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"It rubs some the wrong way, but I'm sorry tech is useless without revenue, and speculative revenue isn't real, it's a flash in the pan. On the other hand I'm not saying it isn't fun to gamble either, take risks, make a profit but none of that is long term. Just my opinions, but when I work on Janus I’m working on a business empire that I wish to have outlive me. Appreciate advancement in technology, yes, but when I see financial institution reports estimating blockchain adoption 7-10 years from now... It means the tech is so far ahead we need to use it now, thus the Janus project".

~ Bjorn, marketing director and concept developer, Janus

Contact Janus Team

The regulatory process: if you’re not at the table, you’re on the menu

On 22 April 2015 The European Securities and Markets Authority (‘ESMA’)1, the equivalent of the US Securities and Exchange Commission, issued a call for evidence regarding ‘Investment using virtual currency or distributed ledger technology’.

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

ESMA has now published the 18 responses it received, only two of which were made on behalf of cryptocurrencies: Nxt and FIMK (which is based on the Nxt blockchain). No response was made on behalf of Bitcoin, although one was made in support of it by an exchange called Paymium.

No response to the ESMA call for evidence was made on behalf of (or even in support of) Ethereum, Counterparty, MaidSafe etc.

One can of course understand the lack of engagement on the part of the majority of cryptocurrencies (being, as they mostly are, opportunistic Bitcoin clones), but for Bitcoin itself and other serious players such as those mentioned above not to have responded is surprising.

The cryptocurrency industry needs to fully engage in the regulatory process to make sure that the potential for independent, genuinely decentralised, blockchain technology to democratize financial power is not compromised by a failure to challenge incompleteness or other inaccuracy in the information relied on by regulators.

Some examples of incompleteness and other inaccuracies can be found in the following extract of the ESMA response from Intesa Sanpaolo (a banking group based in Italy):

“We would like to point out that, unlike Bitcoin’s Proof of Work method (which, as stated in O1, we regard as the only effective one, at least at the moment, because of the computational power dedicated to it), other decentralized double-spending prevention algorithms, like NXT’s Proof of Stake (PoS) presented in paragraph n.17, are still not validated from both a theoretical and an empirical point of view:

○ There is an ongoing debate over the “Nothing at Stake” problem affecting every system which doesn’t use any consumption of resources external to the system for the validation;

○ Every single existing PoS scheme, NXT included, is actually relying on some kind of centralization in validation checkpoints, in “currency” ownership or in nodes distribution.”

It would not of course be reasonable to expect a mainstream commercial banking group to argue in favour of a genuinely independent decentralised financial ecosystem.

Rather, it is for the proponents of that technology to correct any inaccuracies and supply any omissions in how others (doubtless unintentionally) represent it, but to do that they need to get involved in the consultation process.

Thus, by way of correcting certain inaccuracies and otherwise filling in the gaps, we shall deal with each of Intesa’s three claims in turn.

Intesa Sanpaolo claims that Bitcoin’s Proof of Work (PoW) method has been empirically and theoretically validated and that Nxt’s Proof of Stake (PoS) method has not.

Theoretically, the PoW and PoS consensus mechanisms are neither better nor worse than each other, merely different. For a description of Nxt’s Proof of Stake model, see pages 5/6 of Nxt’s Response to ESMA.

As regards, the respective theoretical formalizations of PoW and PoS, the following points should be noted:

PoW formalization

The initial Satoshi Nakamoto paper (Bitcoin: A Peer-to-Peer Electronic Cash System) only investigated the consensus algorithm security against private branch attack.

Since then other potential attack vectors, for example selfish mining, have been discovered.

The selfish mining strategy provides unfair profit for the 33+% adversary and that’s dangerous in the long-term, but not critical for consensus itself.

Most recently, in November 2014, the formal model (of a more or less appropriate quality) was published: The Bitcoin Backbone Protocol: Analysis and Applications.

PoS formalization

Whilst Proof-of-Stake formalization is currently still behind that of PoW it’s now developing faster than PoW’s formalization and therefore catching up quickly.

The first implementations of pure PoS appeared in the second half of 2013, with the first investigations started in the first half of 2014 (Math of Nxt Forging by mthcl) following which Consensus Research made simulations2 and wrote articles3 about the few types of known attacks.

Consensus Research are currently in the process of discussing deeper formalization with colleagues from mathematics and theoretical computer science.

Turning next to Intesa Sanpaolo’s claim that Bitcoin’s PoW method has been “empirically validated” and that Nxt’s PoS method has not.

We assume “empirically validated”, as applied to Bitcoin’s PoW and Nxt’s PoS technologies, is intended to mean: proven to work in practice in accordance with their objectives.

Since both technologies demonstrably do work in practice in accordance with their objectives, at least up until now, they can therefore both be said to have been empirically validated: Bitcoin as a payment system and Nxt as a financial ecosystem which includes a payment system (see: Nxt Core Features, as described on pages 15/16 of Nxt’s response to ESMA).

But blockchain technology in general is still in its infancy and faces a number of significant practical challenges, including that of blockchain bloat and scalability – a problem which, at some stage, will have to be addressed and resolved (if they are to remain viable) by all blockchain technologies, including of course Nxt itself.

However, due to the large and (as currently anticipated) increasing number of transactions being processed through its network, Bitcoin now needs to address that problem as a matter of urgency and it is running out of time in which to do so.

According to Bitcoin Foundation Chief Scientist Gavin Andresen speaking in an interview in June 2015, Bitcoin will be reaching its 1 MB block size limit “some time in the next 6 to 12 to 18 months….”. In the interview Mr Andresen goes on to warn of what could happen if the problem isn’t resolved.4

In an apparent attempt to force the pace as regards tackling the block size issue, a patch to the Bitcoin Core was released on August 4 and is now available to download here: https://bitcoinxt.software/

It remains to be seen whether the Bitcoin network as a whole will accept or reject what in effect is a hard fork or indeed whether the network will split, resulting in the creation of two versions of Bitcoin, thereby crashing the value of one, if not both.

What is certainly clear is that the Bitcoin XT debate (whether or not to replace the current hard-coded block size limit of 1mb with a patch that, amongst other things, supports larger blocks) has polarized opinion.5

And it is doing so for the reason explained in this article in The Wall Street Technologist:

“What we have here is an ideological schism in Bitcoin. Most people fail to realize that this is what the block debate is really about. On one hand you have folks who believe Bitcoin should be the new VISA system. They believe that Bitcoin should be able to handle all the transactions on planet earth, from everyone’s daily coffee purchase, to everyone’s house purchase, to how Google cars should be paid for their services.  On the other hand, you have those who believe Bitcoin’s core value is the fact that it is a hedge against fiat currencies, and by extension, governments (in the case they decide to infringe upon your liberties). Bitcoin CANNOT be both. It’s just not possible.”

Whilst, as already mentioned, the scalability problem is common to all blockchain technologies, the following empirically observed problems are exclusive to Bitcoin and should also be borne in mind when reassessing the accuracy of any claim that Bitcoin is empirically valid:

  • the inherent tendency of the underlying economics of the Bitcoin network to create a vicious circle whereby increasingly sophisticated mining rigs generate increased hash output resulting in increased difficulty which in turn drives the need for evermore powerful rigs thereby making it uneconomic for any but the biggest miners and pools to operate. The end result: increasing centralisation of mining power; i.e. a shrinking network of nodes, making it less secure.6
  • over-dependency on a few manufacturers of the prohibitively expensive ASIC mining equipment.
  • high energy consumption involved in miners competing for blocks to validate, making the process environmentally very unfriendly.

Intesa Sanpaolo claims that “there is an ongoing debate over the “Nothing at Stake” problem affecting every system which doesn’t use any consumption of resources external to the system for the validation.”

The unqualified use of the word “problem” might suggest to the uninformed reader that Nxt, as a PoS system, has actually been subjected to a Nothing-at-Stake attack. In fact, it has not.

Like Bitcoin’s PoW, the Nxt PoS consensus algorithm is a work in progress; the current state of thinking and research regarding any theoretical vulnerability to a N@S attack can be summarised as follows:

A. The first more or less formal definition (at least in the form of computer code) has been produced by Consensus Research:

PoS forging algorithms: multi-strategy forging and related security issues.

B. The number of possible forks grows exponentially over time. A Nothing-at-Stake attack could therefore only be made by a multi-branch forger contributing to N best forks and since it’s impossible to predict whether 2 forks will be within N best forks from the exponentially growing set for k confirmations (a significant imponderable), this attack vector is inherently unpredictable making it very difficult to enforce in theory, let alone in practice.

C. The correlation with stake size is still the open question but, contrary to what has been stated by Vitalik Buterin,7  it’s nearly impossible to attack a proof-of-stake currency with “1% stake even”.

D. A solution to make the PoS consensus algorithmically enforced (as in PoW) is theoretically possible.

E. The N@S simulation tool is published here: https://github.com/ConsensusResearch/MultiBranch  for people to carry out their own experiments. Unfortunately, there is not currently any easy-to-understand (i.e. non-technical) visualization of the non-feasibility of a Nothing-at-Stake attack.

In practice, the Nxt forging algorithm provides a defence against a Nothing-at-Stake attack in the form of what has been termed Transparent Forging (TF), the main feature of which is the ability to predict which account will generate the next block.

Other TF aspects of the Nxt forging algorithm are:

  • account balance having to be older than 1440 blocks;
  • the ability to lease account balance for forging;
  • requiring the forging account to have had its public key announced for 1440 blocks before being able to forge; and,
  • not accepting a forged block if its timestamp is more than 1 second after the predicted time to forge.

Improvements to take effect in release 1.7 are a minimum effective balance requirement of 1000 NXT for an account to be eligible to forge, and preventing very long blocks by an improved base target adjustment algorithm.

Elements of the TF concept which have not yet been implemented include: achieving higher transaction processing speeds by sending transactions directly to the node expected to generate the next block, and reducing the time interval between blocks based on the knowledge of the next few predicted block generator accounts.

Further protection against any ‘Nothing at Stake’ attack can be achieved by temporarily reducing to zero the forging power of accounts which should have generated a block but skipped their turn.

At present though, the currently implemented components of TF are considered sufficient to protect against such an attack.

Those TF elements mentioned above which are designed to increase the possible transaction throughput will only be implemented once the need for it appears, and certainly not until blockchain pruning has first been implemented.

Intesa Sanpaolo claims that “Every single existing PoS scheme, NXT included, is actually relying on some kind of centralization in validation checkpoints, in “currency” ownership or in nodes distribution.”

At their current level of technological development, no blockchain (arguably Bitcoin least of all) is 100% decentralised.

Nxt validation checkpoints

The Nxt protocol includes a rolling checkpoint whereby any block submitted at a height more than 720 blocks behind the current block height is automatically rejected. This in effect limits chain reorganization to the most recent 720 blocks.

The Nxt protocol also includes some hard-coded checkpoints (e.g. at Block 333,000). Their purpose is to prevent any possibility of a so-called “history rewriting attack” in which somebody buys redundant early stakeholder accounts in order to try to build a complete alternative blockchain.

Another reason for the hard-coded checkpoints is performance optimization, specifically: improved blockchain download speeds for peers downloading the blockchain from scratch, the improved speed being due to the fact that they don’t need to check with multiple peers in respect of the blockchain before the latest hard-coded checkpoint whether or not the current fork they are on is the best one.

Most importantly, such hard-coded checkpoints are only added at blocks more than 720 blocks before the current (at the time of adding the checkpoint) last block. At this point, the consensus has already been reached and set in stone by the rolling 720 block checkpoint limit, therefore the hardcoded checkpoint does not influence the decentralized consensus.

Whether or not these validation features can be regarded as  “centralised” is debatable and in any case neither are critically needed for blockchain survival.

Bitcoin, of course, has its own hard-coded checkpoints (see further: https://github.com/bitcoin/bitcoin/blob/master/src/chainparams.cpp )

Nxt currency ownership and node distribution

Nxt does not rely, as a matter of technical design, on centralisation of currency ownership or node distribution and the authors of this article are unaware of any PoS model (or indeed any other blockchain consensus mechanism) that does.

Proof-of-stake must have a way of defining the next valid block in any blockchain. Selection by account balance would result in (undesirable) centralization, as the single richest member would have a permanent advantage. Instead, several different methods of selection have been devised.

Randomized Block Selection

Nxt uses a pseudo-random algorithm to predict the next block generator i.e. forger, by calculating a hash value which should be lower than a target value using the combination of the account stake, time since last block, signature of the previous block and the forger account public key. Since all these parameters are publicly available, each node can predict, with reasonable accuracy which account will forge the next block.

It might be that what Intesa Sanpaolo meant to say in its ESMA response was that in certain PoS models a relatively small number of accounts are in practice currently responsible for the majority of the work of validating blocks and earning the transaction fees for doing so.

In the case of Nxt the original distribution of the currency was made to the 73 subscribers who participated at the start and as a continuing, albeit slowly improving, legacy effect of that relatively small distribution, it is true to say that a large percentage of the Nxt currency has been owned by a relatively small number of account-holders.

Nxt critics have long sought to portray this as an inherent irremediable weakness of the system. It is not and over time, as more people get involved in Nxt, the number of accounts will continue to increase and ownership become more diffuse.

In the meantime, having a large percentage of the currency concentrated in a relatively few hands has had some advantages for the system, not least of which is the relative absence of speculative manipulation (i.e. pump and dump) and the funding of development and marketing that would not have happened but for the generous bounties made available by large Nxt account holders.

Meanwhile, Proof of Stake blockchain technology, of which Nxt is the leading example, continues to innovate and improve.

The features planned for the next hard fork (Release 1.7) are coin shuffling, account control for phased transactions (whereby an account is only allowed to submit phased transactions that require the approval of one or more other accounts), more stable block times and various usability enhancements. A security enhancement, 2FA using hash chains, will be added in Release 1.8.

Nxt core developers will also be adding features that make it easier to use the platform in regulated financial environments, for example “account properties” which can be used to endorse accounts as having been verified or authorized by third parties (to be implemented in Release 1.7) and “controllable assets”, designed to satisfy legal requirements that only authorized accounts can purchase certain types of asset (planned for Release 1.8).

Update: Since this article was published, a new version of The Nxt NRS client software has been released: NRS v.1.7.0e

This is an experimental release for testing only. Source code is not provided.

—————————

Acknowledgments

Many thanks to kushti, Jean-Luc, Riker, mthcl and ChuckOne who all reviewed and variously commented on and contributed wording to the article.

re-esma-nxt-cryptocurrency

Footnotes

1. ESMA states on its website that it:

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

2. https://github.com/ConsensusResearch/ForgingSimulation.

3. https://github.com/ConsensusResearch/articles-papers.

Kushti is currently discussing joint papers possibilities with colleagues and preparing a paper to be published in a peer-reviewed journal.

4. In the interview (at 6:43 mins), Bitcoin Foundation Chief Scientist Mr Andresen, who has a less apocalyptic vision than his colleague Mike Hearn as to what might happen to Bitcoin in a worst case scenario, nevertheless warns that:

“…people will just stop sending transactions if they notice that their transactions are not getting confirmed in a day or two or three or a week. The nature of transaction confirmation and the nature of how blocks are found softens that a little bit so every once in a while we’ll get a period of time when transactions really pile up because blocks are found more slowly than normal and every once in a while we’ll have a period of time where lots of transactions get confirmed because we’re finding lots of blocks.

It’s just the nature of the randomness of mining that we get this natural variation in how many transactions are confirmed in any given period of time and so I think that that natural variation plus people react so if you’re sending transactions with very low fees that aren’t getting confirmed well then you’ll bump up your fees if you can and if you can’t bump up your fees because transactions get more expensive then you find some alternative and that alternative may be: well I won’t use Bitcoin, I’ll find some other way of doing what I want to do.

So I don’t think we’ll have a crash. It won’t be a disaster. I think what we will see is people turning away from Bitcoin and using other things and I think we’ll see transaction fees rising. Both of these things I think are bad.”

5. Bitcoin XT vs Core, Blocksize limit, the schism that divides us all.

“The news recently is all abuzz about the Gavin Andresen and Mike Hearn’s fork of Bitcoin called Bitcoin XT.  For the first time in the history of Bitcoin, its very existence has been put into peril by way of what is termed a ‘Hard Fork’ of the protocol.  I have watched the situation develop, and I feel that I must comment on this topic as the amount of FUD coming from both sides of the camps is reaching alarming levels, and frankly I think this is hurting Bitcoin.”

As at 24 November 2015, there were 410 Bitcoin XT nodes (supporting bigger blocks) out of a total of 5018 nodes in the Bitcoin network. Source: http://www.xtnodes.com/ Accessed 24.11.2015.

6. “As a Proof of Work network becomes stronger, there is less incentive for an individual peer to support the network, because their potential reward is split among a greater number of peers. In search of profitability, miners keep adding resources in the form of specialized, proprietary hardware that requires significant capital investment and high ongoing energy demands. As time progresses, the network becomes more and more centralized as smaller peers (those who can do less work) drop out or combine their resources into pools.”

http://wiki.nxtcrypto.org/wiki/Whitepaper:Nxt#Proof_of_Stake_Attacks.

See also:

“The risk is that the trend will claim too much obsolete hardware and put many miners out of business, resulting in even more centralisation and fewer incentives to invest in the mining space.” http://www.coindesk.com/bitcoin-mining-can-longer-ignore-moores-law/

And:

“The problem is that there is little incentive to run a node anymore. That’s because powerful machines built specifically for bitcoin’s SHA-256 proof-of-work algorithm have changed its decentralized and more open nature.” http://www.coindesk.com/five-biggest-threats-facing-bitcoin/

7. Vitalik Buterin is one of the original authors of a cryptocurrency platform called Ethereum. A version of Ethereum, called Serenity, currently in development “…is meant to move from consensus through Proof-of-work to Proof-of-Stake.”

The “Nothing at Stake” attack is described by Vitalik Buterin here:

“However, this algorithm has one important flaw: there is ”nothing at stake”. In the event of a fork, whether the fork is accidental or a malicious attempt to rewrite history and reverse a transaction, the optimal strategy for any miner is to mine on every chain, so that the miner gets their reward no matter which fork wins. Thus, assuming a large number of economically interested miners, an attacker may be able to send a transaction in exchange for some digital good (usually another cryptocurrency), receive the good, then start a fork of the blockchain from one block behind the transaction and send the money to themselves instead, and even with 1% of the total stake the attacker’s fork would win because everyone else is mining on both.” Extract from Proof of Stake: How I Learned to Love Weak Subjectivity

In the following two papers, the authors also seek to prove the feasibility of a “Nothing at Stake” attack

It Will Cost You Nothing to ‘Kill’ a Proof-of-Stake Crypto-Currency     Nicolas Houy, University of Lyon, January 2014.

On Stake and Consensus, Andrew Polesta, March 2015

By contrast, here’s a detailed description, written in layman’s terms, on the practical impossibility of N@S attack by JordanLee

http://www.peercointalk.org/index.php?topic=2976.msg27303#msg27303

Discussion threads regarding the theoretical possibility of a Nothing-at-Stake attack include:

BitCoin Talk: Nothing-at-Stake & Long Range Attack on Proof-of-Stake (Consensus Research).

Nxt Forum: The Paper on Long-Range attack & Nothing-at-Stake.

NXT Sub-Forum: Consensus Research.

Tutorial: Nxt Asset Exchange

  • What are assets?
  • The Nxt Asset Exchange
  • Browsing Assets
  • Buyer Beware!
  • Buying and Selling Assets
  • Cancelling an order
  • Order Priority
  • Viewing and Transferring Assets
  • Transaction Fees
  • Finding a Good Price
  • Due Diligence

What are assets?

Nxt assets are a convenient way to represent anything fungible and tradeable. An asset token could represent a bar of silver, a pizza redemption coupon, a share in a company, even a portion of a portfolio of other assets. By representing these things digitally on the blockchain, they can be publicly verified and easily traded.

The NXT Asset Exchange (AE) is based on the concept of the ‘colored coin‘. More specifically, the Nxt Asset Exchange is based on the ability of the blockchain to recognise and therefore trace the origin of transactions involving a coin or a set of coins which have been designated (or ‘colored’) to represent any type of asset you can imagine, whether digital (for example, stocks, bonds, smart property) or tangible (for example, cars, houses, precious metals etc).

The Nxt AE 

The Nxt Asset Exchange matches asset buyers and sellers, it works in a similar way to cryptocurrency exchanges. This tutorial will show you how to buy and sell asset tokens on the Asset Exchange.

All asset exchange operations can be accessed from the sidebar in the official core Nxt Client.

Browsing Assets

To view an asset, you’ll need to input the asset ID.

You can search for an asset via the search box in the top left corner in the client.

The search will open up a modal window, now click to view the asset in the Asset Exchange.

You can bookmark an asset by clicking the button in the top right corner.

Our ASSETHUB lists the most popular assets in a Top 50 with their unique ID.

Sites like https://mynxt.info/assets and https://nxtportal.org/assets list all available assets.

Buyer Beware!

A Nxt asset is uniquely identified by its ID number.

Asset names are not unique, this is to prevent names from being squatted on. So never rely on an asset’s name or description to identify it, always check that its ID number and the issuing Nxt account address match those announced by the asset’s issuer on e.g. their website/forum thread. There are scammers who issue assets with the same name as popular assets in order to try to trick people into paying for them.

We’ll use the Jinn asset, which represents profit shares from the Jinn project, as an example.

The Jinn asset’s ID can be found on Jinn Lab’s home page and on its announcement thread in the Nxtforum.

This is NOT the real Jinn:

Research any asset before buying into it, always. Check that the ID number is the correct one.

Where to get NXT coins

Buying and Selling Assets

First click the plus signs to open the buy and sell windows:

To buy an asset on the Nxt Asset Exchange, place a buy order indicating how many tokens you wish to buy, and how much Nxt you’re willing to pay for each token.

Selling assets is similar, but this is done on the right-hand side.

Check that you’re performing the correct action by reading the description on the button (Buying is converting NXT -> assets, selling is converting assets -> Nxt). Before you confirm your order, also check that you have the correct number of digits before and after the decimal point.

You can not bid for more than you can afford with the available NXT in your account. When you place a buy order, the total price of the order is automatically reserved from your account and cannot be moved or spent, unless you cancel the order. It will be deducted when the order is fulfilled.

You also can not sell more tokens than you have in your account, nor, of course, can you transfer tokens from your account whilst they are still up for sale.

Cancelling an order

You can see all your unfulfilled orders under ‘Asset Exchange -> Open Orders’. Unfulfilled orders can be cancelled at any time subject to payment of a transaction fee; once the cancellation of an order has been confirmed, the reserved NXT and the tokens that were for sale are released back to the account holder’s control.

[easy-social-share]

Order Priority

Buy orders are prioritized:

  • first by price (higher bids have greater priority);
  • followed by the block height when they’re added (bids in earlier blocks have greater priority);
  • followed by the transaction ID (bids with lower transaction IDs have greater priority).

Sell orders are prioritized similarly, but lower offers have greater priority.

Higher priority orders are fulfilled first.

Viewing and Transferring Assets

All assets in your account are listed under ‘Asset Exchange -> My Assets’.

Click on ‘Transfer’ at the right-hand side to send asset tokens to another account. Currently you can only send tokens of the same asset in a single transaction; you’ll need to make a separate transaction for each asset you want to send.

You can also “burn” (effectively destroy) assets by using the “Delete Shares” button.

Transaction Fees

Like most other transactions that add to the blockchain, it costs 1 NXT to place or cancel an order, or transfer an asset. The transaction fee is deducted from your account when the block containing the transaction has been confirmed.

Finding a Good Price

If your bid price for an asset is low, nobody may be interested in selling at that price, or it may be a long time before any higher priced buy orders are filled or cancelled and someone accepts your price. The order books and recent trades (below the buy and sell windows) can help you find a good price.

Such recent price information can help you execute a trade quickly, but the price you have paid may not reflect an asset’s true value longer term. Beware of placing too much reliance on short term price movements, otherwise you might end up panic buying or panic selling which is a sure way to lose money. You need to take into account all available information regarding an asset and its issuer in order to reach a properly considered decision about the asset’s worth.

Due Diligence

Before buying an asset, you should at least understand what an asset represents and clarify any doubts with the issuer. On NXTER.ORG’s ASSETHUB you can read in depth asset research and find a Top 50 list over the most popular assets on the AE. Many assets are discussed on the nxtform.org assets sub-board https://nxtforum.org/assets-board/ and the Nxt Projects sub-board https://nxtforum.org/nxt-projects/. Here you can talk to asset issuers and other investors.

You should check that the asset issuers are who they claim to be. So, for example, if someone advertises shares for profits from running a restaurant, you’d want at least to check that the restaurant exists, that they own the restaurant, and they know how to run it. And for profit shares, you’d also want to check that your expected dividends justify the cost of the shares.

A good question to ask yourself is: “How likely is it that the asset issuer might disappear with any Nxt gained from asset sales, rather than follow through with their promises?” For example, if the issuer is anonymous, stands to raise a lot of Nxt from initial asset sales, and/or their stated plan for the asset seems very unlikely to be favorable for them, then they have incentives to just run away with your Nxt. But if, on the other hand, the issuer has a reputation that they want to protect and build on, and they have a sound business plan that stands to make them a lot more Nxt than the initial asset sales, then they have good reasons to honor their promises. Weigh the risks against potential returns before deciding if, and how much, you want to spend on an asset.

Usually it’s more accurate to describe asset tokens as a promise to the asset holder by the issuer to, for example, exchange the token for a bar of silver, or pay dividends from company profits. The Nxt network cannot enforce these promises, it’s your responsibility to check that the issuers can make good on their promises, and it’s for you to decide whether or not to accept the risk that they may not do so.

Regardless of how much due diligence, or even active involvement with the asset, you undertake, things beyond your control can still happen. Even the most trustworthy and capable people can be hit by the proverbial bus. Remember the standard advice regarding any type of financial  investment: never invest more than you can afford to lose.

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

NOOB

I’m gonna take the chance. Here’s my blog post. The more I write, the more I get paid. So blablablablabblah, blablablablabblah, blablablablabblah, blablablablabblah, blablablablabblah, blablablablabblah.

Damn, how to start this.

I got into cryptocurrencies 5 months ago. Yeah laugh, I’m a loser, a noob which is why I lost almost all the money I invested and have no idea how to get it back. Maybe I’ll be in debt forever so, yeah, have a good laugh, it helps me to see the funny side…  When I hang out in trollboxes or read BTT comments I see that I’m not alone, not that I trust anyone. But I think that’s real. That I’m not the only one who invested more than I could afford to loose and lost it. I know. I broke the rules, so I’m the one to blame: Don’t invest more than you can afford to loose. But I did.

You may all be first movers and wonderful traders and rich from the BTC you bought in 2010 and laugh yo ass off, but this market is hard to understand when you’re new to it. You have difficulties making your first EUR transaction into BTC, then figuring out how to place bids, and move crypto between exchanges, but you’re full of hopes, because you read all the latest announcements on the altcoin pages of BTT, and you were lucky to have got in early.

I bought when the coins were cheap. Or at least when I thought they were. Just before they crashed and I realized they’d been pumped. I still don’t even know if you’re supposed to ‘Buy the rumor, sell the news’ or the other way around. And every time the price rose or coins crashed trollboxes cried “China wake up!”, or “it’s caused by the latest news”, and whatever the news was I never saw it coming. I’ve bought both before and after news hit. I’ve bought when it looked like nobody else was. And I’ve bought when the great pump’n’dumpers told me to buy, like all the other dumb noob “fishes”. Turns out though that even pumpers aren’t in control, because when a larger whale dumps, we’re all going under, and we’re all fucked. I’m not sure that’s what Satoshi wanted.

MY DREAM

I’ve had dreams about being a whale. In my dreams I made markets and calculated moves. I’m sure that in reality I would’ve lost my money no matter the size of my portfolio. Even if I was the richest of all mothers I would’ve chosen the worst coin ever, invested all, tried to drive markets up, then sold too late, bought back in too soon, and I’d stand exactly where I stand now, because, frankly, I DON’T KNOW what I’m doing.

Now my real dream is that someone steps up and just yells at me: WAKE UP! Then I wake up. And it has all just been a nightmare, here you go dude, here’s all your money back. 5 months is a long time, when it comes to loosing money, but you survived man, you’re a strong man, and this is your reward: It was all just a nightmare!

Is it possible?

Maybe I should leave this crypto world ASAP. Earn fiat, pay off my debts little by little, go and live on a rock somewhere. But then again.

I’ve discovered magic. Yeah, some so-called geniuses out there will keep telling me they make coins. They don’t. They make clones of shizzle. Don’t listen to them. I don’t have anything left to invest, but I won’t ever fall into a clone trap again. I think investing is about doing your due diligence properly before spending. Magic comes with true innovation. There are those who talk about it, and there are those who deliver it. Also, a good community is more than a plus, it’s the key. Nxt has a qualified and supporting community, and I’m done with BTT.

I write this post because if NXT succeeds, the NXTP I get for it (if nxter.org chooses to publish me!) could – if not fly me to the moon – lift me just a few inches off the ground. If it crashes I won’t have lost a thing. Except for my life of course: I will fucking die at the hands of my girlfriend if I tell her that ‘I can’t get my money back but at least I tried!

I believe there’s a good chance that NXT will outperform everything else ever announced on BTT. Unfortunately I found NXT too late to make the really big money the founders did, so I can’t invest in the hope of getting rich quick. But I think there’s still plenty of scope for getting relatively rich relatively quickly and in any event I can at least follow Nxt’s progress and write about it.

OK, so that’s my blogpost. Like it or leave it.

I know my writing ain’t deep or technical and maybe not even newsworthy so if you dismiss it, it’s OK. But then please make a series about a noob who doesn’t understand crypto. I’m sure it will be of interest to your readers. I for one will be reading along, I’m not an expert yet!

Author:
ZockPop

PS. I would like to be paid for my blog.

Nxt ID:
NXT-6LGH-DKMT-2NPU-BY66Y