Why NuShares Minting is Better Than Investing in a Bitcoin Mining Fund

[rodchi]

I had been considering investing some of my BTC in the ASICMiner 5 PETA Cloud Mining Fund (https://www.havelockinvestments.com/fund.php?symbol=AMHASH1). However, on further consideration, doing so made no sense. Bitcoin mining funds almost always depreciate faster than the dividend payouts. As soon as you invest, you have lost control of your invested BTC. To recover (some of) them, you typically have to sell your shares at a loss.

Let’s compare this with NuShares:

• You keep control of your NuShares as you earn more NuShares through minting.
• You earn Peercoin dividends.
• Unlike the price of most Bitcoin mining funds, the price of NuShares are actually on the rise.
• I don’t need expensive Bitcoin ASICs to mint NuShares. I just started minting NuShares today on an 8 year old Dell computer. My only expenses were a $48 120GB SSD hard drive (purchased on Black Friday at Best Buy) and 4 GB of DDR2 RAM ($50).

[cryptog]

how does nushare investment compare to bitcoin investment?

[rodchi]

I think that NuShares are far better, at least at the moment. My BTC have been stuck at around $375 forever, while at least I earn dividends and newly minted NuShares when I invest in NuShares.

[cryptog]

@rodchi what about long term wise? what are the prospects from your perspective? it is difficult to imagine a crypto world without bitcoin and since its unit price increase is necessary to its survival…

[rodchi]

@cryptog I believe that Bitcoin is not going anywhere because it has such a big market lead on everyone else. However, if NuBits/NuShares had been invented back in 2008, it would be a very different world now. The more that I analyze NuBits/NuShares, the more that I realize that it is Bitcoin done 100% right. I am long Bitcoin, but the biggest problems that I see with it are its extremely price volatility, and its long period where its price simply languishes (like now). The next big runup in Bitcoin’s price won’t happen until the Winklevoss ETF is finally approved. So if you are sitting with funds invested in BTC right now, you are essentially wasting time because your funds could have been appreciating somewhere else.

NUBits/NuShares solves this problem becuase you are always earning dividends and minted NuShares. However, the most brilliant feature of NuShares is that it incorporates a positive feedback loop: the more NuShares you own, the more NuShares you mint. So it encourages people to buy more and more, so the price should continuously go up. This is going to be very hard for Bitcoin, and other generation one crypto-currencies to deal with. NuShares passed up NuBits in marketcap today, and it is almost certain that NuShares will make it into the top 10 on Coinmarketcap.com soon.

The next killer feature is that NuShares can be minted on commodity-level personal computers. No expensive ASICs or GPU miners are needed. I expect that over the course of the next few months, most low to mid level Bitcoin miners will shift over to minting NuShares. I have been able to mint a lot of NuShares on an obsolete 6 year old machine, and this is something that Bitcoin miners will not be able to ignore. I have not needed to become part of a “minting pool”, and I should be able to continue minting for awhile, as long as I also periodically buy more NuShares.

Bitcoin and NuBits/NuShares will continue to coexist, but the relative market caps between the two will continue to lower. It stood at 3,333 to 1 a couple of days ago, and it is dropping. I expect that it will end up at around 100 to 1. Bitcoin is so entrenched since it was first to market that it will definitely survive. NuBits/NuShares will tend to help stabilize Bitcoin’s price, and A LOT of people will use NuBits for purchases instead of Bitcoin. I could definitely see a future where most establishments accept both Bitcoin and NuBits.

[mhps]

the more NuShares you own, the more NuShares you mint.
…
The next killer feature is that NuShares can be minted on commodity-level personal computers.

Has to be honest here. The above two points are true not only for Nushares. All POS coins (peercoin being the first one) have these. Nushares is different in that minting is not only keeping the network running, it is used also to vote, to steer where the network is running.

[rodchi]

@mhps Thank you for the clarification. Yeah, I plan on cranking up a PeerUnity Peercoin minter here pretty shortly as well. I see NuShares as being in an earlier phase than Peercoin, so it is kind of like getting into Bitcoin mining in 2009, vice 2011. I would imagine that by 2016, minting NuShares will be pretty hard, but right now, it seems pretty easy.

[mhps]

If you hold the same amount of Nushares in 2016, minting is about several percent harder than now. But minting difficulty is inversely proportional to the fraction of minting shares against all Nushare. I think only 20-40% Nushares are minting now. So if many more people mint, minting can be several times harder.

btw POS is not a way to get income by itself, despite some people’s wish. Watch out for scam coins.

[zoro]

is the amount of nushares infinite? like ppc?
but at least in ppc we have a burn mechanism with every transaction. i like also the NXT mechanism regarding minting and burning

[cryptog]

I expect that it will end up at around 100 to 1.

100 to 1 is a bit low…

[crypto_coiner]

which rate is that?

[rodchi]

@cryptog Yeah, I see NuShares as being the $1 bill to the $100 bill (Bitcoin). So yes, I predict that NuShares will one day be selling for 0.01 BTC, or perhaps even much higher. That really isn’t that much. At the current Bitcoin price, that would give NuShares a price of about $3.75 each. Assuming 1 billion total NuShares, that would give us a market cap of 3.75 billion dollars, pretty close to the current Bitcoin marketcap. By that time, the marketcap of Bitcoin will be around $400 billion. $3.75 billion is an achievable goal for NuShares considering that it will effectively replace the U.S. dollar in many online transactions.

[rodchi]

@zoro

There will initially be 1 billion NuShares once @JordanLee distributes all of the NuShares that he originally created. That number will increase at a rate of 2% per year through the minting process.

So to find the number of NuBits that will exist in the future, you just have to use this equation:

N = 1 billion * (1+I)^Y

N = the total number of NuShares Y years after NuShares were created.
I = the interest rate, 0.02.
Y = the number of years after NuShares were created.

Lets look at some examples:

• 1 year: 1.02 billion NuShares.
• 5 years: 1.104080803 billion NuShares.
• 20 years: 1.485947396 billion NuShares.
• 100 years: 7.244646118 billion NuShares.

I would imagine that the interest rate will be lowered at some time between year 20 and year 100.

[cryptog]

market_cap(nsr)/market_cap(btc)

[cryptog]

@rodchi regardless of the market cap, nubit is much more appropriate than nushare if you wanna compare it to bitcoin.

[rodchi]

@cryptog You may be right. But the way I see it, NuShares will end up with a much bigger marketcap that NuBits. We have already seen this. NuShares passed up NuBits yesterday, and I think that the gulf between the two will only increase. This is because of the positive feedback loop that encourages NuShares minters to buy more NuShares. NuBits will grow in marketcap also, but much more slowly than NuShares. Too many people have invested too much money into Bitcoin for NuBits to completely replace it. However, I do see a future where almost every site will accept both Bitcoin and NuBits. NuBits will generally be used for purchases of less than $1,000 or so, and Bitcoin will be used for purchases greater than $1,000. I’ll explain why in a moment.

Let’s say that the year is 2030. The price on a single NuBit is still one US dollar, and the price of a single Bitcoin has stabilized at $5,000. If you want to buy a $40 device for your computer, 40 NuBits is a lot more convenient and easy to visualize that 0.008 BTC. Conversely, if you want to buy a $25,000 car, it would be easier to pay 5 BTC that to pay 25,000 NuBits. So the two will coexist, and I would imagine that most other crypto-currencies will have long since died off.

I basically see a future where the following coins will continue to exist: Bitcoin, NuShares, NuBits, and perhaps one or two more.

[masterOfDisaster]

I basically see a future where the following coins will continue to exist: Bitcoin, NuShares, NuBits, and perhaps one or two more.

In the year 2030 I see no Bitcoin. Bitcoin will have died because of economical problems long before. Bitcoin mining will have turned out to be unsustainable and will have died. Popular Proof-of-Stake concepts or its followers (Proof-of-Burn?) will have taken its place. Peercoin is one of those that has a chance to step in. And conceptionally NuShares has a good chance to continue as well as all products of the Nu network have. NuBits will have lots of brothers and sisters if the whole Nu idea is succeeding.
But Bitcoin? Not in 2030… I’m glad that Bitcoin has paved the ground for all this. I doubt it will stay to the end (whatever and whenever that is), though. It would need to switch to a sustainable way to confirm transactions, to secure the block chain. I doubt this can happen easily. So I fear for Bitcoin’s long-term success. Peercoin is in a much better position
…or why do you think Peercoin was chosen to be the medium of dividend distribution? …not only because lots of NuShares supporters are expected to be Peercoin supporters as well, but because Peercoin has the better chance to survive. In less than 90 weeks there will be another halving of Bitcoin’s PoW coinbase reward (from 25 to 12.5 BTC per block); let’s see what happens…

[rodchi]

@masterOfDisaster I could see what you are saying happening. The more that I learn about Peercoin, the more I like it. The only thing is that Bitcoin got such a massive head start. It is difficult to see everyone dumping Bitcoin, then switching to Peercoin/NuBits/NuShares. A lot of people have heavily invested into the Bitcoin ecosystem, and inertia is a very powerful thing.

But let’s say that you’re right. Bitcoin’s difficulty will start to drop as people switch from Bitcoin mining to Peercoin/NuShares minting. The price of Bitcoin will go into a death spiral, making even less of an incentive to mine it. Somewhere around the early 2020s, the last Bitcoin miner will shut down. It is possible, but I suspect that if Bitcoin does die, it will be a much slower death. Those who put a lot of money into it will keep trying to revive it. As the difficulty starts to drop, they will buy more to try to prop it up. It will die only when all of the fat cats give up on it. However, for this to happen, merchants also have to give up on Bitcoin. If the Winvlevoss Bitcoin ETF is successfully launched, this will never happen. Once the Wall Street fat cats start investing in Bitcoin, it’s over. Bitcoin won’t be going anywhere.

Here are 400 million reasons why Bitcoin probably won’t fail: https://www.cbinsights.com/blog/bitcoin-startup-funding-2014/

I still believe that Bitcoin, NuBits, NuShares, and Peercoin will co-exist, each providing a slightly different function. I expect that the 500+ crypto-coins that now exist will consolidate down to fewer than 10 or 20, perhaps even as few as 5 to 10.

[cryptog]

less than 90 months

it is actually estimated to be in 18 months actually.

[cryptog]

I tend to agree with @rodchi here. There is too much momentum for bitcoin to be another myspace.
I believe it will last at least a decade but maybe this is what you have in mind @masterOfDisaster ?
Even if it gets centralized which is likely it won t matter that much.
Therefore I see it keep going a few decades.
The world needs a digital gold, whether it is centralized or decentralized.

However I think there is a lot of cognitive dissonance or fallacy on bitcoin
Bitcoin is mistaken with the notion of blockchain generally speaking among VCs.
Take a look at http://www.coindesk.com/blockchain-application-stack/
First of all it is wrong since you can create any blockchain you want independently from bitcoin but it is also not feasible to decentralize everything in one single blockcain…
It is pure megalomania.