Quick jump
Hello and welcome to this blog post about NuBits White Paper. I am very excited to know that you are interested in this amazing technology, you will be going to amazed by the incredible potential of the blockchain.
There is a lot to learn about this futuristic tech, lets get started to dive into the NuBits white paper and start to leverage it to build a more secure and trusted ecosystem for Industry 4.0 applications.
The aim of this blog post is to help you quickly understand about the philosophy behind the NuBits (USNBT).
I can ensue you that, you will be able to understand every bits and pieces related to NuBits (USNBT) after going through the NuBits white paper.
Without wasting any further time lets get started to dive right in and lets understand white paper first.
What is white paper?
A white paper is an informational, influential, well-structured document, usually published by an organization, to provide in-depth information about a specific solution.
A white paper is used to provide a good insight into the challenges for a specific problem and a proposed solution for the same.
NuBits White Paper
NuBits white paper will be going to provide you, all the information that is needed to get started with NuBits (USNBT), including the inspiration for creating, the problem it is trying to solve and the solution proposed by NuBits (USNBT).
Introduction
The solution is a network with two types of units which are not fungible: shares and currency. Shares represent ownership of the network and their quantity should not change to accommodate changes in the level of demand for them. If demand increases, the price should rise proportionately. They should also provide dividends from network revenues.
The supply of currency, however, should dynamically adjust up and down in response to changes in the level of demand for the currency so that the price is always stable. A network with these characteristics can be most easily implemented as a fork or extension of Peershares. Just like any Peershares implementation, Nu is controlled by shareholders who own NuShares and mint blocks with them using proof of stake. Unlike other Peershares networks, Nu also verifies and transmits transactions of currency units called NuBits.
Nu permits holders of NuShares to manage the quantity of NuBits without dependence on any off blockchain mechanisms. Additional NuBits can be created when shareholders vote to do so and will be placed in the custody of a recipient chosen by shareholders called a custodian. There can be as many custodians as the shareholders elect to have and they can be changed at the whim of shareholders.
Custodians may adopt a pseudonym if they choose to do so. Because custodians can be pseudonymous, many in number and abandoned at the will of shareholders, third parties cannot gain control of the network by leveling threats against custodians. Being a custodian doesn’t impart any control over the network, only over a finite quantity of network revenues. NuBits created and sold are network revenues that can be used by custodians for Nu operating expenses and dividends.
Dividends will be paid only in Peercoins, which means custodians must purchase Peercoins in preparation to distributing them. Therefore, demand for Peercoins will increase proportionate to the amount of dividends paid by Nu. Conversely, the system can reduce the available supply of NuBits through a separate mechanism called parking, where holders of NuBits volunteer to take their currency out of circulation for a user configurable period of time in exchange for a monetary incentive.
This is similar to extending a loan at interest. Shareholders can dynamically adjust the level of interest offered on parked NuBits (which varies by the duration) by voting for whatever yield curve they think is appropriate when they mint a block. When organic NuBit demand is in decline, shareholders will create synthetic demand for them by offering interest on parked NuBits.
Some entities that would have no interest in NuBits as a currency will purchase them simply to park them at interest, thereby compensating for the decline in organic demand. Shareholders will raise the interest offered to whatever level is required so that organic and synthetic demand combined will not decline. As organic demand increases once again, the interest offered will be reduced until organic demand reaches its previous peak, at which time no interest will be offered for parking.
The NuBit price will be suppressed to one USD from custodians maintaining huge sell walls at one USD and supported at one USD by shareholders offering interest on parked NuBits to create synthetic demand when there are market signals that demand is in decline. While early in the network’s life minute to minute NuBit demand could decline suddenly and cause the price to momentarily drop below one USD, shareholders will quickly push the price back into the custodial one USD sell wall by increasing the parking interest rate.
This will punish anyone who sold below one USD and reward anyone who purchased below one USD. Soon it will become clear that selling NuBits below one USD is always a losing trade and buying them below one USD is always a winning trade, which will prevent its decline. A special type of custodian can be compensated to provide deep liquidity to sellers of NuBits at one USD, preventing the price from falling even in the case of a sudden drop in demand that is too quick to allow for interest rates to be raised.
White Paper Link: NuBits White Paper
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