NXTER.ORG

BTCOR Group: Revamped team and asset

Core
BTCOR was formed early in 2015 by House. A visionary who saw the potential of using Nxt as a basis for his projects. Under the BTCOR umbrella he set up multiple assets to provide funds for his trading activities. He was one of the first to put the Monetary System to good use, by setting up a monthly ticket system to invest in his trading activities.  Maintenance of the system and of the assets he has created has been no small task. The assets proved to be a success and House has become a known name in the Nxt and Supernet community.

As BTCOR was growing, help was needed and in May House announced the appointment of an Executive Board to help build the future of BTCOR. You can read more on this in the article about BTCOR published on nxter.org a few months ago.

A lot has changed since then, including some internal changes to the team following Gambleh’s departure for personal reasons.

“It is with sadness that we have seen the departure of Gambleh, but we separated on good terms and we will see him back in slack after a deserved break, while he focuses on his primary concerns in business and family life. – House”

But as Gambleh left, another renowned Nxter joined the team.

“BTCOR is welcoming new team member sigwo, http://sigwo.com/sigwonet.html. As a developer he is now an integral part of the BTCOR Development Team. sigwo together with shack4 as the Chief Systems Engineer and pnoch as Lead Developer will work together closely to achieve the goals the Board will set.    – House”

The biggest news came recently when it was announced that mxxxxxx was joining House as Co-director of BTCOR.

“I am more than happy and honoured to announce that I was propositioned today and agreed to be co-director of BTCOR.

I deeply believe that this will continue to be a great partnership built on hard work, trust, skills, and experience and that we can bring great success with all the brilliant minds involved together within our community.

We have a long and fruitful journey ahead of us with all things coming in the near future together with our personal plans, planned development, cooperations and with a very big possibility of injecting personal business into BTCOR in some safe form for everyone.

As of today I have been granted access to all BTCOR accounts.

Thank you all for the support!

All the best!”

Until recently there were assets for a variety of investments: GDCAR for gold, SVCAR for silver, BTCAR for bitcoin, FIATX for money and BTCOR as a parent asset that would benefit from all of the others.

In addition to the assets there was the option to invest in monthly tickets through the NXT Monetary System. While the assets were a relatively safe investment, the tickets were a high risk investment, with the possibility of losing your complete investment if trades went wrong.

But this is all in the past, as the BTCOR Group announced at the beginning of September that they will change the complete structure of their assets. All previous assets have been combined into 1 asset: CORE. After the announcement an asset swap was started for the investors where all the old assets (GDCAR, SVCAR, BTCAR, FIATX and BTCOR) were exchanged on a 1:1 basis. All the investors had to do was send their assets to NXT-T4BJ-M2B6-9LHP-8YG7 and they would receive CORE assets in exchange.

After 1 month we can say that the swap was a huge success with 99.71% of all the assets swapped.

If you still have any of the old assets send them as soon as possible to NXT-T4BJ-M2B6-9LHP-8YG7. The old assets do not receive dividends anymore. Only the new CORE asset receive dividends from now on.

Having everything combined in 1 asset has multiple benefits for both the investors and the team including a better overview and transparency of the operations. With the new CORE asset the investor profits from all the investments and operations the team makes.

The revenue generated by the BTCOR Group is coming from 2 major parts: trading operations and crypto investments. Operations include trading in gold, silver, bitcoin and fiat. Investments are made in Crypto projects with a promising future that fit the BTCOR profile. You can see their complete portfolio at NXT-NUEG-HFEQ-NU9Z-72KUS.

Breakdown of the monthly profits:

1. 70% from trading profit will go to dividends, 25% from trading profit will be added to the new trading budget for November, 5% to veteran league of heroes /development.

2. 75% from dividends of assets in treasury will go to dividends, 25% for treasury (investments, buy walls, Net Asset Value increase, etc).

3. 75% from new assets sales for treasury (investments, buy walls, Net Asset Value increase, etc), 25% from new assets sales will be added to the new trading budget for November.

In total 5.000.000 CORE assets were issued. 51% (2.550.000 assets) will remain in the hands of the group, 49% (2.450.000 assets) will be sold to the public over time. The sale of assets will happen monthly in small batches. The first batch sold out pretty quick in September at a price of 25 NXT/CORE. The October batch is selling at 30 NXT/CORE, and is moving quickly. This is a pretty popular asset on the market, and we think it’s still a good price to buy in. With the good news and dynamic team behind the BTCOR Group, this month’s batch should sell quickly, with higher prices likely to follow. At the moment there are 383579 CORE assets in circulation.

The core asset id is 18026565504333172181.

Business plans, activities and more information about the BTCOR Group and CORE asset can be found at https://www.btcor.co and on their nxt forum thread.

The first dividend of the new CORE asset was paid on the 1st of October at 0.533 nxt per asset. At 25nxt/asset this is a 2.13% ROI for the first month. Which is an incredible result as they were trading with a low budget in September. Now that the first batch is completely sold and the BTCOR Group can therefore work with a bigger budget over the coming months, the chances are that we will see an increase in dividends, provided they can keep the momentum going.

The BTCOR Group is constantly working on improving their business and strategies. I applaud their enterprise and work ethic which should hopefully result in a promising future for them as well as increasing prices and nice dividends for their investors.

—————————–

This article is for general information and news purposes only. It does not take into account readers’ personal circumstances or investment objectives. As with any investment, readers should carry out their own due diligence research before making (or refraining from making) any investment decision.

Fiat is failing. Let ‘battle’ commence?

This is the first in a series of articles examining the problems of the fiat monetary system and comparing the various possible solutions, with particular reference to the 2nd generation cryptocurrency: Nxt.

———————

Cryptocurrency (which is a decentralised form of digital currency)1 has now reached such an advanced stage of technological development that it would be remarkable if there was a national government anywhere in the world that was still not yet paying it serious attention; at the same time, the debt based fiat monetary system, following the ‘global’ financial crisis of 2007/8,2 remains in a critical condition.3

What exactly the world’s financial and monetary systems will look like beyond the short time horizon of the foreseeable future is impossible to know but we can at least be sure that the powerful private vested interests (primarily the commercial banks) who support the fiat monetary system in its present form will seek to preserve it substantially unchanged as far as possible and for as long as possible (a subject which is discussed in more detail in the forthcoming second article in the series: ‘Is fiat a fraud? From false commodity to false economy’).

fiat-printing-nxt-crypto-currency

Has war been declared and, if so, where are the battle lines?

As yet there has been no internationally co-ordinated government level response to the disruptive potential of decentralised ledger technology (i.e. cryptocurrency 1.0 and 2.0),  although work is currently being carried out which will ultimately lead to a response at the European Union level specifically regarding investments.4

In the meantime there has, to date, been a number of responses from individual countries, either specifically in respect of bitcoin or otherwise regarding all forms of digital currency, including for example:

  • declaring the use of bitcoin as a parallel currency to be illegal (Russia).
  • (whilst allowing citizens to buy or sell bitcoins amongst themselves), banning the country’s banks from processing transactions involving bitcoin (China).
  • stating (or at least intimating) that they do not recognise digital currencies as legal tender and therefore do not regulate them (Ireland).
  • treating bitcoin as a commodity and banning its use as a currency (Japan).
  • treating bitcoin as a foreign currency and banning its exchange with the national currency (Iceland).
  • announcing the creation of a national digital currency and banning all others (Ecuador).
  • regulating digital currencies to the extent of requiring ‘digital currency businesses’ to comply with anti-money laundering laws (Isle of Man).5
  • announcing proposals to consult on how best to regulate digital currencies and in the meantime issuing guidance regarding their status/treatment for tax purposes (the US and UK).

So, whilst some governments apparently see digital currencies as constituting an immediate, existential threat to their financial and monetary systems (even their national sovereignty)6 others are for the time being more welcoming, at least as regards the potential for blockchain technology to confer a competitive advantage on their economies.7

Financial and monetary stability is, quite rightly, of paramount importance to governments but, despite the growing body of evidence to the contrary, they still regard that stability as best being achieved by the continuation of a debt based, fiat money creation and allocation system run by profit-maximising private banks, ostensibly subject to central bank control.

Happily, there are signs that this inter-governmental consensus may perhaps finally be starting to break down:

For more than half a century, Iceland has suffered from serious monetary problems including inflation, hyperinflation, devaluations, an asset bubble and ultimately the collapse of its banking sector in 2008.
Other countries have faced similar problems. Since 1970, bank crises have occurred 147 times in 114 countries causing serious reductions in output and increases in debt. Despite its frequent failures, the banking system has remained essentially unchanged and homogenous around the world….[a] necessary step toward monetary reform is to increase awareness of the drawbacks and risks of the present system and why reform is needed.
This report will hopefully serve as a useful source of information for the coming debate on the money creation process in Iceland and how it could be reformed to serve society better in the future.

Extract from the Preface to ‘Monetary Reform – a Better Monetary System for Iceland’ (March 2015)

The solution to the debt based fiat money problem being proposed for Iceland is the Sovereign Money System.8 How this potential solution, which is also being advocated by the Positive Money campaign, compares with Nxt will be discussed in the third article in the series (‘Comparing the potential of sovereign/positive money and Nxt to solve the debt-based fiat money problem’).

Regardless of the success or otherwise of the Positive Money campaign or the Icelandic initiative, the existing fiat monetary system looks set to continue, fundamentally unchanged, in the rest of the world indefinitely, thanks partly to the entrenched network effect that the existing system enjoys, partly to the commercial vested interest of the disproportionately powerful commercial banks9 and partly also to:

  • the collective bureaucratic inertia of the ‘four pillars’ of global economic governance (the International Monetary Fund,10 the World Bank, the World Trade Organization, the Financial Stability Board of the G2011) and of the Bank for International Settlement;
  • large parts of the financial press; and last, but by no means least,
  • mainstream economic theorists.12

To be as effective as possible in getting our message listened to with attention it’s not enough for cryptocurrency advocates only to refer to the fact that the current fiat monetary creation and allocation system leads to socially and economically damaging results and that it remains in a critical condition, we must also demonstrate that we understand why it does so (topics which are examined in more detail in the next article in the series: ‘Is fiat a fraud? From false commodity to false economy’).

Six years after the launch of blockchain technology (in the initial form of Bitcoin), the commercial banks are becoming increasingly aware of the competitive threat which this rapidly developing technology poses to their business.13

They understand that their long-established centralised system of financial networks based, as they are, on restricted access to the APIs14 on which they run is now being challenged by a rapidly developing and expanding decentralised system of financial networks based on open API access which, in effect, makes possible the democratisation of financial power worldwide.

The banks also understand that cryptocurrency technology does not just represent a competitive threat to their dominant position in the provision of financial services in general it also represents (at least in theory) an existential threat to their virtual monopoly position as money creators and allocators which came about purely as an accident of history.

It’s hardly surprising therefore that most of the major banks are now working on blockchain solutions/strategies albeit that, under the mantra of Bitcoin is bad, blockchain is good they seem to be currently focusing their attention on trying to adopt/adapt the capacity of bitcoin’s blockchain technology to store data and execute financial contracts without needing to use the reward mechanism of the bitcoin currency to secure the integrity of the ledger. Their objective appears to be the creation of a private, federated blockchain in which every hashing institution is known and trusted.

Whether that would work and, assuming it did, what effect, if any, it would have on the continuing development, implementation and rate of adoption of genuinely decentralised, trustless, mathematically secure, blockchain technologies, such as Nxt, remains to be seen.

Much more promising than private, federated blockchains (technologically speaking and also in terms of social utility) is the idea of hybrid systems that, in effect, bridge the gap between the banks’ existing infrastructure and blockchain technology. A prime example being 44 Phones’ hybrid cash and cryptocurrency platform15 which has been developed as a mobile banking application using the Nxt blockchain technology to deliver mobile money via SMS, mobile app and the web.

Systems such as these may well prove to be the salvation of the fiat monetary system which otherwise left to its own devices seems set to go that one step further than it did in 2007/8 and irretrievably implode.

In the meantime, many cryptocurrency enthusiasts appear to welcome the prospect of a mainstream financial collapse believing that it would clear the way for cryptocurrency to take its rightful place in the world.

In practice, though, it is much more likely that in the event of such a collapse national governments would take emergency powers 16 and impose a top down solution designed in collaboration with, and therefore favouring, the banking industry rather than adopting a solution from the genuinely free market, unless that solution had already achieved such widespread acceptance that public and commercial pressure to adopt it was irresistible (an unlikely scenario admittedly, but anything is possible).

Are we ready for war?

The short answer is no, we’re not. At least not one against a common enemy. Instead, the cryptocurrency industry appears to be engaged in its own permanent civil war. Have a quick read of some of the discussion threads on bitcointalk.org and it soon becomes obvious that many, perhaps most, people involved in cryptocurrency seem to regard the only enemy as being the developers, owners and promoters of any cryptocurrency they don’t currently own which is doing better than the ones they do.

Although some people do genuinely invest in cryptocurrency for the long term, most seem to be looking to make as much ‘fiat money’ as quickly as possible. Moreover, whilst all of us (long and short term investors alike) say that we welcome competition as a force for catalysing innovation and improvement, which it undoubtedly does, competition also inevitably has the effect of engaging our instincts for survival and dominance, hence the feeling of despair that some may feel when a crypto in which they decided not to invest suddenly increases significantly in value and then the feeling of relief if, as they had been fervently hoping, it subsequently collapses.

What we must always bear in mind however is that the cryptocurrency industry is still in its infancy and until the various (competing) blockchain technologies become established and their real value gets priced by the market, the price and purchasing power of their native currencies will continue to be subject to much greater potential volatility than that of fiat currencies. In the longer term, of course, the reverse may well eventually turn out be the case.

Can war be avoided?

Answer: it depends if you listen to your heart or your head.

Emotionally speaking, war is inevitable and the ‘enemy’ is either other cryptos or fiat money or both (including their respective providers, users, supporters and fellow travellers), depending on what your unmediated instinct for self-preservation tells you.

Strategically speaking, yes, war can be avoided as there shouldn’t, in reality, be any enemy to fight, at least not as far as cryptocurrency is concerned.

To acknowledge someone as an ‘enemy’ is to acknowledge that instead of merely competing with them one wants, if possible, to destroy them in a ‘zero-sum’ fight to the death where the winner takes all and the loser ceases to exist.

However, there seems little possibility of blockchain technology on its own destroying the fiat based monetary system and absolutely no advantage to be gained by claiming that it could.

Moreover, other cryptocurrencies aren’t the enemy either; no one single coin, not even Bitcoin itself, will be able to monopolize what will inevitably become an ever-expanding and diversifying market.

Every cryptocurrency that gains a foothold in the mainstream (in particular, it must be said, when one of those cryptos is part of SuperNET 17) will help to educate the wider population about the benefits of the technology, thereby opening up the market for cryptocurrency usage more generally.

In my opinion, the language of war is not the most appropriate category of discourse to use in the ongoing struggle to establish cryptocurrency. Instead we should be more inclined to use the language of diplomacy in recognition of the fact that whatever ‘best case’ scenarios we might imagine for cryptocurrency, the financial landscape in which cryptocurrencies will be operating in the future will, in the absence of a complete and irretrievable global financial collapse, almost certainly continue to be dominated by the existing debt based fiat monetary system.

It may even be that cryptocurrencies, by strengthening local economies and thereby building greater resilience into national economies and ultimately the global economy, will actually help the existing fiat monetary system to survive and traditional banks to continue in business.

Seen in that light, it would actually be in the banks’ own best interests to be more accommodating in their attitude towards independent cryptocurrencies and, for our part, perhaps we should be thinking of making a virtue out of the fact that cryptocurrency usage in the mainstream economy, if sufficiently widespread, could have the unintended consequence of actually bolstering the fiat monetary system.

The non-crypto, potential solutions to the fiat problem include:

  • a fundamental reform of the debt based fiat system as advocated by, for example, the positive money campaign, which argues that money creation should only be used in the public interest.
  • Abandonment of the debt based fiat system and a return to the gold standard.

In articles 4 to 6 in the series each of the above solutions is examined in turn and the case is made for why the blockchain based, financial platform known as Nxt is the better solution.

——————

Notes:

1. ‘Cryptocurrencies [which are a type of digital currency] typically feature decentralized control (as opposed to a centralized electronic money system, such as PayPal) and a public ledger (such as bitcoin’s block chain) which records transactions.’ http://en.wikipedia.org/wiki/Cryptocurrency

‘Cryptocurrencies are designed to be capable of replacing cash…No central power has arbitrary control over the money supply.’ https://bitcoinmagazine.com/15862/digital-vs-virtual-currencies/

cryptocurrency 1.0: decentralised, P2P, cryptographically secured, digital payment systems.

cryptocurrency 2.0: ‘…is the application of block chain or distributed ledger technology to things other than digital currency. The block chain offers the ability to facilitate decentralized ownership and store, transfer and process information in a decentralized, programmable way. Many consider that innovation to be the true value of this technology.’ http://www.coindesk.com/crypto-2-0-roundup-bitcoins-revolution-moves-beyond-currency/.

2. ‘While the housing and credit bubbles [the immediate causes of the financial crisis] were building, a series of factors caused the financial system to both expand and become increasingly fragile, a process called financialization.’ http://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%9308

3. Is the debt based fiat monetary creation and allocation system sufficiently robust to be able to respond adequately to the ‘extraordinary’ demands that are being placed on it?

‘…extraordinary central bank action has become the new normal in the developed world. Faced with the twins threats of deflation and economic stagnation, monetary policymakers are reaching for their interest rate levers and digital money-printing tools in a bid to stave off recessions and debt deflationary dynamics.’ http://www.telegraph.co.uk/finance/economics/11378193/How-central-banks-have-lost-control-of-the-world.html

4. On 22 April 2015, The European Securities and Markets Authority (equivalent to the Securities and Exchange Commission in the US) issued a call for evidence regarding ‘Investment using virtual [sic] currency or distributed ledger technology’.

ESMA states on its website that it:

‘…is interested in how different virtual currencies and the associated blockchain, or distributed ledger, can be used in investments. There are now facilities available to use the blockchain infrastructure as a means of issuing, transacting in and transferring ownership of securities in a way that bypasses the traditional infrastructure for public offer and issuance of securities, trading venues like exchanges and central securities depositaries or other typical means of recording ownership. ESMA would like to find out more about these market developments and in particular to know to what extent the use of the blockchain could enter the financial mainstream, and how it could be used.’

Nxt is the example of the digital currency platform ESMA uses in its ‘call for evidence’ to illustrate how distributed ledger technology works.

The NXT Foundation will be submitting a ‘NXT Community Response To ESMA’s Inquiry  On Investments Using Virtual Currency Or Distributed Ledger Technology’ a week before the July 21, 2015 ESMA deadline. For more information visit the related discussion on the Nxt forum.

5. ‘Digital currency businesses [as defined below] will have to comply with the Isle of Man’s anti-money laundering (AML) laws from 1st April [2015] and will likely fall under the remit of the Financial Services Commission from the Summer.’

‘[Those in] the business of issuing, transmitting, transferring, providing safe custody or storage of, administering, managing, lending, buying, selling, exchanging or otherwise trading or intermediating convertible virtual currencies, including crypto-currencies or similar concepts where the concept is accepted by persons as a means of payment for goods or services, a unit of account, a store of value or a commodity.’ http://www.coindesk.com/isle-of-man-introduces-regulation-for-bitcoin-businesses/

6. A senior Central Bank [of Ireland] official has warned that virtual and digital currencies have the potential to challenge the sovereignty of states.

7. ‘Osborne looks to virtual currencies in bid to make UK world fintech capital’.

Further details regarding the UK government’s attitude towards ‘digital’ currency is contained in two recently published reports: Digital Currencies – response to the call for information
and Banking for the 21st Century – driving competition and choice.

See also:

‘Virtual Currency Schemes – a further analysis’, European Central Bank, February 2015.

‘Cryptotechnologies, a major IT innovation and catalyst for change’. European Banking Authority, 11 May 2015.

8. Sovereign Money System: this, in effect, nationalises money by giving the central bank the exclusive power to create money and parliament the power to allocate how the money is used; the government then spends/invests it into circulation.

9.The network of global corporate control’ Stefania Vitali, James B. Glattfelder, and Stefano Battiston published in the New Scientist Magazine 22 October 2011 (Issue no. 2835) An analysis of the relationships between 43,000 transnational corporations has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy.

10. But see: IMF report from 2012 by Jaromir Benes and Michael Kumhof. The focus of the study is the so-called Chicago plan of the 1930s which the authors have updated to fit into today’s economy. The basic idea is that banks should be required to have full coverage for money they lend. Under this proposal, banks would no longer be allowed to create new money in the form of credit in connection with their lending activities. Instead, the central bank should be solely responsible for all the creation of all forms of money, not just paper money and coins. The advantages of such a system, according to the authors, are a more balanced economy without the booms and busts of the current system, the elimination of bank runs, and a drastic reduction of both public and private debt. The authors rely on both economic theory and historical examples, and state that inflation, according to their calculations, would be very low.’

http://en.wikipedia.org/wiki/The_Chicago_Plan_Revisited

11. It should be noted however that the chair of the policy development committee of the Financial Stability Board, Adair Turner, wrote in his foreword to Monetary Reform – a Better Monetary System for Iceland’ (March 2015) that the efforts to make the existing financial system more stable: have still failed to address the fundamental issue – the ability of banks to create credit, money and purchasing power, and the instability which inevitably follows. As a result, the reforms agreed to date still leave the world dangerously vulnerable to future financial and economic instability.’

12. ‘Mainstream economists’, those who subscribe to ‘…neoclassical equilibrium theory and assimilated Neokeynesianism, or to put it differently, American textbook standard economics…Mainstream economics for the most part rests on the assumption of neutrality of money…If one believes in neutrality of money, then of course dysfunctions of the money system are not an obvious subject of concern, despite all financial crises. As a consequence, most mainstream economists find it difficult to see why monetary reform might be of relevance.’ Joseph Huber http://www.sovereignmoney.eu/sovereign-money-in-critical-context/

13. The banking industry is now organising conferences to consider questions such as:

What is the future of money?

Do you know what cryptocurrencies mean for your business and for the future of financial services? Are you leveraging [the] blockchain? Are these developments an opportunity or a threat for traditional financial services providers?

SWIFT Business Forum London, 23 April 2015

14. An example of an API (Application Programming Interface) in the mainstream financial system is the VISA network’s merchant API which only the merchant, as a trusted party, is allowed to program. Examples of APIs in cryptocurrency based systems include: the transaction scripting language, the P2P network protocol and the ‘Northbound’ client, all of which are open source and are therefore available for anyone to program.

15. ‘UK’s 44 Phones Building Blockchain-Based International Mobile Network, Mobile Money Service.’

16. For example (in the UK) the Civil Contingencies Act 2004, Part 2 Emergency Powers, S. 22 (2) (h) http://www.legislation.gov.uk/ukpga/2004/36/pdfs/ukpga_20040036_en.pdf

17. SuperNET is an association of the most reliable blockchain technologies. Giving you access to all their innovation from one place.

The Tipping Point

It’s been a long, long bear market. Nxt has slipped from a dizzy high of $0.10 – a market cap of $100 million – to a low of less than a cent and a market cap of only $8 million. But despite that and even because of it, I think we’ve finally hit a tipping point.

If I had to assign a moment to the tipping point, it would have to be 11 May at 07:35:54. That was the moment when the mgwBTC market on AE dropped to 3300 satoshis and a prescient bitcoin whale picked up a million NXT in one trade while, at the same time, another large SuperNET holder was taking the opportunity to cash out assets without slippage. Another 12.5 bitcoins were sold into the same 300 BTC wall over the next 40 minutes, but after that the price rebounded. A couple of weeks later some irrational exuberance led by China has pushed us back up to and over the 5k mark. (Whether this was caused by money leaving the overheated Chinese stock market and finding a handful of key alts, or whether it was BTC38 faking some volume to gain a reputation as the new exchange in town, we don’t know.) In any event, NXT has recovered around 50% since that low at 3300.

But this tipping point isn’t really about price. It’s been remarked before that market cap is largely meaningless and price does not equal value. As jl777 has said, ‘The market is technically a manic/depressive psychotic. That means it is delusional and says things that are, well, insane. Like LTC is 30x more valuable than NXT, or AUR is 10% of bitcoin, etc.’ Price and market cap should follow, but the market isn’t a good judge of value in these circumstances. The market sometimes overvalues things, like in the early stages where hype sucks in walls of money from excited speculators; it sometimes undervalues them, as when investors lose patience or get caught up in the mood of collective despair that swirls around a bear market. Price and value rarely coincide at all, and then only incidentally, like a stopped clock that is right twice a day.

Building the foundations

nrs

This is about the solid foundations Nxt has built over the last year, particularly its crypto-stock ecosystem hosted on the Asset Exchange. As I recently wrote in another article, it’s just possible that the horrendous bear market was the best thing that could have happened to Nxt, if not individual NXT holders, some of whom have seen their net worth slashed by 90%. It represented a massive injection of liquidity into key assets, a lot like quantitative easing or the boost to spending central banks try to engineer by cutting interest rates: if your money is going to be worth less tomorrow, you spend it today. Some people simply cashed out to bitcoin or fiat, but huge sums flowed into assets. The scale is simply remarkable. SuperNET’s ICO collected something like $4 million, most of it in NXT. Other assets have had no trouble collecting five- or six-figure sums. Some of it unfortunately ended up in mining assets which then mysteriously evaporated, but there was still a vast investment into some extremely promising projects.

Now, at last, some of those assets are starting to pay regular dividends. We’ll ignore the mining assets, but a quick survey shows there’s some respectable activity already.

Coinomat’s assets (coinomat and coinomat1) have been paying out regularly for months, of the order of 0.015 NXT per asset, or a current yield of 0.3% per week at a price of around 5 NXT per asset. Coinomat’s arbitrage asset, MMNXT, yields around 0.7% per week.

The newer arbitrage and trading asset Liquid looks set to yield around 2% for the month, and though it’s early days the wide-ranging trading company BTCOR has been posting stellar results. It paid 0.43 NXT per asset for April, and even at the current sell price of 15 NXT per asset that’s around 3% per month.

Audit company NXTinspect looks set to have a bright future, since its business model involves verifying the accounts, security and strategies of new assets – plus it’s got a new business incubator venture up its sleeve. It pays out in the assets it is paid by clients, as well as NXT, and dividends depend on the number and nature of clients in the last month or months (they’re not always monthly), but the last one was remarkably promising – something like 20%. Freebieservers has been paying out since April based on advertising revenues from its free servers, used by 100,000 gamers and growing fast. The last payout was 0.034 NXT per asset, or in the region of 1% per month if you buy at the current sell price, and they’re looking set to scale pretty well.

Then there are the gambling assets that are just coming online. NXTbubble, the Nxt version of a famous bitcoin game Bustabit, is recording huge volumes of play. The house edge is around 1%, but variance means the revenues probably won’t be regular each month; whilst the house always wins in the end, there are some high-rollers who are testing out the theory and they haven’t hit gamblers’ ruin just yet. After a long delay, neoDICE – based on the legendary bitcoin game SatoshiDICE – is being tested with a small bankroll on MainNet, and a fancy GUI is in the works. What will the effect be when it’s embedded in your SuperNET client, waiting for any spare moments to try your luck? And, of course, there’s SuperNET’s own suite of projects, including InstantDEX, which is now in testing.

The dividends are still a relative trickle given the overall size of the Nxt economy and its daily trade volume, but they are there and they are growing, along with the ever-increasing list of viable assets. It’s like a coiling spring.

What next?

nxt-crypto-tipping-point

It’s unclear to me quite what happens next, though I think the general direction of travel is obvious. Economics is an imprecise science, as any self-respecting economist should tell you. Broadly speaking, the money flowing out of NXT-the-currency has prompted investment in Nxt-the-platform. In the bear market, money hemhorraged out of NXT and into assets. Now, after several months of development, those well-capitalised businesses are firing up and generating a flow of value back to the assetholders in the form of dividends.

What investors then do with that NXT is up to them, but not all will sell it for fiat or other alts – especially if they believe the tide really has turned. Some will be held, some recirculated back into the Nxt economy, into new assets and new initiatives: a virtuous cycle.

Not all assets are equal – not just in their returns but in their approach. Some assets keep pace with NXT, others with fiat. Imagine a traditional ‘real-world’ business, or a mining asset: the NXT invested would be converted to fiat, so the capacity of the business to generate a return is broadly correlated with its initial fiat capitalisation. If a mining asset cashes out 1 million NXT to buy ASICs then its investment is fixed at the fiat value of its funds at that time. All other things being equal (which admittedly is unlikely in the fast-moving and murky world of mining, but that’s another story), if NXT rises in price against the mined coin, the NXT purchasing power of its revenues will decrease.

But other assets – like the arbitrage and gambling assets – mainly keep their funds as NXT. If NXT rises in price then they will keep pace. In fact, they’re likely to do even better, since rising prices lead to greater volumes traded.

The market will presumably judge these assets by their respective earning potentials – punishing some for being pinned to bitcoin or fiat, and rewarding others for keeping up with NXT. Against that, there is the complexity of what happens when a currency rises in price, and funds are sucked in from other areas – both assets and other crypto coins – as traders seek to get on board. And then there’s the issue of rising NXT prices (deflation) that encourages hoarding rather than spending, investment and economic activity. And the fact that the effects could all be dwarfed by the impact of the wall of Chinese money that seems to be pouring in anyway; this time around, the Chinese are wary of bitcoin but a number of alts have posted impressive rises in the last few weeks, up 50 to 100% already.

So it’s complicated, but there are certain incontestable facts: NXT has a fixed supply; the asset economy – now very nicely revving up and moving off the starting line – has no such cap. That means there is no cap on the revenues it can generate, and which it will need to pay out in NXT. Limited supply, unlimited demand. That seems to point in just one direction.

It’s a picture that will only become clear with hindsight. But hazy and fragmented though that picture may still currently be – even leaving aside the steady work being done in the background by the likes of DeBuNe and the NXT Foundation, bringing Nxt to PayExpo, conferences and dozens of businesses around the world – things are definitely looking up.

So don’t say it too loud just yet, but I’d argue it’s just possible we’ve turned the corner.

For more information about the assets referred to in this article, visit:

http://nxtreporting.com or http://www.secureae.com and click on ‘View Live Exchange’

————————————–

Disclaimer Notice

This article is for general information only. It does not take into account the reader’s personal circumstances, objectives or attitude towards risk. It is not (and is not intended to be) any form of advice, recommendation, or endorsement by the author or the web site owner and should not be relied upon when making (or refraining from making) any investment decision.

Remember: the market can remain irrational longer than you can remain solvent; investments can fall as well as rise in value and past performance is no indication of future performance.

Egyptianomics, or what the Joseph story has to teach Nxters

It’s a classic tale of sibling rivalry, betrayal and rags to riches, set in the 18th century BC to a rousing soundtrack of show tunes. But the best-known versions of the Joseph story gloss over his shrewd handling of the famine and some of the more dubious details of his management of the Egyptian economy. In fact, almost nothing here is what it seems at first glance – and believe it or not, it has enduring relevance for the health of the Nxt economy, too.

joe1

I’ve recently had cause to revisit the Joseph story, not least because my three-year-old son enjoys singing tunes from the musical. Most people have some grasp of the outlines of the narrative, which you can read in full in Genesis 37-47, but in brief, it goes something like this:

Joseph is his father’s favourite. He reminds his eleven brothers of this on a daily basis by showing off the amazing technicolour robe his father gives him to wear. He dreams that his parents and brothers will bow down to him, and makes the mistake of mentioning this to them. His brothers decide to kill him but relent at the last second. Being good capitalists operating within the light-touch regulatory framework of 18th century BC ancient near eastern shepherd culture, they instead sell him to a bunch of Ishmaelites and pretend he’s been eaten by a wild animal. Jacob, Joseph’s dad, is glum about this but what can you do?

Meanwhile Joseph is sold on to an Egyptian. It turns out he’s quite good at his job and is put in charge of his master Potiphar’s house. He also catches the eye of Potiphar’s wife, a strumpet who aims to lead him off the straight and narrow and who turns bunny-boiler when he spurns her advances. Joe ends up in jail along with two of Pharaoh’s servants, who are troubled by some odd dreams. If there’s one thing Joe knows it’s dreams, and through a neat blend of Jungian psychoanalysis and divine inspiration he correctly interprets them. Some time later when Pharaoh himself has a bit of a ‘mare about fat cows and thin cows, rumour travels and Joe is hauled out of the clink to do his thing.

Long story short, Joe predicts a nasty famine but the heads-up gives them time to prepare. Pharaoh is impressed and puts him in charge of the kingdom. An emergency 20 percent windfall tax on the harvest and seven years of plenty later, and Egypt has enough food to weather the storm. Joe’s the hero. Then his hungry family turn up looking to buy grain and, after messing with their heads a while, he forgives them for selling him into slavery and invites them to live in Egypt with him. Everyone’s happy.

What this popular version of the story misses is that Joseph was an incredibly astute economist who seized the opportunity posed by the crisis of the crop failure and leveraged it to raise himself and his new master Pharaoh to a position of absolute power. Joseph seems to have grasped the principles of Keynesian economics well before Keynes himself ever came up with them – but instead of using them to smooth out the ups and downs of the economic cycle, he employed his insights to exaggerate the downturn and devastate the Egyptian economy, reducing its entire population to the status of serfs. Hidden within this story are warnings for the cryptocurrency economy, which arguably bears more similarity to Pharaonic Egypt than it does to the fiat economy – especially in the case of Nxt.

joe2

Artificial scarcity and the economics of central planning

One of the chief features of cryptocurrency is its strictly-controlled money supply. Instead of leaving the question of monetary policy to an external party, as NXTer explored in a recent article, crypto coins hardwire the rate of currency creation into the protocol. They may be inflationary, like Dogecoin; include an inflationary period, like bitcoin, before reaching stability; or be designed to be static from the start, like NXT. A coin that has a static money supply is really deflationary, since coins can be burned intentionally or lost in unused accounts. One of the long-term questions about bitcoin is the effect that its limited supply will have on the ecosystem. Unlike the fiat economy, it lacks a central bank with the capacity to adjust monetary policy in reaction to economic events – such as the global financial crisis, which was addressed through interest rate cuts and massive quantitative easing (money creation). For Nxt, I’d argue that the question is even more acute, since supply is limited from the start whilst bitcoin is still in its inflationary stage. In fact, we may be about to experience the impacts of that right now.

Reading the account in Genesis, it becomes clear that Joseph did a bit more than tax-and-spend. He collected a fifth of the harvest from the Egyptians in the good years, and stored it in cities built for the purpose: ostensibly, an eminently sensible policy. Then came the economic shock of the crop failure (in an agrarian economy, a drought is an economic as well as a natural disaster).

At this point, the traditional Keynesian solution would be to spend the money that had been saved in the good years, thereby stimulating the economy. (Grain is as fungible as money, even today, and even more so in Egypt. Moreover grain and money could happily be substituted.) Taking a fifth of the harvest dampens down the economic boom of the seven good years – in which grain must have experienced high inflation, since there was so much of it that its value can only have fallen. Then, in the seven bad years, grain increases in value through scarcity. Joseph could have returned the proceeds of his tax into the economy: an inflationary boost, very much like the effect of reducing interest rates or printing new money. Does he do this? Does he hell.

Centralise like an Egyptian

Joseph has already taxed the Egyptians, but he makes them pay for their grain with the silver that served as their regular currency. Ok, it’s opportunistic, particularly since they hadn’t been expecting the tax in the first place. And yes, technically it’s their own grain they’re buying, though possession is more than nine-tenths of the law when your boss is a dictator whom the rest of the country already worships as god. But it doesn’t stop there.

Joseph keeps the money. He stores it up in Pharaoh’s palace. Keynes, were he to have travelled back in time, would by now be screaming at him to recirculate the money into the economy – to splash out on a few new pyramids, roads, an extra sphinx, whatever vanity project or infrastructure initiative you want, just to get the economy going by pumping all that cash back into the pockets of ordinary people. And that’s exactly what Joseph doesn’t do.

Instead of providing an inflationary boost to the economy, Joseph contrives the opposite. By hoarding the Egyptians’ silver in Pharaoh’s vaults, he reduces the money supply and the velocity of money to near zero by locking it all away with the result that there’s no longer enough money to pay for the goods that are available – namely the grain he himself is selling.

The narrative is quite clear at this point. The Egyptians’ money has run out. They don’t seem to appreciate why, which is understandable since Joseph is millennia ahead of contemporary economic theory. So what do they do? They barter. First their livestock, then their land, and then themselves. They voluntarily enter servitude, working the land they used to own and paying a fifth of the resulting harvest to Pharaoh – not just for the seven years of famine, but forever. With a few cunning moves, Joseph has trapped the whole population of Egypt (barring the priesthood, who had their own allotment of grain) in debt servitude for all time. It’s a brilliant piece of economic manipulation – warfare, even, with the added bonus that the Egyptians don’t even know what he’s done to them.

The crypto bear market

bear

What is the relevance of all this for Nxt? It can hardly have escaped anyone’s notice that bitcoin has been in a long bear market that has lasted for 18 months and even now has not yet conclusively ended. At around $240, it’s roughly a fifth of its all-time high. Nxt, like all alts, is pegged to bitcoin, meaning that any movements on its own terms are superimposed onto bitcoin’s ups and downs. Since Nxt has also experienced its own bear market, going from 0.00014 BTC a year ago down to below 0.00004 today, that makes for painful total falls in value. NXT stands at less than 10% of its all-time high.

Bitcoin, of course, is solely a currency. Nxt is a complete economic system, with its own network of businesses represented within the Asset Exchange. Over the last year, that ecosystem has thrived. New businesses have set up, raised funds and generated dividends. On the surface of it, this is quite counter-intuitive in what has been a pretty brutal downtrend for Nxt overall.

A little further reflection suggests that perhaps the opposite is true. NXT’s supply is – like the Egyptians’ silver and unlike bitcoin or the fiat money supply – static. In normal times it would be a deflationary currency. Unlike bitcoin, there are no miners and no daily addition of 3,600 coins to be absorbed by the markets to pay electricity bills. Left to its own devices, all things being equal NXT will naturally rise in value. As that happens, people will naturally hoard NXT because they want to experience that increase. They will pull money out of assets and keep it as NXT. Something similar happens every time bitcoin spikes upwards: altcoins are sold for BTC to catch the lift.

In a recession, governments reduce interest rates to encourage savers to start spending. Inflation encourages economic activity (rather than saving) because people know their savings will be worth less tomorrow than they are today and prefer to spend them on something useful or tangible instead. Nxt’s long downtrend has effectively been badly inflationary: its value is less than it was in the past.

That falling value has arguably encouraged people to put their NXT into revenue-generating assets. It has kept the Asset Exchange alive and kicking. The bitcoin bear market has been tough on NXT holders. Stakeholders dumping their coins by the million has caused dismay. Loss of confidence by day traders has compounded the misery. What we may not have appreciated is that the lower and lower prices these have brought about may have been the salvation of Nxt. All of these factors – and especially stakeholders releasing millions of NXT – has acted like a massive injection of liquidity into the markets, Nxt’s own Quantitative Easing programme.

BitPay recently released their figures for last year. Transaction volumes have roughly doubled and average payment size roughly halved. The narrative has been that bitcoin is transitioning from a speculative instrument into a real currency, and that the reason for the bear market has been that people have been cashing out by spending coins rather than hoarding them in the hope of another rise. This is exactly wrong: people have spent coins because their value has decreased. The flow of money out of bitcoin was a natural result of an overheated market culminating in 2013’s huge speculative bubble. As the price of bitcoin fell, holders were encouraged to sell or spend them to lock in some of the remaining value. The bear market was a form of inflation for bitcoin, and it was good for the overall economy. The same can be argued for NXT’s downtrend. Without it, we could be in real trouble right now.

Nxt-crypto-charts

Nxt-crypto-asset-exchange

The warning

There’s a final warning for Nxt in the Joseph story. Hoarding is not productive. Nxt is already a deflationary currency. Joseph’s mistake, or stroke of genius, was to prevent money from circulating back into the economy, causing activity to grind to a halt.

Nxt has spent the last year building some solid foundations, both on the development side and in the businesses that have sprung up on the Asset Exchange. In all likelihood they have thrived not despite the downtrend, but because of it. At some point – possibly already – the downtrend will be over. The value of NXT against fiat and against BTC will rise. At that point, the temptation will be to hoard NXT: to lock it away in untouched accounts, choking off funds to the businesses that operate on the AE. This deflationary tendency paves the way for Nxt’s own credit crunch and the next downturn.

The good news is that Nxt is not a closed system. It’s a tiny $9 million economy with plenty of room for growth. Money will doubtless flow from outside into Nxt in order to invest in the assets that perform well due to their decentralised structure and low overheads. But we should bear in mind that the more NXT looks attractive as a currency and a speculative play, the greater impact that is likely to have on other elements of the system.

One last thing: it wasn’t a multicolour coat. That’s a mistranslation from the Septuagint, the Greek version of the Hebrew Bible. The Hebrew itself suggests a long-sleeved robe. That would have needled his brothers just as much because only those who didn’t have to do manual work wore long sleeves – everyone else had short sleeves to stop them getting tangled and caught. Jacob let Joseph off the hard work and so the robe was a reminder to his brothers that he was the favourite. Maybe the moral here is that no one likes a show off, and that hard work is the only way to get the job done. On the other hand, Joseph ended up being the second most powerful man in the world, so maybe looking good and being talented doesn’t hurt after all. Take your pick.

sponsored_by_coinomat

The UK election, monetary policy and the Common Good

TL;DR: the UK election is finally over, and it brought some surprises. One of the policies suggested by the Green Party raised questions about the nature and purpose of money – a conversation that cryptocurrency is well-placed to comment on.

If anyone has managed to miss it, the UK had an election recently. I’m actually writing this on polling day, which means by the time the article is live the election itself will finally be over, very likely giving way to days or weeks of horsetrading in the frantic scrabble to cobble together a stable government (or not).

It’s been a protracted and thankless election, with polls remaining stubbornly stuck firmly in the ‘hung parliament’ zone for months. So firmly, in fact, that it’s hard to grasp how a workable government could be formed. Unlike our European counterparts, from whom so many Brits want to secede, we never learned how to do coalitions. The First Past the Post system engenders a winner-takes-all mentality that means the party with the most seats doesn’t like playing nice with any junior partner (and in this case, it may well need to be partners, plural). Unfortunately, it’s also a critically important election, and not just because the outcome will decide whether we take that vote on EU membership. There’s the awkward question of whether the Scottish National Party, after a meteoric rise catalysed by a failed referendum last autumn, will end up calling the shots – holding to ransom the government of a country that is its stated objective to tear apart. Aside from those two questions of independence, there’s the standard quandary of austerity vs tax and spend; how and if we fund our sacred and cash-strapped National Health Service; and whether a nuclear deterrent is worth the £100 billion investment when a rising number of people rely on food banks to get them through the week, to name a few.

It’s more complicated still because the political landscape has splintered over the past five years, since voters returned no overall winner and we ended up with our first full coalition in living memory – a dysfunctional marriage that held together only for the sake of the children (and the Fixed Term Parliament Act, which effectively served as a cast-iron pre-nup). Ten years ago we could be practically assured that one party would govern with a majority. Today a majority is less likely than ever before, and instead of two main parties and the odd interloper we have two parties with dwindling support and half a dozen others shored up by protest votes.

For the Common Good

The Greens are one of the minor parties that has enjoyed a resurgence in popularity due to vanishing confidence in the bigger players. At the time of writing they have only one MP and it’s likely to stay that way; their support is spread too evenly across the country to achieve the concentrations of votes needed to win in a constituency under the First Past the Post system. But party membership has risen sharply in recent months, and they are enjoying greater prominence on the national stage. Their slogan is ‘For the Common Good’ – a phrase that will sound familiar to anyone who has encountered Catholic Social Teaching. (For what it’s worth, it’s unlikely to have come directly and unadulterated from that source, since the Greens are far more liberal on matters like abortion to want to make that religious association.) It’s something that they Greens take seriously, along with their emphasis on the environment, in that they propose some fairly radical policies to level the playing field and reduce inequality.

Whilst the economy has featured big in this election, there was an intriguing note tucked away in the Greens’ manifesto that touched on something none of the other parties had mentioned: how money is created. The section Regaining control of our money reads:

One of the most fundamental tasks of government is maintenance of the currency. Without stable money accepted by all we can’t buy and sell things or plan for the future. Inflation in particular makes it hard to take the long-term view that the environmental crisis demands.

Most people believe that our money is currently created by the nationalised Bank of England. It isn’t. A pound in your bank account is no more than a promise by the bank to pay you that pound; you don’t actually own any publicly created money. In fact, commercial banks create new money (in the sense of money in bank accounts) whenever they make loans, and that money disappears when the loan is paid back.

The fact that the size of our money supply – the total amount of money in circulation – is dependent upon millions of separate commercial lending decisions by banks makes it hard to maintain economic stability. During the great recession of the past few years, the unwillingness of banks to make new loans and the desire of people to pay down their debts has meant that the money supply has shrunk, and the government has had to resort to the emergency policy of printing money (called ‘quantitative easing’) to prevent an even worse slump.

We believe that the time has come to recognise that the creation of currency and the control of the money supply is far too important to be left to profit-seeking private sector banks and should be brought back under the democratic control of the state. Quantitative easing was but a first step. Commercial banks should be no more than the custodians of publicly created money in current accounts, and the creation of that money should become the function of a new monetary authority, independent of day-to-day government control. This policy would protect ordinary bank accounts, and

  • allow banks to fail safely

  • separate ordinary and investment business

  • provide some control on overall lending and debt

This would be a massive and complex change to our banking system, with many ramifications, and its implementation, involving many years of consultation, legislation and the creation of transitional arrangements, would not be appropriate for one Parliament. But we would take the first steps of preparing detailed proposals and consulting upon them, and Green MPs will press this issue in the next Parliament.

It’s a bold and bizarre policy. Nothing like it appears in any other manifesto. It’s worth taking a closer look at some of the ideas and assumptions that lie behind it, because the same background – albeit with different conclusions – underpins the cryptocurrency ecosystem.

Central banking?

Firstly, like central banks all over the world, The Bank of England (the UK’s central bank) doesn’t quite play the role that people imagine it does. The Bank of England is responsible for the creation of physical cash – coins and notes – but this represents just a small amount of the total money circulating in the economy. The rest is bank deposits, which are simply numbers on private-sector banks’ electronic balance sheets. The Bank of England is not responsible for these. The other kind of money it creates is central bank deposits, which are a kind of special IOUs used to move money around within the banking system. Individuals and non-bank firms only use cash and commercial bank money, rather than these dedicated IOUs. The idea behind Quantitative Easing was to free up money for the real economy (to stimulate activity) by the Bank of England creating central bank deposits and using them to buy up bonds from pension funds and insurance companies. The bonds move to the Bank of England from the pension fund; the pension fund’s bank is credited with the central bank deposits and the pension fund’s account is credited with ‘regular’ money, which can then be lent out to other customers. This process is explained in a Bank of England document about Quantitative Easing, as well as on the Positive Money website (well worth a read).

However, it is private-sector banks, not the nationalised Bank of England, that creates the vast majority of money in the economy (that is, everything excluding physical coins and notes). It’s hard to be certain of the proportion, not least because the definition of ‘money’ itself isn’t clear. One reasonable estimate, though, is that regular banks bring into being something like 97% of money. They do it by lending. When a bank grants a mortgage or another kind of loan, it simply creates an entry in its books and lends that money into existence. The customer accepts it, uses it and, in most cases, pays it back with interest. When that happens, the created money in the bank’s ledgers is gradually cancelled out. In a strong economy, there are few limits on the number and size of loans a bank can grant, since it all gets paid back fairly reliably.

The result is money creation on a vast scale, which has almost nothing to do with the Bank of England or with the amount of money held in reserve by banks. ‘Fractional reserve banking’ (to be explored in more detail in a forthcoming series of articles to be published on nxter.org about the fiat monetary crisis and its possible solutions), means different things according to which school of banking theory you subscribe to but what seems reasonably clear in practice is that banks lend first and then seek to regularise their reserves’ positions afterwards. It’s only when, following a financial crisis or economic downturn, a critical mass of loans can’t be paid back that the problems of largely unconstrained bank lending become apparent. When there’s uncertainty about repayment, banks become wary about lending and there is (as there was) a credit crunch. Thus central banks stepped in to provide liquidity in one way or another – lowering interest rates, buying up bad debt and, ultimately, quantitative easing.

The Greens propose that private-sector banks, driven by profit motives and subject to moral hazard, should not be left to provide the vital function of money creation. Instead, this should be entrusted to a state body, at arms’ length from the government, that would be able to take a more circumspect view of the process – perhaps acting a little like people inaccurately assume central banks do at the moment.

In other words, the Green party currently sees the process of money creation as dangerously distributed – the responsibility of ordinary, profit-driven banks – and seeks to centralise it for the common good. These ordinary banks would then simply become ‘custodians’ of centrally-created money – once again, what most of us always assumed they were in the first place.

Subsidiarity

The proposal is an intriguing one, not least because it raises questions about the nature of money, who really controls it and what purpose it is meant to serve. But it’s also raises an interesting political question. The Greens are not known for their love of centralisation. Take this paragraph from page 68 of their manifesto:

All countries deserve a voice in global decision-making, and we want to use ours to support… A fundamental restructuring of our global economy, with power held at the local and regional level and only passed upwards when international cooperation is necessary. We call this ‘subsidiarity’ – this principle is the basis of our approach to the European Union and other international organisations.

Subsidiarity is, like the Common Good, another term that will immediately be familiar to those with a knowledge of Catholic Social Teaching, in which it is explored in some depth. It can be summarised as appropriate (de)centralisation. No group is given a task that might better be performed by a lower – more local, more devolved – group. The reason for this is that centralising power away from local groups entails taking decisions on their behalf, rather than involving them in the decision-making process. It reduces their agency and participation in the matters that affect them the most. Unnecessarily centralised power is, at best, inefficient and neglectful; at worst, it is abusive and coercive.

There are, of course, activities that must be undertaken by a centralised authority, because such a concentration of power represents the best organisation for the task. National defence and dealing with organised crime are obvious examples – and legitimate purposes of a state or super-state organisation such as the EU. But subsidiarity holds that no organisation should seek to intervene if the activity can more effectively be carried out by a lower body.

The $64,000 question is, where on that spectrum of centralisation should the creation of money lie?

The purpose of money

It’s likely that there can never be a universally satisfactory answer to that question, not least because it may be one of ideology as much as practicalities. But it seems that Subsidiarity and the Common Good may point to a solution that is far less centralised than the Green party propose.

Consider the purposes that money is supposed to serve. It is typically held to involve at least three basic functions:

  • A medium of exchange

  • A store of value

  • A unit of account (measure of value)

There are other properties that are desirable, such as fungibility (capable of mutual substitution – one dollar is the same as another dollar), divisibility and resistance to counterfeit, but these simply enable the chief functions.

Cryptocurrencies are excellent at the first function, and currently notoriously poor at the second and third, due to their volatility. In ancient times, money took the form of precious metal – typically pieces of gold or silver of agreed weight. As time went on, these were forged into standardised coins. Its basis in precious metals meant that money could not simply be created into existence, like fiat money (an apt term; in the Vulgate, the Latin translation of the Bible, God creates day and night with the words fiat lux, ‘let there be light’). These tokens were traded directly between people in return for goods and services – the original peer-to-peer money, free from centralised control. It was possible to charge interest, and people did. What was not possible was the creation from nothing of large amounts of money, on which interest could be demanded. Money was tangible. It could not simply be conjured from nothing, whether by an individual or a commercial enterprise or a state.

This is a far cry from what money has become to us. Money is still a medium of exchange, a store of value (imperfect, due to inflation) and a unit of account. But its centralisation and ease of creation has turned it into something else as well. It no longer serves these purposes alone. The control over the money supply represented by the money-creating loans of private-sector banks means that money is also – inherently – an instrument of inequality. Its purpose is not confined to transferring, storing and measuring value.

Firstly, it intrinsically requires a flow of wealth from borrower to lender. The justice of a debt and interest-based economy is a separate question, but the scale of that flow of wealth is leveraged by the banks, who effectively have no limits on the amount of money they can will into existence. Secondly, there is an inequality in who can create money. It is a function left to the banks alone – most of which operate for profit and to reward their shareholders rather than for the Common Good.

That ownership over money creation underpins our economy. Such a free market for money – easily available credit – is fundamental to capitalism, but the result of the tacit decision to push money creation onto the private sector is not capitalism as we would typically understand it. The ‘too big to fail’ problem that arises means that the system rewards the money creators in good times but pushes the cost of their failure onto a third party – the government/taxpayer – when things go wrong. This is extortion, not capitalism, and allowing banks to fail is a critical part of a healthy system.

The Greens’ solution to this issue is to centralise money creation and control in a single state body, removing that ability from private-sector banks. Cryptocurrencies take a radically different approach.

Algorithmic money creation

No cryptocurrency operates like either a central or private-sector bank, taking unilateral decisions about the amount of money that will be created at any given time. Instead, the money supply is rigidly governed by mathematics. A coin may be permanently inflationary (like Dogecoin or Peercoin), inflationary for an initial phase (like bitcoin), static in supply (like Nxt), or arguably deflationary (like Nxt or bitcoin in the long term, since some coins will be lost or sent to inaccessible addresses). But the supply is always predictable and, so long as the protocol functions as it should, beyond intervention.

Whilst the supply is ‘centralised’ in the code and the intention of the developer, control of that money is anything but. It is a network-wide activity. In bitcoin and other proof-of-work systems, control is given to miners, who may or may not hold coins. In Nxt and proof-of-stake currencies, everyone with a working balance controls the network. Distribution may be skewed, as it is with any currency (including the US dollar – the 80:20 rule), but control over money is not subject to absolute centralisation or a single point of failure.

If the purpose of money is to act as a medium of exchange (amongst other things), the principle of subsidiarity suggests that it makes sense to place control over that function in the hands of those who have the greatest interest in its effective functioning. Centralisation moves that function away from people who want to make ordinary transactions – exchanging goods and services for money – and risks introducing new functions that do not serve those ends. It is interesting that the Greens note in their manifesto:

The change to the new system would create a new and substantial cash flow for the government, which could be spent on social and environmental priorities and assist in paying down the national debt.

This statement is not explained further, but it must, at the very least, raise a few eyebrows.

Conclusion

Crypto has a few major stumbling blocks. One is its volatility, which puts off new entrants – why put your money in something that could lose 10 percent of its value overnight? On a more theoretical level, the automation of money creation is another problem. There is no centralised body to make decisions about the money supply, but instead it is fixed. Is this the best way to go about addressing the problems that led to the financial crisis? Maybe, maybe not. We’re only just starting this grand experiment into the meaning and function of money.

Finding a way to stabilise the value of cryptocurrency will go a long way to addressing its current shortcomings – allowing it to be used as a unit of account and store of value, as well as a means of exchange. There are various proposals for how to go about this, though none have been properly implemented and tested. The holy grail is a currency that is both backed by real-world assets and pegged to the value of a real-world currency, but that is also decentralised. This apparently impossible task is being explored by SuperNET developer James Lee, who hopes to create such a stable cryptocurrency – enabling crypto to be used by anyone without fear of it losing its value.

James’ ‘shorting the box’ solution involving BTCD sidechains should help to protect the participating cryptocurrencies from changes in value caused by speculators trying to manipulate the currency markets artificially. There remains the question of whether it is desirable for more of a currency to be created (or destroyed) in response to broader economic events – and if so, how this should be decided? This is where subsidiarity may again become relevant. Perhaps that decision should taken at a higher level, if not the highest. A truly decentralised approach would devolve responsibility for inflation/deflation right down to the level of miners/stakers – the users and custodians of the currency – but what would the likely result be? History suggests a tragedy of the commons, as individuals look after their own interests to the detriment of the ecosystem as a whole, thereby ultimately negatively impacting themselves.

A Tragedy of the Commons: a fitting summary of both the question of monetary policy and the UK’s election.

Update: Exit polls are out and the indication is so different to the pollsters’ predictions as to be almost unbelievable. Conservative 316, Labour 236, SNP 58, Lib Dem 10, Green 2, UKIP 2. If accurate, it looks like the outcome will be a good deal less messy than expected by just about every single poll in the last 4 months.

Update #2: Unbelievably, even the exit polls underestimated the scale of the victory, as the Conservative Party surged to a surprise win with a borderline majority.

The value of crypto coins

Nxt and SuperNET to the rescue!nxt-iphone

There is only one reason that 7 billion people are suckered into the game of Central Banking, and that is FEAR. People FEAR others will take their VALUE away from them and they run to centralized bankers for help.

But, given that 97% of it is based on debt, how can the mainstream fiat monetary system which we’re still obliged to use meaningfully represent people’s VALUE – i.e. their economic self-sufficiency? Surely debt is the opposite of value, unless you’re a bank.

It seems intuitively obvious that money based on something tangible and in short supply, e.g. gold or silver, must be better for society than a minority elite creating money out of nothing. Indeed, until 1971 most national currencies were still based, albeit indirectly, on gold which at least is something that most people believe has intrinsic worth and which, more importantly, acted as some sort of restraint on the amount of money that could be created. But nowadays of course the (privately owned) banks simply create money without any effective restraint at all.

Result: the minority elite game the system and in the process steal more and more of our VALUE. It’s been going on now for a long time but it’s coming to an end. The fiat monetary system is broken beyond repair. The minority elite know it and they’re running scared.

Thanks to information technology and cryptography (and of course to ‘Sataoshi Nakamoto’), we now have a way whereby a minority elite can no longer continue to directly CONTROL nearly 100% of the VALUE. They can neither possess 100% of the physical and tangible NOR can they directly control the ledger.

Over the centuries, money has taken a wide variety of forms, including (to name but a few) gold, silver, iron ingots and cowrie shells and, since 1971, debt-based representative paper (i.e. fiat money) and, more recently, electronic digits in computer memories.

But whatever form it takes, money has no intrinsic value of its own independent of the value ascribed to it by those who use it.

WE ARE THE VALUE

To thrive, people need an honest ledger of account that is not easily co-opted. We need a neutral, unbiased record keeper. Gold is far superior to being an honest ledger than fiat, since gold is much more limited and can be held directly by the one who created the value. You can’t just hit the print button and have infinite gold come spewing out.

The Elite can use fiat to buy up most of the Gold, Silver, Opal, Diamonds, Platinum, etc etc etc, but the elite cannot ever buy up all the real value because real value resides in the people.

People may wonder what currency has the potential to hold its value the best. Another way of asking this is, what ledger is the most honest and the most difficult to control and manipulate?

Gold itself is not modern technology, therefore it does not play well with the Internet. Gold may never be able to integrate disjointed technologies. You have to take gold with you or you have to trust someone to hold it for you. If you pack gold with you it holds you back and if you keep it in a Centralised suppository it disappears.

To a certain extent, the private ownership of gold, at least in theory, is effectively a decentralised financial system, in that it enables transactions to take place between private individuals without the need for any centralised control, unlike fiat which of course is controlled by banks and governments. However, in practice gold only operates as a very basic, costly and limited form of decentralised financial system.

THE REVOLUTION WILL NOT BE LICENSED

Everything needed to replace the elite’s technology has already been built. Everything needed to render their tech obsolete and hence rendering them obsolete has already been built.

Fortunately, we now have available to us the ultimate means to have an honest, decentralised and extremely difficult to manipulate ledger; moreover, one that is becoming more flexible, integrated and powerful by the day. Unfortunately, very few People have so far adopted this technology, mostly because it is still not well integrated.

DeCentralised Technology is one of KEYS to releasing the shackles on humanity, and you can keep LOCKING it back up or support those trying to steal the keys.

A few months ago, while sitting on a plane, I fell into a bit of a meditative state where I picked up on some things I would never have realized only from conscious thought. I am a long time ‘spiritual’ person, of which there is literally almost ZERO support in the CRYPTO world, even though CRYPTO has immense power to aid the freeing of the world. I am also a bit of a CRYPTO fan and I was shown how the CRYPTO world was trapped in a SHOW ME THE MONEY, LINEAR, very male dominated type LEFT brain mentality. So, I thought I might dabble in trying to bridge the two and see what barriers I come up against, almost as an experiment. It’s as one might expect. The spiritual, new thought, more right brain types, don’t get crypto but are generally positive so crypto info is basically ignored with a few ‘interesting’ type comments, but very little interest.

Spiritual freedom is not well understood by the almost dismissive knee jerk reaction of the very male orientated left brain crypto world. I watch patiently waiting for the two to converge.

Also read:
The value of 10 NXTs
SuperNET CORE coins
Nxt [CORE]: Monetary System

Write for NXTER.ORG and get paid in crypto currency

Shareholders Meeting via Blockchain

It seems we are witnessing a revolution in the corporate world caused by blockchain technologies. We’re moving quickly towards a new business ecosystem of virtual corporations, distributed autonomous corporations, smart contracts, new models of funding and so on. This article is about the exciting possibility of having distributed shareholders’ meetings where results are public and counted in a trustless way.

Since late April last year, I’ve been working on the NXT cryptocurrency as a core developer. NXT is a 100% proof-of-stake cryptocurrency aiming “to transform a cryptocurrency into a decentralised financial platform that supports a thriving and fast-growing digital economy” (unlike hybrid Ripple’s approach which isn’t fully decentralized).

Since 12 May, NXT has had the Asset Exchange (NXT AE) as a core feature. Anyone can now issue assets on this totally decentralized and uncontrolled exchange and trade them.

You can monitor your Nxt asset purchases either via your client or via a number of independent web sites: NextBlocks, NXTReporting and SecureAE  (where you can also purchase Nxt and issue assets).

Read the asset descriptions and you’ll quickly gain an appreciation of the wide range of different applications and services that have already been built on top of the Nxt platform and they’re just the beginning; the start of what is set to evolve into an entire financial and economic ecosystem.

The key feature of the NXT AE for businesspeople is that they can fund their business via asset issuance, getting money from anyone (not just angels/VCs, as with KickStarter), and they can do so from day one and for a low fee.

Imagine getting funding directly from a community needing your product. And, wouldn’t it also be awesome to get feedback and community-powered decisions?

With the voting system I have finished recently that will all be possible. The voting system will be introduced in NRS (NXT Reference Software) 1.5. The latest release version is 1.4.16, so voting API & GUI is already accessible. I can share some API details right now as they will likely remain unchanged.

Also see: Nxt Voting Teaser video (GUI and functionality)

Consider the example of an indy developer making a game. First, he got some funds via the asset exchange. Then he made a promising v.1 of the game. Both the concept and its implementation are still raw but the fans are excited! So he wants to ask the community whether he should polish v.1 or instead build v.2 on the basis of a better concept, or… Having decided on the different options, he starts the poll:

    val question = "Further directions in game development. "
    val description = "I got some great reviews. I have 10000 NXTs left. How should I spend them?"

    val finishBlockHeight = Nxt.getBlockchain.getHeight + 1440 // ~= 1 day
    val options = Array("Improve graphics and release it ASAP", "Start to work on v.2 to get funds for it's development", "Better ask experts, e.g. attend GameDev Conference", "Game is abortive. Stop working on it.")

    val optionModel = Poll.OPTION_MODEL_CHOICE
    val votingModel = Poll.VOTING_MODEL_ASSET

    val pb = new PollBuilder(question, desc, options, finishBlockHeight, optionModel, votingModel)
    val assetId: Long =  // assetId here
    pb.assetId(ai)
    pb.optionsNumRange(1, 1) // only 1 option to choose

    issueTxToGodId(new Attachment.MessagingPollCreation(pb), phrase1)

A vote could be sent with following code:

    val poll = Poll.getByName(question).head
    val vote = Array(0.toByte, 1.toByte, 0.toByte, 0.toByte)
    val attachment = new Attachment.MessagingVoteCasting(poll.getId, vote)
    issueTxToGodId(attachment, phrase2) 

1440 blocks after starting the poll we can get and print to console poll results (where 1 asset=1 vote):

    val pr = PollResults.get(poll.getId).get
    pr match {
        case cpr: nxt.PollResults#Choice =
            val m = cpr.getResults.toMap
            println(m)      
    }

So, we are soon going to have fair, cheap, public and distributed shareholders voting! Just imagine how that could change the world of business.

Notes:

1. This blog post (as revised) was first released by Kushti on 2. The minimum fee to issue an asset on the NXT AE is 1000 NXT. The transaction fee is currently 1 NXT.

First example of fully decentralized crowdfunding: Nxt Academy

Let’s actively bring Nxt into every university and school all over the world!

Crowdfunding usually needs three actors: the project initiator, supporters and a platform connecting both parties. Crowdfunding websites exist only for 6 years. During 2013 $5.1 billion USD was raised by millions of individuals! However the biggest disincentive to using websites such as Kickstarter is their fees. Kickstarter demands 5% of the money raised as a fee, and payment processing fees are another 5%, which in the era of blockchain technology is a little difficult to justify.

Nxt recently released a new monetary system with a crowdfunding feature, which makes a third party – a platform – fully automatic and decentralized. Since January 2015 it’s finally been possible to organize a crowdfunding campaign via the Nxt client with all costs and fees totalling less than a half USD.

The very first example of a completely decentralized Crowd funding via Nxt Monetary System started at the beginning of February 2014, when a Czech Nxter, Petr K. Salsa, issued a currency: NxtAcademy with ACDMY as a code.

500,000 NXT (= 500 units) need to be raised during February in order to successfully finish the crowd funding campaign. If 500 units aren’t bought before block 370,000 (= 1st March 2015), all pledged NXT will be returned. If at least 500 units are bought, the funds raised will be used for maintaining Nxt Academy (= at least 1000 USD/month). More funds = more projects for students, more lectures all over the world, more external teachers, more printed materials.

How to donate?

  • Click at Monetary System + Currencies section
  • Find ACDMY / NxtAcademy (search “ACDMY”)
  • Click at “Reserve” at the “Actions” column.

nxt-crowdfunding-nrs1

  • Buy any number of “Units” (more = better)

nxt-crowdfunding-nrs2

Details and other info: http://nxtacademy.com/about

crowdfunding-nxt-academy

Nxt is an important part of the open source technology. Nxt Academy recognizes Nxt’s spirit and guarantees all content accessible for anyone, anywhere, for free. It is a long term project which focuses on providing free education for the students and children. Every teacher will be able to download and use teaching materials for their students. Everyone will be able to attend free online courses about Nxt from their home. Young people, as yet completely unaware even of the existence of cryptocurrency,  will be informed about Nxt via school bulletin boards and via lectures and student projects organized at their school.

The world of cryptocurrencies has got a huge enemy – ignorance. Society isn’t yet ready for the wider acceptance of the cryptocurrencies. Nxt will in time revolutionize many industries, but right now it is just a toy for geeks. Nxt Academy is going to prepare society for the Nxt crypto revolution by providing teaching materials and much more. Nxt Academy isn’t a commercial project, its existence, form and size depends on donations from the Nxt community.

Direct marketing to Students – education

Nxt Academy isn’t only a passive website with videos and texts. It actively propagates Nxt at schools, universities and student festivals. Nxt Academy will be targeting all bigger Universities and sending its materials to their students. Students will be working on team projects with their classmates, while Nxters will be mentoring them.

Teachers will be receiving teaching materials, infographics, textbooks and worksheets for children, they could even teach young kids about Nxt. It will be easy to download all sources and printed materials will be sent to the schools or handed out after the speeches / lectures at the schools and universities.

Online Marketing and Cooperation

All content created by the Nxt Academy will be actively distributed to the other similar projects – Khan Academy, Coursera, Coin Academy, College Cryptocurrency Network… It’s about spreading the knowledge, Nxt Academy will try to have its courses at all of those sites and many others.

Nxt Academy will be targeting people whose lives are as yet untouched by the cryptocurrencies at various online platforms. Nxt Academy provides press releases, news, blog posts, Twitter/Facebook/Weibo posts, forum posts, videos at multiple platforms… SEO, online marketing etc.

Nxt Academy will be supporting the crypto research

The database of the research/students papers will be very helpful for all cryptocurrency researchers. This side project will create a library with crypto-related articles saved at multiple platforms. With enough funds, Nxt Academy could provide student scholarships, grants or awards. The dream goal is to have a crypto thesis of the year contest during the Nxt Academy conference.

Online courses and textbooks

Before entering the Universities’ or Student festivals, Nxt Academy needs to prepare the teaching materials.

Online courses – Easy-to-use platform for everyone who will be able to learn about Nxt, its ecosystem, its ideas, its abilities. New fresh videos and edited videos will be followed by chosen articles and infographics.

Textbooks – If we want to get cryptocurrencies and Nxt into the mainstream, we need to prepare educational materials for teachers. Textbooks will be created by a cooperation with university professors and school teachers.

Worksheets – Children as well should have the chance to learn about the cryptocurrencies. We need to prepare the world for this new revolution. Worksheets, educational programs for children will be prepared by a cooperation with the school teachers.

Infographics – Social media campaigns need well-prepared infographics to reach the biggest audience.

Check other activities at https://nxtforum.org/nxt-academy/ or http://nxtacademy.com

Crowdfunding Progress

After two weeks Nxt Academy raised 120,000 NXT. 35 Nxters decided to support the project with their donations. It is also possible to donate directly, you can send NXT to: NXT-W4FQ-JGAE-JHS9-3PMNR (from online wallets, exchanges…).

Salsacz can devote himself full time to the project, hire an ‘in-house’ co-worker (school teacher), external university teachers and pay for outsourcing micro-jobs (translations, voice-overs, corrections) via Nxt-jobs or Fiverr. All costs are very low, because the salaries in Czech Republic (1 full time and 1 part time) are very low compared to western countries. The smallest possible budget is 500,000 NXT for a year. More money = more projects for students, external coworkers, printed materials, more speeches…

Nxt Academy is a project supervised by Petr Salsa, who has spoken about Nxt at 5 conferences and one University. A few other speeches at Economics Universities are being planned for the near future. Salsa attended all of the online courses about cryptocurrencies, such as “Introduction to Digital Currencies” by University of Nicosia, Coin Academy, Coursera, Princeton University and University of Virginia. He wants to devote his experience, skills and time to build similar courses about Nxt.

More about the Nxt Academy team: http://nxtacademy.com/about/#team

With Nxt Monetary System anyone can run a decentralized crowdfunding campaign.
Learn more about the Monetary System here: http://test.nxter.org/nxt-core-monetary-system/

NXTER.ORG update #1

Hello world!

NXTER.ORG is slowly (in crypto time) turning into the community project we hoped for. Nxters are contributing with their news and views, so the overall number of news items, blogposts and tech articles published has been going up, and with this also the number of site visitors, social media connections and email subscribers. So a big thank you to everybody who has contributed to the English and the French NXTER.ORG so far.

Done:

In January we focused on getting some basic ‘long lasting’ content up, Nxt guides and in depth presentations of Nxt’s CORE features, not only because they have been implemented in the NRS Client, but also to show they should be and are being used by 3rd party developers to build innovative and user friendly services on top of our Nxt platform. With the essential guides and articles now in place, we can begin to spend more time on diving into the detail of those 3rd party projects. They are, after all, what will probably drive the wider adoption of Nxt in the future. So, if you have a project built, or in the process of being built, on Nxt, please get in contact so we can help you spread the word.

Also read: http://test.nxter.org/developers

But why?

In addition to the obvious reason for documenting Nxt’s core features, one of our goals for February-March is to translate them and add landing pages in more languages. Each ‘local’ NXTER.ORG site will host easy to follow guides, our main articles about Nxt plus the most important links. This is to give non-English speaking people an access point into Nxt and also make it easier for them to spread the word about Nxt locally. To friends, maybe developers, maybe universities, maybe the press. Each subsite can be turned into a full blown local blog space or magazine (like the English and the French sites), if/when local editors take on the task. For the moment we will not be actively working for the latter, as we are still working hard on building the main site.

Translators

We consider the expansion of Nxt’s outreach very important, so we’ve decided to reward translators of this specific ‘landing page’ content, not with the usual 1/3 of what the original authors were paid, but with 1/2. If you are interested in translating and can do it well, you can read more here.

Short news

Sponsorship
Coinomat is now main sponsor of NXTER.ORG.

SuperNET client
The official SuperNET Client will link to http://test.nxter.org.

Crypto radio show
You can listen to crypto radio on NXTER.ORG. Just hit ‘play’ in the sidebar and enjoy. It’s Nxt friendly crypto talk and good music, live and recorded, from http://www.supernetradio.com.

SuperNET silver coin contest
We’ve gotten our dirty hands with a .999 grade silver SuperNET coin, and now you can have it.

The coin is from pondsea, and one out of a total mintage of only 1000 numbered SuperNET coins. This silver beauty can be redeemed for a physical coin or traded as an asset on Nxt AE, ID 1976421459488798622). Here’s how you can win the coin: http://test.nxter.org/win-a-supernet-silver-coin/

Nxtforum.org subforum
We’ve started a public subforum here: https://nxtforum.org/nxter-org/

Do visit, feel at home, bookmark it, push ideas, ask questions, or just post a meme.

New French editor
We have a new French editor: Hachoir. Welcome on board!

New accountant / business manager
Lionel Jeannerat (Ludom), who has been a core contributor to NXTER.ORG since July, has recently taken over from KarlKarlsson as NXTER.ORG’s accountant and general business manager. Ludom is a trusted Nxt community veteran, known as the “French Nxter” (even though he is Swiss), the founder of the world’s Most Interesting Coin (MIC), an asset expert, article writer and (former) editor of the French NXTER.ORG site.

Join the movement

We welcome anyone who wants to join us in our efforts.

We don’t want to just sit around waiting for NXT to appreciate in price. Neither do we want to confine ourselves to merely being a donation funded promoter of the Nxt platform. We want to share Nxt with the world and at the same time make money which can be shared with everyone who is participating in building Nxt through NXTER.ORG.

NXTER.ORG is an opportunity to showcase Nxt and its ever-growing range of services. We think people should directly benefit from contributing to this promotional experiment. Accordingly, when you make a contribution to NXTER.ORG, profit-sharing NXTP assets are transferred to your account and every month we pay out 70% of NXTER.ORG’s Net profit as NXT dividends to our asset holding contributors.

We welcome anyone who wants to join us and contribute their quality skills to our awareness building community project; bloggers, journalists, graphic designers, web designers, translators, SEO experts, Nxt 3rd party project devs (funded or unfunded), and Nxt businesses. We look forward to working with you, either as employers or in a profit-sharing business relationship.

Make contact either by writing directly to apenzl or Ludom or by using NXTER.ORG.

Yours sincerely,
Arthur Penzl, on behalf of the NXTER.ORG Team

Translators wanted!

What do we need?

nxt-ftw

Our goal is to give non-English speakers a local Nxt site.

It can’t just be a logo and a wallet download link, Nxt is not simple like that.

We want to give new users a fair introduction to Nxt with a client guide, descriptions of Nxt use cases and features, links to the most necessary tools and services, our nxtforums, and of course the Nxt client and fiat/BTC > NXT gateways.

It’s an ambitious project (this is the beginning), but NXTER.ORG contributors have already produced the content in English (most of it is also available in French), the website is set up and ready to be expanded with multilingual content, so “only” the translations and the implementation of these are left to be done now.

We need translators! Please help

Are you a confident English reader, well formulated in one of the main languages of this world, and are you interested in helping Nxt grow in your local area and beyond, your help will be very appreciated. If you have some prior knowledge of Nxt or crypto currencies in general, it shouldn’t be a very difficult task.

Besides the great honor of being a Nxt translator 😉 and helping Nxt to gain new users, translators are also rewarded with NXTP assets. It’s usually 1/3 of what the original article author was paid, but for this content you will get 1/2 of the author’s reward. Every month 100% of NXTER.ORG’s net profit is paid as NXT dividends to NXTP assetholders. To learn more about our NXTP asset (ID 17290457900272383726), see http://test.nxter.org/get-published-get-paid-nxtp/.

The local landing pages can easily be turned into local blog spaces or even magazines, with local content alongside translated articles, customized menus, sidebars and advertisement, Nxt services, it’s all supported. But first: Landing pages. To share, send friends to, mail to universities, devs, businesses, maybe the press. They will need it, so they can cover Nxt and SuperNET.

Here are the NXTP amounts for the translations of the articles:

Guides

Tutorial: Nxt installation (200)
Tutorial: NRS user interface
Tutorial: Nxt Asset Exchange (200)

Usecases

Nxt – The Economy Platform (137.50)
Nxt – The Economy Platform For Everybody (125)
Nxt – for Financial Experts, Local Groups and Cryptofans (112.50)
Nxt – for Entrepreneurs, Indie Artists and Companies (125)
Nxt – The Economy Platform For Professional Traders (125)

Nxt Core articles

Monetary System (237.50)
Marketplace (237.50)
Asset Exchange (225)
Arbitrary Messages (237.50)
Alias system (187.50)
The PoS coin (187.50)

Misc

Advertise (150)
Get Published. Get Paid. (250)
Strings (menus, categories, tags, meta keywords, etc.) (300)

Let’s expand Nxt’s outreach. Maybe we’ll make the value of NXT rise. And we’ll increase the value of NXTER.ORG and open new opportunities for it – and the NXTP assets you’ve earned.

You can contact us by using our contact form or posting in the nxter.org nxtforum translations thread. Thanks.

 

NXT Weekly 26.01.2015

Welcome Nxters: newcomers as well as long-time community members!

News Summary

Nxt has just released another major feature: The Monetary System, which allows users to issue customized coins on top of the Nxt Network. The community has voted on whom to entrust with spending our community funds, lots of 3rd party projects are cooking, the Consensus Research Group has released reports about the Nxt PoS algorithm, and also: You can now donate towards the possible destruction of our blockchain. Sounds massive? It is. This is NXT Newsletter #16.

top_no10

In this week’s issue, the focus is mainly on the inner workings of the Nxt core tech and the Nxt Community.

Topics

  • The MS launch
  • CFC: Voting result
  • New Nxt core devs
  • Kill the blockchain!
  • Consensus Research Group
  • Hail to the old committees
  • Quote of the week
  • Words of Wisdom of the week

The Monetary System launch

The Nxt Monetary System (MS) has launched. Using the various parameters outlined here, anyone can now create customized currencies on top of the Nxt blockchain. New coins can be designed for specific purposes, some of which are touched on in this article.

750+ currency names were registered within the first 24 hours of the launch, making it a good day for forgers, with approximately 370K NXT in fees (40NXT – 25,000 NXT per registration) being paid out.

With the Monetary System, you can create coins without having to set up and bootstrap a network, as it’s already backed and secured for you by the Nxt Network. Bootstrapping is one of the biggest hurdles to overcome when launching a new p2p coin, so this is of particular relevance whether you’re a person, a business or a local community which wants to go digital with an already existing local currency. Loyalty points, game currencies, and controllable/pegged currencies are easy to create, it’s even possible for existing coins to be moved onto the Nxt blockchain. The Nxt wiki has a great in-depth tutorial, and if you need further help, you can visit the Monetary System forum.

Another use case is the ‘crowd funding coin’, which is ‘sold’ in exchange for donations; if a pre-set amount of ‘coins’ have been ‘bought’ at a pre-set time, the funds are released to the issuer. If not, the money is returned to the donators/buyers. This feature turns Nxt into a 100% decentralized crowdfunding platform.

As usual with Nxt, this new core feature doesn’t come with an in depth ‘For Dummies’ manual. Use cases are proposed, but the community is encouraged to test, learn and tweak it, brainstorm and find more use cases. If you want to play around with issuing currencies, you are advised to start by doing so on the Nxt Testnet.

Nxt.org has set up an easy to access testnet node, and a well-funded account will provide you the testNXT you need to get familiar with the Monetary System. Instructions and testnet can be found here.

On mainnet new ‘PoW’ coins like EGOLD, ELEMS and FORKK are being minted with the Nxt Mint Worker Utility and sold in the in-client exchange, whilst in the giveaway threads in Nxtforum useless MS currency coins, created out of thin air for a 40 NXT fee, are being given away for free.

While some early MS coins are meaningless, others have clear purposes. These are a few examples:

ORA

ora_logo

The Ora project started out on bitcointalk.org with an idea of making a “free and fairly distributed” 2.0 PoS coin based on the Qora source code. Ora describes itself as being a “leaderless, decentralized ‘starfish’ community software development project”. The initial method of stake distribution was a giveaway using the Nxt Asset Exchange: 889 people registered for a free stake of 166,666 assets each, between June 24 and July 8.

On Nov. 25 Ora announced that it would be launched as a Monetary System coin.

Kora:

When CFB first suggested this option in June the only real reservation was that ORA would be dependent on the NXT platform for its very existence. Six months on, as NXT celebrates its first birthday we believe the connection with NXT is a major advantage for ORA. The NXT ecosystem is resilient, vibrant, and grows stronger every day, and the development output over the last 12 months has been truly staggering.

We believe the NXT platform offers ORA long term network stability, just as TCP/IP offers stability for higher order protocols like HTTP, FTP, SMTP, and this stability will allow us to focus our resources and attention on the more ‘retail’ level concerns, like user experience, leaving the ‘backstage’ grunt work of network security and stability for NXT. As always, we welcome any feedback our stakeholders might have, and we take this opportunity to invite all people to join us, particularly those with dev skills who are interested in developing the ORA applications that will run on NXT.

ORA’s three letter code is the ISO compatible, ‘XOR’, so ORA is set up for future growth and international recognition.

ZIN

ZIN_Logo

Sepehr:

We have issued ZIN as a POS Crypto in NXT Monetary System and will assign everybody with a SMS Number 100 ZIN soon! It can be the biggest airdrop ever in Cryptocurrency history!

Sepehr is a veteran Nxter from Iran, and also the issuer of another asset, Forgecoin, which has earned him trust in the community by paying dividends to its holders for 7 months.

CryptoZin will make NXT (as well as the MS coins built on it), BTC and other top altcoins simple to use for anyone with a smartphone. We don’t yet know whether ZIN will have its own monetary value or not. But by sending a Nxt backed cryptocurrency as a promotional offer to “anyone in the world with a mobile phone”, Sepehr will be indirectly demonstrating the value of his service. ZIN will prove to a non-tech audience that CryptoZin not only works but also is so easy to use that they can send ZIN/MS coins on to friends or even grandparents. Next step, of course, will be to teach them the value of real cryptocurrencies. CryptoZin plans to integrate SuperNET.

https://nxtforum.org/assets-board/(ann)-(cryptozin)-cryptocurrency-for-anyone-with-a-smartphone!-)/

TSC

jl777 has suggested in SuperNET Slack that he will issue an MS coin with a special use case. Exactly how he will tweak it, is something we’ll have to wait and see, as the announcement only contains limited information about this.

jl777:

I want to make a short life cycle realtime currency for poker chips. We need a way to do 1000 tx per second between the players as the poker players are playing that fast. Any change in players extinguishes the currency, and it goes to something more solid, maybe NXT, maybe some MS coin. I believe I figured out how to achieve realtime tx, backed by locked NXT, freely exchangeable, verifiable. Still some unsolved issues but I feel the locked MS coin is a key part of this.

James has not earned his respect in the crypto world by talking tech without backing his words with actual code. So we might soon see a new MS use case turn up here, as part of a feature in his brainchild, the SuperNET.

LTB or not?

Swiss NXT and Bitcoin investor Marc De Messel has recently offered Adam B. Levine to buy out all Let’s Talk Bitcoin coins for 4 million NXT, provided that Adam would use NXT as his reward currency instead. After having his offer appreciated but turned down for various reasons , Marc changed his offer to this: If the LTB crew and community re-issues their LTBcoin experiment as an MS coin with additional features, Marc will back it with 2 million NXT in addition to its own current net worth.

The discussion about his offer is ongoing and can be followed here.

So what’s next?

The Monetary System can be used in its most raw form within Nxt’s NRS client (like any other core feature), but as usual with Nxt, further developments, including third party ones, are quick to appear or at least be under discussion: a java ‘minter’ has already been launched, NxtMint, there’s talk going on about making easily customized standalone MS-wallets, MyNXT has released an MS-plugin for their online wallet, and MS enhancement proposals are being discussed with the core devs.

To discuss the use of MS currencies in Local Exchange Trading Systems, visit this thread.

Anyone can build on the Nxt platform for free. There’s a list of API calls here, and a list of the public nodes available for all. Inside.org is an initiative designed to help new Nxt programmers, and on the forum, you can get help from the Nxt core developers themselves. Nxt is an easy to use crypto platform, and with the MS core feature launch, Nxt has now taken another big technological step forward ahead of the competition. The current use cases for the NRS client are merely the tip of the iceberg of possibilities, as described in the Nxt [CORE] article series.

CFC: Voting result

The proposal on how to structure a new and pro-active Nxt Community Fund (as mentioned in the last newsletter) was adopted with 94.1% of the votes, meaning that the remaining NXT (approximately 6M in total) from the 3 existing community funding committees will be transferred to this NEW committee, which will be given authority to act and spend on behalf of the Nxt Community.

On December 03, interested Nxters were asked to nominate themselves for one of the 8 unpaid positions in CFC. On January 14, a 2 weeks’ voting round finally began and the result of the vote is the following lineup:

Chair : EvilDave
Secretary: Cassius
Business position : Damelon
Technical member : ChuckOne
Treasurers: DomP and Pouncer

Congratulations to all those elected and not least a great big THANK YOU!

New Nxt core devs

A new developer team has joined our CORE dev team. They will implement:

  • Global Collaboration, which includes:
    • Project Management.
    • Regular and flexible payment models via simplified Smart Contract Transaction.
  • Reputation System.

Their vision is a decentralized business network (https://nxtforum.org/debune/announcing-debune/).

NRS manager ChuckOne writes:

Please welcome the new members of the core dev team by providing donations or help to them. Roberto is going to release assets for crowdfunding in order to try covering their expenditures for both the NRS core additions and their third-party application DeBuNe on top of Nxt.

Welcome, Roberto (Capodieci), Yudi and aryanatameiyana. A full list of Nxt core devs are here.

Kill the blockchain!

A week ago a visitor from Bitcointalk made it to the Nxtforums.

cynicSOB:

Hi! I’m cynicSOB and I’m a cynical SOB
and I’m here to hack your coin
white hat
promise!

Nxt raises funds for its funeral

BCNext once advised: Do not trust strangers on the Internet, especially if their nickname is “BCNext”. It’s not the first time that the Nxt Community has set up bounties and dared hackers to attack the Nxt blockchain and kill it. cynicSOB has been met with open arms and best wishes by the community, as well as pledges of both NXT and BTC bounties from Nxt veterans, and EvilDave (former TechDevFund Committee member, now chair in the new Community Funding Committee) is offering cynicSOB technical support to carry out the attack. Unfortunately, an attack on the Nxt blockchain would cost around 3,7 million dollars, so the attack will be carried out on testnet.

EvilDave:

Could we please beef up the TestNet and get some more nodes up? I’d like to see around 20 nodes, with at least 10 forging accounts. We may need to do some serious TestNXT redistribution, as cynicSOB will also need a substantial amount to set up an attack (10% of the total was suggested) as well as substantial sums for the forging accounts.

Let’s see if the creation of BCNext and the Nxt CORE dev team can be trusted. We’re in the hands of cynicSOB. The ongoing drama can be followed here.

rlh:

Only in Nxt do prominent Nxt users want to see their coin hacked!  We know our devs can innovate past any verified flaw! ;D

Consensus Research Group

December 12, Kushti published a simulation tool for Nxt forging on GitHub, taking a less ‘cynical’ approach to the same declared goal – testing whether the Nxt PoS tech is as secure as we claim it to be or not. With ‘Consensus Research Group’, Kushti has started what he calls “the first independent research group going to bring formal verification to the world of cryptocurrencies.”

Kushti:

Cryptocurrencies suffer from unproven claims, bold statements, low-quality ‘papers’ and naive implementations, though the cost of an error could be very high (USD$ millions).

Consensus Research Group is going to improve overall quality of thinking about cryptocurrencies with:

  • proven open-source reference implementations code made partly at least in Coq programming language/theorem prover (https://en.wikipedia.org/wiki/Coq).
  • executable simulations anyone can play with (to e.g. find best parameters under some assumptions).
  • formal but understandable papers.
  • coins’ developers’ consultations.

The research project began when Kushti started writing a series of personal blog posts about the Nxt forging algorithm. Following up on the ideas contained in the first 2 posts, his friend andruiman published a statistical paper on some of the properties of Nxt forging, thereby causing a heated debate in the Nxt forums. He converted Kushti’s model into Coq, “proving some basic properties as theorems, and introducing multi branched forging (which could be turned into so-called Transparent Forging during implementation and also to open the door to Nothing-at-Stake investigation.”

Paper on attacks related to Multibranch Forging:  https://github.com/ConsensusResearch/articles-papers/blob/master/multistrategy/multistrategy.pdf

1st paper: http://www.scribd.com/doc/248208963/Multibranch-forging
MultiBranch Forging Simulation Tool: https://github.com/ConsensusResearch/MultiBranch
Nxt PoS forging simulation tool: 
https://github.com/ConsensusResearch/ForgingSimulation

Vitalik Buterin (Etherium) has discussed the first paper in this thread on reddit.

On January 14, 2015, Kushti concluded:

Nothing-at-stake attack – not possible at the moment! Will be possible when a lot of forgers will use multiple-branch forging  to increase profits. (…) In such scenario attack is possible only within short-range e.g. with 25 confirmations needed 10% attacker can’t make an attack. And attack is pretty random in nature, it’s impossible to predict whether 2 forks will be within N best forks (from exponentially growing set) for k confirmations. So from our point of view the importance of the attack is pretty overblown.

People are invited to carry out their own experiments using N@S simulation tool.

Kushti first entered the Nxt stage as the lead developer of a Techcrunch Disrupt Hackathon project, Cryptamail, a decentralized email system built on top of Nxt. He joined the Nxt CORE dev team as a tester and subsequently went on to develop several Nxt core features, including the Voting System and 2-Phased Transactions.

Consensus Research Group has issued a crowd funding asset (‘consensus’, asset ID 5841059555983208287) which is sold in lots, the timing of the sales being based on the achievement of certain development milestones. The price of each asset is 1 NXT and should be bought only from the Issuer account. There will be no dividends but there will be opportunities for investors to start research projects by vote. You can view all the results here: https://nxtforum.org/consensus-research/

Hail to the ‘old’ funding committees

To round this off, let’s take a look at some of the projects that the soon to be obsolete Nxt Funding Committees actually funded.

Recurring core developer salaries

The most valuable investment of the community funds: The core of the Nxt platform.

Nxtwiki.org

https://wiki.nxtcrypto.org/

300,000 Nxt to cover 12 months of bounty funds at 25,000 Nxt per month.

NxtWallet / NRS GUI

400,000 NXT. http://nxtra.org/nxt-wallet/ (redirects to nxt.org)

Freenxt.org

10,000 NXT for the faucet. http://freenxt.org

Nxt-Starter.com

One of the first community initiatives to get funded. 200K NXT were sent on April 23 to the NXT crowd funding site initiative, but then things got complicated. On October 27 POPPP announced that the site was finally up.

Nxt-Starter.com is fully functional but still in its first version. Payments are made through a coinpayments.net solution – the plan is to integrate p2p funding with NXT and MS-coins directly, making the payment system fully decentralized. If you want to raise a bounty for the NXT Community, you can do it here for no fee. In addition to running crowdfunding campaigns you can get a page for your Nxt Marketplace store, and list projects that have already got funded.

Nxt-Starter is part of the NXTweb asset, which will also contain a freelancer and a microjob website, based on source code from CoinEvolve. But, as they say, that’s another story.

The Nxt B-day giveaway

10 random NXTER.ORG newsletter subscribers have been picked as the winners of 100 NXTP each, as announced in the last NXT Newsletter. The Nxt Community was asked for random numbers, which we checked against our list of email subscribers to find the lucky winners and then asked them for their Nxt account ID to receive their prize. Congratulations to the winners!

6 x 100 NXTP have been sent out. As for the last 4 winners, if they haven’t claimed their prizes before 27.01.2015, new winners will be picked – so now is the time to check your inbox and spam box.

Quote of the week

Damelon

Work needs to be rewarded

Words of wisdom of the week

ChuckOne:

NXT will be the fuel currency of the Nxt ecosystem. People will pay NXT to forgers (as they do now) in order to get transactions verified. Forgers will sell NXT to people in exchange for currencies. So, there will be a market that determines the price of NXT.

Also read: The Value of 10 NXTs

The value of 10 NXTs

Introduction

What is the value of 10 NXTs?, you may ask. This article might give you an answer. Let’s start off with a short dialog though.

“What is the value of $10?”, the teacher asked his class. “$10, of course”, a student responded quickly.

“Try to explain it without using $10”, so the student rethinks and replies with a grin: “10 times $1, right?” But the teacher is still not satisfied: “Well, what is the value of $1 then?”

Another student joins in the discussion: “$10 is worth whatever you can buy with them”.

For one thing, this short conversation illustrates the fallacy which many people fall for when they try to understand what the value of their assets and disposable income is; for another, it succinctly shows the way in which people commonly understand the value of a monetary unit, for example the US Dollar: the value of $1 simply being the amount of goods and services one can get in exchange for $1 (in other words: its purchasing power).

One might then ask: how do you measure the value of a dollar? The simple but unsatisfying answer is: it’s the amount of goods and services you can buy with it. A more complicated, but equally unsatisfying answer (because of its reliance on other artificial constructs), involves exchange rates, Treasury notes and foreign exchange reserves. The value of the US Dollar, like any fiat currency, therefore depends on factors seemingly far removed from people’s lives. For the reasons put forward in the next section, it remains difficult to understand the real everyday value represented by the US Dollar even if one uses it many times each day.

Goods and Services

One big problem with using goods and services to demonstrate the value of a fiat currency is their lack of interchangeability: whereas one dollar bill is entirely interchangeable with any other dollar bill, different goods and services (although they may cost the same) are not of course interchangeable. This lack of interchangeability makes it impossible to ascertain whether, say, 10 bottles of beer (purchased for $10) is a better or worse measure of fiat value than, say, 5 loaves of bread (also purchased for $10). In effect this is the same issue facing government statisticians who have to choose which items to include in the average consumer’s notional shopping basket for the purpose of measuring changes in a country’s consumer prices index.

A related problem is that the precise nature of numbers gives an appearance of certainty to things which don’t actually possess it. Thus, people fail to understand either the real value of $10 or the real value of ‘5 loaves of bread’ which are in practice both as imprecise as each other: dollar bills, although they are interchangeable, have no intrinsic value in themselves, only in terms of what they can buy; however, the things that can be bought with dollar bills, although they do of course have intrinsic value in themselves, are not interchangeable and therefore have no dependable utility as a measure of value.

The lack of preciseness can be ascribed to the lack of a measuring tool which serves in a replicable way to measure the value of something no matter where, when and by whom it is bought and sold. The nearest thing available is the market price expressed in units of fiat currency. However, the market price of something is not necessarily the same as its value. Although an important indicator of value, the market price only tells us the minimum amount that people are prepared to pay, but not the maximum amount (i.e. their willingness to pay). Moreover, due to external factors, under- or overvaluation might occur – i.e. short term prices may be too low or too high compared with the long term average.

The need for a measuring tool, as described above, would quickly become evident were you to go into a grocery shop and ask the price of something. Such a question would definitely produce different answers depending on whether the shop was located in North America or in Asia (leaving aside the question of conversion rates). Repeating this experiment 10 years from now would also result in different outcomes. Furthermore, businesses adjust the prices of their products to better meet the requirements of their trading partners or customers on a deal to deal basis.

Given that observation, we can ask the question how are prices created and how do they change? That is a field of ongoing study which is outside of the scope of this article. Prices are the result of complex social interactions, political considerations, emotions and even the technological progress. In the remaining part of this article, we will discuss what the value of a NXT is.

Transactions

When using the Nxt platform, all you need are NXTs. You can buy goods and services on the Nxt Marketplace, you can buy assets on the Asset Exchange, you can buy brands, cast votes and much more and all you need to have are NXTs. Those tokens are the default currency unit of the economy platform: Nxt. With them, you can buy a variety of native Nxt objects as well as user-generated content, products and services. However, we still have the same imprecise definition of the value of 10 NXTs as we have with $10.

There is, though, another element that plays an important part in helping to determine the value of one NXT. NXTs are not only relevant to pricing goods and services but also to paying for transactions. Transactions are the most basic native objects you can buy with your NXTs. They are and will be omnipresent in the Nxt platform. At the time of writing, 1 NXT is worth 1 transaction (in most cases). Thus, the value of 10 NXTs is the ability to buy 10 standard transactions, like those described above. That basically means if you have n NXTs in your wallet, you can buy n transactions from the network.

We can describe an experiment to measure the price of a transaction in Nxt. The price for a transaction – also called a fee – has a minimum at which the network accepts the transaction. It is encoded in the social contract enforced by the Nxt network and its current implementation can be found at the repository. This experiment can be repeated irrespective of who you are or where you are. It can only change over time if the network agrees to change. From this point of view, the minimum transaction fee is the most equal and transparent price we have; independent of your location and yourself.

Given that tool, we can now measure how much a good or a service on the Nxt Markeplace is worth in terms of transactions. When we pay somebody 25 NXTs for his service, we are in effect enabling him to perform 25 further transactions and we can do 25 transactions less than we could before.

When analyzing the calculation of the minimum transaction fee, one can recognize a correlation between the minimum fee and the size of the transaction. However, the correlation does not apply whilst, as is currently the case, the relevant coefficient is set to zero. It is assumed that in future versions of the Nxt protocol, the network will decide to raise this coefficient in order to better reflect the actual expenditure of verifying and propagating transactions of a specific type through the network. Still, the process of price setting is visible and verifiable and equal among all people using Nxt. There are many possibilities regarding how to agree on these coefficients and other constants which make up the minimum fee. However, this is a problem which needs to be addressed in another article.

Conclusion

value-of-nxt

Each NXT represents the ability to buy exactly one standard transaction which gives us a precise tool to measure how much worth a good or a service would be. Instead of asking how many NXTs does it cost, you might equally well ask: if I buy this good or service how many fewer transactions will I be able to carry out (i.e. how many transaction performances will it cost me)? Similarly, the seller, instead of asking how much NXT can I get for this good or service can just as well ask: if I sell this good or service, how many more transactions will I be able to carry out (i.e. how many transaction performances is my good or service worth)?

Thus, 10 NXTs are worth 10 transaction performances or the goods and services you can get for them in exchange.

This article is also available in French.

A few upcoming Nxt features explained

True to form, the NXT Core Developers continue to deliver groundbreaking new features for Nxt.

Because of their uniqueness and many possible use cases, I am especially excited about these ones (expected to be released within the next few months): the Monetary System, Voting System, and 2-phased Transactions.

Monetary System

UPDATE: Nxt Monetary System is released 

The Monetary System is the feature closest to being released and, at the time of writing, it will be brought to the mainnet at block 330000 (roughly Jan. 10th). This is a way for anyone with a few NXT to create a fully fledged digital currency. MS has a unique property: namely its ability to mint currencies. Minting is very similar to mining with the key distinction that it is used solely for the distribution of a currency and the MS currency doesn’t need to rely on its miners for blockchain stability unlike the typical alt-coin.

The minting property has four main advantages:

  1. It helps miners of other cryptocurrencies to feel at home on a PoS system like Nxt.
  2. There is a steady and ongoing distribution and therefore now a way for minters to create value on Nxt’s blockchain, thereby providing another powerful answer to the negative comments often made about Nxt’s initial distribution (to stand alongside this one: the supposedly unfair distribution was, in fact, a deliberate move to create a sustainable system).
  3. A mintable currency doesn’t depend on the minters for the blockchain’s security, a MS currency that no one mints being just as safe as one with a large hashrate. Every MS currency is backed by the stability of the Nxt network.
  4. With mintable currencies, there will be a way, in effect, to transfer electricity costs into the value of a MS currency which can be directly traded for NXT, allowing for NXT to be exchanged without having to deal with exchanges at all.

Also, MS currencies have the advantage of being controllable and, as such can be pegged, for example, to USD, or backed by gold or silver, thereby helping to ensure a degree of stability. This would bring us closer to solving the common cryptocurrency problem of volatility and allow for an MS currency to be used to purchase items without the fear of drastic price drops or rises.

Voting System

UPDATE: Nxt Voting System is on public testnet, ask for testNXT here.

Next we have the Voting System, scheduled to be released in Nxt version 1.5, once the MS has been fully integrated. The voting system allows for polls to be created, voted in, and counted, all from within the Nxt blockchain. You are also able to weigh the voting, either by the amount of NXT owned, or by the amount of a specific Nxt asset owned. The most interesting subset in my opinion is weighing a poll by the amount of an asset owned.

With this, a number of things are possible:

  1. Asset owners can seek a consensus from asset holders about a specific question.
  2. Assets can be created and distributed in order to create decentralized voting committees that are given polls to vote on created by any member in the community.
  3. Polls can be created without fear of a Sybil attack (one person pretending to be many people to vote more than once) because one person with, for example, a holding of 100 jl777hodl has the same voting weight as 100 people who each have a holding of 1 jl777hodl.

Also see: Nxt Voting System Teaser Video

Phasing

UPDATE: Nxt Phasing is on public testnet, ask for testNXT here.

Finally we have the most abstract of the soon-to-be-released features: 2-phased transactions. This doesn’t yet have a definite release date, but will hopefully be launched around the same time as the Voting System, as parts of it rely on VS.

2-phased transactions are Nxt’s implementation of multisig, but extend the definition of multisig to include many more functions and use cases. Basically, a user is able to define a transaction in two phases: the first phase being when the details of the transaction are defined (e.g. the amount of NXT to send and the recipient), and the second being when the transaction is released into the system. 2-phased transactions will also enable the account-holder to make a transaction dependent on the results of a poll. This greatly widens the range of possible use cases of 2-phased transactions:

  1. Asset holders can now vote to veto or accept payments made by the asset issuer or company on whose behalf the asset was issued.
  2. Trust-less escrow is possible by phasing two transactions in parallel.
  3. Joint accounts can be run with ease.

As these features become operational, thereby allowing people to have control over making their own currencies, polls, and phased transactions, the use cases of Nxt as a platform will start to increase exponentially and Nxt will have moved still closer to achieving its goal of being a viable decentralized economic platform.

Nxt is in the process of giving financial power back to the people. With this power in their hands, who knows what will be created next.

Other links:

The Nxt [CORE] article series
Nxt – The Economy Platform – Usecases for everybody

Nxt [CORE]: Monetary System

Nxt’s Monetary System allows users to create new decentralized currencies on top of the secured Nxt blockchain. New coins are highly customisable, with a wide range of parameters that can be set to govern their properties and use.

The Nxt Monetary System (MS) enables the launch of altcoins without going through the trouble of bootstrapping the currency with its own blockchain and network, thereby removing a major impediment to easy, real-world adoption and use of different customized cryptocurrencies.

The ultimate value of a new coin is determined by the market, depending on adoption and demand, and by the parameters set by the issuer. However, coins may also be created by ‘locking’ a certain amount of NXT, thereby giving a floor value to the issued currency at which they can be redeemed for NXT if desired.

With Nxt, new coins are highly customisable, with a wide range of parameters that can be set to govern their properties and use. It is possible to launch an MS coin that is distributed by proof-of-work, but secured by Nxt’s PoS algorithm. It is also possible to create fiat- and commodity-backed tokens for particular real-world applications.

These allow for the creation of bespoke and niche currencies for highly specific applications, crowdfunding coins, ‘regular’ altcoins, reward points, coins pegged to fiat currencies or precious metals, while also being a stepping stone to new future Nxt features, such as p2p loans, meaning that Nxt can become the underlying tech for a completely decentralized banking system.

When? Now!

MS can be explored in the Nxt testnet, ask for testNXT here.

The main net NRS release that will implement the MS System has also been released. Monetary System will be activated with block 330000, and nodes not running 1.4.5 or later will be on a fork.

mscoins_testnetTestnet screenshot

Read an NRS installation tutorial here or on nxt.org.
A guide to the NRS Client interface can be found here – or watch the video tutorials.

Potential impact and significance

Monetary System offers greater exposure to NXT as the machinery that powers financial transactions, over and above its utility as a currency; however, this does not imply that NXT itself will become worthless. NXT remains a ‘decentralised store of value’, with fixed supply. MS currencies may become something akin to a decentralised credit system, meaning that users transact with MS coins but all of them depend on NXT for their ultimate utility.

Of course, this does not mean that MS will not catalyse a shake-up of the NXT ecosystem, providing an impetus for the redistribution of existing NXT wealth, as Come-from-Beyond writes:

‘In the beginning we will have an epoch of instability when hundreds of currencies will pop up every day. After a while some currencies will become more and more popular, but the whales will have their wealth dispersed among thousands and they will get only a fraction of initial wealth in the most popular currency.’

The Monetary System is necessary because different currency properties are suited to different applications. Having a series of currencies that fit the needs of the market are the obvious solution to the one-size-fits-all problems of both fiat and any single cryptocurrency. For example, as Come-from-Beyond also writes:

‘Having a fixed currency supply (like Bitcoin and NXT) isn’t ideal for all situations. Fixed currency supplies make a great ‘store of value’, but they make lousy credit systems. The Monetary System is simply another tool to allow people to create local currencies to break free of centrally controlled fiat.’

NXT will be bought by those looking to create currencies – it will not be used to purchase alternative currencies (as is presently the case).

ChuckOne writes:

‘NXT will have one specific use case only: to enable transactions. Nxt Monetary System is about separating power from economy. So, we can basically move the NXT Economy from this platform to another one if something is wrong with NXT or to penalize forgers if they misbehave.’

MS enables a series of far-reaching developments, including:

  • Coin shuffling. Claimable currency units can be shuffled and returned at the same exchange rate, allowing for anonymous transactions without potential loss of value in the process.
  • Fiat-backed tokens. Once USD, GBP, EUR or other fiat currency-backed coins are trading, it will be possible to send fiat money using the NXT infrastructure. This brings the benefits of speed and very low transaction costs to international money transfers. Unlike with Bitcoin and other cryptocurrency transactions at the moment, there would be no volatility, and exchange rates would be negligible (or zero, since these tokens could simply trade internally within the NXT system indefinitely, until the recipient wanted to redeem them against fiat).
  • Local currencies and exchange trading systems to benefit specific economies.
  • Niche loyalty tokens issued by businesses to reward customers. These tokens would also be freely and globally tradeable, meaning the market would set their value beyond what they could be redeemed for within the business in question.

ms_testnet2The NRS Client exchange, testnet screenshot

Monetary System: specifications

The following descriptions are taken directly from MS documentation as it stands at the time of writing. Documentation may change without notice. Latest version can be found here: https://bitbucket.org/JeanLucPicard/nxt/issue/205/monetary-system-documenation

Overview

The ‘Currency’ entity is the basic building block of the NXT Monetary System, currency has a unique name and code and uniqueness is guaranteed by the protocol, currencies can be deleted and their code can be reused under certain conditions.

The total currency supply is divisible into currency units. Like assets, currency units support decimal positions implemented as a client side feature. The maximum number of currency units which can be issued per currency is similar to NXT: i.e. 10^9 * 10^8. The actual maximum units supply is set by the currency issuer. The currency issuer is the account which issues the currency and pays the issuance fee. The issuer is responsible for setting the currency properties and in some configurations has additional control over the currency usage. Like asset balance, currency units can be transferred between accounts.

Currency Properties

The currency entity supports several properties. Properties can be mixed and matched in various ways to compose the currency type. The currency type then controls the inner workings of the currency. The list of available currency properties is as follows:

EXCHANGEABLE – the currency can be exchanged with NXT. Holders of the currency can publish an exchange offer specifying the buy and sell rate of the currency, in much the same way as banks or currency exchanges publish their exchange rates. Each account can publish only a single exchange offer at any given time. Exchange offers have an expiry block after which they are no longer in effect.

Buyers and sellers can issue exchange requests to match published exchange offers. Unlike asset bid/ask orders, exchange requests are not saved, they are either executed immediately (fully or partially) or not executed at all. A match of exchange offer with a buy or sell exchange request creates an exchange entity which represents the transfer of currency units, in return, to NXT balance and causes the relevant account balances to update. Issuing an exchange offer reduces the NXT and currency balance of the offering account temporarily until the offer expires. Exchange offers also specify a limit on the number of exchanged units which can be larger than the number of units offered. When a buy exchange request matches an exchange offer the number of units offered for sell is reduced and the number of units offered for buy is increased as long as the limit has not been reached. Once the exchange limit of an exchange offer has been reached, this exchange offer can no longer be used.

CONTROLLABLE – currency property suitable for currencies which need to track an external entity. It imposes the following limitations on the currency: (1) Currency can be transferred only to/from the issuer account (2) only the issuer account can publish exchange offers. The issuer account can issue a large (practically infinite) supply of units in advance, then transfer units to accounts, or offer to exchange units, to reflect actual transactions which take place in an external system. The large supply of units in the issuer account can be used to mimic the effect of creating units out of nowhere to support features such as creating new units and interest payments.

RESERVABLE – currency units are not issued immediately. Instead the currency issuer sets a block height by which the currency is to be issued and a limit of NXT per unit needed in order to issue the currency. Currency ‘founders’ then spend their NXT to reserve their currency stake. If the amount of NXT per unit needed in order to issue the currency is not reserved before reaching the block height the issuance is cancelled and funds are returned minus fees. If the required reserve is allocated, the currency is issued and units are split between founders according to their proportional stake of invested NXT. In case of rounding, leftovers are sent to the issuer account. See below for a discussion of usage scenarios for Reservable currency.

CLAIMABLE – currency units of reservable currency can later be claimed at the same NXT per unit rate reached when reserving the currency. The ability to claim a currency at a certain rate imposes some practical limits on the rates at which users would want to exchange it. However claimable currency can also be exchanged if only for the purpose of exchanging the whole currency supply, so that the currency can be deleted.

MINTABLE – currency can be minted using proof of work algorithms in much the same way as Bitcoin. Unlike Bitcoin mining, minting currency does not secure the network (this is done by NXT). Minting is used solely for creating new currency units and serves as the only mechanism to increase the number of available units after the currency issuance.

NON_SHUFFLEABLE – this property indicates that in the future this currency cannot participate in coin shuffling. By default currencies are allowed to participate in shuffling.

Properties are combined into an Integer bit mask designated as the Currency type.

Currency Exchange

For exchangeable currency, each currency holder account, can publish a single exchange offer specifying the buy rate and sell rate vs NXT and the number of units she is willing to exchange (which cannot exceed her available currency units and NXT balance). Users can observe all currency exchange offers (intuitively similar to fiat exchange offices) and try to match them with buy/sell exchange requests. An exchange offer has an expiration height, as well as a limit on the total number of units which can be exchanged. When units are bought from an exchange offer the number of units to sell increases automatically and vise versa. The publisher can also limit the total transaction volume of currency units traded for a specific exchange offer.

Deleting a Currency

Since the available currency codes are limited to 3, 4 or 5 uppercase letters, the total number of codes is limited to 26^3 + 26^4 + 26^5 – 1 = 12355927 unique values (The code “NXT” is reserved), it is likely that some of these codes will have value in themselves. Therefore deleting a currency is possible under certain conditions depending on the currency type. Users may re-issue a currency, or delete a currency and then issue a new currency, with the same code but with different properties. In order to delete or re-issue a currency an account must poses all the currency units (and additional conditions apply based on the currency type)

Creating new Currency Units

The only way to create new currency units after issuing a currency is using proof of work minting. Other methods of creating units are susceptible to denial of service attacks and/or sock puppets and are therefore not allowed. The controllable currency type provides a partial solution for creating new units, by allowing the currency issuer account to treat her supply as a treasury and only consider units outside of this account as the total currency supply. This approach requires users to trust the currency issuer which can increase the currency supply at any time.

Minting

Users can issue minting requests in order to mint additional currency units. Each minting request triggers a hash calculation based on the submitted data and the currency hash algorithm. The resulting hash code is compared to the target value derived from the current currency difficulty. Minimal and maximal currency difficulty values and minting algorithm are specified when issuing the currency and cannot be changed later. The expected number of hash calculations (i.e. difficulty) of minting the first unit is 2^minDifficulty while the difficulty of minting the last unit is 2^maxDifficulty. Difficulty increases linearly from min to max based on the ratio between the current number of units and the total supply. Difficulty increases linearly with the number of units minted per CurrencyMint request, small minters can mint only a few units per request while large minters can mint large number of units per request.

The number of units per minting request is limited to 1/10000 of the total unit supply. Minting is limited to a single minting transaction per block/account/currency. Currency issuers can specify initial supply of units as a ‘pre-mint’ supply assigned to the issuer account then use crowd funding by making the currency RESERVABLE and EXCHANGEABLE.

Once the currency becomes active the delta between the current supply (reserved supply) and total supply can be minted. The NRS provides a Java based, reference implementation minter, which can be used for minting. In practice we expect users to enhance this minter to calculate hash codes using their Asics or GPUs, trying to match the current target, and when solving a hash, to submit a currency mint transaction (thus paying a fee).

However the hash code is smaller than the target, the currency units are credited to the sender account.

See the documentation for the reference implementation ‘Mint Worker’ utility here #207

Store of Value

The combination of RESERVABLE and CLAIMABLE properties can be used to allocate initial value for a currency by locking NXT. Once the currency is activated the reserved NXT are locked and the only way to release them is to claim back the currency units in return for NXT. This provides the currency with a value based on the locked NXT balance. Note: locked NXT do not participate in forging, therefore, in theory its possible that a large amount of NXT becomes locked as a currency store of value thus reducing the amount of NXT used for securing the network; we are aware of this problem and will monitor it closely. We do not expect this to become a major problem any time soon.

Crowd Funding

The combination of RESERVABLE and EXCHANGEABLE properties can be used for crowd funding; in this configuration the NXT balance reserved by founders is not locked, instead it is sent to the currency issuer account once the currency becomes active. The issuer can use these NXT for its operations and the founders cannot claim back their currency units, only exchange them based on the published exchange offers. Currency issuers can specify the initial supply as ‘pre mine’ and the founders get to share the difference between the reserve supply (also named ‘pre-activation’ supply) and the initial supply.

Fees

Currency issuance fee is based on the length of the currency code:

3 Letters – 25000 NXT

4 Letters – 1000 NXT

5 Letters – 40 NXT

Re-issuing an existing currency with different properties costs 40 NXT regardless of the currency code length. All other currency transactions (as of today) have a fee of 1 NXT.

Unit conversion

Currency is measured in units and like assets has decimal positions, however the blockchain maintains currency balances as a whole number (QNT). Therefore, for example, in the case of a currency which has 2 decimal positions and the client has reserved 123.45 units, the ‘units’ value submitted in the API call should be 12345. APIs using NXT balances should send the value measured in NQT as usual. When specifying ‘rate’ in the API, it calculates the ratio between NXT balance in NQT and currency balance in QNT.

Example: For a currency with 2 decimal positions. When submitting a buy exchange request for 12.34 units at a rate of 5.6 [NXT/Unit] the values submitted to the currencyBuy transaction should be: units = 1234 i.e. units without decimal position or 12.34 * 10^2 rateNQT = 5600000 i.e. rate converted to NQT then divided by decimal position or 5.6 * 10^8 / 10^2

In order to prevent rounding problems when submitting information to the server, the UI enforces the following rule: If a currency has D decimal positions. Unit values cannot have more than D decimal positions and rate values cannot have more than (8-D) decimal positions. Therefore when issuing a currency, we do not recommend specifying more than 4 decimal digits so that conversion rates are also divisible to at least 4 decimal digits.

Disclaimer

  1. Before issuing a currency we recommend issuing a currency with the same properties on the testnet and experimenting with all parameters since these cannot be changed without deleting the currency.
  2. This documentation reflects the actual code implemented as of this date.

API Documentation

This section is relevant to API and client developers.
https://bitbucket.org/JeanLucPicard/nxt/issue/205/monetary-system-documentation

Nxt Monetary System is only one Nxt CORE feature.

Read other articles from the Nxt [CORE] article series.

Also see: Nxt – The Economy Platform – Usecases for everybody

Nxt [CORE]: Marketplace

Nxt Marketplace (formerly known as the Digital Goods Store, or DGS) is a decentralized mall created for buying and selling digital goods. Like the Asset Exchange, it is built into the Nxt client and enables direct peer-to-peer trading. Although it was designed for buying and selling digital merchandise – music, ebooks, software, and so on – physical items have also been listed for sale.

marketplace

The Marketplace was a planned feature from the start, detailed by Nxt creator BCNext before Nxt was launched. As BCNext remarked, the workflow is relatively simple:

1] A developer sends a message describing a product (it’s stored on the blockchain).
2] A user sends a payment to the developer’s account.
3] The developer sends an encrypted message with a link or a code (stored on the blockchain as well).
4] The user decrypts the message and uses the code to unlock premium in the application. *

Key points

1] Developer publishes their account on their webpage to prove they are the legitimate owner (or uses Reputation System of NXT).
2] All actions are public and can be audited (the encrypted message can be audited if one of the parties reveals the key).
3] Only transaction fees are charged, 100% profit goes to the developer.
4] No one can shut the store down nor they can DDoS it.

(* Note: ‘to unlock premium in the application’ means, in effect: to obtain the product).

Nxt’s decentralised Marketplace was released at block 210,000, on 1 August 2014.

Using the Marketplace

marketplace_mystore

Now, large parts of the workflow described by BCNext have been automized in the NRS client.

You can list your digital (or physical) goods with ease, set a price, change or cancel the listings if you wish, and communicate safely with your customers through encrypted private messages on the Nxt blockchain. Costs are limited to the transaction fee and the cost of exchanging messages (both currently 1 NXT). Listing and selling goods through the Marketplace is free, except for transaction fees.

Buyers are able to search goods by issuer ID (account), item name or by tag (category). Buyers can set an order expiration date, and also leave private or public feedback after receiving the product.

There is a video tutorial available here.

3rd party use cases

The launch of Nxt Marketplace was met with great enthusiasm in the Nxt Community, but since then relatively little community energy has gone into developing it further. There are few user-friendly solutions (like Secureae.com for the Nxt Asset Exchange).

Melodius.me is the most promising announcement so far.

Due in Q1 of 2015, Melodius is a website for independent artists, built on top of the Nxt Marketplace. A partnership with crypto exchange CCEDK allows users to buy and sell their music, concert tickets, merchandise and shares not only with cryptocurrency (NXT and BTC) but also with fiat money in their local currency.

This significantly enhances the buying process, since Nxt remains very much in the background. The attraction for indie artists is the low commission fees; whilst iTunes and Google Play take substantial percentages of artists’ sales, Melodius charges only the standard transaction fees required by Nxt Marketplace. Every penny earned goes directly to the artist. Interestingly, the CEO of CCEDK, Ronny Boesing, worked in the music industry for many years, selling music around the world for major brands. His partnership with Melodius brings together two areas of interest and expertise.

A possible concern with having a decentralized and unregulated global marketplace may be that it attracts people seeking to circumvent the laws of their particular country. Nxt has chosen not to censor goods, but 3rd party sites like Melodius.me can easily filter listings according to their niche, their users’ choices or their local laws.

When buying and selling goods online there is, as in the real world, a chance of getting scammed. There are far too many sad stories about people (and not all of them anonymous) in the crypto world who turned out to be scammers. The solution is to be on your guard at all times, preferably only deal with people you know, always do your due diligence and, if possible, use a trusted escrow for larger transactions.

Concorde_Logo

There is currently no escrow or reputation system implemented in the Nxt core (Reputation System is a feature planned for future development), but a solution for 3rd party clients or websites could be to implement CONCORDE, the escrow system developed by blackyblack, which is currently being tested on Nxt Testnet. Concorde will be included in the next release of FreeMarket, a 3rd party marketplace built on top of Nxt’s Arbitrary Message feature, but can be integrated into any Nxt system.

If you you want to help with the testing, make yourself known in this thread: https://nxtforum.org/freemarket/ann-concorde/, where further information about how Concorde works can also be found. Concorde is open-source and a direct download link can be found in Concorde’s nxtforum thread. As blackyblack writes:

‘It is an escrow system opened for all NXT users. Feel free to build your own projects on top of it or use for your daily needs.’

Conclusion

At present, Nxt Marketplace is being used, but mostly through the Nxt NRS Client. It remains a hidden gem of Nxt: an almost undiscovered secret, ready to be put to wider use.

A few listing sites are available, which detail all the goods for sale on Nxt Marketplace; users can see and search the goods, but everything must still be bought and sold with a Nxt Client. An example of such a listing site is http://jnxt.org/market/.

The goods sold are up to the imagination of the sellers. A house has been put up for sale, ebooks and articles are sold, domains, oil paintings, screensavers, a NXT faucet organised (NXT-55AK-82KK-DK3Q-6U4RN), crowdfunding has been attempted, NXT node operation services arranged (NXT-9TNK-QXJ6-YPMY-32CTA), NXT lapel pins (NXT-WBFF-3UMJ-RMLD-7VWS4) are available, even home-made maple syrup is offered (118670936523580125). Also, Nxter.org has its own store, NXTER STORE (NXT-EAVH-SLEV-KSEE-EE2KP).

The low fees and decentralized nature of Nxt Marketplace mean that it can solve real problems, not least for writers, musicians, developers and other digital content creators. Nxt Marketplace can easily be made the backbone of an app store, a decentralized crypto exchange, a subscription-based payment system for magazines, game updates, or even a full-featured crowdfunding platform. Only the imagination of the developer – or the business ordering the use case – sets the limits.

As one new Nxt developer wrote in early March 2014, ‘This [Nxt] is almost like building with lego bricks again’ – this person ended up coding SuperNET.

Nxt Marketplace is only one of the Nxt [CORE] features available.

Read other articles from the Nxt [CORE] article series.

Also see: Nxt – The Economy Platform – Usecases for everybody

JLH – jl777hodl : description and introduction

Account ID of the portfolio: NXT-2AHU-UXZW-K9Q2-HENLW
Asset ID: 6932037131189568014
Quantity: 10’000’000
Decimal: 0
Exchanges: Nxt Asset Exchange, Poloniex
Website: http://jl777hodl.com/ (WIP)

JLH portfolio in 2014, source Nxtreporting

The JLH portfolio

‘jl777hodl’, abbreviation JLH, is the first and biggest ‘portfolio of Assets’ on the Nxt platform. It was created on 17 May 2014 by jl777 (an active and respected member of the community and creator of SuperNET). From the beginning, jl777 has been including in the portfolio a proportion of his new ventures (5-10%) and some of the Assets he receives from promising companies.

The intention isn’t to trade the assets, but instead to hold them in the portfolio permanently (or almost…). Except in rare and special case, no assets will ever be sold. Some of the revenue generated by the portfolio’s assets in 2014 was invested in the acquisition of new ones. But the main part of the portfolio consists of assets which have been added by jl777.

You can see the actual composition of the portfolio in real time on the Nxt blockchain on the account NXT-2AHU-UXZW-K9Q2-HENLW.

The jl777hodl Asset

The ownership of the JLH portfolio is shared between the owners of JLH Assets. There are 10’000’000 JLH (Asset ID 6932037131189568014). This means that 1 JLH represents 1 in 10’000’000 of the portfolio.

The goal of JLH

JLH is a promising portfolio which covers the most interesting Nxt projects created since the Asset Exchange launched. Such a portfolio should generate a lot of investor interest.

In his projects, especially for the Asset/Asset exchange InstantDEX, jl777 needs a stable asset with a big volume of transactions. JLH, with its varied and promising portfolio, is perfect for jl777’s projects.

JLH is an important financial tool which provides a valuation reference for InstantDEX and the asset trading tools created by jl777 for SuperNET.

Revenue and holder’s reward

The jl777 portfolio has two sources of NXT revenue: the dividends it receives from its assets and forging revenue. In 2014, this revenue was invested in new assets and to pay for events that were organised to increase the transaction volume.

Starting in January 2015, the revenue will be partly distributed to the JLH holders as a bonus. A big part will go to the holders and the rest will be used for JLH management and promotion .

NAV and market maker

The NET Asset Value (NAV) is the basis of valuation of the JLH asset. The NAV per share is calculated by dividing the total value of the portfolio by the number of the shares (10’000’000). You can find a good estimation of the portfolio’s value on Nxtreporting.

As the value of JLH’s underlying assets increase, so does the value of each individual share. Sometimes, however, the share price doesn’t always reflect its actual NAV (Net Asset Value). In late 2014, jl777 tasked LibertyNow to act as a ‘market maker’ in order to keep the share prices closer to NAV by increasing liquidity and market visibility.

LibertyNow makes his own calculation of the JLH asset’s NAV; he bases it on an average of the last trade price/high bid price/low ask price. It’s a little different from Nxtreporting which only uses the last trade price.

The JLH team

jl777 (James): founder and manager of the portfolio.

LibertyNow: market maker.

Ludom and nxter.org: information and newsletter

For more information:

JLH/jl777hodl Newsletters
JLH/jl777hodl articles on nxter.org
Official topic on Nxtforum
Official topic on Bitcointalk

JLH/jl777hodl on SuperNET Wiki

If you need help, would like to buy/sell shares or have any questions, feel free to PM LibertyNow or Ludom on bitcointalk.org, nxtforum.org, forum.thesupernet.org, or in Slack.

This article is also available in : French

 

Nxt [CORE]: Asset Exchange

The Nxt Asset Exchange (AE) is Nxt’s built-in decentralized trading engine. Using the AE you can create, buy and sell assets that represent data beyond simple coin transfers – opening up wide-ranging possibilities. Also, you can pay dividends to your investors with a single click and only a 1 NXT fee, or you can transfer or burn any amount of assets if you need.

Coloured coins

The AE is based on the ‘coloured coins’ concept whereby a coin or a set of coins can be designated (‘coloured’) to represent something-else. By contrast, many crypto currencies only ever operate as just that  – currencies, and nothing more. However, since the blockchain provides a trustworthy and permanent ledger of all transactions, it can be used to record far more diverse information than purely currency transactions.

NXT was designed and built to leverage this coloured coins idea. NXT coins can be designated (‘coloured’) to represent other crypto coins, stocks/bonds, property, commodities, or even ideas. As a result, the NXT network can be used to trade almost anything. It currently costs 1,000 NXT to issue an asset, and just 1 NXT in transaction fees to buy or sell them.

issue-asset-nxt-ae

Find a Nxt AE guide here

NXT assets

These crypto-assets can gain significant market cap, and many of them are listed on CoinMarketCap.com. In fact, since there are now so many, CMC has created a new page exclusively for assets, a high proportion of which (more than 70%) are, in fact, NXT assets. Many of these were launched by jl777, including SuperNET, NXTventure and InstantDEX. Others include Jinn and NXTTY.

As well as trading on the AE against NXT, some of these assets can now be traded against BTC on the BTER and Poloniex exchanges. SecureAE.com – an online NXT wallet that puts the Asset Exchange at the centre of its functionality – also allows trading on the AE with Bitcoin.

Examples

There are, of course, many different applications for assets, with hundreds already available. Here are just a few interesting use cases.

Mining

At present, the most common use of the AE is to create and trade dividend-paying assets – effectively shares of revenue-generating companies. Issuing an asset is a popular way of raising money for a new project. For example, mining enterprises can raise capital to buy ASICs by issuing and selling assets. The mining rigs using the ASICs then generate income in the form of Bitcoin or other PoW coins, which is exchanged for NXT and paid out to asset holders as dividends every week.

USD-pegged asset

Coinomat’s USD asset is tied to the US dollar. The idea is that this can provide a degree of stability within a crypto-portfolio, without necessarily having to cash out by selling the assets and transferring the money to a bank account (with the costs, time and inconvenience which that would entail). It also means that you can send USD over national borders for just a 1 NXT fee. Using Coinomat’s service you can withdraw your USD assets to any VISA / Mastercard.

Of course, the CoinoUSD asset’s utility/value depends on Coinomat honouring its promise to redeem it, and would be worthless if the company failed to do so; the concept therefore requires centralization to achieve its aims. You can read more in this article or on the NXT forum.

Reward points

Nxterpoints (NXTP) are reward points given to people who contribute to nxter.org. Every month, Nxter.org dividends out its net profit (generated by advertising, store sales and services fees) to all NXTP holders: writers, translators, editors, graphic designers, site developers etc. This means that any person who is having an influence on nxter.org’s net worth, gets monthly rewards in NXT through the asset exchange according to their contribution to the income. The dividends are transferred to their Nxt account for as long as they own the Nxterpoints, which can of course also be traded on the AE. You can read more about this groundbreaking reward concept here.

Company shares

Coin IPOs are commonplace in the crypto world, and after doing just a little research in the field you should realize that some of them are scams. It can’t be overstated that you must ALWAYS do your due diligence before investing in anything.

On the AE, it’s important to distinguish between revenue sharing assets and assets representing ownership (including voting rights) in companies. Here are some examples of each type:

Revenue sharing assets include BGCaffe, a South African café (with plans to expand), Lyth; an upcoming MMORPG based on Nxt features; FinHive (AI on the Nxt blockchain); Pangea, a decentralized poker game; Coinomat, an exchange accepting Nxt, Tradebots (NxtCoinsco) and a lot of revenue sharing mining assets.

Company stocks (shares of the entire company) include examples like Jinn Labs (which is developing a general purpose processor based on ternary logic); SuperNET; Nxt Mobile Applications Company (the company behind the Nxtty mobile messaging app), and more.

Crypto backed assets

mgwBTC, for example, is a crypto backed Nxt asset representing Bitcoin. mgwBTC is used by Multigateway, the distributed cryptocoin exchange developed on top of Nxt by jl777. You simply transfer your Bitcoins (or LTC, BTCD and what other coins are supported) to an address generated by the multigateway, and these are automatically made tradeable in the MGW exchange and on Nxt AE.

Software licensing

toknormal describes an example from the software development industry.

I am an independent software developer and I plan to use the NXT asset exchange to issue software licenses as follows:

[1] – a licensing component in the software makes a call to the NXT network and creates an account (instantaneous).
[2] – it writes the private key to disk and informs the user of the account number.
[3] – the user purchases one license unit from the NXT asset exchange.
[4] – on a subsequent launch (or periodically) the software detects the presence of the appropriate asset in the account it created for itself and considers the installation licensed.

InstantDEX: addition to the Asset Exchange

Nxt is among the fastest cryptos with 1 minute block times, compared to Bitcoin’s 60 mins. To some though, even this may not be fast enough. Step forward InstantDEX: A Nxt 3rd party service, and now also a core service of the innovative SuperNET project, which aims to provide its users with nearly instant transactions. It’s also an asset which will dividend out a percentage of the commissions  generated by the service; currently, it’s paying asset dividends to its investors from its holding of NXTventure.

jl777:

With the NXT AE, people are able to trade things, but there will be the blocktime to wait. 1 minute usually, but sometimes could be more. Also 1 minute will feel like a really long time if the market is changing dramatically.

The goal of InstantDEX is to offer realtime trading of NXT, NXT assets and other cryptos. there won’t be any centralized servers, there won’t even be an actual website as the GUI will be running locally. Just direct peer to peer trading in realtime.

The monetization model is very clear and simple. InstantDEX will not have any fees for withdrawals [or for changing a bid or ask] and the commissions will be set to 0.1% at first.

Caveat emptor!

The AE is completely decentralised and completely unregulated. The substantial benefits this offers – freedom, cost savings, lack of intervention, and so on – also come at a price. There is no hand-holding or policing, and scam assets can be and often are created. Whilst the community generally picks up on these relatively quickly, if you make a mistake then there is very little recourse as transactions are irreversible. As valarmg puts it, ‘When an unknown issues a new asset, it should be treated in the same way as a ‘Nigerian prince’ sending you an email. After a week of due diligence, maybe people could start thinking about buying assets.’

The bottom line: research, research and research. If a long-standing member of the community with a proven track-record issues an asset, there is more reason for confidence than if a newcomer does – no matter how impressive their sales pitch. Ultimately, the responsibility to check out an asset, its issuer and business plan is yours.

Nxt is a versatile, open source cryptocurrency platform. In this Nxt CORE article series we will dive into the main 2.0 features of Nxt. The first article was about NXT, the token itself, the second about Nxt ALIAS system, and the third about Nxt Arbitrary Messages. Upcoming: Nxt Marketplace (DGS), Nxt Monetary System (MS).

The information contained in this article does not constitute (and is not intended to constitute) any form of advice, recommendation, representation, or endorsement by the author or the web site owner and should not be relied upon when making (or refraining from making) any investment decision.

Relevant links

Nxter.org/assethub

Nxtforum asset board
Guide: How to use Nxt Asset Exchange

Read other articles from the Nxt [CORE] article series.
Also see: Nxt – The Economy Platform – Usecases for everybody

This article is also available in French.

Sorted Asset List

The purpose of this list is not to play police but to be a place where any investor can do some research before investing in any assets. Treat this thread as an Asset Directory for the time being, a short term solution for new comers and new investors. 

New to Nxt AE?
Consider reading these articles first:

Nxt [CORE]: Asset Exchange
Guide: How to use Nxt Asset Exchange

For more information on tradings for these assets please use this link:

1. https://www.mynxt.info/assets

WARNING: This list has not been updated for a while. Some of the assets may be abandoned.

The Nxt AE is a decentralized market, asset issuers and scam assets can not be banned or removed from the blockchain, only downvoted and avoided so please do your own DUE DILLIGENCE.

Please use and contribute to: https://nxter.org/assethub


Assets listed

  • CryptoCoins – No dividend payment
  • JL777 Group – With dividend payments
  • Joint Projects SN & NXTventure
  • Multigateway
  • Investment – Investment funds
  • Investment – With dividend payments
  • Investment – Physical Companies
  • Applications – With dividend payments
  • Projects supporting NXT

AE_banner

Crypto coins Type: No dividend payment(2)

* Please report immediately if you find the link to Asset Board thread is broken or that there is an asset missing from this category.

 JL777 group – with dividend payment (7)

  • SuperNET → ID: 12071612744977229797 → Web
  • NXTventure → ID: 16212446818542881180 → More infoMore info
  • InstantDEX → ID: 15344649963748848799 → More info
  • jl777hodl → ID: 6932037131189568014 → More info
  • NeoDICE → ID: 18184274154437352348 → More info
  • NXTcoinsco (Tradebots) → ID: 17571711292785902558 → More info
  • crypto777 → ID: 13476425053110940554 → More info

* Please report immediately if you find the link to Asset Board thread is broken or that there is an asset missing from this category.

Joint Projects SN & NXTventure (6)

  • FreeMarket → ID: 134138275353332190 → More info
  • NXTCS → ID: 12658817572699179955 → More info
  • Pangea → ID: 6883271355794806507 → More info
  • Jay → ID: 8688289798928624137 → More info
  • Skynet → ID: 6854596569382794790 → More info
  • MyNxt→ ID: 2176003302076381931 → More info

* Please report immediately if you find the link to Asset Board thread is broken or that there is an asset missing from this category.

Multigateway (9)

  • MGW → ID: 10524562908394749924
  • superBTC (Bitcoin) → ID: 12659653638116877017
  • superLTC (Bitcoin) → ID: 125609428220063838
  • superBTCD (Bitcoindark) → ID: 6918149200730574743
  • superVRC (Vericoin) → ID: 9037144112883608562
  • superBITS (Bitstar) → ID: 13120372057981370228
  • superDOGE (Dogecoin) → ID: 16344939950195952527
  • superINFX (Influxcoin) → ID: 5378783389140157313
  • superSYS (syscoin) → ID: 15767200156607801771

* Please report immediately if you find the link to Asset Board thread is broken or that there is an asset missing from this category.

Investment – Investment funds(2+1)

  • CORE → ID: 18026565504333172181 → More info
  • NEXT → ID: 5504266111917554921 → More info
    • BOND → ID: 2269284270297846281 → More info

* Please report immediately if you find the link to Asset Board thread is broken or that there is an asset missing from this category.

Investment – With dividend payments (12)

  • Coinomat → ID: 6220108297598959542 → More info
  • Coinomat1 → ID: 7474435909229872610 → More info
  • CoreMedia → ID:1584198250936051677 → More info
  • NXTUSD → ID:1938368828495773639 → More info
  • DeBuNe → ID: 6926770479287491943 → More info
  • EPL2016 → ID: 4347550005568983492 → More info
  • Index → ID: 13634675574519917918 → More info
  • LQD→ ID: 17750387231635486778 → More info
  • MMBTCD → ID: 8122396658538927693 → More info
  • NxtPlugins → ID: 3779904130149819589 → More info
  • SIGWONET→ ID:12628887590172965573 → More info
  • TVE → ID: 10848741160900045194→ More info

* Please report immediately if you find the link to Asset Board thread is broken or that there is an asset missing from this category.

Investment – Physical Companies (3)

  • FARLAWEB → ID:17491339106794048806 → More info
  • HdgFundNXT → ID: 10160127190599911503 → More info
  • BGCAFFE → ID: 2978798152942226372 → More info

* Please report immediately if you find the link to Asset Board thread is broken or that there is an asset missing from this category.

Applications – With dividend payment (3)

  • Jinn → ID: 3061160746493230502 → More info
  • Nxtty → ID: 18128686802152832026 → More info
  • Newbium→ ID: 4207789768563155290 → More info
  • Scavenger→ ID: 4229113651443629513More info

*  Please report immediately if you find the link to Asset Board thread is broken or that there is an asset missing from this category.

Projects supporting NXT (5)

  • NXTP → ID: 17290457900272383726 → Web
  • NXTSecurityCoin → ID: 6775372232354238105 → More info
  • NXTblocks → ID: 3374201242031203848 → More info
  • Consensus Research → ID: 5841059555983208287 → More info
  • clubnxt → ID: 172381791830552501→ More info

* Please report immediately if you find the link to Asset Board thread is broken or that there is an asset missing from this category.

 

Original author of this article: Darkhorse, edited by RubénBC

Note: I am not perfect, so I may have missed some of your assets; if I have, please make contact, and I will add them to the list as I go. For the time being I am going category by category to make my life easier. I am still experimenting on the most efficient format of information sharing, so let’s discuss if you have any ideas to improve this. Anyone is welcome to help me in compiling the information. 

Nxter.org pays Nxterpoints (NXTP) for asset updates. Chip in.
Also, if you are an asset issuer and want further exposure on this site, please contact us.

———————————

The information contained in this article does not constitute (and is not intended to constitute) any form of advice, recommendation, representation, or endorsement by the author or the web site owner and should not be relied upon when making (or refraining from making) any investment decision.

Nxt [CORE]: Arbitrary Messages

The Arbitrary Message (AM) feature enables Nxt users to send small amounts of data to the Nxt blockchain. A simple concept in theory, but the applications for this feature are extensive.

Arbitrary Messages commonly take the form of SMS-length communications between users. This was the first application and is still one of the most popular uses for AMs, but the term ‘message’ is a loose one: as well as being used to send public or encrypted text messages to each other, AMs can also be used to send up to 1,000 bytes of any form of data.

Messaging

At its simplest, messaging involves sending a string of text from one NXT account to another. These messages can be viewed within the client. There is also an option to encrypt messages. If they are left unencrypted, they can be read by anyone since the blockchain is a public record of every transaction. Like a regular transaction, AMs are subject to standard tx fees – currently 1 NXT.

Nxt_msg

There are, of course, many valid use cases for unencrypted messages. A famous example is the AMs sent to the hacker who stole 50 million NXT from BTer’s hot wallet on August 15, 2014, or jl777’s use of an AM to cancel the SuperNET deal with CoinEVOLVE after the dev created a series of scam assets and went missing in action. You can view a list of all blockchain messages here.

Although transactions on the blockchain are meant to form a permanent record, AMs are intended to be removable. In the future, when the blockchain has grown and needs to be slimmed down to ensure its sustainability, messages may be pruned. Nevertheless, they form a critical building block in NXT’s second-generation functionality, underpinning a series of features.

MORE USE CASES

At the most basic level, the AM system can be used to transmit human-readable messages between accounts, creating a decentralised chat system. However, advanced applications can use this feature to store structured data, such as JSON objects. These can be used to trigger or facilitate services built on top of NXT.

Nxtmemo

The idea of a Twitter clone based on NXT messaging has been around since the earliest days of the platform. Nxtmemo (https://nxtmemo.com) is a straightforward version of this idea.

You can add your nxtmemo profile to the blockchain, and BBcodes are available for showing images, links, medialinks, etc. Log into your nxtmemo account with a NXT token to choose your display name – it must be a NXT alias that belongs to your account. Simply send your unencrypted messages to NXT-W6CT-NPDH-AAQW-HWCHA to have them show up on the site.

nxtmemo

NXTMemo is free and open source, and is created and maintained by toenu. See more on the NXT forum.

Cryptamail

cryptamail_nxt-inside

Cryptamail is a project created at Techcrunch Disrupt NY 2014 by a group of five developers, led by Kushti (now a Nxt core developer). The goal was to create a user-friendly decentralised email client with Alias-based identification. Although not currently in active development, Cryptamail is still running on the NXT testnet. It’s at cryptamail.com.

Read more about this proof-of-concept on the Nxtforum.

Multigateway

mgw

The Multigateway (MGW) is Nxt’s distributed cryptocurrency exchange – the least centralised such service currently available anywhere.

The primary use case for AMs in MGW is the automated deposit and withdrawal of bitcoins and other supported cryptocurrencies. These are held on MGW’s secure servers and exchanged for tokens representing each currency in the Nxt Asset Exchange, allowing for direct peer-­to-­peer trading. There are three separate servers, at least two of which have to agree for a transaction to take place – making it vastly more secure than traditional exchanges.

Essentially, MGW creates a deposit address for the Nxt user account for each of the supported coins. When the user sends coins to that deposit address, MGW delivers to the associated Nxt account the same quantity of coin assets (designated mgwBTC, mgwLTC, etc). Each of these assets represents one coin. Coin assets can then be traded on the NXT Asset Exchange like any other asset. MGW uses a similar process in reverse to withdraw coin assets back into the user’s own coin wallet. The requests to the MGW servers are broadcasted to the Nxt blockchain as Arbitrary Messages.

Multigateway was originally a plugin to the Nxt NRS client from NXTservices. It has now been incorporated into the SuperNET client v.0, in the form of a modified Nxt client that can be downloaded from the Multigateway site.

You can read more about the Multigateway here.

Helix

Helix is a standalone cross-platform financial analytics and visualisation client. As a part of FinHive, a powerful distributed financial analytics initiative that is the backbone of SkyNET, Helix has the ability to learn. A small apps store for financial tools will be included in the client, not only for crypto but also for traditional traders. The Helix client includes a distributed computation module to provide BOINC-like functions, tailored towards the financial industry.

Helix uses AMs as data containers to store whole apps. Developer nexern explains:

‘The multilayer perceptron app is 2.3 kb in size and chunked into 3 AMs. You can see the compressed and encrypted perceptron (and tetris game 4 AMs) in the blockchain here

Helix simply loads, concatenates, decompresses and decrypts these AMs directly from the blockchain, where they are stored, into memory. The process takes just three seconds. No disk space is needed. It is a fast, clean and secure solution which has a number of important real-world advantages:

  1. It makes apps very independent and robust against attacks.
  2. It provides nearly unrestricted access from anywhere due to the decentralised storage.
  3. It provides on-the-fly autorepair/update capabilities.

For example, if an app is broken due to an outdated API link, Helix can look for additional update/repair resources by scanning AMs and looking for the current app id. Where higher resource stamps are found, they can be added while Helix is running.

helix_finhive

Helix will be used by FinHive, a wholly owned subsidiary of SkyNET. You can see FinHive’s roadmap here.

Read more on the Nxtforum.

 

Conclusion

As a result of its versatility, AMs can be used to build a vast range of projects, from simple messaging apps to file-sharing services, decentralised applications, and higher-level NXT services.

NXT is in ongoing and constant development, and changes to the core can always be proposed by the community. One of the topics currently being discussed about the AM feature is adding a standard for multipart messages or increasing the allowed message length, as new projects have started to link AMs together so they can save more data to the NXT blockchain. You can join that discussion on the Nxtforum here.

Nxt is a versatile, open source cryptocurrency platform. In this Nxt CORE article series we will dive into the main 2.0 features of Nxt. The first article was about NXT, the token itself, the second about Nxt ALIAS system. 

Read other articles from the Nxt [CORE] article series.

Also see: Nxt – The Economy Platform – Usecases for everybody

Nxt supporting the student revolution in Hong Kong

Nxt at the Internet Finance Initiative CEO (IFICS) Global Bitcoin Summit

During the two days (28/29 November) of the IFICS, Global Bitcoin Summit in Hong Kong, at which I was invited to speak, Nxt enjoyed a fantastic opportunity to gain significant exposure; it was the only cryptocurency represented, even the Bitcoin foundation was missing. The summit was aimed at investors, businesses, and consultants. As always, it was full of representatives from various Bitcoin related services, including exchanges and ATMs.

As they had done at the Shanghai Bitcoin Expo in September, OKcoin was trying very hard to gain the best exposure. But it’s not just about the size of the booth. For example, take the China-based Bitcoin exchange, Huobi: they sent maybe just one representative, but the speech given by Wendy Wang (Huobi’s International Business Director) was absolutely amazing and they always prepare very nice slides.

After I had given a small speech at the Bitcoin Expo in Shanghai, I decided to represent Nxt at the Hong Kong IFICS summit in order to follow up with the Asian contacts I had made. And, as things turned out, it was a good idea, because the IFICS organizers were very Nxt friendly; so much so, I was given two opportunities to make presentations. In fact, Roger Ver (Bitcoin Angel Investor) and I were the only delegates who not only gave a speech but who also spoke on the discussion panels.

It meant that the other members of my discussion panel, having had no other exposure, had to deliver a lot of information in the short time available, while I could afford to focus on just a select few topics because most of what I wanted to say had already been presented in the speech I had given earlier.

Nxt was placed in the ‘Innovations in the digital currency’ category, so I decided to go with the simple topic: Nxt Innovations. As well as speaking about Nxt’s innovative technology, I also focused on the innovations taking place in our community. In particular I wanted to share my excitement regarding the working Starfish: Nxt’s decentralized ecosystem. The information in the speech came from many sources, not just the Nxt wiki, but also all the ideas I had spent weeks getting from the community to present at the conference.

I carried out this information gathering exercise via a private questionnaire for businesses and by opening new threads on the Nxt forum in order to get feedback from Nxters. So, while I was speaking at the conference about certain topics, I was able to put up slides quoting the real opinions about those topics made by Nxters. I showed a lot of pictures as part of my presentation – including infographics, a nice comparison of the Nxt mining rig (raspberri pi) and a picture of Bitcoin’s ASIC factory after the big fire. I even showed the pictures of Come-from-Beyond’s family which CFB had published.

I am not a native English speaker, but neither of course was the Chinese audience, so the speech was written in simple language, but the information in it was based on long-term research. As already mentioned, I have invested a lot of time getting all the information I needed, for example, the number of Nxt commits in the source code. I have been studying Nxt since January, when I was working on my ‘Nxt myth’ study. Since then I have been continuing with my research by formulating some new questions and trying to figure out the answers.

On the second day of the conference, I made the first presentation of my discussion panel. Initially there were about 80 people in the room. Many others came in while the presentations were being made. Half of the audience consisted of young cryptocurrency fans and the other half were businessmen, investors, speakers, and sponsors. As one of the invited speakers, I was able to attend both of the lunches and also the VIP cocktail dinner party. This is where a lot of contact building takes place, so it was very important for me to be there. And of course, we didn’t just speak about Bitcoin.

I took every opportunity of introducing Nxt and SuperNET. I think SuperNET is something so new and different that it has the best chance of capturing people’s attention. Even on the discussion panel, I spent more time talking about SuperNET than I did about Nxt AE and third party services, such as Coinomat, Nxt2pay…

During the event I gave out quite a large number of business cards, maybe 30-40. I was approaching people or they were just running into me. My question was always the same – what can Nxt do for you to accept it in your business? And, if it wasn’t a business, I would simply ask: Have you heard of Nxt? In the months leading up to the conference I had been involved in many internet discussions with lots of anti-Nxters thereby, in effect, training myself to deal with any troll type questions that might get asked at conferences. I had even discredited some of the troll-ideas in my speech in order to dispose of them in advance of any questions. But, as I have discovered in previous conferences, the people you meet are not only reasonable and fair-minded, many of them already know about Nxt and have nothing against it. That said, some of them are old school Bitcoiners, so here you need to speak to their friends and let the magic work…

The venue of the Summit was in the Cyberport, which is quite some distance from Hong Kong’s urban areas; even so the commute only took an hour, included searching for bus stops. It’s easy to travel in Hong Kong if you use Google maps, but sometimes it takes a lot of time to get a GPS signal. On one occasion I asked a policeman for directions, he used his mobile phone to search for the name of the street. 😀 The Cyberport’s hotel, where the delegates were invited to stay, was too expensive for poor Salsa, so I chose a 10x cheaper accommodation in a 2x2m room in Kowloon. But the food was included in my VIP ticket, so I could at least enjoy many luxurious delicacies.

Nxt and the student revolution in Hong Kong

And what about Nxt supporting the student revolution in Hong Kong? Each day after the conference business was over, I visited the demonstration camps. These are situated in a few streets near Admiralty, the Central Government Complex, and have been occupied by students for months. Actually a battle of Admiralty happened whilst I was at the second demonstration in Kowloon. The ‘Admiralty camp’ consists of hundreds of students; it’s become, in effect, their home and you can see them carrying on their daily lives: eating, learning, doing homework, drawing, preparing transparencies, providing information.

This camp is a very interesting place and something which you cannot see anywhere else. You can see many tourists passing by, making photos or selfies, there’s even a press camp… and the Lennon wall. I was talking to many students and I was proud of them for knowing about the Lennon wall in Prague (which a few weeks ago was destroyed but then restarted!) and for also knowing about a similar revolution in 1989, when we, the Soviet union countries, successfully demonstrated for democracy.

The Lennon Wall

The Lennon wall in Hong Kong is covered in paper messages, mostly in Chinese, supporting the Hong Kong revolution. These temporary means of communication are a fascinating topic with a long history; for example, in Shanghai, I was showing people pictures of the paper messages aimed at the Soviet army’s occupation of Czechoslovakia in 1968, as an example of anonymous communication. In Hong Kong, the students were also using chalk to make inscriptions. They have a symbol – a yellow umbrella, which can now be seen all over the place…

‘Pravda vítězí’ – ‘The truth wins’

At the end of the first day of the Hong Kong conference I placed a Czech symbol of Václav Havel’s fight for democracy: ‘Pravda vítězí’ – ‘The truth wins’ –  on the Lennon wall. This is a slogan which also appeared on our first postage stamp issued after the revolution. The idea of placing a message about Nxt on the Lennon wall came to me a little bit later, so when I returned to the Lennon wall for the second time, I left a Nxt message there too. It was a slogan that I remember from our site – ‘Nxt, democratizing the future’.

Nxt’s ideas fit perfectly into these demonstrations, because that’s what we are all doing: simply fighting for our rights, our freedom, for democracy. Although I took hundreds of photos of the demonstration camp, it wasn’t enough to satisfy my journalistic and freedom-loving instincts. So, in the evening, having found the Kowloon’s demonstrators, I joined them as a photographer.

Kowloon’s demonstrations

Kowloon’s demonstrations were very peaceful and, comprising around 1000 people, relatively small in scale; the demonstrators, sometimes splitting up into a few groups, just walked around the same few blocks. I was hoping that this would be a good opportunity for me to explore the area, but because we were going around in circles I only ever saw the same few streets. The Kowloon demonstrations were uncoordinated and therefore didn’t have much of an impact. Students, joined by many tourists and the press, went to the left, then to the right, then back, crossed the street, sometimes stopping for a few minutes.

The crowd was blocking the pavement, but it was always possible for other people to get through. Policemen were mostly just taking care of the traffic, so when there was a green light they let us cross the street and when there was a red, they blocked us. Once, when the crowd was blocking a bus, the police were a little more active, holding hands and pushing the crowd back onto the pavement. On another occasion, when someone was injured, the situation became rather more intense. It was a signal for radical protesters to start shouting and making gestures, for policemen to protect the wounded person and for the press to take hundreds of photos a minute.

In the TV news reports you can see the battle of Admiralty, where bricks were thrown and pepper spray had to be used. At the Kowloon demonstration I joined one local Bitcoiner and we were checking the situation online via social networks. In the TV reports you can see a policeman holding a red flag. The police operate according to a set of rules, which is good, especially for tourists and the occasional photographer like me, enabling us to escape into safety. Each policeman always carried three flags of different colours. I myself never saw them deployed, because the demonstrations I attended were peaceful, but in the TV reports you can see them being shown. The flags have different meanings according to their colour, so the first flag is just a warning:  ‘Police cordon, do not cross’.  The second means: ‘Stop charging or we use force’. And the last flag means ‘Disperse’. This is when you really should run away, put on your mask or start recording because the videos recorded in these circumstances are the ones that will appear on TV.

I don’t want to make this article over long, so I’ll conclude my account of what I witnessed with this: when you see on the TV or read in the newspaper that ‘the revolution has escalated’, what it actually means is that after many boring hours of nothing much happening, except for lots of verbal warnings, suddenly flags start being shown and the bulk of the crowd begins to disperse, leaving behind just a few radical protesters to fight with the police. Even on the videos showing the worst of the confrontations you can still see many reporters in the middle of the fight.

Although I was only a simple observer, I became a silent member of the demonstration. I didn’t shout “Kowloon” or any of the Chinese slogans shouted by the ‘one-minute-leaders’ which were then repeated by the demonstrators, nor did I raise a hand in the Hunger-games style. However, although I didn’t fully adopt the protest mentality, I still became one of the demonstrators and, for a while, was even leading them.

PS: I didn’t spend much time doing anthropological research while I was there, but I would suggest to anyone studying revolutions to visit this place, talk to people, talk to students (oral history), digitalize all written (temporary) sources and to record the students’ gestures during the demonstrations.

——-

Some more photos of the conference and the demonstrations