Bitcoin wars, miner problems, scaling issues and… ARDOR

It’s been some really quite interesting weeks lately in crypto land.

Scaling hasn’t been much of topic for the last years – and boom – now it’s front and center. Bitcoiners used to clobber anyone who thinks miners having different incentives than currency holders is a problem.

Now it’s suddenly consensus on r/bitcoin. Not only are there repeated threads saying a change of the Proof of Work algorithm might be necessary, I’m actually seeing more and more suggestions to switch to Proof of Stake! I can’t believe my eyes! Just the mere mention of it even half a year ago would have brought you into downvote hell and 500 angry “nothing at stake” chants, before your post got shadow banned. I’m not saying that it’s a majority position by any means, but what a difference!

Crypto alts’ cap goes ^

The changing tides are sweeping a lot of money into the alts. The combined crypto cap is exploding:

While Bitcoin’s share of it is decreasing. The pace is accelerating towards parity. That could be a huge deal with unclear implications (…but don’t dare mention this on r/Bitcoin).

How Ardor fits into the mix

There is a major sea change going on, and props to the Jelurida dev team to see this long ahead: Designing Ardor specifically around scaling capabilities, puts it in a position to take advantage of the situation. Now there is just the question if this can somehow get attention. So far it is always Ethereum that gets used as example for Proof of Stake. Once again, it took the spotlight. It also gobbled up the biggest gains. Ardor seemed to have merely been swept up with the tidal wave that took all alts along.

I don’t know if all that will change to the best of Ardor and NXT. But I’m sure: This ain’t over. And people are still either in denial or stuck in old ways of thinking.

  • The Bitcoin wars will get worse.
    First off, there is AsicBoost, which is worth millions in advantage for parasitic miners. Why would they give that up for anything? Higher market cap doesn’t help their bottom line, they live of higher margins. A fork of some sort either will happen or must at least come close enough that these miners must fear trashing their hardware.
  • Disruption will be huge either way. The user experience will be a disaster. Alts will pick up refugees… but if Bitcoin suffers too much, all crypto will take a hit.
  • The miner problem is, of course, deeper anyways. It’s an incentive problem that will return. Miners, they only care about users and hodlers if it somehow helps their short-term earnings.
  • What also clearly came to light is that the monopoly is even worse than anyone thought: It’s the hardware! That’s all done by basically one manufacturer in one location – with the ability to legally block supply for anyone who doesn’t agree with their plans. Bitmain is abusing this already. That skews not just which miners can join, but also how much existing ones dare to contribute to debates.
  • People still don’t understand the scaling issue. It seems bizarre to me that Ethereum/Monero/Dash are seen as solutions. All these have exponentially worse situations should they ever catch on remotely as much as Bitcoin.
    It’s just that neither Ether or Litecoin are used enough to make clear to everyone that they have the exact problem Bitcoin has – or worse.

So there is Ardor, with an actual solution. My fear is that people might once again overlook it, just like NXT was laughed at when it pioneered what is now the altcoin standard. Maybe it’s premature optimization. But it might be the right unique selling point at just the right time.

One joker card could be the Lightning network or the “sharding” that Buterin promises. Basically, they could change the landscape of the scaling discussion – and make it a non-issue. But it’s just promises so far. Maybe someone more knowledgeable can shed some light one that angle.
Anyways, the potential in the upcoming year is huge – and that’s what speculators are trading on.

This article was first posted in https://nxtforum.org/general-discussion/price-speculation

Under the Knife #1: Janus token

Janus

On November 09, 2016, 11:57:13 pm, Janus joined in the Nxt and BTC sphere by announcing their ICO on Nxtforum and Bitcointalk.org. Up for sale were Janustokens, which are tokens that will represent revenue shares in Janus, a (soon to be legally registered) software and services company which plans on launching multiple businesses. The industries targeted are done so specifically for maximum revenue with the lowest market share.

The Janus project is being launched by veteran blockchain enthusiasts with the aim of bootstrapping a number of initiatives under the umbrella of a parent company. As with any business, the goal of these initiatives is to become profitable and pay investors regular profit shares which exceed market rates of return on invested capital.

Our vision is to create a software and services company which utilizes a common technology platform to rapidly implement distinctly branded projects targeting a number of carefully selected markets. We believe that this approach will allow us to decrease development costs and increase product quality which will enable us to establish successful businesses and generate substantial profits which will then be shared with the Janus token holders.

From the Janus whitepaper

The janustoken.com site takes investments paid with BTC, NXT, and most altcoins (via Shapeshift). The tokens are issued on the Nxt blockchain and will be distributed to investors after the ICO. Dividends will be sent to investors via the well-tested Nxt dividend mechanism, in BTC, and directly into each investor’s BTC wallets.

The countdown, profit sharing plan, roadmap, time line, and income generation business model, can all be found on the website and in the Janus white paper. Nxt Foundation acts as escrow, investors which contribute and hold the equivalent of more than 50BTC Janus tokens, will receive a seat on a Janus ‘Advisory Board’.

What can actually go wrong?

Nxt and the cryptocurrency scene have seen many sellers jump into our forums, promising “moon” and good ROI, and, I’m sorry to say, but we have a damn good reason to be reluctant. We’ve been victims of numerous scams. We’ve funded some of those good pitches and seen our money vanish.

Under the knife

Janus coming out of the blue like a ninja, suddenly being all over the place, pitching, praising Nxt, posting walls of text and asking for funding, but without revealing much detail about their business models, could be either backed by relevant enthusiasm, good marketing, and natural protectionism of their unique business ideas, but on the other hand, it could also turn out to be nothing but “used car seller” tricks.

That’s what I told Bjorn, the Director of Marketing of Janus, when I contacted him on nxtchat.slack, in their #janustoken channel, and proposed this interview, my first in a series of asset issuer interrogations. Bjorn agreed to do the interview and, after reading the questions, decided to let lobos, Janus’ director of technology, Robert Gasch, join in the conversation as well.

Here’s the result.

ae-knifed

Q & A

Anonymous

Q: Bjorn, you have chosen to be anonymous. Why?

Bjorn: Due to current employment and the country I live in, I’ll be anonymous until Q2 2017.

I gave my passport to the Nxt Foundation though, that’s not a public fact but I’ll tell you that its encrypted and they have it.

Q: Who did you send it to?

Bjorn: evildave

Ad1: Dave Pearce, Nxt Foundation Board Member, has confirmed to me that he received a passport scan from Bjorn. I quote: “I can’t guarantee with 100% accuracy that it’s genuine, obviously, but we have also checked and confirmed the IDs of Robert and Luis, and they are genuine. Robert and Luis both know Bjorn in real life, so if something goes wrong, they will also be able to track Bjorn down.” 

Q: You’ve promised anonymity to tokenholders, yet Janus will become a registered company in Q1 2017, according to your roadmap. You have sought advice from “some legal experts”, you say, but “the finer details are still to be investigated”.

Why would any government allow you to pay out dividends to anons?

Bjorn: As a company most governments would not. To cover the majority of countries we are proposing to handle this in a way to reduce the generally imposed KYC that a company direct profit sharing would demand. For Janus token holders, the net profit will be distributed by one of the company co-owners as an individual and not as the company itself to allow those receiving profit sharing to retain anonymity.

Lobos: After deliberation with the lawyers we asked, we would lean towards the option of transferring the profits which are to be paid out to a company executive who would then distribute them using blockchain technology, as a person. This would sidestep the issue of the company directly performing this profit distribution but also shift legal responsibility to the designated executive. (the last word on this subject has not been spoken yet; it turns out that this is a much more complicated question than we originally anticipated which also depends on the jurisdiction in which the company is formed).

Q: You are working in the grey zone, I guess we can agree on that. What happens if regulations kick in?

Lobos: If and when regulations kick in which make the above proposed (and any other reasonable) method impossible, we would at this point lean towards a buyback program.

Q: A scenario could be that you would have to ask asset holders to give you their personal information. Message tokenholders via the blockchain and give them the choice to either hand over their personal details to you or sell their tokens (buyback option/sell on market). Then re-issue the Janustoken, on an Ardor KYC child chain in Q3 (if available by then) and distribute this new token to those who registered.

Bjorn: If this becomes an available choice, and doesn’t impede the distribution of profit sharing it can be altered to accommodate KYC, yes. The buyback could very well be the easiest route in the event of severe legal implications.

lobos: As a matter of fact, we believe that a buyback could be structured in such a way that it would take the place of the profit sharing.

Q: The thing here is, it’s not only your ability to launch grow and run a business we have to trust with our money. It’s a promise that you can run a registered business and we can be anonymous investors. Would you close the business or ask us to provide our personal info if forced to make the choice?

Bjorn: We would find an alternate method, more than likely what was proposed above and allow buyback options for Janus holders. There is always a way to protect users as long as everyone is willing to take the extra steps with us to do so.

Backstory: Betterbets.io

betterbets-site

Q: I have sent a message to Luis and Robert on LinkedIn, asking them to confirm that they’re related to Janustoken and BetterBets.io, because they don’t mention it on their LinkedIn CV’s. Also, BetterBets’s “About Us” page does not mention any of you. Can you prove that the betterbets site is yours? In some cases, when new asset issuers have wanted to provide proof of their identity, they’ve made a small change to their existing website, for example the “About Us”-page. Could you do that?

Bjorn: Yes we can. (it’s now added as of 5 minutes ago) Bottom right of the BetterBets.io landing page links directly to the Janus sale site and we have added this to the BetterBets about us page as you suggested.

Ad2: I have received a DM from Robert and Luis via LinkedIn and they confirm their active involvement with BetterBets and the Janus project. 

Q: You’ve said that BetterBets is in the top 5 of BTC dice/casino sites. When googling betterbets, I haven’t found you on any top list. I found a 5/5 review though, with a referral link to your site.

Bjorn: The google search would reveal paid ratings sites, we go by verifiable volume which is done by third parties such as www.dicesites.com. This site is and has been for years a true bitcoiner’s source for real casino data and provably fair thats been tested by the industry leaders who invented the methods used to calculate the provably fair methods used today. It’s an unpaid source and created by forum user NLnico who has been a long time community member to uphold security and proper business practices. He’s even done security work for Bitcointalk owner Theymos so this is not taken lightly when he approves a site for admission. The true top 5 sites changes often, one week we are #2 the next #7, the next #3 the next #10. This does vary but strictly averaged BetterBets is top 5.

Lobos: If you factor the volume we processed on Bettebets (68k BTC) and take into account the fact that we only launched approx. 18 months ago, you will see that we have been quite successful when compared to some of the casinos which have been around for years.

Q: Please elaborate on your success. You’ve moved around 47M dollars?

Bjorn: This is correct at this date BetterBets has achieved : 68806.33 BTC in betting volume since opening in May 2015. This site (thebitcoinstrip.com) isn’t completely current but gives some backstory as well.

Q: You’ve said that betterbets is a model of how the Janus project(s) will work (Janus will be a conglomerate of course, so there will be multiple companies, not just one, earning profits to Janus investors). Relevant to this (and to back you with trust), you’ve brought some of BetterBet’s early investors into the Nxtchat.slack.

Bjorn: The stakeholder program we created was actually 40 total spots not 20 (I may have misspoke in chat) and investors were able to purchase each spot for 5 BTC apiece (200 BTC total). One group close to us purchased half (20 spots) to secure their portion of the revenue from BetterBets. This investment and profit sharing will end in Q1 2018 as we have stated to all stakeholders.

Q: In the crypto investment space we’re used to new people dumping into IPO and ICO threads. They come with no backstory, yet they are all happy to buy into the project. Wouldn’t miss this opportunity for anything in the world. In other words, they are sockpuppets, accounts created to pump the ICO.

I’m not saying that @merk, @ropes, @kushed, @l3gionario, @bitcoinpot and others are sock puppets. But noone cares to ask them any questions. Why? Look at this:

You write that your investment offering to betterbets investors was minimum 5 BTC per slot, 20 slots in all. They sold out in 6 weeks.

bjorn_bb [9:37 PM]
now they are here and investing in Janus haha
it’s been a positive experience”

bitcoinpot [12:26 PM]
Hey there everybody, am here thanks to Janus team …being one of their stakeholders at BetterBets.io project consider myself lucky for having the opportunity to fill one of their stakeholders position avaliable already received back ( always on time – 1 day of the month) more than 50% of my initial investiment after 7 months of dividend sand I have still 17 months ahead

Q: Taking your word for it, 200 BTC was invested in betterbets within 6 weeks and everyone is on track to a full ROI in 4-6 months. Now, today with 1 day left of the 8% early investor bonus period for Janus, a total of 16.8 BTC has been raised, including NXT investments and new BTC investors.

I can ask the aliases in Nxtchat why they haven’t invested (more?) yet, but do you have thoughts about this issue yourself?

Bjorn: The only thing I can think of as to why some have not invested is really because we didn’t push investment into Janus on them, we showed them the details, the project and gave them insight as to what was coming but I didn’t direct sell it to any of them. My goal was to see if they had interest based on what we made public and decide for themselves. If I were to speculate I’d say some may not be in a position financially to invest, or are waiting until further into the token sale. Some previous stakeholders have invested. One is currently the largest investor in Janus up to this date. It’s impossible though to state exactly why, however, some of them are very busy or private and rarely even make contact as we have run a tight investment, and they probably never feel the need to enter the private slack we made available to them.

Lobos: Some of our investors are quite private and hardly communicate with us. I think the general feeling for Janus is that a lot of people are sitting on the fence waiting to see how it develops (less in terms of the token sale itself, but with regards to how we are able to communicate the story and whether we are able to hold up to the scrutiny which has been coming out way). Also, with the token sale having a set time limit (and for now not being in any danger of being sold out) there is no rush for them to dive in. From a personal perspective, I can say that I’ve never been a fan of diving into an ICO early on).

bct-betterbets

Source: https://bitcointalk.org/index.php?topic=1677509.msg17008011#msg17008011

Nxt vs BTC dividends

UPDATED: Due to a recent change of plans in Janus’ ICO and token distribution method (as announced on December 5th, 2016) some of the Q & A’s below are outdated. I have striked out the irrelevant parts.

TL;DR: Keep your Janus tokens in a local Nxt account at the time dividends are sent. Dividends will (for now) be paid in NXT. You can read more about this and get the latest Janus insights here

Q: The Janus token is issued on the Nxt Asset Exchange (AE) and you will use the dividend mechanism for distribution of BTC (not SuperBTC) to BTC accounts. Can you elaborate on this?

Bjorn: Janus exists on Nxt as a token and will be publicly traded on both the AE and traditional centralized exchanges. We have contacts in some exchanges and hope more will become available in time to allow greater platform trading. The method for receiving profit sharing will actually be executed outside the dividends feature, we will convert the Janus token site to allow all Janus holders present and future to create an account then input a BTC and their Janus/Nxt account addresses to receive their portion of profit sharing. It will be a simple verification of their Janus balance then sending BTC to the address users provide based on Janus amount owned. 

Q: Have to wrap my head around this; so only tokens which are held in a local Nxt wallet at the time of the verification snapshots and which have also been registered on the Janus site (to connect the Nxt account ID with a BTC address), will receive dividends. Token holders with Janus tokens on central exchanges (and Janus tokens bought on the Nxt AE but not registered on the Janus website) will not receive dividends. NOTE that the centralised exchanges could register their Janus token Nxt account on your website too and the exchange would receive the dividends.

Bjorn: Correct anyone who chooses to purchase Janus and also wishes to receive dividends needs to register their account on our site and add a receiving BTC address, this does mean that anyone, exchanges included could do this. I have a feeling that in the event we get on larger exchanges they would be willing to credit user accounts the BTC from profit sharing out of fairness. I’m also sure some smaller exchanges would keep it for themselves, unless their users demand they credit traders accounts.

In my humble opinion if profit sharing is significant people will have no issue using this method to reap the rewards of our work.

Q: Would Janus keep the dividends for non-registered token holders or pay all dividends to the registered token holders at the time of the snapshot?

Bjorn: We will pay all dividends out to those registered with Janus account and BTC address at the time of the snapshot.

Q: You’ve mentioned that the Janus token may be incorporated into some of your future sites. Can you elaborate on this?

Bjorn: One method to incorporate Janus on some of our sites will be similar to using a rewards model. Without a user having to understand anything technologically about blockchains, it’s very easy to allow ‘reward token’ (which would in fact be Janus tokens) to be used to redeem or send to other users on specific sites we are launching.

The main focus when our team enables features of this nature is to reduce any of the thinking associated with new technology, the way it will be used may not even indicate that it is a Janus token by name, although the underlying fact is that it will be Janus and using Nxt/Ardor blockchain for accounting.

Final Round: The FUD

dont_panic_button

Q: NXT price goes down. Will my Janus tokens lose value?

Bjorn: Our speculative answer is no, Janus derives nearly all its value from our business sites (and announcements of), therefore it is almost independent of any platform in regards to inherent value.

Q: Nxt Foundation gets 5% for acting as escrows. When will they release the funds?

Bjorn: The Nxt Foundation will release funds when all Janus tokens have been credited to the accounts from all participating people in the token sale and all bounties and associated rewards have been paid to participants.

Q: If they release funds after you’ve distributed the tokens to investors, how does this guarantee that you won’t run away with the funds? The AE token cost you 1000 NXT to issue, it would make you a very decent ROI.

Bjorn: We only have our reputations and word to guarantee this, we have a running blockchain based business that people depend on currently to do well, it could be used as leverage were we to run away. Also our core team for Janus 2 of 3 are now public, and Robert is co-owner of everything we do.

Lobos: I have been a professional software developer for 25 years and have worked on quite a number of enterprise-grade and mission critical projects. My work record is impeccable and no matter what happens to the token sale, I intend to emerge with my reputation intact; if for some reason this won’t be the case, it will severely impact my future employment prospects which is not something I am willing to risk.

Q: Nxt is controlled by a dictator doing hardfork attacks all the time. It’s a proven fact. What will you do when Nxt API changes and your services break?

Bjorn: Hypothetical question?

apenzl: FUD.

Bjorn: Our primary goal for all holders of Janus is security and longevity with the means to track users tokens held to deliver proper profit sharing percentages. We will adapt or use any platform necessary to carry this out, Nxt was chosen specifically for it’s secure and proven track record though. Janus will adapt if needed to any threats.

Lobos: One of the reasons we are donating 5% of token sale proceeds is that we wish to help put the Nxt foundation into a position which will enable it to continue the stewardship of the Nxt blockchain and its associated technologies.

Q: It isn’t guaranteed that Ardor will launch. Might be vaporware. Are you going to stick with old Nxt when Ardor doesn’t happen but other fancy fast scalable blockchain 3.0 solutions launch?

Bjorn: The best part of Janus is really the fact that platform choice is more of a convenience than mandatory, profit sharing is delivered in Bitcoin, and using Nxt currently to track Janus tokens per account. If at any point a new method to track distribution of Janus owned is needed, we will make this happen, even if it means launching our own private blockchain. We personally hope this never happens, because one of the great things about Nxt/Ardor is the developers and foundation. They put so much of their time and lives into the Nxt platform, thus allowing groups like the Janus team to focus on the use of their hard work and efforts. Our team believes in using the tools available to achieve success, this is why our focus is on business and not trying to advance a technology that’s already a decade ahead of mainstream adoption.

Lobos: We can only re-iterate that Janus is not a blockchain technology play but a business play. The underlying blockchain technology is actually quite irrelevant to us as long as it is actively maintained and supported. NXT has an impressive track record in this regard which is the primary reason why we chose it as technology base for Janus.

Q: Look at the Waves ICO. No code but pretty pix and promises at the time. It made them 16M USD equivalent. People like GUIs. It’s the same with Komodo. grewal posts screenshots of an easyDEX GUI and the crowd goes wild. Could we ask Janus for something to look at? A screenshot of the GUI from one of your promising projects. You plan to launch a business in Q2, you must have something. As long as it doesn’t give away some “secret”, could we have a look?

Bjorn: Yes, and we plan to show at the bare minimum, some of the things our framework for sites to come looks like. Including projects already using some of this in the wild now.

Lobos: Having been a software engineer for 25 years, I can not stand to simply push out code which just happens to work and is a complete mess. As such, one of the things I have done is to develop a framework which allows for a modular codebase and avoids the mess that monolithic codebases tend to become over time. The first public site implementation based upon this framework is actually the Janustoken.com site.

In addition to this, I have developed and own the copyright to code which can be used to implement Realty and eCommerce sites. This code has been implemented over the course of many years and has evolved to handle complex business logic while retaining its flexibility. Unfortunately the code has been written for a legacy architecture and needs to be refactored to properly fit into our new framework, but refactoring a codebase is many times easier than writing one from scratch, especially so if you can preserve the business logic which has evolved over the course of many implementations.

As a final point: over the past three to four years I have mostly been busy working on contract basis, mostly utilizing proprietary frameworks for large-scale customers. I can point to sites such as https://ice.com , http://vulkan.com, https://www.worldshop.eu and many others that I’ve helped implement. The most active site running an ancient version of my realty package is http://www.lrossa.com, a major booking engine for the region of Istra in Croatia.

Ad3: I have checked to my satisfaction that lobos (Robert) has been involved with the development of the sites mentioned above.


JANUS UPDATE:

ICO “CANCELLED” –
JANUS IS TRADING ON THE NXT AE

December 5, 2016

On December 5th, the Janus Team decided to stop the ICO and return all funds raised to their investors. Read details about the refund HERE.

Bjorn_bb writes:

The pace of the original sale was not going to reach 3500 BTC as was required to allow for such high revenue dividends, therefore we took a decisive course to allow investment directly here: https://www.mynxt.info/asset/4348103880042995903

Details:

[ICO] Janus on the Nxt AE

UPDATE 2:

Dividends are being paid monthly, 90% $NXT from BetterBets.io | 10% $ETC from https://etcbets.com, and their planned businesses are being built, the roadmap is being followed.

Latest updates:
https://nxter.org/ae-janus-4348103880042995903

Website: https://janustoken.com/
Bitcointalk: https://bitcointalk.org/index.php?topic=1677509.0


Disclaimer: This post is for general information and news purposes 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, representation, or endorsement by the author or the website owner and should not be relied upon when making (or refraining from making) any investment decision.

Nxt assets “Under the Knife”

To date, almost 800+ assets have been issued on the Nxt Asset Exchange (AE) since it was launched less than 3 years ago, as the first implementation of the coloured coin concept in crypto.

Some assets have gained magnificent market cap, in some periods even outperforming its reference currency, NXT. While others have been issued as experiments and some have, unfortunately, been scams.

The Nxt AE has been running secure and stable during all this time and continues to impress issuers and users with its advanced built-in features. In the Nxt Client, you can easily search for assets by their unique asset ID – but how can you find these IDs? You can trawl through asset threads on nxtforum.org or you can check an asset list on a Nxt Blockchain explorer.

That’s it. Because to this date, we have not had any service or central hub dedicated to rating, describing, or warning against fake assets.

How to find the good assets?

On the AE there’s no built-in hand holding. No regulation, no government protection, as it’s a 100% decentralised global asset market. There is no built-in KYC registration (such can be implemented on Ardor child chains), so investments and trades made on the AE are based on whether you trust the issuer / business or not.

Do your due diligence. Investigate. Ask questions to the issuer.

Experienced AE traders know this. Asset issuers should be aware of it too and go a long way to provide details and quality answers to their potential backers. But, let’s be honest, more than a few asset issuers got shocked by the community’s “guilty until proven trustworthy” approach, felt attacked, and ran off from NxtForum, after going in there full of energy and ideas, pitching their most promising project in an [ANN] thread, combined with a well-prepared business model (or not!), and possibly even a 100% working product to give ROI to their investors – if only they’ll back the startup.

While some campaigners may have only spent minutes on writing their pitch (and, thus, will be ignored), others have worked hard for months, or even years, on their business idea or software before finally seeking funds.

In both cases, the campaigners will be questioned, thoroughly, about their personal backstory as well as their business plan and product or service offering. If there are obvious holes in the issuers’ plans, it will show, and critical questions, and thus, judgement from the masses might not always come out politely in such cases. Wise asset issuers / campaigners thank the community for the free consultation and up their game and announce the necessary changes to the plan. Or, they defend their plan because it’s well thought through and fine. Campaigners would know if such a response was successful or not through the follow-up feedback from the community.

Either way, the process is tough on issuers. Some feel confident, others humiliated or trolled. Some give good answers while others can’t handle the stress and finally answer back aggressively. Unfortunately, then they lose out.

This is bad for investors. Not if the asset was a scam, of course, but unfortunately it isn’t always so.

So back to the question: how to pick the good assets – and avoid the bad?

[ANN] Nxt Assets “Under the Knife”

ae-knifed

In a new interview series hosted on Nxter.org, I will approach asset issuers with questions that are relevant to AE investors. I won’t be soft. Thus the title for the article series: “Under the Knife”.

Issuers will get an opportunity to read the article before it gets published. This is to give them a chance to make changes to their approach instead of having potential flaws revealed out in the open, on the oh-so-never-forgetting internet (who wants a “scam” post connected to their new great business name on Google search results?). Asset issuers can refuse to make an interview, but they can also ask for one to be made.

If an asset issuer decides to sponsor an article in the series, they won’t be guaranteed any recommendation. It can only be guaranteed that we’ll do our independent research and due diligence and publish it, which may turn out to their advantage – or their disadvantage. No asset sales are guaranteed.

Why?

Nxter.org works independently, yes, we’re a rare case. We’ve proven more than once that we can’t be bought. We exist to provide readers and investors with non-biased information. With this approach, we also give issuers a more seriously researched article, to which they can point both forum trolls and interested investors, instead of wasting time on answering the same more or less relevant questions over and over again in different chat rooms, private messages, and forums.

There are too many scam ICOs in the world of cryptocurrency but there are also too many hidden opportunities on the AE. The current situation is bad for investors and bad for crowdfunders as well, so let’s try to give both parties a helping hand. If you’re interested in helping, please contact us. In parallel with the interview series, we are building the nxter.org/assethub. More info about that will be available asap.

Who’ll get cut?

Time will tell. The first interview has been made with the Janus project. It felt natural, as they are currently hosting an ICO. Janus is a start-up business conglomerate that will be using the Nxt dividend feature to distribute BTC dividends, and may also implement their Nxt AE Janus token in some of their businesses…. or so they say. Check nxter.org tomorrow and read the first “Under the Knife” asset issuer interview.

Related posts:
Under the Knife #1: The Janustoken

You can subscribe to the Nxter News list, if you want the interview sent to your mailbox.

“The Forging Bounty Lottery campaign” will pay 5 million in rewards to forgers and Nxt nodes

egalodon has come forward with The Forging Bootstrapper initiative;
an account holding 5M NXT, which will be distributed randomly among Nxters forging to help run and secure the Nxt network. The Forging Bootstrapper wants to make it more profitable to forge and run nodes, and thereby build a stronger decentralised Nxt / Ardor network.

‘Forging’ is Nxt’s equivalent to PoW mining. Nxt mining uses a deterministic lottery that grants the right to mine (forge) the next block. With a minimum balance of 1000NXT you are eligible to win the lottery, and thereby earn all the fees inside the blocks you produce. The winning ticket is picked at random, but if you buy several tickets you multiply your chances of winning. Your probability of winning is the number of tickets you bought divided by the total number of tickets sold to everyone participating in the lottery. The probability of winning the forging contest is your NXT balance divided by the total balance of NXT forging throughout the network.

Megalodon writes:

Forging Bounty Lottery campaign managed by Forging Bootstrapper account NXT-HH9F-JMRB-6HRD-HD5ZW is designed to reward active forgers. Transactions with exceptionally high fees will be sent randomly (but not frequently) from the start of Ardor snapshot until the account balance is zero. The lottery is skewed in favour of accounts with smaller forging power. Mining pools are also eligible for this campaign. To increase your chances in the lottery, please identify yourselves here. Thank you.

This campaign is managed such that it is expected to run for some time after Ardor chain is live. Ardor tokens distributed to this account will be rewarded to Ardor forgers while the remaining NXT will continue to be rewarded to Nxt 1.0 forgers even after Ardor is launched.

Some large accounts have opted out of this campaign. Please note that “Lottery Transactions” may accidentally be forged by opt-out accounts due to the non-100% certainty of forging order.

No matter the size of your stake you should forge, either by yourself or by leasing your account balance to a Nxt forging pool. Leasing your balance is of no risk to you. When leasing, you maintain full control of your NXT – the pool simply receives your “effectiveBalance” which is your current forging power. The pool cannot do anything with your NXT account or balance. When you sell/buy NXT during an active lease, what happens is your contribution to the pool is automatically adjusted in the NXT protocol.

You can forge if you’ve had more than 1000NXT in your account for more than 1440 blocks.

All you have to do to forge is start your NXT client, log in with your private key and it will begin forging. There will be a green forging indicator. You forge when you are online.

With the leasing feature it also takes 1440 blocks (24 hours) from you hitting the “lease”-button until your NXT-stake is actively forging in the account/pool that you lease it to. If you’re often offline, leasing your forging rights to a pool may be a good idea, as forging pools are often forging 24/7 365.

How do I lease my forging balance?

Start your Nxt Client, log in with your passphrase.

  • Click your account balance.
  • Click the “Account Leasing” tab.
  • Click “lease your balance to another account”.
  • Insert the account you wish to lease your balance to.
  • Set for how long you want to lease your balance under “period” (it’s expressed in blocks: 1440 blocks = 24h). Default is set to max; 65535, a lease of 65535 blocks is about 46 days.
  • Put in your secret phrase.
  • Click “Lease Balance” button (it costs you 1 NXT to lease your balance).

If you want to leave the pool before the expiration time you’ve set, you can transfer your NXT to another account under your control, forging rights are then transferred to this account. If you transfer the full balance, a balance of 0 NXT will stay with the pool until the leasing period ends.

Who can I lease to – what are my options?

You can lease your balance to a forging pool that:
– pays out all of your forged fees to you or
– donates your forged fees to projects that they select or
– keeps the NXT forged (you personally want to support with your forging fees).

You have to trust the pool to distribute your share to you, as the forging fee stays with the pool.

Pools

Nxtcrypto.org

http://198.211.103.222/howto.html

Nxt forging pool which has been running since May, 2014.

Forum thread: https://nxtforum.org/general-discussion/nxtcrypto-org-leased-forging-pool-only-fees-are-1nxt-to-withdraw/
Pool address: NXT-K5KL-23DJ-3XLK-22222
Pool status: http://198.211.103.222/status.php
Pool earnings: http://198.211.103.222/confirmedearnings.php
Lease fee: 1 NXT. Payout request: done via arbitrary messages, send a message (the content is not important) to request a payout, 1 NXT. Payout transfer: 1 NXT. Distribution: proportional to the forging power.

NXTER.ORG Pool

Nxter Magazine / NXTER.ORG‘s forging node is nrs.nxter.org.

Pool alias: Nxthub1
Pool address: NXT-NYJW-6M4F-6LG2-76FR5

By leasing your balance to alias nxthub1 (acct NXT-NYJW-6M4F-6LG2-76FR5) you support the Nxt network PLUS our work.  :)

Leasing fee is 1 NXT. The NXT’s forged by the pool are donated to the promotion of the Nxt and Ardor Platforms.

Click on your balance in the Nxt Client
> Click Account Leasing
> Click Lease your balance to another account
> Enter account ID or account alias (nxthub1). Choose max period (default).
Lease.

“Lucky Node” lottery

Lurker1 writes:

Now with this lottery you can ‘mine’ coins running a public node on your computer. I think it’s important to reward 0 weight nodes of newbies who set up their first node and want to earn some coins. You get bonus coins for:
* hallmarking your node and having weight>0;
* open API
* open API_SSL
* running an archival node

A random number of NXT coins will be sent every 2 hours to a random node.

To participate in the lottery you must put your NXT address in the nxt.myPlatform property, into the nxt/conf/nxt.properties file.

nxt.myPlatform=NXT-XXXX-XXXX-XXXX-XXXXX

For OpenAPI configuration you must have these set:
nxt.allowedBotHosts=*
nxt.apiServerHost=0.0.0.0

optionally increase the value of nxt.maxNumberOfInboundConnections to make your node more available to peers and increase your odds:
nxt.maxNumberOfInboundConnections=500

and finally restart your node for configuration changes to take effect.

Optionally hallmark your node to get extra bonus for weight>0 on top of lottery prize.

Restart your node for configuration changes to take effect.

Look up your node in https://nxtportal.org/peers and http://peerexplorer.com lists, it must be in both for best results.

NXT-8F28-EDVE-LPPX-HY4E7 is my address from where coins will be sent, don’t put it in myPlatform property. I’ve funded it with a small amount. When it runs out, I hope a whale can contribute little amounts from time to time to keep this lottery going.

Megalodon added:

As this lottery falls within the overall objectives of the Forging Bounty Lottery campaign, it will be supported via donations from Forging Bootstrapper account NXT-HH9F-JMRB-6HRD-HD5ZW. (To receive rewards from both, you need to run a public node AND forge).

How to run a Nxt node

You can run a Nxt node from your home.

Instructions for setting up your node on a Raspberry Pi can be found in this tutorial: http://test.nxter.org/how-to-set-up-a-nxt-node-on-a-raspberry-pi-2/

If you want to set up a node on a VPS (free or paid) or a dedicated server but don’t know how to, emoneyRu will set it up and maintain it for you for free. You can contact him here: https://nxtforum.org/public-nodes-vpss/emoneyru-will-for-free-manage-you-vpss-for-you/ 

But if you want to DIY, here’s a tutorial:
https://nxtwiki.org/wiki/How-To:CreatePublicNode

Other useful links:
Set up Archival node
https://nxtwiki.org/wiki/How-To:CreateHallmark
https://nxtwiki.org/wiki/How-To:CreatePublicNode
https://nxtwiki.org/wiki/How-To:UseSslCerts

Hallmark and earn NSC (Nxt Security Coins)

There are additional rewards to get if you hallmark your node.

A hallmark is a stamp of approval for a Nxt node. By creating a digital signature based on your IP address and secret passphrase, you are verifying that your account ‘owns’ a node and is accountable for it. This helps protect the network from attack, and increases the network’s trust in your node.

As well as receiving extra rewards from the “Lucky Node” lottery by hallmarking your node you will also earn NSC (Nxt Security Coins), a reward coin based on the Nxt Monetary System and created to promote growth and security of the Nxt network. NSC coins can be sold for NXT in the MS Exchange booth.

abctc writes:

MS NSC distribution for hallmarked nodes
– Minimum NRS version : latest and second to latest main release + latest experimental release if presented
– Our node must have seen your hallmarked node, please make sure you have these node in your config “nxt.wellKnownPeers=nsc.nxt.org”
– You can check where your node is active or not: http://nsc.nxt.org:7876/nxt?requestType=getPeers&active=true
– Hallmark check is performed many times per day to ensure we capture as many hallmarks as possible. Captured Hallmarked nodes are saved into a database for use during the fortnight distribution. You can see them here: http://nsc.nxt.org/
– The distribution takes place fortnightly.
– How much MS NSC you earn* depends on the stake you have in the NXT community!
– less than 1000 NXT: 0.02 NSC per day per node (for the small stake holders/ node owners)
– 1000 – 9999 NXT: 0.5 NSC per day per node (normal)
– greater than 9999 NXT: 3.5 NSC per day per node (more trusted nodes)
* Please note, that NSC will be sent every 2 weeks with the bottom line of 20 NSC (to reduce fees). If you’ve earned lower than 20 NSC, they will be transferred to the next 2 weeks’ round.

EmoneyRu can manage your VPSs, for free: https://nxtforum.org/public-nodes-vpss/emoneyru-will-for-free-manage-you-vpss-for-you/

The value of an NSC coin is decided by the community (hint: please help by submitting buy offers on Nxt Monetary System Exchange Booth and/or not selling all of the NSC that you are distributed)! The issuers will never sell issued coins!

Megalodon writes:

This long-running campaign managed by abtc and EmoneyRu using the Monetary System coin NSC exclusively reward hallmarked nodes. Forging Bootstrapper account NXT-HH9F-JMRB-6HRD-HD5ZW will also be supporting this campaign by putting up occasional buy offers that are significantly higher than existing offers.

To benefit from all 3 campaigns, you’ll need to run a public node AND hallmark it AND forge with your NXT balance.

Nxt-ardor-forging-rewards

Source: https://nxtforum.org/general-discussion/5-million-nxt-bounty-for-nxt-ardor-forgers/

NXT/BTC Up 117.60% on the Week

[fusion_builder_container hundred_percent=”no” equal_height_columns=”no” menu_anchor=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” class=”” id=”” background_color=”” background_image=”” background_position=”center center” background_repeat=”no-repeat” fade=”no” background_parallax=”none” parallax_speed=”0.3″ video_mp4=”” video_webm=”” video_ogv=”” video_url=”” video_aspect_ratio=”16:9″ video_loop=”yes” video_mute=”yes” overlay_color=”” overlay_opacity=”0.5″ video_preview_image=”” border_size=”” border_color=”” border_style=”solid” padding_top=”” padding_bottom=”” padding_left=”” padding_right=””][fusion_builder_row][fusion_builder_column type=”1_1″ layout=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” border_position=”all” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” center_content=”no” last=”no” min_height=”” hover_type=”none” link=””][fusion_text]NXT is down -1.18% on the day, up 117.60% on the week and up 113.24% on the month on a last price of 0.00002770. NXT/BTC is trading between a 24hr high of 0.00003800 and a 24hr low of 0.00001981, in a weekly up trend.[/fusion_text][fusion_text]

Trend

trend is UP

Last price

0.00002770 NXT/BTC

$USD

last price $ 00.01750856
one week ago $ 00.00804635
percentage 117.60%

Price change

Price change is the percentage change within the period:

period change
day -1.18%
week 117.60%
month 113.24%

[/fusion_text][fusion_text]

Remarks

News
Nxt announces Ardor:
http://test.nxter.org/the-nxt-2-0-token-distribution/

“Ardor’s prime innovation is to split the blockchain into a main chain that is used for consensus creation only, and multiple child chains that keep separate ledgers of transactions, each child chain using its own coin/token.” 

Learn more
http://test.nxter.org/

https://bitcointalk.org/index.php?topic=1518497.0

https://cointelegraph.com/news/ardor-new-competitor-to-ethereum-arises-amidst-reports-of-the-dao-attack

http://www.forbes.com/sites/rogeraitken/2016/06/21/nxt-crypto-blockchain-team-prepares-ardor-scalable-child-chain-platform/

[/fusion_text][fusion_text]

Market capitalization

Market capitalization is the total $US dollar value of the NXT market calculated using the formula: market cap = ( available supply x last price )

[/fusion_text][fusion_text]Market Cap
$ 17,491,051[/fusion_text][fusion_text]Available supply
998999999[/fusion_text][fusion_text]Last price
$ 00.01750856[/fusion_text][fusion_text]

Support

period support
day 0.00001981
week 0.00001200
biweekly 0.00000900
month 0.00000900

Support is the lowest price within the period.

[/fusion_text][fusion_text]

Resistance

period resistance
day 0.00003800
week 0.00003800
biweekly 0.00003800
month 0.00003800

Resistance is the highest price within the period.

[/fusion_text][fusion_text]

Chart

nxt-chart

Market sentiment

While the weekly trend is up and bullish, the profit taking sell-off is gaining momentum with the more recent trading sessions on a downturn. As a result the sentiment is considered “neutral”.

This report was printed on Monday June 27 2016 23:00 hours UTC.

Author: KittyBitcoin. Poloniex is the data source.
OP: http://allcoinsnews.com/2016/06/26/nxt-market-report-nxtbtc-up-117-60-on-the-week/

Contact KittyBitcoin to request custom reports.

Disclaimer

Past history is NOT an indicator of future results.
Read the legal disclaimer: http://kittybitcoin.com/docs/disclaimer.php

[/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

The Nxt 2.0 token distribution

Details about the Nxt 2.0 token distribution have been announced.

Those who have been following  Nxt 1.0 know that the launch of Nxt 2.0 (Ardor) will be a big and important step forwards, not just for Nxt but for blockchain technology in general. With the amazing and broad set of truly disruptive, stable features already running on the Nxt 1.0 blockchain, the next leap forward will be the solving of the blockchain bloat problem inherent to all existing blockchains.

This can make Ardor the first globally scalable crypto platform, and in addition to this, Ardor will enable any individual, business and community to launch their own fully secured customised private ledgers. In short, a Nxt 2.0 Main Chain token (ARDR) will ‘forge’ (~ stake/~mine) all the childchain transactions and thereby secure them. The first and default Nxt 2.0 childchain (Ignis) to be launched with the genesis block will be a ledger which integrates all the functionality of Nxt 1.0.

Ardor’s prime innovation is to split the blockchain into a main chain that is used for consensus creation only, and multiple child chains that keep separate ledgers of transactions, each child chain using its own coin/token.

In the announcement Jean-Luc writes that:

The Nxt 1.0 branch will continue to run

Nxt 1.9 is going to be the last major release on the Nxt 1.0 branch.

Nxt 2.0 is not a fork of Nxt 1.0. NXT tokens will continue to exist.
Existing 1.0 users will be able to log in to Nxt 2.0 with their existing passphrases.

The Nxt core development team is committed to providing support for Nxt 1.x for at least one year after the Nxt 2.0 launch. Additional GUI functionality may or may not be added to the NRS Client.

The distribution of Nxt 2.0 tokens

The Core Developers recognise the tremendous contributions of the investors and holders of the original Nxt 1.0, without whom Nxt 2.0 would not be possible, and have decided to grant them exclusive rights to the new 2.0 tokens.

Ardor tokens

ALL Nxt 2.0 Main Chain tokens (ARDR) will be distributed among the holders of Nxt 1.0 tokens.

Nxt 1.9 will be announced shortly with a hard fork for the ARDR distribution without API changes.

The only way to get ARDR is by holding NXT in your account during the snapshot phase (which starts when Nxt 1.9 is released and will run for about 3 months).

Jean-Luc writes:

The Nxt Software will start taking periodic snapshots of all users’ NXT balances, at regular intervals (most likely once an hour), for a period of three months.

The NXT balances in each account will be averaged over this full three month period, and at the end all accounts will be automatically credited with a token representing their ARDR holdings, issued as an Asset on the Nxt asset exchange.

This ARDR Asset will be freely tradeable.

The distribution of the real ARDR coins will be based on the ownership of ARDR Assets taken at the point of time when the 2.0 Genesis block is created.

There will be no burning of Nxt 1.0 needed in order to receive either ARDR or [Ignis]  Tokens.

ARDR tokens will be used for forging (i.e. staking / mining) to maintain and secure the full Ardor network and incentivize people to set up nodes. Users of any Ardor childchain will have to pay bundled transaction-fees to ARDR forgers.

Riker explains:

Holding the ARDR token provides the ability to bundle many child chain transactions into a ChildChainBlock transaction on the main chain (i.e. become a bundler) and forge transactions on the main chain.

Ardor Mainnet is scheduled to launch in Q3 2017.

IGNIS; the Nxt childchain tokens

Introducing: Ignis.

As stated above, Nxt 1.x will continue to run; you will get to keep all your current NXT tokens.

The Nxt 1.x equivalent chain which will launch with the Ardor genesis, is a new Nxt ledger. Its transactional token has been dubbed Ignis. The Ignis token will be the only transactional token on the Ardor network when it launches, and until new child chains can be spawned.

Ignis tokens will be distributed ~ 50/50 to NXT holders/Nxt core development team.

The ~ 50% Ignis which are to be distributed to the core development team will be theirs to use for funding the continued development of the Nxt 2.0 platform.

Jean-Luc writes:

[Ignis] will be created in the Genesis block of Nxt 2.0. At the moment NXT holders will get 50% [Ignis] of their NXT balance. The other 50% will be reserved for the devs, for instance to do an ICO with, or something else. As this is still one year in the future, the exact method of this is still being debated.

This means, that in addition to the Main Chain tokens (ARDR), NXT 1.0 holders will be accredited a number of Ignis (Nxt 2.0 transactional tokens) equal to ~ 50% of the NXT they hold in their account when Ardor launched in Q3 2017.

As a warning to traders, Riker states that: “If you keep your NXT on a centralised exchange you’ll need to check with the exchange how they handle the ARDR/Ignis distribution since it will be distributed to the exchange account. The exchange will get the ARDR / Ignis tokens and will decide what to do with it”.

Our best advice would be for you to keep your NXT in your own Nxt account with your own passphrase.

Nxt Developers – feel safe to code with Nxt

Nxt has had issues with breaking backwards compatibility when preparing for the switch to Nxt 2.0 / Ardor.

Nxt 1.10.x API will NOT be changed, so developers working with the Nxt 1.10.x API can feel safe that their code will keep working on the 1.0 branch and that they can easily port their new or existing Nxt projects to the new Nxt 2.0 ledger, if they want to do so after it has been launched. The Nxt core development team is very willing to offer their help in that regard, in case it should be necessary.

One exception to the backwards compatibility-rule is, as announced on release, the Nxt add-ons feature (available for developers from Nxt 1.8.0e), as this will “undergo significant refactoring in 2.0”.

Use it to test, play with it, but like Jean Luc writes: “Keep any custom add-on code simple, and be prepared to have to change it for 2.0 or discard it”.

You can follow the Nxt development in nxtforum.org/, and if you’re in doubt about anything, ask the core developers.

Nxt 2.0 – should investors and asset issuers be afraid? [video]

Here’s some great listening for you – Nxt core developer Riker chatting about Nxt, other cryptos and investing with Marc De Mesel, an investor who has 35% of his investments in NXT.

Marc wants to learn about Nxt’s anonymous lead developer Jean Luc, about where Nxt is now, compared to Ethereum and other blockchain ‘competitors’, and also about the recently proposed changes to the Nxt protocol (the NXT 2.0 proposal).

Riker explains how Nxt 2.0 aims to solve the blockchain bloat problem and make Nxt the first ever globally scalable crypto platform.

Also: how Nxt, if version 2.0 were to proceed, would become a sidechain and how, with version 2.x, more sidechains could be added. Instead of implementing Some Asset < > Some Asset trading, Nxt 2.0 would make all Nxt AE assets tradeable across all sidechains, globally.

Having a sidechain pegged to a fiat value, and other sidechains pegged to crypto coins like Bitcoin, Nxt assets would become tradeable on several new markets thereby, in effect, creating a fully decentralised, multi currency, low fee, globally scalable asset market, powered by Nxt AE.

[youtube id=”tN4FjZ-31uk” width=”600″ autoplay=“no”]

Nothing is yet set in stone, but as the Nxt 2.0 design has been discussed and refined for at least 6 months already among the Nxt core developers, there is every indication that Nxt 2.0 in its essence will be programmed as proposed, with all the remaining details hammered out in cooperation with the users, the active Nxt Community.

Riker mentions how Nxt 2.x could also be of benefit to companies, a user category which has shown a lot of interest in the Nxt Monetary System (MS) but been reluctant to use it because of the current need for users to pay transaction fees in NXT.

Now, with Nxt 2.0, they would be able to launch fully secured sidechains with Nxt features but without the sidechain users having to buy NXT to use it. As an example, Nxt MS tokens could be used as concert tickets, and only the business running the sidechain would have to pay fees to the Nxt main chain forgers.

Another obvious use case, via the Nxt MS’s crowdfunding feature,  would be to run crowdfunding campaigns in the sidechain currencies, such as fiat or Bitcoin.

Some organisations would probably want their own private blockchains, and ask the Nxt core developers for their help. But would any such private work which the Nxt core devs might get paid to do ever benefit the Nxt investor? Should we be looking for companies which would be willing to pay for the core development of the open sourced Nxt? Or would such companies get too much power over development?

Also read: Jelurida Q&A; Nxt core devs mean business

Is there a risk that, if Nxt became a sidechain with Nxt 2.0, the value of NXT would CRASH bringing down with it all AE asset prices, as some people have been claiming in the ongoing discussion regarding the design proposal? If so, should AE asset issuers and asset investors run away from the Nxt blockchain asap?

You’ll have to decide for yourself, of course. The crypto market is volatile and unpredictable, so who can really tell.

Lots of noise on this video, lots of good information too.
Thanks to Marc and Riker for doing this interview in Amsterdam.

Discuss the Nxt 2.0 design proposal in Nxtforum

To follow Marc De Mesel on Youtube, you can subscribe to his channel.

arc-de-mesel-nxt-blockchain

NEXTBOND: High interests Bitcoin asset

Today, NEXTBOND started trading exclusively on the Nxt Asset Exchange.

NEXTBOND (asset ID 7105354913147670050) is 1:1 with superBTC and can always be exchanged to Bitcoins without any price slippage issues. It is similar to keeping your funds in a high interest account.

NEXTBOND funds are used for arbitrage on BTC/USD exchanges (low risk). Preliminary results from the arbitrage bots have returned a minimum of 4% monthly, so NEXTBOND holders are offered a 2% return.

If you look at lending returns on poloniex, okcoin, bittrex etc, NEXTBOND’s return is much better.

NEXTBOND will pay dividends every Sunday until the automated script is ready to do daily dividends. NEXTBOND dividends are paid in superBTC to your account without you having to worry about a thing.

The people working behind the scenes on making you money with NEXTBOND are: Coinomat, whale, and Cassius.

NEXTBOND procedure

Deposit:

Send your superBTC to NXT-ESXQ-5QFC-ARPP-HG2C7 to receive NEXTBOND.

You should expect to receive your NEXTBOND within 24 hours.

Withdrawal:

When you want to withdraw your superBTC, simply send your NEXTBOND to NXT-ESXQ-5QFC-ARPP-HG2C7.

You should expect to receive your superBTC within 24 hours!

For those who don’t know: 1 SuperBTC is 1 regular Bitcoin on the Nxt blockchain.

Bitcoins are deposited to the Nxt Multigateway, where they automatically get converted to decentralised tokens (superBTC). The coin-backed tokens can be withdrawn to any Bitcoin wallet or exchange using the same multi-sig process. In the process of being deposited and withdrawn via the Nxt Multigateway each coin is handled by 3 secured servers. Multi-sig is used to ensure that all three servers agree before transactions are made, so there is no single point of failure unlike with a traditional exchange. The Multigateway is a distributed gateway – the least centralized crypto-to-crypto exchange service in existence.

Nxt Multigateway is a part of the SuperNET Client!

NXTBOND pays 2% of its profit to NEXT (asset 5504266111917554921).

Swap your EIX and MMNXT

As announced on 13.01.2015:

EIX and MMNXT has been merged into a new asset, NEXT.

NEXT dividends

  • NEXT dividends are paid in NXT.
  • NEXT will pay dividends on the 1st and 15th of every month.
  • NEXTBOND, which arbitrages on BTC/USD exchanges, will pay 2% of its profits to NEXT. This new revenue stream will be added to the EIX and MMNXT bots after the swap.

You can read more about NEXTBOND here.

How to swap your MMNXT/EIX for NEXT

to receive the new combined asset, NEXT:

Send your MMNXT/ EIX to NXT-ESXQ-5QFC-ARPP-HG2C7

2.3 EIX per NEXT = 247,043 NEXT assets swapped for EIX
29 MMNXT per NEXT = 298,212 NEXT assets swapped for MMNXT

You should expect to receive your NEXT within 24 hours.

No more dividends will be sent to EIX and MMNXT holders

Please swap your EIX and MMNXT to NEXT assets to receive further dividends.

[AE blog] EIX to merge with MMNXT; BOND to launch

Trading funds E9 (EIX) and MMNXT are merging under a single fund, NEXT. This will allow better use of combined funds, more clarity and no conflict of interest between the activities of the two funds. At the same time, a new bitcoin bond (BOND) will launch to generate further revenues for NEXT and directly for BOND holders through arbitrage on BTC/USD exchanges.

BOND

Arbitrage across bitcoin exchanges currently yields returns of up to 4% monthly. 1 BOND will represent 1 bitcoin (SuperBTC) on the Asset Exchange, with a guaranteed monthly payout of 2% in superBTC. The remaining income will go to NEXT assetholders. BOND may be redeemed for SuperBTC at any time by sending back to the issuing account. They can also be traded on the AE’s secondary market. BOND will pay monthly, on the first of the month.

All reasonable security precautions are taken and arbitrage is low-risk, but investor funds cannot be guaranteed against theft or exchange hack.

MMNXT/EIX asset swap for NEXT

MMNXT and EIX will be combined into a single asset, NEXT, which will pay out twice a month (1st and 15th) in NXT.

A total of 10% of active NEXT assets will be reserved for management payments. 25% of the total NEXT issue will be reinvested to grow the fund (similar to EIX’s current 29% reinvest and MMNXT’s 25% buyback). It makes sense for NEXT to hold 25% of NEXT’s assets to automate this.

A total of 1 million NEXT will be issued, with 15% being held back for future asset sales if required (there is no immediate intention to sell more assets). Of the 850,000 active assets, a total of 35% will be retained for management and reinvestment (85,000 + 212,500 = 297,500).

This leaves 552,500 NEXT assets for swap with existing MMNXT and EIX assets. No MMNXT or EIX assets are currently retained for management payments, only founder shares. (EIX currently reserves 15% of income for management payments as well as 29% for reinvestment.)

EIX price: 14.5. Assets issued: 568,200. MMNXT price: 1.15. Assets issued: 8,648,144. Total combined market cap of MMNXT and EIX is therefore estimated at around 18 million NXT; there is some daily variation. Thus 552,000 NEXT assets will be swapped in proportion to MMNXT and EIX market cap, at 32.6 NXT per NEXT, with each being worth around 21 NXT when considering all 850,000 active NEXT assets.

2.3 EIX per NEXT = 247,043 NEXT assets swapped for EIX
29 MMNXT per NEXT = 298,212 NEXT assets swapped for MMNXT
Total: 545,255. The remaining 6,745 assets will be retained by NEXT for reinvestment, bringing the fund’s total of its own assets to 25.8%.

The asset swap will begin on 16th January, after EIX’s next dividend. BOND will launch shortly.

Further details will be posted in due course.

Source: SuperNET Slack / https://nxtforum.org/assets-board/e9-multistrategy-nxt-hedge-fund-bots-fx-crypto-trading-and-asset-portfolio/msg205742/#msg205742

Phase 4: A look at what’s coming

nxt-cryptocurrency-phase4

Group psychologists sometimes describe the dynamics of team formation and evolution in four stages, often dubbed Forming, Storming, Norming and Performing. Looking at the history of Nxt and its community, it’s certainly possible to divide it into three distinct parts, each of which is characterised by its own Zeitgeist – as well as the market’s reflection of that mood. It’s also valid to consider where we are now as being the end of one era and the beginning of the next, with its own challenges and opportunities: Phase 4.

Here’s what we’ve seen so far:

Phase 1: Forming

December 2013 – April 2014. Nxt launches. The market has no way of valuing the new 2.0 platform that promises much but has had no time to prove itself, or even implement many of the promised features. Like most alts, the price spikes – in this case about to around $100 million market cap. The hype inevitably fades, short-term traders exit and the new community forms from the wreckage.

Phase 2: Storming

April – August 2014. It’s a formative stage for Nxt. The community has become established, the Asset Exchange launches, and there is a huge amount of excitement and momentum. There are also an unprecedented number of scams. It’s a tumultuous time, but a case of too much, too soon; optimism evaporates, the bubble bursts and the community is left licking its wounds.

Phase 3: Norming

August 2014 – present. The SuperNET ICO brings a wave of optimism and activity, but over the next 14 months the protracted bear market saps confidence in Nxt (and all the alts) and sees its market cap shrink to less than a tenth of its high. However, behind the scenes there is a huge amount of positive activity, with dozens of new businesses and initiatives getting under way. The downtrend has the effect of funnelling money into the Asset Exchange, as holders seek either to sell or invest their NXT for a better return. Key relationships and reputations become well established. The community consolidates and collectively negotiates a set of tacit rules about how it will operate.

Phase 4: Performing

November 2015 onwards. Those who are going to leave have done so as the price collapses; those who are left have accumulated a larger share of NXT and built strong foundations for the future. A number of key business projects are well underway. The Nxt Foundation is well-established and the Tennessee project fully funded. There are good reasons for optimism.

However, here’s where it necessarily becomes more speculative, it’s always easier to describe the past than predict the future. There are many unknown factors in play. New 2.0 projects such as Ethereum are attracting attention, while the bear market across the alts continues. Bitcoin, meanwhile, is looking healthier than it has for a while, with more and more positive news – though still unresolved issues of its own. These factors will undoubtedly affect Nxt.

In addition, there are some interesting economic effects in play that are unique to Nxt. The bear market went hand-in-hand with an asset boom, arguably a bubble. At historically low prices but with optimism growing, minds are turning to accumulating as much NXT as possible. This naturally means selling assets as well as BTC and other cryptos. Thus there’s a chance that Phase 4 will kick off with an asset crash as traders and holders position themselves to go long on NXT, and that new assets will struggle for liquidity as a result. On the other hand, increasing interest from outside the core community might compensate for that, albeit with a time lag.

These are all issues that will no doubt work themselves out, one way or another and with a few more bumps along the way. What should be obvious at this point is that Year 3 and Phase 4 will be well worth sticking around for.

Nxt and the Great Depression: avoiding the crunch

TL;DR – Nxters need to find more ways of funding and trading assets, ideally right about now.

I’ve been looking at the nature of money recently, and in particular the way that how we ‘do’ money impacts the type of economy that arises. A lot of economists believe that the Gold Standard prevented several major economies from bouncing back in the 1930s, turning what should have been ‘just’ a harsh recession into the Great Depression. It was those economies that came off the Gold Standard and adopted what is now the anathema we call ‘fiat’ that limited the damage. There’s a lesson there for Nxt I think we need to heed – the sooner the better.

Fortunately, it doesn’t involve a Central Bank of Nxt increasing the supply to 100 billion. In a couple of previous articles, I’ve looked at the way that Nxt is a deflationary currency, and how the devastating crash in the NXT price over the last year or more may actually have been the best thing that could have happened to the ecosystem. To rehash those arguments quickly (because they’re highly relevant here), the fall from around $0.10 to less than $0.01 has acted like a bout of Quantitative Easing or high inflation, incentivising massive investment in assets as people are prompted to spend (or sell) their NXT instead of hold them, believing their value is heading downwards. The result has been that the Asset Exchange has received remarkable liquidity, with the equivalent of literally millions of dollars pouring into assets.

But what happens when, finally, the picture changes and the long downtrend is over – as appears to be the case now? That investment is now starting to generate returns, putting NXT back into the pockets of investors (at least, the ones that didn’t buy camel milk or dubious mining assets). Potentially, you have the opposite effect to before, as people decide to hoard, not spend NXT, hoping for higher values tomorrow, and investment drops. But there’s a wider issue, and it’s one asset issuers need to get ahead of as soon as possible.

The Gold Standard and the Great Depression

There’s an old Jewish proverb that maintains that wherever you have two Jews, there are three opinions. The same is true of economists, who will happily debate cause and effect until the cows come home. So take this with all the usual disclaimers, because there will always be someone with a different take on things.

Governments and central banks like inflation for a few reasons. It erodes the value of their debts in real terms, so they don’t have to pay back as much as they should do. It makes people feel a little richer, so long as pay rises keep up – an important psychological effect. It also puts more money into the economy, stimulating growth. As noted above, if your money is going to be worth less tomorrow, you’re more likely to spend it.

If the money supply is fixed, it can hold an economy back from growing. So it was that the economies that came off the Gold Standard, printed money and devalued their currency thereby became more competitive and recovered fastest in the 1930s. (Shame about their creditors, who took not so much as a haircut as a scalping, but there you go.)

Just to make it clear, this isn’t an advert for fiat money (though some economists do blame the Gold Standard itself for the Great Depression). For others, switching to fiat during the Great Depression can be seen as a least worst, short-term option to a crisis that was the result of economic mismanagement and never should have happened in the first place.

And herein lies the lesson for Nxt. We have a limited supply of currency: NXT the token. We also have a thriving and growing asset market. We’re arguably now at the point where these two things find themselves in tension.

The problem…

There are currently something in the region of 500 assets issued on the Asset Exchange. Many have proven very popular, with high trading volumes. Lately, though, volumes on the AE have been lower. Is that a result of lower confidence, or less interest due to uncertainty? Or is it simply the fact that the available supply of NXT cannot serve such a large number of assets?

Nxt has 1 billion coins in existence – just short of that, since a few have been burned. Now discount all the coins that are in forgotten accounts, and those that belong to the ‘strong hands’ who won’t sell under any circumstances. It doesn’t matter how many NXT are left, because the principle is the same in any case, but it’s probably a few hundred million less.

That number of NXT has to serve the entire range of assets on AE. When issuers create assets and seek NXT for funding, they typically collect it in NXT. When Nxters buy and sell assets on AE, they use NXT. If they place a bid, those NXT are tied up and can’t be used for anything else until the bid is cancelled or filled.

In simple terms, the more assets there are, the more thinly-traded and poorly capitalised they will all be. The growing Nxt economy is reliant, at the moment at least, on the limited supply of NXT the coin. It cannot expand if it is starved of funds. Like America in the 1930s, its Gold Standard risks choking it of liquidity and the means to grow.

…and its solutions

It may be that this simply won’t be a problem. Perhaps NXT’s value will rise as available supply drops, and assets will devalue against it. That will undoubtedly happen in some cases, since assets are embedded in different economic systems. Take mining assets, for example. The asset issuers raise money in NXT, convert it to fiat and use it to buy mining rigs, which then pay out in crypto. Whatever else goes on in terms of changing Difficulty rates, the revenues are generated in terms of that fiat-equivalent investment. If NXT rises against the USD, the mining asset will pay out less in NXT terms; conversely if NXT falls in value, it pays out more.

That’s not always the case, though. The USD/NXT exchange rate dictates revenues in the case of many assets, which use fiat to buy equipment and pay employees. But other assets are ‘pegged’ to crypto. Take marketmaker bot assets – these are less vulnerable to fluctuations of crypto against USD. And then there’s the practice people have of uniformly pricing assets in NXT, rather than against fiat – an arguably odd but persistent habit.

The good news is that there are answers to the problem of limited NXT supply. In short, asset issuers and Nxters in general should do everything they can to enable fundraising for and trading of assets in bitcoin and fiat, whilst the Nxt platform is used for administrating them and paying out in NXT the currency.

Capitalising assets with ICOs on exchanges, or through private sales for BTC, is a good start – since these funds are typically used for startup costs anyway. Similarly, trading against BTC and fiat on other exchanges will bring liquidity without tying up NXT in orders and choking the wider ecosystem.

That has other issues, since centralised exchanges have hardly proved safe in the past. Asset-to-asset purchases are one development that will help, since it will enable people to buy Nxt assets for mgwBTC (superBTC) and other cryptocurrencies. Integrating Shapeshift into the Nxt client will also help, just as SecureAE.com enables instant BTC conversion. Both of these are slated for future releases.

The good news is that Nxt is not America, and the problem is not exactly the same as that posed by the Gold Standard in the Great Depression. But the overall message is the same. We need to be more outward-looking, to engage the wider crypto community and the previously un-cryptoed, rather than relying exclusively on our existing members to grow and further the Nxt economy.

Crunch! What can we expect next from Nxt?

We’re entering a new phase in Nxt’s business cycle – and it might be one we’ve never seen before. What happens next is uncertain, as ever, but we can at least be sure there are new challenges ahead.

credit-crunch

Back in May the NXT market turned a corner after a downward slide that lasted most of a year. Around that time I wrote an article about what had happened in that year. Basically, the decreasing value of NXT prompted people either to sell their coins or invest them in assets. The bear market had the same effect that central banks engineer with quantitative easing and interest rate cuts: increase inflation and make people spend the money they think will be worth less tomorrow.

Nxt is an odd system, economically. There are just a shade under 1 billion NXT coins, and there will never be any more. It’s a deflationary currency, as I explored in this article. No big deal, so are many others. But it’s not just a currency. It’s an entire economic platform, and that system crucially includes the Asset Exchange, our very own, very popular cryptostocks’ system. The best of those cryptostocks have been extremely well funded over the past year; in that respect, the bear market may have been the best thing that ever happened to Nxt. The cash they collected provides a solid foundation for growing businesses and pumping money back into the Nxt ecosystem in the form of future dividends. As a result, we can expect rising prices. And herein lies the next challenge: the Credit Crunch.

The credit crunch

Healthy business isn’t the only factor driving the price increase of recent weeks. In fact, it’s a very minor factor at this stage in Nxt’s development. Right now a wave of money from China is making a much greater difference, probably as a direct result of their stock market tanking. But the point remains the same: if inflation causes people to invest their NXT in revenue-generating businesses, what will rising prices (deflation) do?

It’s a little early to be a doom-monger. In fact, we’re barely out of the bear market – if at all, depending on what metrics you use to judge the exit point. But already the price action is impressive. At the time of writing, NXT’s price has roughly doubled in just six weeks.

It’s been a while since we’ve seen that kind of rise. Critically, we’ve not seen such a rise since the Asset Exchange has been up and running. NXT saw a spike up to its all-time high shortly after it was launched, at the beginning of 2014. Then another bull run in May saw a run up to $0.10 and a $100 million market cap – dubbed the ‘PayExpo pump’, but more likely mainly caused by Chinese speculators again. The Asset Exchange was just starting to become active at that point, but was certainly not the thriving hub of entrepreneurship it is now. The only other major rise in price happened at the end of last summer, when jl777 launched SuperNET. That time, though, the increase in NXT price was caused by the asset launch. As James had offered a 5% bonus for NXT and BTCD purchases, a huge number of people bought NXT to fund their SuperNET investment. The effect on what was a fairly thinly-traded market was substantial.

Now? For the first time ever, the Asset Exchange is at full steam contemporaneously with NXT possibly being in a bull phase.

China is a huge factor in that. As time goes on, the asset market itself will contribute more and more, since businesses will need to buy NXT to pay out as dividends to their asset holders. The irony is that the more successful those businesses are, and the more they push up the price, the less people will want to invest in new businesses. A rising NXT price equals a credit crunch.

However, it’s possible that those businesses grinding out the dividends will, by doing so, effectively solve the credit crunch problem themselves but only if existing investors see those dividends as ‘free money’ and use it to take a punt on the next big asset. Then again, maybe they’ll just decide to blow it all on a Lambo or a few rounds of very expensive drinks.

Beware fiat

And so to the bottom line. What does all this mean for Nxters?

For starters, not all assets are the same. Compare your average mining outfit (or rather, one that actually pays out instead of cutting and running…) with an arbitrage and market-making bot, like MMNXT. The former converts NXT to fiat after the ICO, uses it to buy mining rigs and then pays out in NXT that it buys with its mining proceeds. By contrast, the latter might convert some NXT to BTC, but generates revenues from low-risk trading activities, taking advantage of price differentials across different exchanges.

Assuming the mining asset is legit, it makes perfect sense to invest in a bear market: NXT is sold for fiat, which is used to buy mining equipment. So you’re not really investing NXT, you’re investing fiat and then the further NXT falls, the more you receive in dividends. In a bull market, by contrast, mining assets can be a disaster. Imagine, for example, buying an ASIC for 1 BTC when the price was $100, only to see it rise tenfold. Your returns diminish to 10 percent of what they were in BTC terms, without taking into account any other factors like increased ‘difficulty’ prompted by extra competition entering the mining race in the hope of easy returns.

The arbitrage asset, on the other hand, isn’t subject to the same risk. All things being equal, the NXT revenues stay the same – and in reality, rising prices bring more exchange activity and more opportunities for arbitrage.

For investors, then, there is a clear warning: make sure you know how the asset will generate income. If it involves conversion to fiat at any point, there’s a risk of exchange rate changes wiping out the benefits of any revenues, or worse.

For asset issuers, there’s the problem of attracting enough investment to launch. Simply, if investors think their NXT will be worth ten times more if they keep it in their wallet for another month, they’re unlikely to part with it to fund a speculative project. That ought not to be a problem if the business in question isn’t vulnerable to fiat/crypto volatility – but it might still be a problem anyway. Investors aren’t always rational, and if they are, they may take into account the fact that other investors aren’t rational. I know that an asset like MMNXT won’t lose NXT if the price rises – its accounts will still be just as well funded as they always were. But what happens if you suspect a significant number of existing investors are intending to sell their MMNXT and cash the NXT sale proceeds out to fiat? Then I’ll be reluctant to buy, knowing that MMNXT will likely drop in value. I might even sell it myself to anticipate the fall.

This is why it is rare for an asset to appreciate in NXT terms at the same time that NXT appreciates in BTC terms, at the same time that BTC appreciates in fiat terms. A rise in asset prices tends to correspond with a fall in NXT prices, and a rise in NXT prices tends to correspond with a fall in asset prices. The same with NXT/BTC.

Nxt has an odd counter-cyclical property built into it, whereby the seeds of the next bull market are sown during the crash of the previous bear market. It’s an interesting dynamic, and one that might be unique to Nxt. Over the next year, we’re likely to see whether it’s a problem. If it is, we’ll need to wait until the next bear market for businesses to attract major rounds of new capitalisation. That will be hard to stomach at the time. But it will be very good news for the next upturn.

NXT lazy portfolio – May & June

lazy-nxt-portfolio

The aim of this monthly report regarding my personal portfolio is to show potential investors how a selection of NXT assets can perform. Readers must of course carry out and rely on their own due diligence research before deciding whether to invest or refrain from investing. My trading strategy is explained here.

Apologies for doing my report so late. I’m reporting May and June here. Due to work commitments, I was not able to do a report earlier. Also, I was not able to do my monthly investment (300 euro) on time.

Portfolio allocation snapshot: 18/06/2015

mayjune asset allocation

Dividend april & may :

mayjune dividend

For “Usdbitfinex” dividend, I’m showing the corresponding NXT value, but the dividend was in the form of usdbitfinex asset. For “NXTinspect” it is similar. “Phoenix”, “Supernet”, and “Liquid” asset were delivered as dividend. I’m just showing the corresponding NXT value for accounting purposes. With today’s pair 1NXT = 0.0125 euro, I received the equivalent of 6.68 euro in April, and 12.68 euro in May. Dividends are growing monthly, I really appreciate that.

Asset performance 18/06:

mayjune asset profit

Most of the assets are performing well! Generally speaking, asset value is growing slowly.

Portfolio performance

mayjune portfolio performance

 

April showed again a negative return (-6%). However, the recent NXT increase in value has recovered the losses of the last couple of months (+26%). The favorable NXT/EUR pair now gives a positive return to my portfolio. I have a small gain of 60 euro for a total of 1200 euro invested.

Stay tuned:
As explained in my strategy, I will use the bitcoin exchange BitBoat (French & Italian market) to purchase 300 Euro worth of bitcoin for 1 more month, then 150 euro monthly. I stick to my strategy, and in a couple of years I should be able to say if NXT platform is a good opportunity for long term investment and steady return. In my opinion, NXT as a whole looks much more sustainable than bitcoin and 99% of the other crypto.

For my future investments, the “Bankroll” asset looks good but it’s currently difficult to buy them at a good price. “CoinoEUR” offers a 0.06% daily return, and “Jinn” should bring some great news in the coming days.

Full details regarding my portfolio, including its trading history, are available here (refresh the page if it doesn’t load correctly) and do of course remember to look out for my next monthly report!

Remember: Do your own due diligence research and take fully into account your own personal circumstances, objectives and attitudes to risk before making any investment decision and, of course, never invest more than you can afford to loose.

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

NXT lazy portfolio – April

lazy-nxt-portfolio

The aim of my monthly report regarding my personal portfolio is to show (potential) investors how a selection of NXT assets can perform. Readers must of course carry out and rely on their own due diligence research before deciding whether to invest or refrain from investing. My trading strategy is explained here.

Portfolio allocation snapshot: 07/04/2015

asset allocation avril

(Source: nxtreporting.com)

Capital appreciation assets

capital apreciation asset avril

Capital appreciation assets

dividend asset avril

 

 

Dividend March

dividend avril

The total amount of dividends received in March was: 385.86 NXT or 3.85 euro. Nxt/eur pair: 0.010

A better dividend yield is expected for next month, with an 11 euro dividend from Usdbitfinex, a dividend from Liquid, as well as the regular dividends.

Asset performance 07/04

asset performance avril

(Source: nxtreporting.com)

No significant price movement at the moment. I guess we will have to see InstantDex and other SuperNET features go live before the market starts ticking up noticeably.

Portfolio performance EURO March

monthly performance avril

The current volatility and price drop of NXT has important consequences for my portfolio’s performance. Result is -15% in euro. However, over the long term my strategy should deliver great results. This price drop is actually an opportunity for me to get more NXT when I trade my Euro!

In accordance with my strategy, I will be using the Bitcoin exchange BitBoat (French & Italian markets) to purchase 300 euro worth of Bitcoin each month for the next 3 months.

Full details regarding my portfolio, including its trading history, are available here (refresh the page if it doesn’t load correctly) and do of course remember to look out for my next monthly report!

Remember: Do your own due diligence research and take fully into account your own personal circumstances, objectives and attitudes to risk before making any investment decision and, of course, never invest more than you can afford to loose.

——————

This report 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.

 

NXT lazy portfolio – March

lazy-nxt-portfolio

The aim of this monthly report regarding my personal portfolio is to show potential investors how a selection of NXT assets can perform. Readers must of course carry out and rely on their own due diligence research before deciding whether to invest or refrain from investing. My trading strategy is explained here.

Portfolio allocation snapshot: 04/03/2015

march asset allocation

(Source: nxtreporting.com)

Capital appreciation assets

march promising asset

Dividend paying assets

march dividend asset

Dividend February

march dividend
I recently received a bonus award of 32.4609 NXTmemo assets from NXTinspect, which I have since sold for 0.4NXT each. For accounting purposes I have included this sale in the NXTinspect dividend.

As regards USDbitfnx, the asset owner (Bitfinex_USD) recently posted on the Nxt Forum that:

There was no dividend in February, because of low swap interest rates.

Please check this spreadsheet: https://docs.google.com/spreadsheets/d/1bSej427-QIqm3ls-r3pIwV8XWWEm1aul9I2ToDIzHzA/pubhtml

Once 100$ are accumulated, it will be paid out.

The total amount of dividend received in February was: 269.42 NXT or 3.34 euro. Nxt/eur pair: 0.01243

Asset performance 07/03

(Source: nxtreporting.com)

Great performance for NXTP!

I just sold all my Freebsrvrs, which was either a panic sale or a wise idea. Time will tell 🙂

Portfolio performance EURO February

march monthly performance

Price volatility was really significant in February. I checked a few times on nxtreporting and saw that the capitalisation of my portfolio was down by 20%. As of 04/03/2015, my portfolio capitalisation is 288.69 euro, which ‘only’ represents a 3.8% loss (dividend included). The main reason being the current volatility of the nxt/eur pair.

I received 1 debune asset as a gift. It could become eligible for inclusion on my list of capital appreciation assets but from my point of view it’s still too early for me to be investing in it.

Last month some buy orders didn’t go through, so I used the NXT that had been reserved to meet those buy orders to buy Liquid (asset id: 4630752101777892988). I understand that dividends should start being paid out in a couple of months.

As explained in my strategy, I will be using the bitcoin exchange BitBoat (French & Italian markets) to purchase 300 euro worth of bitcoin for the first 5 months of trading. This month I’m thinking of mainly investing in usdbitfinex, mmnxt, and SuperNET.

Full details regarding my portfolio, including its trading history, are available here (refresh the page if it doesn’t load correctly) and do of course remember to look out for my next monthly report!

Remember: Do your own due diligence research and take fully into account your own personal circumstances, objectives and attitudes to risk before making any investment decision and, of course, never invest more than you can afford to loose.

—————————-

This report 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.

NXT lazy portfolio – February

The aim of this monthly report regarding my personal portfolio is to show potential investors how a selection of NXT assets can perform. Readers must of course carry out and rely on their own due diligence research before deciding whether to invest or refrain from investing. I believe that investing can provide good returns without the need for day trading, pump & dumping, or insider trading. My ‘lazy portfolio’ will follow a simple strategy, one which I don’t anticipate will require more than a couple of hours of my time a month to implement.

NXT is now just over a year old, the ecosystem is growing and this is my contribution to promote it.

My personal strategy/portfolio:

-300 euro monthly investment for the first 5 months, then 150 euros.

-Invest only in assets that produce something (no mining, ponzi, gold, altcoin…)

-Dividend reinvested.

-Buy & hold.

-30% in promising asset.

-70% in dividend asset.

(image unavailable)

Details:

I’m the representative of a bitcoin exchange called BitBoat (French & Italian market) through which I will purchase 300 euro worth of bitcoin a month which I will then use, via the multigateway, to purchase NXT.

Because investing can be risky, diversification is important (as can be seen from my portfolio), and will be kept under review both as regards my existing holdings and as regards new asset issuing projects joining the Nxt community.

I will provide a monthly report of value of my personal portfolio, but you can check whenever you want on nxtreporting.

Performance will be recorded in euros, as only nxters are interested in NXT 🙂

Conclusion:

Only time will tell if my strategy is profitable, so see you next month!

(image unavailable)

Remember: Do your own due diligence research and take fully into account your own personal circumstances, objectives and attitudes to risk before making any investment decision and, of course, never invest more than you can afford to loose.

——————

This report 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.

 

 

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.