How do tether and bitusd hold their peg?
Tether is backed by bank deposits, so those bank deposits are subject to counterparty risk.
BitUSD uses a social expectation that BitUSD will be $1 along with have ample Bitshares posted as collateral. BitUSD doesn’t offer liquidity and the funds in BitUSD are unavailable for any productive use. NuBit proceeds can be used to fund initiatives that add value to the market cap of NuShares. The value can be taken back out of NuShares and into NuBits as needed by pairing a NuShare creation and sale with a NuBit purchase and burn.
Centralised competitors will proof to be a strong competitor for Nu. They will likely have a better ability to reach the masses due to the larger capital at their disposal and with that potential marketing power behind them.
But as we know their model is flawed and will therefore eventually fail at high cost (to either the taxpayer or the investors/shareholders) like many banks did. The question is how many people will recognise that and when?
We need to and already have the answer ready, by continuing on investing in the decentralized platform we know as NuNet, simplify things and get our marketing to the next level.
It is interesting to see how Tether’s peg is flaundering (at 0.93ct) on coinmarketcap due to the Bitfinex issues. Look at their BTC/USD rate. See: http://coinmarketcap.com/assets/tether/#markets
Same issue NuBits faced earlier this week for the same reason, but apparently the NuBots got adjusted.
I’d like to see some up to date analysis on various stable coin implementations to see if Nu still has a niche to target, which is essential if it’s going to recover in some form.
Tether is more centralised, but has huge volume & adoption, however the centralisation is a huge risk, as demonstrated by their recent banking issues that have wobbled confidence.
Not sure how BitUSD etc is doing, or how it compares to Nu.
MakerDAO sounds interesting (pegging to SDR).
When I have some time I’ll try to do a quick survey of similar projects & how they compare, but at the moment it seems there isn’t any decentralised stable coin with any significant following, which gives Nu an opportunity to aim for.
There are also Steem dollars, never looked into it. But there appears to be some kind of a loose peg, almost like Tether nowadays.
BitUSD is probably the closest to decentralisation. However their model requires huge reserves, which is safe but not very efficient and therefore expensive. It dates back to when gold backed all currencies up to the seventies or so. I believe we have moved on since. Still on the fence whether that is good or bad, but the concept of money is changing fast, so experimentation with new models is the way to go as opposite to rely on last centuries models.
Look forward to your view of all the others.
I never forgot the main culprit of Tether was counter-party risk, but it turned out that Nu’s was larger.
Let’s see what happens with Bitfinex/Tether in the next few weeks…