Have fun!
I am curious about Jordan Leeâs ideology, it seems he like â1984â, perhaps âRoad to Serfdomâ also his favorite, but his product, NuBits, is completely controlled by the federal reserve, which is Keynesâs style.
I think his motivations for NuBits being tied to USD are ones of practicality, as USD are the dominant world reserve currency. I get the feeling he is perhaps less of a fan of inflation than pure Keynesians, but only he knows for sure.
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USD is the best reference substance, better than EUR, CNY, GBPâŚjust need a little anti-inflation revise, then Nubits is perfect.
How about burn 3% NBT every year for NSR? We will become the first good money in history and get rid of the accusation of being FEDâs flunky.
Sunny King is also a libertarian with comment on NuBits in #114 weekly report.
Weekly Update #114
Since the release of Nubits, the exchange peg of nubits to USD appears to be working so far. It must be noted that, the fact that due to the peg itâs under political control (fiat inflation) to some extent, is actually quite superficial. This is because, the pegging mechanism can be used to commodity money as well, especially gold. The fact that the project issues USD equivalent first is likely a market driven decision, as USD remains the dominating currency in the world.
Also, Nubits inherit privacy features of bitcoin, thus having privacy properties very close to fiat cash. Letâs recall that during Internet 1.0, David Chaum had a project known as digicash/ecash, which focused on anonymity of digital fiat. The project failed primarily due to political obstacles. But it was a big deal back then, as that was the only known way to preserve privacy in money at the time. That was before bitcoin brings decentralization technology to the market. It is decentralization that allows the market to freely launch currency projects without official support from banks and governments.
Notably, Nubits now has achieved similar goals of ecash, despite having different compromises in its properties. And thanks to decentralization, nubits is now circulating in the market, while the other pioneers of market-driven digital currencies, ecash and e-gold, languished in the footnote of history.
Chronology:
1995 digicash/ecash, anonymous digital note
1996 e-gold, digital gold note
2009 bitcoin, decentralized digital currency
2012 peercoin, energy efficient decentralized digital currency
2013 peershare, decentralized autonomous/anonymous company
2014 nubits, decentralized pegged digital note
You see, SK worried about our pegging with USD whose value manipulated by FED, because political control always lead to inflation which is a way of robbery.
Serious history of FED
One needs to tread carefully here. The âbackingâ occurs at the exchanges and at present these are operating primarily with Bitcoin. This means the peg involves an intermediate step: USD <â> BTC <â> NBT. If the value of BTC were to collapse to zero, that link gets broken and NuBits would likely be in serious trouble.
The BTC link is not essential and can be corrected of course, but it does illustrate a conceptual problem. If NuBits were to be pegged to gold or a basket of commodities, how does this backing get implemented? The fiat banking system allows USD to migrate to an exchange through a sequence of slow and expensive digital transfers. Although itâs inefficient, the real USD to back NuBIts are there, in principle. How would this happen with an arbitrary commodity? Would it be via shares of an ETF such as GLD? Would these shares sit on the exchanges? If not, then someone has to hold physical gold somewhere or else the notion of backing is invalidated.
A selling point of NuBits is that they are backed by real USD, even though liquidity is facilitated at the moment by BTC. If the NuBits backing gets replaced by a commodity, the logistics to implement this will add a significant layer of complexity and risk.
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Crypto should be backed by other cryptos and fiat. The commodity such as gold/silver/crude oil etc can not be directly used to back NBT unless they are electronized.
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That is true. I think real inflation-protected cryptoasset is several technological steps away from reality. However the difficulty is being chipped away: e.g. see Bitreserveâs digital gold and oil.
I am still waiting for an answer from OP about liquidity pools
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@sportscliche That is a very good point. That is why need nubits to be adopted by btc-e or cryptsu as a second step, and then eventually by Kraken or Bitfinex. Bitstamp is too bitcoin-centric.
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That would be great to have @Benjamin update on his analysis of the current economics of Nu after all those improvements.