Really easy question, but I couldn’t answer it myself. When I buy 1 NBT for example on BTer, who will get 1$ that I paid for it?
1.) Who will get it now (first day of Nubit)
2.) Who will get it in the future (day 365 of Nubit)
Proportionately to the shareholders as a dividend via peercoins
Also proportionately to the shareholders (using peercoins)
thanks @Ben
1.) But he devs haven’t sold any shares yet. so the 1$ goes to them?
what means proportionately to shareholders via peercoins?
probably I understand it better when you complete this:
the way of 1$ fiat:
My Bank Account --> Exchange (BTer) --> ?
fiat transaction --> Exchanging to NBT --> payout to ?
Shares have been sold. I don’t know how many individual holders there are, but it is larger than the number of people involved in the development of Nu.
Profit from most of the sales (in the form of dividends denominated in peercoin) are paid out to shareholders based on their proportion of ownership. If you had 0.5% of the outstanding shares at the time that the dividend was paid, you would receive 0.5% of the dividend distribution.
To show it using the model proposed, it would look something like this:
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$1 leaves your bank account and is transferred to BTER.com through a bank wire transfer.
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The $1 is deposited into your BTER account and is available for trading.
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You buy 1 NBT for your $1 on BTER’s NBT/USD market.
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The $1 is added to the BTER account controlled by the elected Dividend Custodian.
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Depending on how the grant was structured, either that dollar will be exchanged for $1 worth of peercoin, or, more likely, it will be “recycled” back to the buy-side of the exchange at a price of $1 minus the exchange fee.
In the second case, there probably a dividend percentage that is taken at the time of sale (say, 5% or 10%). That portion is diverted to be used to buy peercoin and the other 95% or 90% are returned to be used to support the lower-bounds of the NBT price.
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The peercoins that were acquired for the dividend are moved off the Custodian’s exchange account and then distributed to all of the shareholders using their Nu wallet. Previously the shareholders had run a function in their Nu wallet that exported a set of private keys into their Peercoin wallet connected to the dividend addresses. These Peercoin addresses are where the distribution ends up once it is sent.
That was a bit longer than I had intended, but hopefully it wasn’t boring. I’ll keep working on refining how I describe it. Let me know if there are any parts that aren’t clear, or that need a more detailed explanation.
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yea I got it! Thanks for your patience 
found also this thread with some more information:
http://discuss.nubits.com/t/where-do-dividends-network-revenue-come-from/
Now I only see one problem:
What happens if I buy a loooot of NBT?
Somebody (Custodian) will put my money (fiat) in PPC to pay the shareholders. So the Custodian will buy a lot of PPC and the price rises. It will take some time and the shareholders probably will sell their PPC and the price will fall again.
I could buy PPC (low) than a bunch of NBT (1$) (to pump PPC) then sell PPC (high) and sell NBT (same price). and then start over.
I hope you understand what I mean.
Am I right? The shareholders would indirectly have to pay the bills for “my” little pump and dump game.
If you do that, for example, you buy 1million NBT by spending 1million USD and the custodian take 10%, i.e. 0.1million USD out to buy quite some PPC, and PPC price rises, of course your PPC value rises. And then u wanna sell 1million PPC@1USD price.
If you accomplish this, some one has to pay this 0.1million USD. And then you start over, again and again. until the NBT price drops to 0.9$ and 0.8$ etc.The reputation of NBT will be crashed.
This is a real problem.
brio, how about my suggestion on profit model?
It seems really like a ponzi for me :-/
NBT won’t survive a run when everybody wants to sell NBT to get their $ back. That’s a problem. Probably not even a small run, because you will need some rich custodians… in my opinion the only winners of the nubit-game are te exchanges and early custodians when people buy NBT.
Price manipulation in PPC over NBT will be terrible. Shareholders should be paid in various different currencies to avoid this problem.
I think it’s difficult to make walls with 1.02$ and .98$ because once you left this fixed “magic” 1$ value probably somebody will say: why not 1.15 & .85? or 1.5 & 1.25 - and there we go… we have a normal market and fluctuation again…
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Hi brio, what do you exactly mean with this?
You buy one NBT for 1$. Where goes this money? One small part goes to the exchange, one big part has to be kept for people selling NBT and one part goes to the shareholders.
The shareholders will get the dividend paid in PPC. The divident will be bought with the money from selling NBT. Buy a huuuge amount of NBT --> a lot of PPC will be bought to pay the shareholders --> PPC rises.
You can sell your NBT for the same price.
I hope I’m right, :-p If not, please correct me.
After some thinking, my opinion is that the dividend should only come from Nu’s pure profit, ie transaction fee.
So , the Nu system is sustainable and NOT ponzi.
Ok, let’s say that hypothetically all of the shareholders agree with this position. How do we deal with the more difficult challenge: keeping the funds used to back the purchases in a location that is stable in value, secured against threat, and accessibly only by the protocol rather than by an individual or individuals?
So the 90 or 95% USD is still in custodian’s account on exchange to support liquidity.
While I suggets 100% USD from NBT selling is in custodian’s account on exchange .
I think we shouldn’t preset the divident ,ie10% of selling income or 20% etc.
How about 40% of selling income? So what’s the calculation method of divident? Just because nushareholder’s election propaganda?
The divident should come from our business activity profit, how can we preset it before we finishing that business action?
I guess many Nushareholders will sell their PPC divident for FIAT and money will never return into Nu system again.
My two suggestion
- 100% reseve, divident come from pure profit.(transaction fee etc)
- In future, Nushares go to public market. Custodians must pledge their 2X 3X value NSR in order to issure NBT. If a custodian runs away, or stolen, the system can keep those NSR to make up a loss.
The free market knows and compares NSR/NBT market capitalization, if NSR fluctuates lower than NBT, they will sell NBT for FIAT to avoid risk. In this way, Nu system is always affordable for its product:NBT. And that’s the source of our reputation.
We can only be helped by ourselves, not any others. We are central bank and business bank simultaneously, why people belive NBT=1USD is our wealth: NSR in shareholders and FIAT in custodians’ hands. We have no guns, tanks, missiles, A-bomb to force people accept a currency which is badly backed such as FIAT.
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The difficulty I see is the $ needed to pay out NBT sellers. Where comes this money from? From the $ I paid before there will be only ~0.9 left because of fees and divident payouts.
That’s clearly a ponzi scheme.
you have to tell the people that they buy NBT for 1$ + 0.1$ fee. That would be ok.
Another problem: PPC will get obsolete and the worth decreasing over time. Bit & -altcoins have worth because the people think one day they can pay with them. But PPC will be substituted by NBT so all the people investing now in PPC will sell, value decreasing. PPC will only be a conversion path between other currencies. Value will probably get as low as Ripple or Stellar.
That is how the NuBot is configured. Sell-side pricing of NBT ($1.002) is set nominally above the intended pegged price of $1.00, to account for exchange commissions. The buy-back price of NBT ($0.998) set by the bot is the exchange fee subtraced from $1.00, to somewhat mitigate a situation where the sell and buy walls are slowly eaten by fees.
What would be very good for the Nu ecosystem would be to find or develop an exchange that would offer extremely low commission fees on NBT trades if they occurred within a narrow range (say, $0.9985 to $1.0015). That way, the walls on either side could be positioned just to either side of $1.00.
The exchange could be customized to an even larger degree to allow people to sell for the same price that the walls do and still get their orders picked up before the walls’ orders are. By doing this, anyone could price themselves at the same price as the major wall, but they would not have to wait for the sell wall to be consumed before their orders would be accepted to satisfy a bid.
Why not introducing a wider spread between buy and sell? That way the custodians could “earn” money and pay e.g. dividends or park premiums with it.
Nothing big, 0.98 / 1.02 maybe.
The space in between would sometimes be filled by other traders so that in fact the effective buy and sell prices would be close to 1 USD.
It’s certainly possible to do that. I would like to see a custodial proposal generated that take this into account and articulates the type of ROI that could be attained.
24 Hours volume on Bter 172BTC, while only 22BTC of buy wall which means the custodian only sell out 22BTC value NBT.
Most people buy NBT and sell it later. The transaction volume vs sell out =172/22=7.8.
If we charge 0.5% transaction fee, we got profit of 0.5%X7.8=4%.
Not bad.
I think your calculation is too optimistic. Not all trades would attract a transaction fee. Only the ones on the buy/sell wall.
Edit: 0.5% also sounds high.
Edit2: Or is the 22BTC SELL/buy wall only?
Currently, 100% of the value of the NBT sold on the exchange are going back into the buy wall. @KTm’s report from the other day indicates that the 10% withholding from the sales has not yet started (though it is being recorded to properly match with the “periods” she describes in her proposal).
“Total trading volume” on the exchange is bi-directional. The wall is 100% funded if everyone who purchased NBT decided to sell, the buy wall would be completely consumed. There may be a tiny fraction not covered due to arbitrage position losses, or there may be a fraction left over because of gains due to exchange rate differences. But in any case, it is close.