People still dont get NuBits (and Bitcoin's issue)


#1

This is a conversation I ve picked up on facebook:

J: “Heard of NuBits yet? We’re a fork of ‪#‎Bitcoin‬ and ‪#‎Peercoin‬ that has kept a $1.00 US price since Sep 2014.”

D: What problem does it solve?
March 6 at 10:03pm · Unlike · 3

C:How would it be possible to profit from future appreciation? If you stay equal with the dollar then it will lose value like the dollar
March 7 at 7:14am · Unlike · 2

J:The philosophy is that you cannot have a currency without stability - So I guess it solves the volatility issue of all cryptos
6 hrs · Like

J:What appreciates is Nushares, Share in the decentralized autonomous corporation that issues NuBits - Anyone can be a nushareholder, apparently.
6 hrs · Like · 1

D: - markets do not reflect “philosophy’s” – if NuBits has kept a $1 price parity it is only because of someone(s) desire for it to do so by buying up available inventory under the belief that it is undervalued. Likely in the hopes that others will have the same sentiment so that they can eventually liquidate their position at a profit.

If that’s the value proposition, then it does not solve any problem on its own – and in fact how could it without the backing of active investors?? The “currency” does not have an independent valuation proposition extrinsic to itself. Without someone hitting the “buy” button the market cap would crumble.

If I wanted something that held a parity to $1 value I’d put my money into a money market fund, not some random crypto with an agenda.
2 hrs · Edited · Like

D:ALSO, the “Nushares” concepts smells like an “unregistered security” – ala “Karmashares” – I wouldn’t touch it with a Feathercoin
2 hrs · Edited · Like

J:Fair enough. Do you have a strategy on how to make a currency out of bitcoin? can we perfectly transact with a commodity that fluctuates in value? ( not just a daily basis, but on a minute basis)
Empirically, data up to now have shown that we cannot.
1 hr · Like

C:Bitcoin is extremely young. It will be volatile. It’s not gonna settle down until it has a much larger market cap. Like Microsoft in the late 80s and through the 90s. The reward will go to the early adopters. Keeping Nubits at parity screams manipulation. Sounds like your saying bitcoins movements make it inviable as a currency. Currencies move against each other. It’s called forex. Just bc BTC deals in odd numbers doesn’t mean much. We will be dealing in millibits or microbits eventually. A bitcoin will be an old unit worth a lot of money
1 hr · Like · 1

D:" Do you have a strategy on how to make a currency out of bitcoin?"

It already behaves like a currency (more so like an equity IMHO but we can talk about that in depth another time).

Instead of having the “tail wag the dog” – restate your underlying goal without naming specific technologies.

For example: As a green grocer, I would like to be able to accept currency from clients, so that I can use that currency to acquire organic products from a farmer who is willing to transact with same.

However if your real underlying question/problem is “how do I peg a cryptocurrency to a stable external benchmark” – then you will need to look at establishing an automated equity management system that holds and trades baskets of goods in order to maintain your parity.

For example, if I create 1M tokens and release them and desire to maintain an exchangeable parity of $1 USD for each token, I will have to credibly (and transparently) demonstrate that I have and hold the equivalent value in other equities, updated in realtime, all the time. That is in effect what a “money market account” does and provides.

Otherwise, creating 1M tokens and maintaining a thinly traded volume to give the illusion that the value is a stable store is fraud.
36 mins · Edited · Unlike · 1


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#2

Or prove that levers exist to change supply (and demand) for Nubits which ultimately results in a 1 USD peg. Without those levers I would be inclined to agree.


#3

Those blind people forget that fiat is backed by nothing per se ( usd piece of paper is bot redeemable for gold) and yet it works well as as a currency.
Blind bitcoiners believe they can create a currency out of a finite quantity of tokens.
Basic common sense tells you that it is non sense. Or they really do not care about stability. Fair enough. You might not care about stability when fluctuations do not go under a price that corresponds to say 100x returns because you bought bitcoins at 1usd but the vast majority of users would cry for even a few usd decrease.
So for the vast of users, bitcoin is useless as a currency.


#4

WARNING: The following is what bitcoin means to me. It is not fact nor a prediction. Also satire is a main ingredient.

I hardly think believing in bitcoin coin makes me blind. Bitcoin isn’t just a currency. It’s also the idea that I can be part of a new era where governments don’t own their people. A time when inflatation doesn’t eat peoples life savings away, or the cost of living doesn’t goes up while wages stay the same. A time where banks don’t gambles people’s hard earned money away just to have it given back to them using money my great great grandchildren will be paying to the tax lords. This has happened over and over and over in history but for the first time ever bitcoin can end the cycle.

My “bitcoin” is probably different then most, but that doesn’t make it wrong. I find it odd that people don’t see bitcoin like I do. Those people aren’t “blind” they just have different bitcoins.

Now you may ask, how this relates to Nubits? While bitcoin may satisfy my needs, Nubits satisfies everyone else’s! I’d be “blind” :wink: not to see a need for a stable cryptocurrency.

tl:dr I believe in both bitcoin and Nu.


#5

Joe, you are a child of Antonopoulos like my self :slight_smile:


#6

I am certainly biased and limited by my own subjectivity for sure. Therefore I am might appear blind to other people as well.
But it s difficult to argue that bicoin is a currency for the very first property of a currency is to be stable.
There is no way bitcoin an become stable unless there is a change in the design that would enable the network to control the supply according to the demand.
So it s a fallacy to advertise bitcoin as a currency and people get that because most of them do not have bitcoin and they are are interested in purchasing some, imho.
So bitcoin is also a very bad store of value unless it keeps going up for ever which does not appear to be the case.
Does it make bitcoin worthless? I do not think so for several reasons

  1. first of all bitcoin is a huge marketing asset for the world for advertising the world of crypto-currencies
  2. second, it plays an crucial role right now for Nu as a pivot currency to produce the peg
  3. third, it represents as you have implied a safety net in case of a catastrophic failure of the current FIAT system.

What a name
#7

I personally disagree that volatility cannot exist in a currency. People in some countries deal with 3 or 4 exchange rates everyday and they get by just fine. As far as storing value, it is not true that the value must always go up. Bitcoin is the only place I can store value without fear of it being stolen by banks or governments. Even if bitcoins value drops I am still offered that unique protection at the price of the value of my holdings dropping. Some people don’t like this, others think it is worth it.


#8

Which countries? Define “fine”


#9

It’s been awhile but i think i meant fine as in economies haven’t fallen apart just because of volatility. Many countries (especially tourist destinations) use multiple currencies. I remember in costa rica I had to learn the exchange rate when bartering with the locals.


#10

have you traveled to Argentina lately?


#11

Yah idk what i was thinking. Pegging a crypto to any fiat currency does not actually solve volatility since the peg is still subject to the volatility of whatever fiat currency its pegged to. I would really like to read more discussion about pegging to a basket of goods.


#12

This is what to do ultimately or ideally but USD is good enough for me.


#13

Is it possible to create a currency pegged to a basket of goods (bog) but initially valued at 1 bog = 1 usd? The goal being it would be initially just as useful as usd and over time become worth slightly more.


#14

No country wants their currency to be volatile. It’s bad for business. Central banks shudder when their currency appreciates because exports become expensive. They rather prefer devaluation like what’s happening in China and Japan. However, they also don’t want their currencies to drop in value so fast because it will hurt the purchasing power of its citizens.

That’s why central banks manipulate their currency in the free market by quantitative easing or increasing interest rates, etc.

Now, Bitcoin with no means of controlling its value will rise up exponentially and people won’t spend it. And then when it swings downwards, businesses won’t hold it. Bitcoin may be valuable as something else, but never as a currency.

I don’t think Nubits is really pegged in a sense because it’s operating in a free market. A peg is when an entity like a country will guarantee fix rate at their expense like what happened with CNY years ago and Iraqi Dinar.

The US Dollar is freely traded and has volatility, but I’m sure the Federal Reserve is making sure it does not rise too fast.

Imagine your one USD which equals some 1.10 EUR today and next week it becomes 2.50 EUR, I wouldn’t spend USD at all and spend EUR instead.


#15

That is my understanding of the general plan of the nushareholders and my want too.
Also, I dont see why it is not achievable.


#16

[quote="drei4u,

post:14, topic:1716"]
That’s why central banks manipulate their currency in the free market by quantitative easing or increasing interest rates, etc.
[/quote]

How does one manipulate the currency in a free market?


#17

How are rates actually determined?


#18

In contrast, what does nubits operate in these free markets?


#19

Do you have any sources to back up that claim? I can just as easily say that bitcoin will eventually reach an equilibrium when user adoption is complete. This model makes more sense to me. I’ve never seen a market behave like the wild west for it’s entire life time. A similar model we have to compare with is the internet and we all know how that one went.


#20

http://www.investopedia.com/ask/answers/07/central-banks.asp and http://www.investopedia.com/terms/o/openmarketoperations.asp