Author Topic: NuBits  (Read 51646 times)

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Offline Chronos

A slow fall toward 0 over a month?  Then shorts will have covered and bitusd holders would have sold for usd.
Forgive me for my ignorance: I don't understand Bitshares too well (yet). If Bitusd holders sell for USD, doesn't that mean that the entity on the other side of the trade is buying Bitusd with USD, so this generates no net effect on the overall network?

EDIT: Ah, you mean that the closing shorts are matched with the Bitusd sells? As here: https://bitsharestalk.org/index.php?topic=8390.msg120409#msg120409 Still seems like it could be a problem. If there is demand for $10'000'000 of cryptocurrency pegged to USD, but there isn't enough faith (AKA value) in BitsharesX to create that much BitUSD, what happens?
« Last Edit: September 24, 2014, 10:44:40 pm by Chronos »

Offline bytemaster


An instant revaluation?  Then bitassets go to 0 value.  A slow fall toward 0 over a month?  Then shorts will have covered and bitusd holders would have sold for usd.

That is somewhat concerning, given that over its history bitcoin has had a few flash crashes where it lost a huge portion of it value instantly.

Are there any mechanisms in place that could help maintain order in a scenario like this?  Perhaps the delegates wouldnt all update feed prices to represent the flash crash, and things could proceed more orderly?

Delegates update their feeds slowly and should require manual confirmation of any major changes in their price sources.  They should also be pulling information from multiple exchanges and using the median rather than the average.
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Offline Ander

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An instant revaluation?  Then bitassets go to 0 value.  A slow fall toward 0 over a month?  Then shorts will have covered and bitusd holders would have sold for usd.

That is somewhat concerning, given that over its history bitcoin has had a few flash crashes where it lost a huge portion of it value instantly.

Are there any mechanisms in place that could help maintain order in a scenario like this?  Perhaps the delegates wouldnt all update feed prices to represent the flash crash, and things could proceed more orderly?

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Offline tonyk

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BitUSD can go back to 0 as a result of margin calls or covering.

0 supply, or 0 price? 
..........
Thanks!
0 supply...
 read more here:https://bitsharestalk.org/index.php?topic=8390.msg120409#msg120409
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline bytemaster


BitUSD can go back to 0 as a result of margin calls or covering.

0 supply, or 0 price? 


How would the price of bitUSD withstand a rapid collapse in the price of the BTSX that is being used as collateral by the shorts?

Thanks!

An instant revaluation?  Then bitassets go to 0 value.  A slow fall toward 0 over a month?  Then shorts will have covered and bitusd holders would have sold for usd. 

For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline Ander

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BitUSD can go back to 0 as a result of margin calls or covering.

0 supply, or 0 price? 


How would the price of bitUSD withstand a rapid collapse in the price of the BTSX that is being used as collateral by the shorts?

Thanks!
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Offline bytemaster

The problem is the supply of NuBits is constantly growing with no way to reduce it... the only thing the system allows is to "kick the can" down the road of people looking to exit.

Is bitUSD supply not as well constantly growing with no way to reduce it? (I believe the answer will help us to make the right comparison)

BitUSD can go back to 0 as a result of margin calls or covering.
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline tonyk

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It seems way off target to argue against NuBits by attacking the US Dollar. Again, if NuBits is as sound as the USD, then it is a raging success. That appears to be the entire point.

On top of that, the NuBits protocol can use its mechanism to peg tokens against any asset, even inflation-protected assets. If the USD fails, NuBits shareholders could create a new set of tokens within the same network to peg to the value of whatever currency replaces it.

I think everybody reading this got that point... you can create as many assets is you desire and the only limiting factor is the available air...

Destroying said assets is technically impossible (at least above your abilities). The best surrogate you have come up with is to sit on them... willing sitters will be paid with a new dose of thin air....


Dare to answer ANY of my questions, or you are here to just re-iterate the whitepaper?

... Start with what is criteria in selecting to whom you are going to sell a seat in this self appointed FED of yours, please?

Quote
Undistributed NuShares will be sold in lots typically 5 million in size to people who have demonstrated skills that will be helpful to the advancement of the network. We are in a sense
picking business partners. People will need to contact us via Bitmessage
« Last Edit: September 24, 2014, 08:52:06 pm by tonyk »
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline tonyk

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It seems way off target to argue against NuBits by attacking the US Dollar. Again, if NuBits is as sound as the USD, then it is a raging success. That appears to be the entire point.

On top of that, the NuBits protocol can use its mechanism to peg tokens against any asset, even inflation-protected assets. If the USD fails, NuBits shareholders could create a new set of tokens within the same network to peg to the value of whatever currency replaces it.

I think everybody reading this got that point... you can create as many assets is you desire and the only limiting factor is the available air...

Destroying said assets is technically impossible (at least above your abilities). The best surrogate you have come up with is to sit on them... willing sitters will be paid with a new dose of thin air....


Dare to answer ANY of my questions, or you are here to just re-iterate the whitepaper?
« Last Edit: September 24, 2014, 08:43:39 pm by tonyk »
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline Chronos

It seems way off target to argue against NuBits by attacking the US Dollar. Again, if NuBits is as sound as the USD, then it is a raging success. That appears to be the entire point.

On top of that, the NuBits protocol can use its mechanism to peg tokens against any asset, even inflation-protected assets. If the USD fails, NuBits shareholders could create a new set of tokens within the same network to peg to the value of whatever currency replaces it.

Offline yellowecho

In 1980 when demand for the US dollar was in decline the Federal Reserve raised interest rates to the high teens. People were quite happy to buy dollars and treasury notes to receive these high interest payments. Far from being an unsustainable action, it saved the US dollar from hyperinflation at that time. 34 years later it remains viable.

The demand for dollars declined as a result of debt expansion from The Great Society, the Vietnam War, and the Nixon Shock.  Since debt expansion is an increase in the money supply by definition it's inflationary.


To say Fed policy 'saved the US dollar from hyperinflation at the time' overlooks the fact that Fed policy was responsible for the debt expansion to begin with.  Now compare the expansion in the money supply from the chart above with the growth in CPI:


See a correlation?  It should be no surprise to see that the expansion of the money supply (debt) also expands the CPI which (as you probably know) is a measure of inflation.  So if NuBits is designed to work in a similar manner (as you say it does), it's more of a ponzi than Federal Reserve Notes because as least they're partially collateralized.
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Offline liondani

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The problem is the supply of NuBits is constantly growing with no way to reduce it... the only thing the system allows is to "kick the can" down the road of people looking to exit.

Is bitUSD supply not as well constantly growing with no way to reduce it? (I believe the answer will help us to make the right comparison)

Offline GaltReport

If NuShares placed their Shares as collateral against NuBits then you would have BitShares assuming NuShares were a freely traded crypto and the interest rate voted on by NuShare holders was the interest rate PAID by the shorts to the longs.   

What happens if the collateral loses value? This approach introduces a serious default risk. As it is, the viability of NuBits does not depend on maintaining the value of NuShares.

I think if their is no collateral their is no value to maintain. :)

Agreed - but also the nubits system produces no value... 

Unlike Btsx, which is an exchange with revenues (value creation) as well as a 200% collateralized bank.


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Yes, i agree.  My remark was kinda tongue in cheek.

Offline tonyk

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In 1980 when demand for the US dollar was in decline the Federal Reserve raised interest rates to the high teens. People were quite happy to buy dollars and treasury notes to receive these high interest payments. Far from being an unsustainable action, it saved the US dollar from hyperinflation at that time. 34 years later it remains viable.


It is not one of your big problem regarding the NuBit/NuShares indevour, not by a wide margin...

Never  the less you have the wrong idea as to what happened in the late seventies up to the mid eighties... In short the Fed did some of the most stupid things in its existence. The situation was resolved not because of the FED's actions but despite them...
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline donkeypong

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If NuBits recreates what the Federal Reserve has done since its founding in 1913, it will be a smashing success. An entire country (plus many others, via pegged currencies) have had relative stability under the US dollar. Of course, there are valid criticisms to fractional reserve, but the Fed's dollar has lasted over 100 years now. That's a pretty good run for anything crypto.

So NuBits has created a monetary system. Now all they need to do is create a United States of America to back it and provide demand. Should they fail, NuBits will be written off as a Ponzi.