Where are the central bank haters?

The Plaza
#21

It occurred to me today that our “The World’s Best Stable Digital Currencies” brand tagline is compatible with creating fixed-supply assets. All that would be required is a re-branding to two streams (or “Series”) of products:

Series A: Stable-Value Digital Currencies

  • US-NBT

  • CN-NBT

  • EU-NBT

  • X-NBT

Series B: Stable-Supply Digital Currencies

  • BTC-NBT (21,000,000 supply)

  • LTC-NBT (84,000,000 supply)

  • CUSTOM-NBT (1,000,000 supply)

Issuing Series B would be profitable for the network and require no liquidity or price stability maintenance. Using the naming convention I propose, it wouldn’t dilute our brand either. We could offer a Proof-of-Stake Bitcoin on our network, where users finally control the asset, not miners.

3 Likes
#22

Hm, interesting idea. I’m not sure I’m comfortable with the naming convention, when I said NuBTC i meant a price-peg to BTC/usd or whatever. We could fix the supply to the current btc supply though, we can thereby sell more on the open market as new miner rewards come out (and as they’re burnt in fees on the nu blockchain). The question is why would someone buy it? Then again, the only cost is the dev cost to put it in the client, so as long as we recoup that why not sell it?

This product would depend on the governance and PoS security of Nu, but would be disconnected from the complex finances.

4 Likes
#23

You’re right, following our existing convention it would be BTC-NBT, LTC-NBT, etc. I updated my previous post.

I think many hardcore crypto enthusiasts would prefer using a Proof-of-Stake cryptocurrency that has a fixed supply, and a group controlling it (shareholders) whose interests are aligned with their own. Fixed supply + enhanced governance capabilities.

1 Like
#24

I fully agree with Jordan’s motivation and appreciate his effort on building such Nu/B&C projects.

But I have different opinion on the strict pegging. Although we want to acheive three targets at the same time.

1)A stable foreign exchange rate
2)Free capital movement (absence of capital controls)
3)An independent monetary policy


Infact we cannot, just like we cannot make a “perpetual motion machine”. The Impossible trinity tells us that our dream is theoritically or empirically impossible.

We have to give up one of these three target to keep the other two.

The combination of the three policies, Fixed Exchange Rate and Free Capital Flow and Independent Monetary Policy, is known to cause financial crisis. The Mexican peso crisis (1994–95), the 1997 Asian financial crisis (1997–98), and the Argentinean financial collapse (2001–02)are often cited as examples.

Is Nu powerful than Mexican, Asian, and Argentina governments?

Break the strict pegging, let NBT as anti-inflation curerrency, central banks haters will love us, otherwise even myself dislike NBT.

1 Like
#25

Very interesting.
I can see a huge potential demand personaly for such currencies because there must be a lot of traders that want to speculate on btc price while being able to go from one exchange to another rapidly…
It reminds me of the side chain thing but in case of Nu we have already a lot of experience and expertise in liquidity operations.

1 Like
#26

I guess none of us are economists and even economists quarrel with each other for 200 years on what’s the best currency, this is a very, very heavy topic that even the smartest people on this planet cannot convince all, however, if we hope our financail experiments successful. please just reference to a decent theory at all.

Bitcoin’s theory is gold standard theory(deflation), including many alt coins. BTC has ZERO invention for economics theory, just a new IT blockchain tech.

Central banks’ theory is from Keynes etc(inflation), currency controlled by government, blabla

These theory above are all from the master, nobel prize winner level experts.
What’s the Nu’s theory? FIAT’s accessary? That’s why central bank haters hate us too. We even disobey the impossible trinity theory!

Who, anyone of this forum can invent a new theory and apply nobel prize? Please stand out!

IMO, the only way is Hayek’s theory, which is the 3rd competing theory, anti-inflation & anti-deflation.Othewise, for me Nu is immature experiment originating from IT programmers, neglectable in human’s finance history.

1 Like
#27

Series A, inflated, in fact not stable value at all.

Series B, deflated

I love Series C: Stable buy power Digital currencies. Is Nu enough bold to try the 3rd way? Don’t imitate others, it’s boring and hopeless.

1 Like
#28

how to create that?

I think we should acknowledge the fact that central bankers have been doing a not so bad job at creating more or less stable currencies.

Even the central bankers haters use FIAT money everyday.
That is pure contradiction.

I really do not care so much about whether or not I hate or like central bankers.
I am interested mostly in business.

Let s forget a bit about the ideologies and work on generating revenues.
The rest is secondary, to me.

I think Nu should be first of all business-driven.

3 Likes
#29

that

#30

Difficult to distinguish ideologies from business especially in cryptoworld. Many central bank haters spend their hard earned money to buy BTC, without the liberalism belief, they probably cannot withstand the volatility. For myself, I can buy more NSR by selling other cryptos, but I won’t, because I hate central banks.

According to Hayek, “It was not ‘captitalism’ but government intervention which has been responsible for the recurrent crises of the past”. They are tragedy maker, unforgivable.

Even the central bankers haters use FIAT money everyday.

They have no chioce, you cannot say a woman enjoy being raped because she cannot resist.

Creating an anti-inflation currency is simple if the DAO has renenue, just lifting the price of sell/buy wall.

#31

These fixed-supply currencies would have nothing to do with the actual asset price. BTC-NBT would probably have a marketcap like $100k, therefore its price would likely be something like $0.006/BTC-NBT. This is a shift on @Sabreiib’s triangle from flexing 3 to flexing 1 (sacrificing the stable exchange rate).

1 Like
[Draft] motion to increase the percentage of reserves
#32

Ok. I thought we were talking about a NBT pegged to the BTC price.
What is the point of BTC-NBT then?

1 Like
#33

@tomjoad answered you above…

The security model in proof-of-stake cryptos like Peercoin requires the rewarding of interest to minters for securing the network. Because of these continuous rewards, the currency supply will never stop expanding. A lot of hardcore crypto people don’t like this about proof-of-stake coins. They don’t like the constant inflation and they believe it causes the rich to get richer. Those who care deeply about a fixed supply would rather stick with Bitcoin and proof-of-work with all its problems.

We can cater to these people by creating a fixed supply version of Bitcoin that runs on Nu’s blockchain. Security would be taken care of by NuShareholders through proof-of-stake. Because PoS interest is rewarded in the form of NuShares, the supply of BTC-NBT wouldn’t need to be inflated for security and could remain fixed at 21 million coins, just like Bitcoin.

Any BTC-NBT sold would be profit for Nu. Since the price would be free floating, no money would need to be spent on providing liquidity. We could follow along with Bitcoin’s current supply, which is already over 15 million coins. Maybe we could somehow mirror Bitcoin’s blockchain and give out the initial 15+ million BTC-NBT in equivalent amounts to the people who already own Bitcoin. So for example, person A owns 1 Bitcoin person B owns 100 Bitcoin. Mirroring the Bitcoin blockchain onto Nu would allow the same people to own 1 and 100 BTC-NBT for free.

As the supply of Bitcoin increased through PoW block rewards, we would create and sell equivalent amounts on the open market, so the supply of Bitcoin and BTC-NBT continue to match each other. One thing people won’t like is the manual distribution of new coins to keep up with Bitcoin inflation. I would suggest a multisig group like FLOT being granted a new batch of coins to sell every 2-3 months. This prevents the entire 21 million coin supply from being held by too few people and puts more control into the hands of shareholders to keep distribution going, since regular grants will be required.

Unlike Bitcoin, transaction fees in Nu are destroyed. This creates profit for Nu. Let’s say all 21 million coins were distributed over time. Once Bitcoin hits that target, no more coins will be created, but if Nu hits that target, transaction fees will slowly eat away at the 21 million supply. We would need to keep creating grants of new BTC-NBT in order to replace all the coins destroyed through transaction fees. Grants could only be created up to 21 million though. If the currency supply is still expanding and hasn’t yet hit 21 million, the same would be true. Any part of the supply destroyed through transaction fees would be replaced by selling more BTC-NBT on the market. This would make it so the supply of Bitcoin and BTC-NBT both match each other.

Another major benefit is that BTC-NBT holders would have a say in the overall network (through motions) and share in any profits if they bought NuShares. The same can’t be said for Bitcoin, where huge miners control everything and the majority of users have no say at all. At Nu they’ll be able to make money by selling currency and make their voices heard by using Nu’s model of decentralized governance.

It remains to be seen whether there would be any interest in a fixed supply proof-of-stake coin. Since no liquidity provision is involved, the cost of implementing and supporting such a coin would be low, so I think there’s no reason why we shouldn’t at least try it. There’s always the possibility it could be a hit and provide the network with some income from sold BTC-NBT, which could be used for liquidity operations, development, marketing, share buybacks, dividends, etc…

I have a question though. How would selling coins to keep up with Bitcoin inflation work? Wouldn’t we be constantly putting downward pressure on the price? Also, what price would we start selling BTC-NBT at and why?

5 Likes
[Draft] Currencies in Nu 3.0 (BTC-FSN)
Potential Revenue Model: Liquidity as a Service
#34

I like the idea in general, although I have some doubts regarding adoption.
Depending on how much effort it is to code that product, it might be worth testing it.
I want to point out that BTC-NBT holders can’t vote in motions, because the PoS that processes BTC-NBT is maintained by NSR holders; it would be another currency like NBT, but with controlled supply rather than controlled price.
You more or less said that; I just wanted to make it even clearer.

The initial distribution on a snapshot date to BTC address in relation to their UTXO could raise some awareness at BTC holders for BTC-NBT if properly announced.

The thing is: it will be hard to find and exchange that lists BTC-NBT.
There’s some potential confusion and it will be utterly important to explain what BTC-NBT is and what not.
People might even distribute confusing information on purpose to sell BTC-NBT (which they’d received for free in the initial distribution) at high prices claiming that it’s a currency pegged by Nu to the BTC rate.
Nu so far is known for providing price pegged products and only for that.

This must not happen!

We might be able to convince BCE to list BTC-NBT.
Then you could maintain a sell side operation there, which uses BCE itself as price feed.
The sale account could be refilled with 25 BTC-NBT per 10 minutes or 3,600 per day (until the next coinbase reward halving).
That wouldn’t mirror the BTC distribution exactly, but I don’t think that’s necessary.
Not dumping all 6 million BTC-NBT that remain for sale at once is for sure better for the BTC-NBT rate; there are already 15 million BTC-NBT in the hands of people who didn’t pay anything for them.
The sell pressure will be huge!

Without having an estimate for the development costs (and without a crystal ball) it will be hard to make an estimation about the ROI of this product.

#35

This is why the naming convention is important. We already have someone confused just in this thread, lol. A new name, like FSN-BTC (fixed supply nu bitcoin).

As for distribution, we should use something like weekly or monthly auctions of a fixed amount until we hit the current distributed BTC supply, then we dilute at the 12.5 or 25 btc/block rate (estimated). Seeded auctions for bonus points.

Yes, this will cause downpressure on the price. But that’s kinda the point I’m trying to make around here. Literally every crypto project dilutes. Bitcoin dilutes, bitshares dilutes, peercoin dilutes, ether dilutes. Dilution is what allows blockchains to have an incentive model. The idea that we are the only one diluting is absurd. Hell, we’ve bought back more than we’ve diluted, so we’ve diluted less than literally every other cryptocurrency on the market.

2 Likes
#36

I am not sure fixed supply and pegging can be had at the same time. Pegging requires issuing the currency when demand is high and vice versa. Without pegging the token’s price is determined by market and has little to do with btc price.

1 Like
#37

This is not meant as a pegged currency.
It should more or less follow BTC’s distribution scheme, although the FSN-BTC wouldn’t be paid to miners.
It would be a volatile product with a capped supply.
It would indeed have little to do with BTC except for the number of tokens.

#38

Try reading my reply above. As MoD said, it’s not meant to be pegged to Bitcoin’s price. It’s a volatile crypto with a fixed supply like Bitcoin, but runs on proof-of-stake, rather than proof-of-work. I don’t believe there exists something like this at the moment. Every fixed supply coin that I know runs on PoW. I explain more in my post above.

#39

We could do the entire initial distribution in a single seeded auction. Just put all 15.5 million up for auction with a single closing date. Have people register address pairs, just like a seeded auction, and have the auctioneer do the manual check each day or maybe twice a week for people that sent funds from an unregistered address. Then, when the auction closes, burn all NBT collected at the auction address and distribute the entire supply of FSN-BTC based on how many NBT each address pair submitted. Call it an IPO.

We could also do multiple single-side auctions, that’s not really an issue. However, I don’t really think we want to do full dual-side auctions because we aren’t ever going to seed the NBT side (BTC is never destroyed).

Of course the auctioneer could be multisig, but it would make sending back funds to people that didn’t register properly more complicated. That’s the biggest reason I can think of to do it in multiple auctions.

Is there any way to do the FSN-BTC addresses as a mirror of the US-NBT addresses, like PPC and NSR have? Then the registration wouldn’t be a problem and we could do it all as multisig.

#40

For each private key there will be 1 of each type of Nu blockchain token (in fact, all cryptos), correct? In that case, there should be a button you can press in the fully complex wallet to import the same private key to all the different currencies. Then, you’ve effectively registered those addresses every which way and we can host whatever kind of auctions we want without registration.

1 Like