Nu is a great experiment that illustrates what kind of decentralized governance a PoS blockchain can do.
The biggest drawback is that most contributors are anonymous and this impacts a lot the confidence that people can put into it. As a direct consequence, people do not buy NSRs as they buy Monacoin for example, so the price and the liquidity remains meager.
Then it gives little incentive to the professionalization of minting=securing the network by holding shares.
This is related to what @Phoenix tells regarding the amateurish liquidity team that maintained the peg before it fails (i was a part of it) .
I hope the efforts to create a real team of dev in Vancouver proposed by @Phoenix to @jooize will help make the project public.
If we want to get big, we need a professional public team that is held accountable for their mistakes and actions.
@cryptog it seems then that NuBits is moving to a more centralized model, at least for execution. Some of the posts I have read express some concern over the level of decentralization. Yes, governance is decentralized via a PoS blockchain. But some in the community seem to be concerned that the majority of the shares are concentrated in relatively few people.
@Phoenix mentioned that the shares were available to anyone in public open markets. To me, that speaks to the fairness of the process not the extent of decentralization. @Pheonix seems to be arguing anyone could have bought NuShares, therefore those that did buy have every right to use them. That sounds right to me.
But I think there is a separate issue as well: the extent of decentralization. In an extreme case, you could have shares sold openly but only one person chooses to buy. That system may be fair, but it wouldn’t be decentralized.
I am curious how others think about this issue. Especially given the rise of other stablecoins like Tether that are explicitly centralized. What are the pros and cons of decentralization for stablecoins? How does that affect the future of NuBits?
There was a time when many people involved did not expose their real name and identity. Those days are gone, as they should be. I believe I am the only person regularly paid by Nu that doesn’t have their real name associated with their work here. Remember, I don’t hold any shareholder funds. No one can hold any shareholder funds (so far as I am concerned), even as a multisig signer, without letting us know who they are, among other requirements.
I agree completely.
Decentralization really matters, but there are more important matters, like meeting our customers’ needs. It is one value among many. Bitcoin wasn’t decentralized when it was small. All these blockchain networks start from a single point. They require growth to acquire decentralization.
There have been lots of people who have loudly screamed for more decentralization. Ironically, these individuals have been instrumental in concentrating share ownership by decreasing the NuShare market cap, decreasing the number of NuBits in circulation and shrinking the community. These voices have shrunk our community a great deal on at least two occasions: by abandoning the peg and starting a separate chain purported to have better distribution, by excluding NuShare holders that voted to support the NuBit peg. It is far from clear that such a method will produce more decentralization, and indeed it has not seen any success. The new chain, Augeas, is inactive and illiquid. We must conclude many who have advocated for decentralization on this forum are either stupid, incompetent or have ulterior motives. I suspect all three are the case to some extent. When someone wants to be involved and posts to the forum a great deal but has no NuShares, they tend to feel unempowered and they express that by complaining about the lack of decentralization. What they are really saying, in many cases, is they would like more power themselves. But nothing I have seen these people do promotes decentralization. Take Sentinelrv, for instance. He has complained about a lack of decentralization. His solution? Sell his stake. Many others have done they same. Of course, this will only decrease the degree of distribution.
I have always said the only practical road to robust decentralization is growth. It will surely bring more decentralized ownership, and I doubt any other approach will be successful. Those who have advocated most strongly for decentralization on this forum are the very people who have effectively opposed decentralization with their own actions.
can you reveal the names of the paid contractors?
I wanted to send a thank you out to @coinforward for his article on NuBits. It demonstrated an excellent understanding of our unique history. It was quite even handed: a solid piece of journalism. I would like to see more of you around here @coinforward.
There are a couple clarifications I would like to make that pertain to the article. Since September 2016 the peg has been more stable than the coinmarketcap chart suggests. There are some very brief and large spikes and drops in their chart, but with very little volume. A real price swing of that magnitude and speed would bring high volume. They are just bad data points. Some exchange listings of NuBits are supported by liquidity operations, some are not. Occasionally an unsupported exchange listing will have a tiny size trade far from the peg price. Smaller deviations appear to occur regularly but don’t actually happen at all. They appear in the chart because almost all our NuBit exchanges occur for Bitcoin. No agrees exactly on the price of a Bitcoin at any one moment. We have a way of calculating that using an average of prices from a variety of exchanges. Others, like coinmarketcap, will invariably use a slightly different method, sampling a different set of exchanges to understand the Bitcoin price. It is the disagreement about the Bitcoin price that causes coinmarketcap.com to suggest our peg is slightly above or below $1.
Finally, the motion to fire me had less than 10% support. There are quite a few people who post on the forum who are frustrated with me. They are mostly the people who got left out when we decided to use a smaller group of highly professional people. Regardless, I am much more popular with shareholders (who hold the power of the purse) than forum content suggests.
Thanks for your response and for helping me understand NuBits better. I have updated the post to include a reference to you your response above.
This saying is a bit unfair, many of forum members are BTC fans, and decentralization is their belief.
For Nubit.
Good Decentralized Liquidity > Good Centralized Liquidity > Bad Decentralized liquidity > Bad Centralized liquidity
decentralization is always better than centralization as long as both are “good” or “bad”.
If Phoenix&Jooize corrupt now, and run away with all the money, this is called “Bad centralized liquidity”, this is the worst result and totally a crime.
Nubits FLOT multi-signatured group is something like bad decentralized liquidity because they were slow acting and had less understanding of Nubits mechanism–“Liquid Engine”.
Now Nu is centralized in liquidity, and phoenix & jooize are honest, this is called good centralized liquidity. This is better than FLOT.
The Nu’s future depends on whether we degrade into bad centralized liquidity or achieve the best option-- good decentralized liquidity.
I have brought a design of good decentralized liquidity(modified Hayek model), but still no enough support from this forum.
I must conclude many who are not interested in Hayek model on this forum are either stupid, incompetent or have ulterior motives. I suspect all three are the case to some extent.
Thanks @Sabreiib for that thoughtful and insightful post. I agree with almost everything you have said, and I think what you are saying is important.
There are just a couple clarifications I would like to make:
I am sorry if my previous communication lead to misunderstanding. I am not suggesting holding decentralization as a value is incompetent. Rather, I am observing many key forum posters that have expressed decentralization as something they value highly have actually effectively opposed decentralization with their actions.
Decentralization has many characteristics. Some are good. Some are bad. Whether particular characteristics are good or bad may depend on the context a great deal. Consider the present context of Nu: our blockchain protocol to control creation of assets and authorize blockchain transactions is indisputably purely peer to peer, with control shared by all NuShare holders with at least $25 of NuShares (at today’s price), in proportion to the size of their NuShare holding. The protocol can’t be decentralized further, without doing something that would remove Nu from the realm of proof of stake. I haven’t heard anyone suggest our protocol needs to be decentralized. That is really important not to lose sight of. When I became Chief of Liquidity Operations and created a hierarchically organized group to provide liquidity, I didn’t change the decentralized blockchain protocol in any way. In fact, I presided over a radical dilution of NuShare holders by more than tripling the number of NuShares circulating in 2016 by offering them for sale in completely public venues, accessible to all. The current degree of decentralization of NuShare ownership could only be limited by the number of people interested in putting up $2 or more for a stake.
So when we talk about the lack of decentralization at Nu, we are talking about what is going in one department that decentralized shareholders have consistently supported though our decentralized blockchain protocol. Now back to the notion there are some costs and problems with decentralization. One of those is expense that comes from redundancy that is inherent in decentralization. A second is that participants tend to be less informed and have less expert knowledge as decentralization matures. Thirdly, participants in decentralized systems tend to have less at stake than in centralized systems. These three drawbacks are key to understanding why liquidity operations needed to be centralized in recent times.
Every liquidity provider and multisig signer must be paid one way or another. With robust decentralization, that can be really expensive. Nu was spending a large share of its operation costs on this two years ago. Despite the high expense, compensation to each participant was quite insufficient. We didn’t pay enough to get reliable, professional people with the kind of economic knowledge they need to make decisions about how to operate in NuBit markets. It surprised me, but it appeared no one involved had an understanding of how the market would react to various market interventions. I understood those dynamics due to my professional background, but failed to comprehend how specialized this knowledge is. We discovered monetary policy, even something as simple as maintaining a peg, requires expert guidance. Paying even a few people with this expertise is completely unaffordable at this time. Even I am part time. Esko and I have a great deal at stake. How about failed signers like @woodstockmerkle and @masterOfDisaster? We don’t know that they had anything at stake. That was a mistake. We allowed the founding principle of the network, proof of stake, to be violated.
So, decentralization adds certain types of strength and reliability. But it is also presents a host of risks and costs that have to be managed. It may be that the costs of properly mitigating those risks is greater than the benefits of decentralization in liquidity operations in some contexts. That doesn’t mean it will always be that way. It depends on a variety of factors, perhaps the most important of which is the quantity of resources that can be brought to bear.
The decentralization of handling shareholder funds is at hand: I aim to have multisig signers who prove a stake in NuShares, are dependent on Nu for their livelihood at the present time, have a proven history of responsible and compliant actions, have clear and well thought out contracts with shareholders, will subordinate to expert decisions, demonstrate a commitment to contract law, have a human relationship with one another, among other things. It is a demanding list. It is a complicated undertaking that takes time. I understand that delaying an implementation brings large risks, as does a poor (and rushed) implementation.
Recently, things like reviving B&C Exchange and hiring new people to work on Nu’s problems has been a higher priority to me. Everything takes longer than anyone would like, including me. To all of you who care, please consider creating solutions rather than complaining about some problem we haven’t solved yet. Remember, our decentralized governance model will empower and compensate anyone who can convince shareholders they are bringing value to the network.
I suspect you are being a bit too impatient. I think there is a lot of support and interest. It is a big undertaking, among other big undertakings that are splitting our attention. I can tell you Esko and I have had detailed discussions about Hayek money and our options for implementation of one, in just the last week.
I don’t recall you presenting a design with enough specificity to be suitable for implementation. If I missed it, please link to it.
It is a medium term objective of mine to release a currency on the Nu blockchain that is both more stable, and maintains it’s value better than USD or CNY (and USNBT and CNNBT). There are many details to attend to. I wish I could get it done faster, too.
@Phoenix, remember when you gave away hundreds of millions of NSR to people, some who did nothing more than support you verbally here on the forum? You are the last person here that is qualified to speak on decentralization of share ownership. That is a big part of Nu’s history that I’m sure you are not proud of and didn’t mention in this public interview.
This statement is partly greatly exaggerated, and partly simply incorrect. If you would review the facts available to the public on this forum, you will find that there were I believe 2 people (maybe 3) who were rewarded for their helpful contributions on the forum. I’m pretty certain the aggregate reward for those individuals was less than $1000 USD in NuShares, and less than 2 million NuShares. Therefore, while you claim it was “hundreds of million of NSR”, it was, in fact, hundreds of thousands of NSR, and for a different reason than you have claimed.
Why are you so determined to so grossly twist the facts against me and the integrity of the project?
Because I do not feel this project has had the level of integrity you claim, with your own twisting of the facts. It happened, as you have admitted, which is something that should be written forever into Nu’s history.
Feelings are not very helpful in bringing us to understand the truth. Many people are angry some things didn’t go as expected. You might be feeling that. I have certainly felt that. It is common to blame the most prominent target, though a more thorough investigation would show that I am solving the serious problems created by multisig signer misconduct in 2016. It is a process, but there has been great success, with the NSR market cap and NuBit supply both recently reaching new all time highs.
It is time to stop being angry. NSR is up 1600% this year. Normally, that is considered a phenomenal performance. Surely that should dispel some anger, or does it need to be 16000% annual return before you will be satisfied with progress?
phenomenal in your terms, disastrous in grounded peoples’ terms. I am too lazy to look it up, but @Phoenix himself non-stop repeated how important NSR liquidity is for the whole liquidity system. Then let’s measure his performance in the terms he himself defined.
I am not sure whether we are climbing the ranking up or down with you (@Phoenix) in full charge. Let’s assume we are climbing up: you are so phenomenal that we could even soon overtake FuckToken. Congratulations. For those who are confused by the weird ranking (Fucktoken vs Applecoin) - they first rank according to market cap and then after Applecoin there is a cut. That’s where the absolute shitcoins start with public interest approaching zero, which is represented by the literally non-existent volume. We are proud of you @Phoenix, without you all this would not have been possible.
@coinforward as you are an outstanding journalist, please draw a complete picture and let your followers know that this coin is literally dead. If you like how @Phoenix talks, you could use one of his favorite sayings, which goes like this: “The market has spoken”. I would be willing to pay you the same amount of money that @Phoenix paid you to write the article.
@MaVo you know the volume figure you pictured has no relevance. Neither is it accurate. Why did you decide to use it? Which of our competitors is paying you to do this?
I am self-employed, mentally healthy and morally consistent. Who pays you? I can tell you who did: I did. $20,000 for BKS that you put straight into your pocket.
And you know what? Come on, let’s argue about the volume figure. Tell me, what is the volume, the most important aspect for the liquidity engine to work. How much is it? I would use a percentage figure if I was Phoenix to let everyone know, because it sounds more impressive (although it is misleading of course). Let’s take $3,000 as an example because of the buybacks. I said it’s roughly $50. Jesus, that is 6000% of what I actually said! Ok, Nu is good to go. In best shape ever!
Edit: but you must still admit that we still can’t compete with AppleCoin.
The truth is not available to us, so we can only rely on feelings and gut instincts. This is how you have structured Nu. If you don’t like people assuming things about you, then do something to change it instead of consistently making the governance problems worse.
This link has most my design for Hayek model.
Hayek model solves two big problems of liquidity engine.
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No need to pay decentralized LP, let them earn their own living, e.g low cost.
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No need to dilute (early) shareholders. We must make the share price higher and higher, otherwise the early shareholders may rebel, this is dangerous for a child company.
In 2015, I invested 130 BTC into B&C, if BKS price is as good as BTC (more than 20X higher), I may consider retiring and put all my energy into B&C. See, we must make early participants rich, this will help our project just as BTC did.
In 1976, F. A. Hayek designed an excellent mechanism to issue private & stable currency, we just need to “port” it into cryptoworld. His thought is way better than BTC’s fixed supply.
Here is a link for people researching Nu and it’s history: [Passed] Performance Bonuses for Peg Restoration