I’m new in nubits technology, i discovered it few days ago and i have to say that it is pretty interesting.
But there are some things about i did not really understood. i read a lot of things about it but some areas are not clear in my head. here are my questions :
is nubits fully decentralized ? does it need human participation or it can work without any human action ?
i saw past charts of nubits on many exchanges i can see that the price has always been stable. is that impossible for the price to fall and be worth nothing ? what happens if a whale dump 10000 nubits ? the equation 1 NBT = 1 us dollar will not be verified anymore, right ??
is the total supply amount fixed ? or are coins being generated every days, like for Proof-of-stake or pow coins like dogecoin ?
is there a way to mine nubits, or its an unminable currency ?
why the total amount supply has been fixed to around 750 000 ? would the price have been $1 if the total supply would be 1000, 10 000, 100 000, 1 000 000 ?
thanks again to this community for the help it will gave me
It’s decentralized, but automation is a different question. The general makeup of Nu is that everything is manual, such that shareholders can create Nubits at will with a blockchain vote. This gives a vast amount of theoretical freedom for the network to operate in many different ways, though it does imply that additional layers of automation are important. With this in mind, we have a multi-tiered process.
What you see on the order books is mostly liquidity pool providers, who are paid to maintain liquidity on the order books. This can be done in a number of different contracts with varying amounts of decentralization.
At the core of operation is an elected group of signers called the first liquidity operations team (FLOT) that maintains a multisig btc reserve. Most contracts operate off funds related to this reserve.
And the final tier of defense is that shareholders can willingly dilute shares to generate funds to reclaim the peg. The basic principle behind this tier is that shareholders know nushares are worthless without the nbt peg and so will vote to dilute to keep it floating.
If you sell a ton of nbt, you have to buy it first. If you buy it from us, it’s not hard to imagine how we can buy it back from you at the same price.
By the way, there are actually about 810 thousand nbt in circulation this week.
I thought I did. You see, Nubits are not a fixed supply, they can be created via shareholder vote. If you are looking to secure the network, NuShares use PoS (they are a fork of Peercoin) and you can earn mint rewards using them. There is no mining. Nubits are not used to secure the network in any way.
If there were a billion nubits in circulation, I would have to assume that Nu was given a billion dollars to put the NBT in circulation. So yes, it would still be $1.
NuShares and NuBits are part of the same blockchain. NuShares can be minted with, (like Peercoin) while NuBits cannot be minted with. This means that users of NuBits need not worry themselves about helping to secure the blockchain. It’s already taken care of for them by NuShareholders.
By minting their NuShares and working to keep the USD peg, NuShareholders are basically providing a stable, decentralized crypto transaction service for users of NuBits. The question is how are NuShareholders being compensated for providing this service? There needs to be compensation, otherwise there is no incentive for NuShareholders to keep providing this service.
As @Nagalim mentioned above, one of our upcoming features is volume dependent transaction fees. According to coinmarketcap, we currently have a supply of over 700k NuBits. When volume dependent transaction fees are added to the protocol, these NuBits will slowly be burned away as people make transactions on our network. As the supply of NuBits is decreased through transaction fees, shareholders will need to keep printing and selling more NuBits to replace the ones that were destroyed. So NuShareholders provide a service and users of NuBits are charged for that service through our network transaction fees. NuBits destroyed through fees is profit for shareholders, because we get to create more and sell them again.
Nu does have costs to continue running. These costs take the form of our entire liquidity providing operation to help maintain the peg, plus development and marketing costs. In order for Nu to be financially successful, we need more people to start using NuBits, because our profit is tied to the number of daily transactions being made on our network. The more transactions made, the more NuBits destroyed through fees, the more we can sell again in the future.
Many shareholders are very long-term minded when it comes to the financial success of our network. We realize it will take a while for this technology to take off, so in the meantime we are working toward improving all aspects of the network, especially our liquidity operations. We are also working on a decentralized exchange called B&C Exchange, which will help move crypto trading off of centralized exchanges and increase demand for NuBits, as it will be used on B&C as a substitute for fiat. Ultimately, the goal is to have people using NuBits as a day to day transactional currency, rather than only using it to hedge Bitcoin volatility like its being used for right now.