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A few questions for our follow-up article on NXT asset transparency singapore
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Author Topic: A few questions for our follow-up article on NXT asset transparency  (Read 2170 times)

GlassBox

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Hello. We're currently writing a follow-up article to our first report (www.glassboxinvestments.com), which focused on NXT (and the jl777 assets in particular). Thanks to everyone who contributed to this thread about the report: https://nxtforum.org/general-discussion/glassbox-spreading-fud-about-nxt-and-jl777-assets/.

The following questions are part of our effort to paint an even more accurate picture of the NXT investing world. We also hope they'll help spark a healthy dialogue here in the NXT community:

Question #1: Which NXT-based assets are tied to services that are currently operational AND generating revenue? And in the case where a service is bringing in revenue, can investors clearly understand the business model by which this revenue is generated? (For example, Freemarket, which charges a listing fee, appears to have a clearly-defined revenue engine). Also, can this revenue be independently tracked on the blockchain?

The logic here is straightforward: assets that are tied to revenue-generating services are more likely to be legitimate investments. Those that are actually swinging a profit are often even more legitimate.

As we've seen time-and-again in the crypto world, it's all to easy to create an asset out of thin air, pump it full of hype and pretty rainbows, and then dump it for a profit. Revenue generation sends a clear signal that an asset is more likely to be a legitimate investment.

Speculation on the future valuation of non-profitable companies is a perfectly legitimate investment strategy - and it happens all the time in the "real world." Just look at Twitter (TWTR), who lost $175 million last quarter. However, Twitter does have a clear business model and does generate revenue ($361 million in Q3). Although some would argue that it's a colossal time-sink, it's clearly not a hallow shell designed simply to get investors onboard.

Speculative assets that generate NO revenue whatsoever would be riskier. A phantom service, built simply for a pump-and-dump, would be very likely to fall into this category.

This is not to say that ALL non-revenue-generating assets are pump-and-dumps; much like successful crowdfunding efforts, some are wonderful ideas that require funding to be fully realized. But again, revenue generation sends a clear signal about legitimacy.

To put it another way: imagine if Glassbox itself issued an asset tomorrow, along with glowing projections for the future. As of today we've released one report and have no quantifiable user base. The risk of investing in us would be quite high. On the other hand, if we had 1000 subscribers at $10/month each, along with a track record for rapid growth, the risk of investing in us being a pump-and-dump would be notably less.

Question #2: Where can prospective investors find clear, verifiable, and unbiased information on NXT assets?

As we noted in our report, a great deal of information on NXT-based assets is buried in the forum threads. It would be helpful if one could easily find, in one spot, accurate and easy-to-understand information about an asset's:

- Business Model
- Operational status
- Revenue (if applicable)
- Creator(s)
- Community Ratings

Question #3: What questions do YOU think we should ask in an effort to assign an asset's risk level?

This query is more of an effort to help us - Glassbox - build a better service. Questions we currently ask include:

- Is the service tied to this asset live and functioning?
- Is the service tied to this asset generating revenue? (as discussed above)
- Do the creators of the asset provide clear, accurate information and/or prospectuses? ( as discussed above)
- Are the project developers known, or anonymous? (as discussed in our first report)
- What is the developer's reputation in the community?
- Is the asset account/address of its creator(s) public? And if so, is there a "hold" on these funds so they creators can't sell out until a certain time has passed?

While a yes/no to any of these individual questions does not mean an asset is legitimate or not, in the aggregate they can provide a much clearer sense of risk.

Are we missing anything here? What would you add to this list?

Your thoughts and insights are greatly appreciated. In terms of assets, NXT is hands-down the busiest crypto 2.0 platform. As such, it's a great place to dig deep and start exploring these questions.
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jones

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Re: A few questions for our follow-up article on NXT asset transparency
« Reply #1 on: January 08, 2015, 04:38:59 am »

1. https://nxtforum.org/asset-exchange-general/community-asset-board-summary-(w-i-p)/ is a good place to start
Personally I like coinomat for dividends, it pays out very consistently pretty much every week.

2. https://nxtforum.org/nxtinspect/ are working on something, also nxtforum asset boards are a good spot

3. I would ask nxtinspect, they've done a lot of work in that area as I take it.

just my shortform version, having analysis of different assets is a very good thing to have, giving investors multiple avenues of getting their due diligence done is vital, I wish you luck with your project :)
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valarmg

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Re: A few questions for our follow-up article on NXT asset transparency
« Reply #2 on: January 08, 2015, 11:43:19 am »

Good questions. I hope NxtInspect chime in as they are a Nxt asset rating agency and can probably answer the more detailed questions.

One thing about assets is that plenty of them are venture-capital style businesses which means high risk, high return so it's expected that there plenty of risk involved. I'll mention a few revenue generating assets:

CryptoCoin: An actively managed crypto portfolio. http://cfa-consulting.ch/en (http://cfa-consulting.ch/dlfiles/CryptoCoins_Presentation_EN.pdf)
Coinomat: https://coinomat.com/ This returns dividends from transaction fees on currency conversions.
MGW: (http://multigateway.org/) This allows deposit and withdrawal of coins onto the asset exchange (via a proxy asset) so they can be traded on decentralized asset exchange. Fees haven't been enough to cover expenses yet, but it generates revenue from deposit/withdrawal fees.
MMNXT: This uses investment funds to fund a trading bots, trading profits are returned as dividends.
Nxt Inspect: Asset rating agency that sells subscriptions of "early bird" asset ratings to investors.
ForgeCoin: http://www.forgeco.in/ Bitcoin mining asset which buys miners with investment capital and returns dividends based on bitcoins mined. (There are several other mining assets.)
HRLTCGear: One of several cloud mining assets based on LTCGEAR. (These have returned substantial dividends, but LTCGEAR might be a ponzi, in which case they are all in trouble right now.)

Plenty of the assets are based on products still in development so can't be expected to have revenue yet. Lots of firms get VC capital well before they start making revenue, long before they have a chance to launch on wall street so these assets shouldn't be compared to wall street assets, but to projects that look for VC funding. But it doesn't have to be only dry business plans aimed at professionals that get funding these days, a cool kickstarter video can get millions in funding.

Projects looking for VC funding would have to have more rigorous business plans, but this asset exchange is a whole new way of doing business and it's only in it's foetus phase. It's a mixture of kickstarter and wallstreet. Some asset investments are more like kickstarter donations, just giving money to a project because it's cool and you want to see it built. Others are all about the returns. There's a whole range of different levels of assets types possible, and people can invest in each one for totally different reasons.

Of course this asset model does allow scams and pump-and-dumps. That's true for all new cryptocurrency coins as well. But the asset exchange allows much more than cryptocoins. Crowdfunding a video game or a ternary-based processor, with the ability for those who who invest to get huge returns if the project takes off. Look at this project: https://nxtforum.org/news-and-announcements/(ann)-melodius-'join-our-music-revolution'-q1-2015-7120/msg143205/#msg143205 It hasn't launched, but the ability to support a band by buying shares in it's success is an exciting idea.

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durerus

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Re: A few questions for our follow-up article on NXT asset transparency
« Reply #3 on: January 10, 2015, 02:59:31 am »

Hi GlassBox!

Your questions are only about assets. But I am still disappointed with what you write about NXT itself in your article. Maybe others here are too and therefore don't feel like responding to your questions? I dunno.

You write:

Quote
One of the most concerning aspects of NXT is the way in which the original 1 billion NXT coins were distributed. Rather than gradually being minted into existence via proof-of-work (POW) mining (as with Bitcoin) or being backed by a large crowdfunding effort (as with Swarm and Ethereum), these tokens were simply coded into being.

Without wide participation and actual wealth backing this creation – with the exception of a limited “IPO” of 21 BTC that resulted in the NXT tokens being placed in just 73 accounts – these initial tokens appeared to have been distributed to a relatively small number of holders. This high concentration of wealth would make it easier to manipulate both the price of NXT, and its underlying assets.

I miss here the fact that the IPO lasted for two months. This is important info. Cause when you just talk about the limitation to 21 BTC people might believe that the IPO was only a day or a few days and only BCNext's previously informed friends were able to invest. IPO lasting for two months means that for a long time people had the chance to invest. Many people think that a long IPO is fairer than a short one. So you are painting a wrong picture of NXT here for these people. Please add that IPO lasted for two months!

Another thing: Why do you write "without ... actual wealth backing this creation ... these initial tokens appeared to have been distributed to a relatively small number of holders." What has "wealth backing" to do with distribution? If everybody gave a Satoshi 21 BTC would have been enough for a distribution to 21*100 million people. This is illogical. If you want to be nice to us NXTers you could write the obvious and say that BCNext didnt want to make a hell of money with IPO. This guy was a true idealist! :)

Another thing: You say: Bad distribution, therefore easy to manipulate in price. But you are only talking about initial distribution. Why dont you add numbers about actual distribution now and compare to other coins or USD? As I understand you want to make an article for investors today, no?


Last but not least: No mention of Transparent Forging, its status of implementation and possibilites in an article about NXT? Adonbilivit ;)



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salsacz

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Re: A few questions for our follow-up article on NXT asset transparency
« Reply #4 on: January 10, 2015, 03:17:34 am »

73 accounts? Why everyone ignores 27 other accounts that claimed their stakes after the genesis block and before 4th January?
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kimhansen

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Re: A few questions for our follow-up article on NXT asset transparency
« Reply #5 on: January 10, 2015, 06:29:50 am »

I think the questions GlassBox are asking are very relevant and to push for more transparency and better organised information is very welcome.

Even if people have different opinions. We all see the world with different glasses..
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valarmg

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Re: A few questions for our follow-up article on NXT asset transparency
« Reply #6 on: January 10, 2015, 11:05:11 am »


Last but not least: No mention of Transparent Forging, its status of implementation and possibilites in an article about NXT? Adonbilivit ;)

Good post dureus, but I disagree about Transparent Forging. Nxters have been trumpeting that for a long time, but how it's implemented right now has no real advantages, and there doesn't seem to anything on the immediate roadmap where it will be implemented in full. Nxt has plenty of great features ready right now and more about to be implemented in the immediate future, no point in talking about features not coded up yet.
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apenzl

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Re: A few questions for our follow-up article on NXT asset transparency
« Reply #7 on: January 19, 2015, 10:45:55 am »

Don't forget this wonderful café: https://nxtforum.org/asset-exchange-general/bgcaffe-asset-monthly-payout/  :)
That thread is also one example of how the community has gotten used to "interviewing" new asset issuers before risking a dime.

There's quite some info about AE on nxter.org too, you'll find links in the main menu > 'Asset Exchange'.

For examples of OTHER Nxt use cases: http://nxter.org/nxt-the-economy-platform/
For a summary of Nxt core features (and some 3rd party projects): http://nxter.org/category/nxt-core/

Thanks for writing this follow-up article.
You chose to cover the most advanced crypto platform right now, for your virgin article. I'm looking forward to the Result 2.0. Good luck. :)

GlassBox

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Re: A few questions for our follow-up article on NXT asset transparency
« Reply #8 on: January 24, 2015, 07:34:22 pm »

Thanks to everyone for the replies. We'll be releasing our follow-up article within the next week. This article will clarify certain points from our first report, and also weave in some of the discussion in this very thread.

valarmg and dureus, may we quote your responses in our follow-up?
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GlassBox

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Re: A few questions for our follow-up article on NXT asset transparency
« Reply #9 on: January 24, 2015, 07:36:28 pm »

Don't forget this wonderful café: https://nxtforum.org/asset-exchange-general/bgcaffe-asset-monthly-payout/  :)
That thread is also one example of how the community has gotten used to "interviewing" new asset issuers before risking a dime.

There's quite some info about AE on nxter.org too, you'll find links in the main menu > 'Asset Exchange'.

For examples of OTHER Nxt use cases: http://nxter.org/nxt-the-economy-platform/
For a summary of Nxt core features (and some 3rd party projects): http://nxter.org/category/nxt-core/

Thanks for writing this follow-up article.
You chose to cover the most advanced crypto platform right now, for your virgin article. I'm looking forward to the Result 2.0. Good luck. :)

Thanks for the info!
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valarmg

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Re: A few questions for our follow-up article on NXT asset transparency
« Reply #10 on: January 24, 2015, 08:16:07 pm »

Thanks to everyone for the replies. We'll be releasing our follow-up article within the next week. This article will clarify certain points from our first report, and also weave in some of the discussion in this very thread.

valarmg and dureus, may we quote your responses in our follow-up?

Feel free.

Also I believe SuperNET will have a release next week (not all features operational), which might dispel some concerns of jl777's assets all being vaporware.
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durerus

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Re: A few questions for our follow-up article on NXT asset transparency
« Reply #11 on: January 25, 2015, 05:16:53 am »

Thanks to everyone for the replies. We'll be releasing our follow-up article within the next week. This article will clarify certain points from our first report, and also weave in some of the discussion in this very thread.

valarmg and dureus, may we quote your responses in our follow-up?

Sure. Looking forward to your article :)
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