According to inflation rates, there are three types of currencies.
1)inflated. eg FIAT, loved by central banks
2)deflated, eg, gold, bitcoin, loved by liberalist? gold fans
3)relative stable buy power curency, advocated by Hayek.
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Just check the period where BTC went from 200$ --> 400$.
Nu was in better shape than it is now where BTC is “stable”?
I think that the low NU transaction volume started the time where ALP and MLP
were missing from Poloniex and only Nubot gateways were keeping the peg with a 2-4% spread!
That is why i agree with JL, although i have little experience in economics (in fact what i have learned is from this forum!)
And it is very possible that our efforts to keep the peg had an impact in liquidity operations.
Moreover, don’t expect the use of Nubits for payments even for some more years!
All my friends still have the same old question "how can i be sure that they will buy my NBT back at any time and in any quantity?"
No answer to that, yet!
Still riding the learning curve 
Start small, think big is my answer. Depending on your disposable income it is relatively safe to have some ‘change’ in your wallet. Just start with what you had cash in your wallet 10 years ago or ask your parents for those who never had.
Motivating people to hold some cash and showcasing them how quick and easy it is to spend will go a long way. The challenge (cost and effort) is still on exchanging the fiat you earn quick and easy into NuBits.
Having said the above that is the mid to long term strategy. Short term liquidity is the indeed the answer I believe. I just struggle with the cost of it and there are barely benefits in the short term. We have to play short term losses and hope for long term gains. Tough and possibly rough game indeed.
I do believe in decreasing the spread to <1% for a first tier which represents up to 75% of intended liquidity on a pair. The other 25% should have more friction/cost and can be up to 1.5%. The latter can be provided by tiered ALPs or Nu funded NuBots/PyBots as we have now. This doesn’t need to increase the costs significantly when keeping the target liquidity on Poloniex roughly the same.
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Good question. But before NBT becomes a storage currency, why not use it as a payment tool?
There are huge content on the internet, every day when I check some papers, articles, and post thread on forums, download something from forum, I am usually asked for “credit”,“points”,“fuel” etc. With unhappiness, I have to deposite some USD via paypal to buy those ridiculous “gasoline”. In fact all this can be replaced by NBT.
if Youtube is far from us, let’s talk about the adault website! When you pay several bucks for something on internet, you don’t care about the long term pegging safety, as long as the content providers can transfer their NBT to FIAT, they don’t care either.
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The higher the liquidity and the lower the spread, the higher the resulting costs.
Liquidity creates no revenue. Revenue may be made from the spread, though.
So there’s need for a spread that is high enough to compensate the costs of liquidity provision at least in parts.
The vehicle is moving forward. The tank is not exactly full at the moment and we try to reach a destination. We are on fuel-saving mode and for good reason.
High liquidity at low spread doesn’t necessarily create demand for new NuBits to be sold. It might just cause more trading.
Trading at exchanges creates no revenue!
Using NBT for transactions creates revenue.
That’s currently the only revenue model Nu has.
Other potential revenue models like lending aren’t even modeled!
But even if increased liquidity creates demand, selling additional NuBits creates additional liability for which we have no insurance and NSR buybacks in the illiquid NSR market caused surges of NSR rate.
So NSR buybacks are currently not the ideal instrument to avoid BTC volatility.
…the risks of an increased liquidity provision stay reduced.
Nu needs to do some homework, before it’s wise to increase the liquidity at a reduced spread.
One part of that is to find a sweet spot at which Nu (or the LPs) can make some money from the spread to compensate the costs.
That requires data we currently don’t have.
Other parts of the homework are ways to control the risks caused by Nu’s liabilities
- BTC volatility insurances are required
- alternatively/additionally the NSR market needs more liquidity (to trade BTC for NSR back and forth without loss from moved NSR rate or spread)
Even B&C Exchange can’t fix those two important tasks out of the box!
The spread was much smaller.
I need to look in the old logs, but off the top of my head I dare say it was most of the time <1% and only after I realized that I can’t keep sustaining that alone up to 2%.
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Having T1.1 at <1% (maybe even much lower), T1.2 at >1% makes sense.
But I’d like to put the weighting upside down: 25-40% on T1.1 (ALP), 60-75% on T1.2 (Nu funded bots).
Those who are in a hurry to trade big amounts of NBT may pay a price for that (buying/selling into the T1.2 orders).
A considerable amount of liquidity is always available at a low spread.
This way Nu can provide a tight spread by decentralized liquidity operations (ALP) while providing backup (that actually might compensate big parts of the costs by the spread) through Nu funded liquidity operations.
Just for the record: T1.1 can be provided by Nu funded operations, but that is a different matter.
This is an attempt to evaluate that: [Passed] Dual side gateway at hitBTC by masterOfDisaster
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Glad to see more and more talking about the revenue, but sadly Nu has little revenue now.
If Nu is in short of profit to pay for the LP, situation is very serious. Then let’s take some drugs, several years ago, my mind was blow off when reading an article about the internet porn industry, saying (in 2006)
General pornography stats
Every second 28,258 users are watching pornography on the internet
Every second $3,075.64 is being spent on pornography on the internet
Every second 372 people are typing the word “adult” into search engines
40 million American people regularly visit porn sites
35% of all internet downloads are related to pornography
25% of all search engine queries are related to pornography, or about 68 million search queries a day
One third of porn viewers are women
Search engines get 116,000 queries every day related to child pornography
34% of internet users have experienced unwanted exposure to pornographic content through ads, pop up ads, misdirected links or emails
2.5 billion emails sent or received every day contain porn
Every 39 minutes a new pornography video is being created in the United States
About 200,000 Americans are “porn addicts”
All sites in the world, 12% of porn sites, which means that there are about 24,644,172 pornographic websites. According to Google’s advertising services, Double-click statistics, traffic and data traffic porn sites is extremely impressive, before the global unique visitors 500 sites, dozens of pornographic Web site. In all search engine requests, and one-quarter are related to pornography, in all Internet downloads, more than a third of all pornography. The world’s largest monthly visits porn sites Xvideos is staggering 4.4 billion. Users on pornographic websites far more than the residence time of the residence time on the news page, because the porn sites tend to offer more video.
No, this is not moral, but if Nu is really in need of revenue, just contact them because that industry is very fond of new technology.ie New technology Pioneer! Below are the new technologies supported by this industry and become popular finally.
Broad Band internet access( 1990s to 2000)
Online Payment (in mid 1990s!)
Online streaming media player(2000s)
O2O (online to offline)
VR (now!)
Porn also promoted the development of the hard disk industry. The first use of porn sites or spam, pop-up ads, malware, browser hijackers, and other technology, domain name hijacking “pioneer.”
I don’t know whether it’s legal in some big countries, but this is the last resort before Nu starving to death. Reasons are below
1)People browsing this kind of content usually want to be anonymous, any leaking information of ID, email address etc is joyless.
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Some people may not view such content for months, but still need to pay fee monthly. What they want maybe just pay for what they are interested.
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Website owners are among the most new tech welcomer.
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People usually don’t care much about the price(1$ vs 1.1$)when they find a favorite video.
So we can just develop a browser plugin that connect to NBT wallet, so that whenever customers wanna get content, just click the mouse and payment done for specific content. Of course, we may negotiate with the website owners that 3-5% of payment is destroyed by default.
Is this the potential big revenue for Nu?
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And don’t forget that once BitBay is pegged, Bitcoin investors hedging their profits by converting to BitBay will cause the volume to skyrocket!
What better way is there to do that now? Nubits has issues.
From: https://bitcointalk.org/index.php?topic=1456464.0
Can anyone verify this rumor?
For the record - the rumor is here:
https://bitcointalk.org/index.php?topic=1456464.msg14802728#msg14802728
That is ok as long as not everybody is selling NuBits at the same time, which is the case.
Example:
at one point in time, one whale buys 1m NBT when 1BTC=1000NBT, (Nu gets 1000BTC)
Several others buy 6m NBT. (Nu gets 6000 BTC)
Then at another point in time, the one whale sells back 1m NBT when 1BTC=400NBT.
The other several whales do not sell back (Nu gives back 2500 BTC, so Nu needs to take 1500 BTC from the 6000 BTC which is fine)
Right now we have say 100k of buy side liquidity but with 700k NBT in circulation.
We should be already dead if every holder sold back.
But we re not because not everybody is selling back at the same time.
Have you ever wondered why?
It s strange but oddly enough it is a fact.
This is why a fractional reserve works and this is why we can make revenues.
And this why I do not see how Tether can make any revenues significantly because it is 100% reserves backed.
Nu should be very profitable because of its very fractional reserve, because we do not need to be able to buy all NuBits in circulation at the same time.
I disagree. Liquidity should create revenues, much more than tx fees.
How?
Quantifying the bottomless nsr reserve is not an easy thing to do. To call us a fractional reserve implies our nsr reserve has no value.
1） Nu can be attacked intentionally by suddenly dumping lots of NBT bought long before and spreading the rumor Nu is insolvent. Of course, Nu need to be worthy of such attack at first.
- Partial reserve is OK as long as Nu has sufficient revenue to pay for liability in relative short time period. However, if Nu has little revenue or gambling on btc price, it is ponzy scheme. Cannot last long.
The more NBT nu sell, the more liability(NBT)and asset(BTC), it’s hard to predict whether profit is more or less.(depending the btc price changes)
Directly keeping BTC from selling NBT as PROFIT, equals to zero basic accounting knowledge at all. If Nu shareholders are confident magician who can make money from nowhere or play NBT<–>NSR shifting, let them continue, I’ve already quit.
Essentially, if someone bought NBT long before then they are most likely an ally not an attacker. Even if they are an attacker, their attack is basically just loaning Nu money, so it’s not too difficult to repel with just some good liquidity to absorb it.
There is a concept here of an individual owning a large portion of the NBT debt. As we have developer funds and B&C has some NBT, owning a large portion ends up being in the hundreds of thousands. This is a big number for an attacker to use. Not impossible, but it’d have to be quite coordinated.
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exactly.
So Nu sends a message to the freemarket
Customers, if all of you sell NBT, I will die! And if you are late in selling NBT while others do it earlier, you have empty hands!
OK, what an exciting message! Great potential of bank run. Bad thing will happen if Nu use up its fund and provide less liquidity. High risk tendency customers may use NBT temperorily, but low risk tendency customers(like me) don’t buy NBT at all.
Where are the financial reports for Nu company in 2014 and 2015? No one knows the cash flow, liability-asset balance? Is this the way you running a company? The blockchain based transparent company?
I mean, i am in the process of making a shareholder pledge that literally says that shareholders will keep attempting to pay off their debts by diluting at a constant rate of 25mil nsr/3month. You are strawmanning Nu, it’s very easy to call a system flawed when you ignore the solutions staring you in the face.
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Sorry, what I said in 16 May becomes truth, I cannot believe it.
The solutions starring me in the face…
So Nsr are fiat shares?