ForexMinute.com – A basic thing which we expect from an altcoin is, to overcome the loopholes in Bitcoin technology. While there have been many greater attempts to overcome Bitcoin’s technical issues – for example Litecoin to reduce the transaction confirmation period, or Darkcoin to bring better transaction anonymity – little has been done to eradicate the problems related to its volatility.
Peercoin creator Jordan Lee once proposed a method that could bring better stability to cryptocurrency markets. The man, with the help of its dedicated and talented team, shaped that idea into the world’s first stable cryptocurrency. Dubbed as NuBits, the cryptocurrency was released on September 23rd 2014, after over a year of its mention in the public domain.
The real question however was, how NuBits could achieve something that has never tried-or-tested by the developers of other altcoins. Alongside the cryptocurrency, Jordan Lee also published a white paper explaining the overall roadmap of NuBits. He wrote:
“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.”
You can read the entire white paper here.
As for now, NuBits is pegged as a derivative to the US Dollar. It means that its price will always be attached to the price of USD, whether it is going up or down. The coin can also be further pegged with other fiat currencies like EUR, CAD, NZD, CHF, etc. Understanding the crucial nature of this feature, Jordan Lee has made sure to release NuBits along with a label which says “experimental software”. It simply means that it has a chance to succeed, but fail as well.
Connecting the dots between a cryptocurrency and a fiat currency however is still not digest-able to many. Few individuals have outright rejected the concept, citing the centralization of fiat currencies a major issue. Sportscliche, one of the Peercoin followers on Reddit, argues:
“The USD is controlled by a central bank, i.e. The Federal Reserve. If the dollar experiences devaluation as a result of reckless Fed policy (e.g. inflation) then the value/worth/utility of NuBits will suffer in lock step. Bitcoin, Peercoin, Litecoin, etc. do not have this problem. If, for example, the world evolved into a largely Bitcoin economy and fiat currency essentially ended, NuBits and its network would be worthless.”
“This is discussed in the NuBits whitepaper,” he adds.
Nevertheless, NuBits will achieve stability, whether it is by hook or crook.
Indeed, NuBits is not for adventurous investors but would largely appeal to businesses that are wondering to enter the cryptocurrency space without risking anything major. Governments meanwhile should also welcome this change as they have become poised to criticize digital currencies for their volatile nature.
To contact the reporter of the story: Yashu Gola at email@example.com
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