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