Updates

NuBits

Why NuBits peg dropped and how it got fixed

1) What happened in May and June:


Just after the large NuBit sale by a single holder on May 27th, the peg was immediately lowered to 0.95. That is the cause of the failure of the liquidity engine. Period.

Then NuShareholders and the Liquidity team focused on:

- Focus on nsr buy back which lead to fund depletion  and complete halt of funds in tier 4, 5 and 6.
The result was: US-NBT went straight from $1.00 to under $0.20 while NSR went from 500 satoshis to 70 satoshis. 

Between June 2016 and September 2016, about 700 million NSR were spent repairing the damage from the reckless and unauthorized "experiment" 

 

We dont know where the attack came from --
It could have come from a nushareholder

 

2) What we have learned:

Directing liquidity operations effectively and efficiently requires expertise very few have. 
Liquidity operation needs to be centralized for now and decentralizing liquidity operations again is a long way down the priority list.
BUT the decentralized nature of the NuBits network remains unchanged. None of the changes NuShareholders have instituted in liquidity operations requires a protocol change. The basic deal and mode of the network remains unchanged. Transaction processing, voting of all kinds and most importantly, the allocation of custodial grants remains completely decentralized and unchanged from how it worked in 2015.

We have a chief liquidity officer: Phonenix (probably the second name of Jordan Lee, the founder of NuBits) -- He raised $300,000 in the two and a half months he has been CLO

NuShareholder must prevent a loss of peg on nubits, because it will be reflected back immediately on nushare

To sum up, NuShareholders would like decentralized liquidity. However, reliable and cost effective liquidity is a much, much higher priority.


3) A lot of debate is going on about:
- whether we should have a business model
- to which extent we should back up US-NBT in reserve.

However Phonenix (not supporting any business model and any model) has earned the consensus by voting (64% of support)
His popularity is growing
Minting is picking up
He is getting paid for his role.


4) Asset price:

We have boosted the asset price without parking, without reserve
400% in 70 days


5) What we are doing now:

We have resumed the selling of US-NBT since the peg was abandoned in late May. When we sell US-NBT from liquidity operations, the funds become part of our reserve and are used to place US-NBT buy orders at $0.995. 

The US-NBT price on Poloniex has stayed within the $0.995 to $1.005 range for all of the last 24 hours. There are $5600 in buy orders at or above $0.995 and an impressive $39,000 in buy orders above $0.975. That is probably more than 13% of all the US-NBT in circulation.

6) The future:

Launching CN-NBT and EU-NBT 

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blog   2016/10/07   gbboy

CATO Institute discusses NuBits

NuBits is the only serious contender to displace Bitcoin as the number one crypto-currency

On the 29th of December, 2015,  William J. Luther, scholar at the CATO Institute, published an article entitled "Theoretical Fedcoin, Meet Operational NuBits".

In this articile, Luther describes NuBits as the first decentralized crypto-currency to maintain a perfect peg to the US dollar.

In this sense, he concludes that NuBits is accomplishing the role of a Fedcoin.

At the end, he however states that NuBits is not perfect.

Nontheless, he acknowledges that NuBits solves the biggest problem of Bitcoin: its volatility.

I do think that the world is starting to realize the huge benefits of NuBits over Bitcoin.

It is time to realize that NuBits is far superior than Bitcoin as a currency.

One might remember what Hanke and Dowd that wrote "New private monies" said about Bitcoin's volatility at the end of 2014.

“Though the supply of Bitcoin is limited, the demand is very variable; this variability has made its price very uncertain and created a bubble-bust cycle in the Bitcoin market. Perhaps the safest prediction is that Bitcoin will eventually be displaced by alternative cryptocurrencies with superior features.”

To me this is clear. Bitcoin will be eventually displaced at the crypto-currency with the most liquidity and NuBits is the only serious contender right now.

2016 is likely to be a very interesting year for NuBits!

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blog   2015/12/31   uploada

NuBits: achievements after 15 months of operation [part-2]

"- A healthy core mechanism that has been established

NuBits is NOT backed by fiat reserves but by the value of the issuing "bank" like corporation Nu.

NuBits (NBT) get sold by Nu for BTC and the BTC get invested in development (increasing the value of Nu), share (NuShares; NSR) buybacks and very little in marketing and other activities.

While sold NBT are only temporary revenue (the NBT in circulation are a liability for Nu), NBT get destroyed with transaction fees.
Destroyed NBT are final revenue for Nu.
Nu is still young and evolving, but the peg has been kept at exactly 1 USD.

The close peg is a direct result from the compensation that is paid to liquidity providers to put orders with a close spread on order books;

 

- NBT have all attributes good crypto currencies have:

* the blockchain is being run in a decentralized manner.
* NBT owners can have total control over their NBT by sending them to an address for which only they have the private key (an experimental web wallet is available, though).
* multi signature transactions are available to increase security and allow escrowed transactions.
* the source code is open, but compiled wallets for Windows, MacOS and Linux are available (as well as at least 2 apps for Android: Coinomi (btw. the Coinomi developer is one of Nu's core developers) and NuDroid).

 

- If there's need to adjust Nu, there's the incredibly powerful "motion" feature. 
This has been used for a lot of strategic decisions and can be used for anything that requires a consensus of those who have a stake in Nu. NSR holders (the owners of Nu) can decide what to do.
Nu is a corporation with business process on a blockchain - the same blockchain that processes NBT transactions.

 

- Meanwhile you can use NuBits for hedging crypto currency volatility.

 

- NuBits is in a unique position if the following attributes are important: 

* open source
* decentralized
* being pegged to fiat, but not depending on fiat (not holding fiat as collateral)
* stable!
 

- NuBits has successfully proven that it is possible to create a stable crypto-currency. Imagine that the design of Ethereum had been based on a stable coin (tracking say the dollar / euro) which would be used to pay for transactions and a separate share token that is used to stake out consensus.

 

- NuBits is secure:

* Nu is check-point free for over a year with no problem. 

* Relies on Peercoin Proof of Stake, to which the objections  are purely theoretical and bad theory at that. The only real argument against PoS comes down to whether you can trust humans to come to consensus about something over the long term (weak subjectivity). The fact that some governments (a long-term human consensus process) have existed for hundreds of years kinda flies in the face of the 8 years btc has existed for. Note that weak subjectivity is also used in bitcoin (btc core) and is revealing a lot of politics on the long term scale. Basically, the only flaws Peercoin or Nu have are the same flaws that bitcoin and in fact all governments and human consensus processes face."

 

 

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release   2015/12/11   gbboy

NuBits and the decentralization of finance

Nu is welcoming anybody that wants to contribute to the decentralization of finance.

Nu is welcoming anybody that wants to become a shareholder of Nu, the first decentralized central bank in the world.

If you would like to become a shareholder of Nu, you will need to acquire NuShares, the assets that back the peg of NuBits to one dollar.

NuBits is free of any counterparty-risk. It is not reserve-backed.

The peg is kept solely by buy/sell side liquidity walls around 1NBT = 1USD across several exchanges.

The liquidity is provided by liquidity providers that can contribute in stand-alone mode or via decentralized liquidity pools.

Right now, there are roughly 500k NBT in existence, the buy side liquidity is around 90k NBT and the sell side liquidity around 110k NBT.

The peg has been kept perfectly since NuBits' inception in Sep 2014. Nu has more and more liquidity, with more and more exchanges trading NuBits.

 

But perhaps the biggest thing on the horizon is a totally decentralized exchange called B&C Exchange which would guarantee a very secure and cheap NuBits liquidity for Nu Shareholders.

That exchange which will be released in a few months will be using NuBits as a synthetic dollar to get in and out of the exchange.

In that sense, NuBits is a crypto-FIAT (crypto-dollar), or a crypto-currency pegged to FIAT money (dollar).

 

You have the following links at your disposal, if you would like to get more information.

- www.nubits.com: official web site

- www.discuss.nubits.com: official forum

- https://docs.nubits.com/history : the origin and the beginnings of NuBits.

 

NuBits combines the best of both worlds:

- the convenience and stability of FIAT currencies

- the decentralization of Bitcoin

 

Nu is welcoming anybody that wants to contribute to the decentralization of finance!

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blog   2015/10/12   uploada

NuBits, the potential to be the basis for a cost API

Provided a sufficiently solidly written motion that is passed by Nushareholders, NuBits could go beyond the function of issuing a stable currency.
What about providing a cost API?

"Proof of burn is a suitable means of applying cost to actions that don't need to be a revenue stream. Any time a company or service accepts money it has to be accounted for. This can complicate things, but applying costs to an action can prevent abuse. This is the fundamental purpose for the transaction fee in Nu network. Now, let us imagine a company or service wants to apply a cost to an action, but does not want to deal with the overhead of having to account for receiving that value? Require a NBT burn instead. Have the user submit a transaction ID for the NBT burn. Now that Nubits has the burn RPC command implemented, it's very easy for anyone to burn NBT or NSR. A service can verify burn transaction ID to process an action on their service without having to account for receiving any value. It could be worthwhile for Nu to become a cost API of some kind. That would require to make the client flexible enough for others to utilize it within their services. Proof-of-burn or proof-of-park are two ways that other services could utilize Nu blockchain for applying costs to services. We should make it easy for them to use those features. We should explore all potential uses for NBT outside of just a transactional currency. Being able to manage the supply to maintain a stable value gives us a huge advantage in offering these types of services. Creating consistant demand for NBT while simultaniously removing NBT from the available supply will create a healthy stream of profit to the network. Being a cost API is probably the most decentralized approach to building profit for Nu, because anyone could utiltize those services without needing to be voted in, or any action from shareholders. But the protocol must allow for it, and the client must make it easy to use."

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blog   2015/10/07   gbboy

Why we funded Nu

Having a cryptocurrency with a fixed value is so important.

"So that it can move beyond the realm of a speculative asset and become an important facilitator of commerce. Businesses and consumers need to know what their money will be worth in a month and a year. Bitcoin has solved the volatility problem by partnering with banks via Bitpay and Coinbase, both those are centralized solutions. This will allow commerce without banks on either side of the transaction.

A currency must be fungible, transportable, divisible and a stable store of value. NuBits possesses these attributes more than any other currency in the world. We have a lot of work to do in encouraging them to be widely accepted, however. Soon, we hope NuBits will be used for lending and commerce around the world. It should be very good for international commerce.

Whereas most crypto supporters believe mass adoption will eventually stabilize price, the creators and supporters of Nu believe they have it backwards, that price stability will encourage mass adoption.

Business Model: NuShareholders provide the service of a price stable crypto. This service costs shareholders as one can see from the monthly fees Nu pays out to provide for decentralized liquidity. The job of shareholders is to continuously increase demand and adoption for NuBits. As demand increases, new NuBits are created and sold. The proceeds are then either distributed to shareholders in the form of Peercoin or NuShares are bought back and burned. The transaction fee is also one way that users of the network pay for the service we provide them. The transaction fee slowly decreases the supply over time, which then allows us to create and sell more NuBits again for profit. In the future, NuShareholders will also decide to add more pegged currencies, such as the Euro or Yuan to target different markets."

 

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release   2015/09/02   gbboy
タグ:NuBits , Nu

Why does Nu have the right approach to distributed reserve banking?

Nu has the right approach - namely: the currency price is that of the market(s) and stability is reached when demand and supply sides are balanced, elastically so that the price is constantly maintained to its stable value.

Now, how do we elastically, dynamically control the buy/sell sides on market?
By having intelligent shareholders that monitor in real time the network, that have an incentive that the peg is not broken.
How is that possible? every nushareholder is smart, has a direct voting influence, and the more nubits spread, the more there are nuclear shareholders that monitor Nu in real time and providing new motions, making it more robust.

Whereas the FED will sell its currency to banks that will resell them to end users into loans,
(in a pyramid structure) Nu will ask reputable liquidity custodians (local banks?) to resell NBT for a fee so that the peg is maintained.

Nu is a currency supplying reserve bank that is co-owned, and flattened out - that is distributed among as many shareholders as possible and pyramid-scheme-proof.
It appears that the satoshi blockchain thought form is perfect for that task - to distribute shares and make decisions based on a consensus among an indefinite number of people scattered on the web that do not need to know each other.

Nusharesholders cast vote because they have an absolute direct business incentive (they have nobody above, nobody below to oversee or check out, no intermediary to pass the money onto) to do so - so that the peg is maintained

The bottom line: "to have a stable price, you must be able to expand or contract either the supply or demand for the currency. Thanks to the peershares template, shareholders can expand the supply by voting to create it in the hands of particular entities and also support the price by increasing demand for the currency by paying interest on NuBits when necessary."

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blog   2015/09/02   gbboy

Inflation adjusted NuBits

Just pegging NBT to the USD is not good enough for people who are worried about the Dollar inflation.
The good news is that Nubits can be more stable than USD, by adjusting its value in real time vs inflation.

But this is not a priority right now and will be implemented in second step.

This is how we would implement an inflation adjusted currency:

"Someone would advance a motion proposing the character and code we will use to define the currency, as well as its marketing name. They will also propose the use of a particular source and methodology for measuring inflation/deflation.
If passed, the dev team would need to make some minor changes to the code to include the currency.
Supply would be introduced the same way as NuBits, and on a monthly basis custodians would adjust the peg by configuring NuBot with the adjustment indicated by the economic data source chosen by shareholders in the original motion. This could be a downward adjustment in the unusual case of deflation."

"We anticipate that shareholders will begin using a data feed of their choice to configure their vote rather than manually configuring it as they do today. This will be particularly important with multiple currencies because each currency will require a different management of currency supply to match the demand of the currency in question. Because the management of multiple currencies through manual shareholder configuration of voting is impractical, I strongly support waiting to create additional currencies until there is a diversity of stable data feeds offering voting guidance to shareholders."

Reminder:

"NuBits is intended to the the first implementation of a currency deployed on the Nu block chain. The white paper discusses the idea of an inflation adaptive currency that could also be developed. There's a discussion that has been going on over at the Nu forums that starts to dig into what it could mean and the economic theories that support its creation:"

http://discuss.nubits.com/t/pegging-the-buying-power-of-1-2014-not-1-itself/148

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blog   2015/09/02   gbboy

NuBits can solve 2 problems at the same time

This is possible because NBT price is controlled in real time by Liquidity Provider Custodians.

Problem 1: cryptocurrency volatility, short-term fluctuation, the reason why cryptos cannot called money
Problem 2: FIAT inflation, long-term fluctuation, the reason why FIAT is called "bad money".

"In the first step, we'll manage to eliminate the crypto volatility and in the second step (perhaps one year later), we will resolve the FIAT bad money issue."
 

 

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blog   2015/09/02   gbboy