR) under e-gold Ltd. that allowed users to open an account on their web site denominated in grams of gold (or other precious metals) and the ability to make instant transfers of value (âspendsâ) to other e-gold accounts. The e-gold system was launched online in 1996 and had grown to five million accounts by 2009, when transfers were suspended due to legal issues. At its peak in 2006 e-gold was processing more than US$2 billion worth of spends per year,[1] on a monetary base of only USD $71 million worth of gold (~3.5 metric tonnes),[2] indicating a high monetary turnover (velocity) of about 28 times per year (for comparison, annual velocity of USD is about 6 for M1 [3] and less than 1.6 for M2 [4]) . e-gold Ltd. was incorporated in Nevis, Saint Kitts and Nevis with operations conducted out of Florida, USA.
OK. Fixed lending term is like forced expiring dates of future trade contracts that forces all lenders of nsr for nbt pay for the inflation. However realizing this fact lenders will pull the fund early if the economy of the coin system is not looking good. When Singapore is going to sell, all lenders will try to front run so the coin will become cheaper in real terms.
So you answered what the mechanism to destroy coins.
If this business has the size of a developed country, as shown by most developed countries, making the economy to grow all the time is very difficult. For a normal sized business, making a financial product that performs better than inflation rates is not highly difficult. But youâd ask what is the point in issuing a currency when you could just sell fund.
If our decentralized LP capital turnover is like e-gold, say 28 per year, when they set 1% spread on NBT/USD pair, their profit ratio is 28% per year. They can afford inflation rate, they can == Nu can.
@mhps,@phoenix Have you calculated the total trade volumn of NBT from 2014 to before the crisis? Whatâs the turnover rate?
If nu has shares in private companies economize, it can generate revenue.
ownership of land, Sustainable Forestry
ownership of storage facilities, storage of foreign and own things. eg wood
ownership of farmland, self-cultivation or lease
If that would work easily, a âHayekâ coin would be easy as well.
You need a way to store those shares in a way thatâs out of reach of governments - I have no solution for that.
Youâre saying the same thing (or I donât understand the difference), BTC also know as digital gold (not in exchange of BTC), is how I read Sabreiib comment
You issue tokens that represent onwership of (just as an example) a% BTC
ok maybe Iâm wrong, still I think he means the same, except naming only one example of digital gold, it could (of course), also be a number of those (PPC, XPM, XMR), which would result in what you are saying, an index @Sabreiib maybe you better speak for yourself
Iâd happily include PPC and XPM for technological reasons in that index.
PPC can be regarded as a kind of âinsuranceâ against BTC failure. PPC as old PoS coin with a track record might be seen as safe harbour in case BTC fails. I donât know about its potential independent from BTC failure. PPC trade volume is quite low. It should have only a minor role in the index.
XPM is quite ASIC resistant. Are there even FPGAs? Iâm only aware of GPU miners. The inflation model is smoother than Bitcoinâs and the number of tx per time can exceed Bitcoinâs.
But I fear thereâs not really enough trade volume in XPM pairs to consider it for the index.
To float an idea possible members of such an index could be (part 1):
BTC
ETH
XMR
LTC
FCT
XCP
DASH
NXT
MAID
BTS
Optional members with low percentage (due to design or trade volume (part 2); or candidates for a second, âincreased riskâ index):
WAVES
EMC
SJCX
SYS
NSR
XPM
The choice is somewhat randomly taken from listings on coinmarketcap, although I tried to include coins with a reasonable trade volume and features (vastly/slightly) different from other index members.
Part 2 obviously deals with a set of coins that should have only little percentage (due to little trade volume), but could play a role (due to features) in an index - maybe a separate index.
These cryptos are all very volatile, because if BTC price halves over night, most of them also follow, are all âbad moneyâ, if we peg to these, the meaning of peg is gone.
Then why not use BTC directly? @ConfusedObserver, do you know the meaning of âstable currencyâ at all?
I know about stable currency.
I hope you can concur that the token I proposed is stable related to the tokens in the index.
I never tried to create a token stable to a fiat currency this way. I didnât even try to create âgood moneyâ, because of the issues elaborated in the initial post.
I was just trying to propose a token that has some use and can be utilized by Nu for making revenue when selling it at an offset.
Customers might want to pay the offset, because it saves them from building their own index fund with a lot of different tokens.
Here they buy the tokens with BTC, they sell the tokens for BTC. Nu converts the BTC in fractions of the coins listed in the index. Customers have a token thatâs backed by a lot of currencies without the need to sync blockchains, manage private keys for all coins etc.
Is that not clear from the initial post?
Iâd love to make a proposal for âgood moneyâ. Without being able to hold the necessary stocks, futures, ETFs in a way thatâs not prone to government regulation/confiscation I made a side step and fled to crypto currencies.
How shall Nu be able to make money from pegging to BTC?
My index has some diversification and I dare say that not all coins in the index follow BTC.
Depending on the reason for a BTC price move, the might move contrarily.
Imagine BTC drops because of issues with PoW. What do you think will happen with PoS coins?
Inagine BTC drops because of issues with SHA.
What do you think will happen with algorithms different from SHA?
Would you rather buy single stocks or index ETFs?
My proposal offers you a âcrypto index ETFâ.
The most simpe version would be using all the top (by market cap) coins - just like Dow Jones Index, Nikkei index etc.
Is it really necessary ⌠to store those shares in a way thatâs out of reach of governments?
Such shares are not competing with the monetary system. A forest is always worth the same, regardless of the inflation.
One can also conclude contracts with governments in which the values or shares are.
I see no difference whether someone from China buys a company in Europe or whether Nushare buys a company in Europe.
Edit:
Itâs comparable to an international real estate fund. Only with the difference that you can use the equity shares as money. Why should governments forbid?
BTC, PPC you know, backbone currency