
NuBits: the First decentralized digital currency to keep $1.00 for an entire year - gbboy
https://discuss.nubits.com/t/september-23-2015-nubits-becomes-the-first-decentralized-digital-currency-in-history-to-maintain-1-00-for-an-entire-year/2750
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tomasien
Isn't NuBits widely believed to be a scam?

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Sentinelrv
Widely? The only scam accusation I'm aware of came from Daniel Larimer of
BitShares, which is a direct competitor of Nu. The scam accusation was
directed toward our parking interest mechanism. With this mechanism
NuShareholders could offer interest to those who parked their NuBits for a
certain amount of time, which created synthetic demand during times of demand
decline.

The problem was that this was only a temporary measure to increase demand and
one that would ultimately increase the supply when the interest was released
to the parkers. This made the parking system unsustainable if it was the sole
mechanism used to control supply and demand.

Thankfully NuShareholders correctly identified this as an issue in the very
beginning even before Dan Larimer's comments and they've worked over the last
year toward a solution. NuShares are now used to back NuBits. When demand is
low and all other measures have been exhausted, NuShareholders can vote to
print NuShares, which will then be auctioned off and the proceeds used to
purchase NuBits and burn them, permanently reducing the supply. This process
has already been used to successfully reduce the supply from 1.8 million to
under 600k NuBits.

When demand increases again, the proceeds from NuBits sold can then be used to
buy back NuShares and burn them, effectively lowering the supply and returning
value back to NuShareholders. Our first NuShare buyback and burn was actually
just completed.

Parking interest is still part of the system, but it is used as a short-term
supply/demand control mechanism. If parking interest rates continue to have no
effect on demand, then it can be used as an indicator that NuBit burns need to
be carried out.

As mentioned, these mechanisms have now allowed shareholders to successfully
hold the $1 peg for an entire year. We've also been able to keep a stricter
peg when compared to competing projects like BitUSD, which has been known to
sway in value, negating the point behind stable cryptos.

All of these improvements were publicly discussed on our forum and voted on
using our motion system, which allows shareholders to quickly come to
consensus on important issues. You can read about all of this, which has been
documented in the history section of our website...

[https://docs.nubits.com/history/](https://docs.nubits.com/history/)

