NuNet chain revenues and exploring opportunities like NuBase

The Plaza
#1

In this post I’m exploring new opportunities and revenue streams for NuNet. I’m interested whether NuShareholders would support investments in areas other than providing pegged currencies.

Introduction
I have been triggered by the discussions in the last 12 months and more recently why we are not paying dividends. The main reason is that Shareholders have chosen for a shares buyback scheme. That way the value won’t be leaking into other chains and stays with Nu which seems reasonable to me for now. But where does our revenue come from and are there other opportunities to create more revenue and potentially dividends?

Current revenue streams
Let’s have a closer look first at our current revenue streams.

  1. The main revenue stream is selling NuBits for BTC. The BTC received for selling NuBits are used for the buyback.
  2. Transaction fees. The transaction fees are automatically burned by the network. Practically this means that when the demand stays the same we can sell 1 NBT for 100 transactions assuming the current fee of 0.01 NBT applies.

In the future by kickstarting other currencies like SDR and NuEuro more profits can be made by selling these for BTC or NBT. I deliberately mention NBT as it is likely that a certain percentage of NBT holders will jump ship to another currency on the Nu blockchain. So we have to be cautious about forecasting profits for releasing future currencies.

Opportunities
In the last few months the blockchain technology has been popularised a lot and many companies are looking into it. However the trend is for companies/banks to establish their own chains. Just check out what is happening within NXT or with the whole discussion around sidechains within Bitcoin, child chains and other variances of cross blockchain technology like within Ethereum. Could the strong and trusted Nu network present a similar offer? As everyone knows it is not easy to set up a blockchain. To do so you will need nodes, a blockexplorer etc.

Most companies don’t need a currency or another full blockchain though, they just need a publicly verifiable set of transactions stored in their database. However they still need nodes or blockexplorers. They are generally not interested in that type of infrastructure. The infrastructure is what we happen to have with NuNet or to me it appears we can relatively easily create on our own Nunet blockchain. Basically a token as a service, but a bit more than that. Is that a viable business case? Maybe.

NuBase example
So let me introduce the concept of NuBase, a kind of transactional database on NuNet available for anyone who can afford to pay some fees (see below) but won’t have the capacity to set up a secure blockchain with all required assets as nodes and blockexplorer for themselves. One could buy an instance of NuBase. Here is an example. Let’s say Bob wants to buy NuBase for his company tracking ownership of Bobmeters. Bobmeters are used to track the meters people travelled using his helicopter service. Bob’s NuBase chain would just be another currency on the NuNet blockchain. The currency would be Bobmeters. A number of Bobmeters are issued by Bob when customers have travelled. They can be redeemed by his customers for future travels. Bob can also issue Bobmeters as gift cards redeemable for his services. As an additional service Bob also provides the service to exchange the Bobmeters for NuBits on the B&C exchange.

Fees
The above is just an example, other services like notary services and message services are also possible. The key questions are what kind of charging model would work for Bob and what kind of other services would Bob require to make this a valuable and attractive service for him and make him buy a NuBase instance on NuNet?

Would NuNet charge Bob for the creation of his token and a monthly fee thereafter? Besides nodes and a blockexplorer Bob probably would need an application where customers can find their balance. This would require developer services. A way around this is to offer standard packages for e.g. customers rewards like Bob’s example, notary and message functions. Should we offer those packages together with a NuBase offering? That would of course require an upfront investment in development and marketing. Can we afford that?

Blockchain size issue
Another challenge is when adding new services to the existing blockchain is that we need a prunable blockchain. The blockchain size would increase significantly. Honestly I think we should have this in place with the introduction of the new stable currencies anyway as out blockchain size is already growing rapidly. A temporary workaround is to provide a torrent blockchain from a trusted source which downloads seamlessly when starting the wallet for the first time to kick-start the initial download process.

Feedback
I’m keen to hear the feedback from other Shareholders regarding a concept like NuBase. Should we invest in this type of commodity market or should we stick to providing pegged currencies? And if we should invest in it what would be the timelines, should we be leading by starting now or should we be followers picking up this potential market later this year.

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#2

Why not offering a pre-made peershares instance installed on a VPS and ready to run, a peershares wallet and a stripped down nuexploerer (with custom branding and theme)?

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#3

Sounds nice. However with your own instance you still have to maintain the code (the nodes) and run them. Something many people are not interested in. My proposal, NuBase, is to lower the bar further and provide a service without the maintenance hassle at the blockchain level. All the updating of clients and maintaining the security (POS difficulty) is already been done by NuNet, why would you try to do that yourself if you can piggy-back on an existing network?

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#4

I am not sure the return to Nu is worth the added complexity. Do you want to hold shares of a bank that also provides utility (blockchain) to a helicopter company? Better create a super company so that the bank and the heli business are separate – even that doesn’t sound good.
Peershares is the perfect level of blockchain-as-a-service template to support all sorts of businesses. However the problem as I understand it is that Nu has had a lot of popular improvement not in peershares, so peershare looks a tad obsolete.

#5

I suppose there is a price for that, what would be attractive for the Shareholders still attracting 3rd parties on the chain?

Spot on, that’s why I think there is a market for NuNet.
The price is probably close to the price of the number of hours x rate developer to update the Peershares code and then to maintain it going forward and keep a number of nodes running. Anyone willing to try to make the calculations?

Edit:

I think the comparison is a bit off. An ISP also offers their services to many different companies. I’m holding Shares in a blockchain infrastructure with a DAO on top, but why not renting out the blockchain to other DAOs?

#6

Then you are talking about the super company I was refering to. If Nu can market its infrastructure and techno dev teams, it would work.
Actually the fact that B&C is seen as a spin off rather than a sub-entity of Nu shows that if the business can take off as you described it will likely become a spin off (with possible deals for nushare holders) like B&C.

#7

The main reason I believe why B&C was separated was because of the funding. Apparently it was easier to raise funding for a separate entity and besides it apparently needed a separate blockchain anyway.

I’m looking for a way to monetise the assets of NuNet (mainly the blockchain and the nodes) on an ongoing bases to cover the considerable maintenance costs we have for the peg and ongoing development. Even better would be to provide some dividends assuming we are able to make it profitable.

@mhps appreciate your responses, but I’m slightly underwhelmed by the lack of other responses. Will take it as a signal that Shareholders are not interested in this. Too hard?

#8

This is kind of heading in the direction of NXT right? Where anyone can create assets on the blockchain and track them They have a pretty advanced system for it that is already far more flexible than anything we could compete with. Their client is built from the ground up using java with HTML5 interfaces. It’s far more agile to develop on than what we can produce with our current set of resources. Basically I think there’s a lot more technical reasons outside of just the blocksize that would prevent us from being competitive in such an offering. The blocksize one is a big deal, and managing extra assets is something that we haven’t even attempted yet. In the current scope it would require developer intervention to add them as well.

I love the idea of it but I think we’re very far away from being able to implement it, and there are already lots of competitors in that space of “create your own asset”. NXT, Counterparty, etc. We still have a lot of work to do in regards to liquidity management to keep faith in the core of our project as well.

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#9

This is where Ethereum, BitShares and NXT are heading to name a few big ones and they have their reasons a few of them I mentioned in the OP. BTW not aware of Counterparty you mentioned, but I suppose they do.

I recognise that we have limited resources as all networks have. But therefore it is even more important in assessing what we are focussing on. At the end of the day it will need to be profitable or at least have the ability to be profitable in the future.

Agree that we need to invest in the core first before branching out further, but I’m a bit unsure if that would be enough. Maybe you are right and is my proposal rightfully in the too hard basket in the views of many Shareholders at least for now.

I’m still hoping though that we can monetise our assets one way or the other more than just selling NuBits or other pegged currencies in the near future. Hope that we can find other opportunities to do so.

#10

I think we should figure out ways to leverage the unique aspects of our network. The stability of NuBits and expendability of our tokens. I think those elements allow us to generate profit for the network right now without any extra development or a shift in project focus. My burning API was a suggestion in that direction but it’s a solution looking for a problem from a lot of the feedback I received.

How do we find a use case for people to destroy NuBits? If we find a use case, the network starts generating profit immediately. Without any extra development work, or resources. In fact it would increase our ability to develop because the network would have extra liquidity to attract users with dividends, increase value of NSR with share buybacks, or spend the surplus of liquidity on advertising, development, or anything else.

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#11

A lot of people are on a sort of vacation at the moment. I bet the same is true for this community.
I for one am less active here than normally.
I wouldn’t take it as a signal that there’s no interest in your proposal.
Offering services for a fee makes a lot of sense, especially if it’s not easy to get that service anywhere else at a competetive price.

#12

People are more excited if there is an goal within reach. Do you have a business in mind or do you have a plan to attract specific potentially interested business if the shareholders approve NuBase?

#13

Very interesting proposal.
However focusing on increasing liquidity for our pegs should be the priority i feel.
Besides i do not think platforms that are trying to do everything will be successful.

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#14

I find it very interesting too.
Every blockchain can be used for on top applications as counterparty,nxt,ethereum (to name a few) has shown.
I would like to see this happening in NU in the future.
I think that shareholders can guide NU to any direction they see fit, even if it is to abandon peg coins and use DAO for something else, who knows. :wink:
I am thinking that it would be more easy to vote for a specific application using NU net than to vote for a general platform.

#15

Other than the examples I’ve mentioned I do not have an actual entity demanding this service right now. I believe it is an investment in the future to prepare the network for such services. Today I was strengthened in this view by an article about Lyft and their 500M investment by GM. They see a future where car ownership is not a necessity, same as home ownership is not. I think this is the same for blockchain services. There will be a number of trusted blockchain owners renting out their services on a pay-by-use scheme. NuNet could be one of them being trustworthy and decentralised. I don’t see that as doing everything, I see it as one of the core services for successful and profitable blockchain providers in the more distant future.

However I do see that the investments required are not priority and apparently complex coding is still required. I do believe that we should build in the flexibility to provide those services in the future where possible when not necessarily related developments are applied to NuNet from now on. This would ensure sustainability of NuNet in the future.

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#16

This is going in a slightly different direction than NuBase (and in fact more towards the Peershares idea, but as Peershares is not really up-to-date in terms of code, has some other drawbacks, etc.).
Yet it shows that others sense a possible future business model based on offering “Blockchain as a Service” and that’s the marrow of NuBase.

Have a look here:

This is a blog post from Marley Grey (Director - Technology Strategy Financial Services at Microsoft).

Ideas like NuBase to offer a “Blockchain as a Service” product might have a future!

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