Interesting discussion with Vitalik Buterin on stable currency

[mhps]

in the bitshares community. nubits is mentioned, too.

[tomjoad]

Comment from that thread in regards to Jordan’s NBT-for-NSR currency burning proposal:

Actually Nubits has changed this (or will change this), and Nubits can be burned now. Thus making them 100% less ponzi-ish. Makes them a stronger competitor, which just makes it all the more important for us to have decent marketing.

The fact that the BitShares community is aware of this is a very positive sign that our brand awareness is developing effectively. 2015 will be the year of stable-value cryptocurrency projects, and NuBits will be a powerhouse competitor.

[cryptog]

2015 will be the year of stable-value cryptocurrency projects

I think so too and I believe that NuBits will be the model to follow once the code is open sourced.

[zoro]

very exciting to see how much growth and progress has been made to crypto universe these 5 years since i first met BTC. and how many briliant persons are devoted to cryptos!

[cryptog]

I have watched the whole video: https://www.youtube.com/watch?v=qPsCGvXyrP4

No mention of Peercoin or Nu as if Vitalik was afraid to face the reality that the issues he is trying to deal with have already been solved

[mhps]

No mention of Peercoin or Nu as if Vitalik was afraid to face the reality that the issues he is trying to deal with have already been solved

Yep. So we know he is a human with weakness

[mhps]

There are some progress in the thread. I recommend anyone interested stable currency in general to read.

TL;DR version:

• Vitalik tried to understand how bitUSD works and appeared to find a hole in the system. I guess he is going to implement a bitUSD equivalent on Ethereum if bitUSD is interesting enough.
• Multichain was discussed and Vitalik offered some insights that blockchains are “like decentralized computers that people run services on”
• Vitallik pointed out problems with delegated DPOS, which boils down to political centralization.
• ByteMaster came back to the topic with a blog post to claim Stable-Crypto-Currencies-are-Impossible, to which Vitalik gave a detailed [reply][5] showing BM was mostly wrong.
• BM got it and wrote another blog How to Create a Stable Decentralized Crypto Currency His beef with nubits is that pegging to the USD gives control of long-term value to the FED, which I think is a fair point, but he ignored/failed to see the main point of nubits – a liquid, decenterized electronic currency that is stable enough for daily commerce. He now has this idea (of the month?) of making BTS the ideal currency.

edit: fix the last link

[tomjoad]

BM got it and wrote another blog How to Create a Stable Decentralized Crypto Currency His beef with nubits is that pegging to the USD gives control of long-term value to the FED, which I think is a fair point, but he ignored/failed to see the main point of nubits – a liquid, decenterized electronic currency that is stable enough for daily commerce. He now has this idea (of the month?) of making BTS the ideal currency.

I found Dan’s quote rather surprising, in a positive way. BitShares’ stance against Nu has evolved from mocking it as a scam project with no merits to simply “NuBits represent the value of USD too well”. Luckily our white paper provides a solution in the event of USD failing:

“In the edge case that USD hyperinflation does occur, shareholders may at that time pass a motion to peg NuBits to another currency, commodity or basket of goods.” Source: https://nubits.com/about/white-paper#if-usd-becomes-unstable

In any case, I don’t see the validity of criticizing the decision of NuBits to peg to the US dollar. It is currently the world’s reserve currency, the most liquid, and by far the most widely accepted. It is the logical choice for an initial pegged currency. Nu 100 years from now might look very different, but there’s no arguing it provides its users with a tremendous amount of utility by maintaining a constant $1.00 US value.

[zoro]

very interesting discussions! to me nu is like a corporation that produces currency stability. then this stability can be viewed as a product or an asset of the “real” world. the good thing is that i can influence the ways of working of this corporation by voting, having as priority the increase of its value.
it is a real DAO!

[desrever]

Criticism is good. But if their argue against the usd choice, well today usd is at record levels over euro (1.2, last time happened in 2010). Not so bad choice after all

[masterOfDisaster]

It’s not only the relative level compared to other currencies that made USD a good choice. USD is used across the world for reference prices. USD is the de facto currency for international business. I believe that was the main reason and in my opinion it was a good choice!

[Raythma]

I find Bitshares pegging scheme too complicated , i wish i could fully understand it to create some comparisons infographic with Nu.

[cryptog]

@mhps

Awesome set of links. Tks a lot.

I think this quote from Vitalik sums it up well.

It is wrong to extend criticism of existing centralized monetary policy into criticism of the very concept of monetary policy at all.

Your 5th link should be: http://bytemaster.bitshares.org/article/2015/01/01/How-to-create-a-stable-decentralized-crypto-currency/

Dan Larimer’s “Fixed Supply Currency is Ideal” is insane to me.

[cryptog]

USD is the de facto currency for international business. I believe that was the main reason and in my opinion it was a good choice!

@masterOfDisaster Well it is a geopolitical fact that USD is losing its status as the world reserve currency.
The BRICS’ agreement to create a BRICS bank back in July 2014 is one important indicator.
Basically the Bretton Woods agreement is being dissolved.
We are now converging to a basket of currencies instead of a single US dollar, in which the YUAN would be the currency with the highest weight I believe.
Even against bitcoin, it seems that the Yuan has the highest volume.
http://www.coindesk.com/yuan-trades-now-make-70-bitcoin-volume/

So yes the USD is maybe the most referred currency or the most quoted currency but certainly not necessarily the most important one in terms of liquidity or trade volume, imho
That should be taken into account when we need to consider other currencies to peg to.
@JordanLee alluded to the fact that developing Nu’s community in China matters.
I think that developing Nu in Japan does too. Pegging a version of NuBit to JPY will be a natural step.

But in terms of marketing, pegging to USD makes sense.
There is also a cultural dimension to it. JL is probably based out of the US. Some important elements of NU’s community are based out of the US, obviously.
A simple google search gives you the answer.
Nothing wrong with it of course.

[mhps]

Thanks. I fixed the link.

[Cybnate]

Well it is a geopolitical fact that USD is losing its status as the world reserve currency. The BRICS’ agreement to create a BRICS bank back in July 2014 is one important indicator.Basically the Bretton Woods agreement is being dissolved.We are now converging to a basket of currencies instead of a single US dollar, in which the YUAN would be the currency with the highest weight I believe.Even against bitcoin, it seems that the Yuan has the highest volume.http://www.coindesk.com/yuan-trades-now-make-70-bitcoin-volume/

So yes the USD is maybe the most referred currency or the most quoted currency but certainly not necessarily the most important one in terms of liquidity or trade volume, imho. That should be taken into account when we need to consider other currencies to peg to.

Agree with you and some others that there are some cracks with US dollar recognition as a world reserve and that from a technological and rational perspective we should probably move to a basket of currencies or goods. However in that case we would loose the convenient 1:1 currency peg, which is very practical. There is also still the emotional value attached to an US dollar contrary to an anonymous basket of currencies or goods. Therefore it requires a totally different marketing strategy.
I think we will need another currency, and the Nu system can support that within the same infrastructure, but it might be a bit too early to bet on two horses when we can only afford to have one running. This might change in the near future though.

[cryptog]

There is also still the emotional value attached to an US dollar contrary to an anonymous basket of currencies o

That being said, I totally agree on the fact that pegging to USD makes a lot of sense from a marketing standpoint and it should be the point of focus for a while.