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When coins are 'locked', where do they go? singapore
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Author Topic: When coins are 'locked', where do they go?  (Read 1860 times)

Daedelus

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When coins are 'locked', where do they go?
« on: January 07, 2015, 02:53:54 pm »

Say I successfully crowd sourced a coin, NXT2  ;D,  and 500,000 original NXT was locked into it.

Where does this NXT go? Into another account? It can't go to the genesis account, as then you wouldn't be able to unlock NXT2 for NXT at a later date.

Is there a security issue if the account holding the locked NXT gets hacked?
« Last Edit: January 07, 2015, 02:56:59 pm by Daedelus »
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Fatih87SK

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Re: When coins are 'lcoked', where do they go?
« Reply #1 on: January 07, 2015, 02:55:42 pm »

Is there a security issue if the account holding the locked NXT gets hacked?

Good question.

A good/better account security measure becomes more important because MS is being launched.
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Daedelus

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Re: When coins are 'lcoked', where do they go?
« Reply #2 on: January 07, 2015, 02:57:39 pm »

Is there a security issue if the account holding the locked NXT gets hacked?

Good question.

A good/better account security measure becomes more important because MS is being launched.

I suspect this isn't the answer  ;D I just wanted to know what the answer is
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LiQio

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Re: When coins are 'locked', where do they go?
« Reply #3 on: January 07, 2015, 03:02:04 pm »

My take:
- locked in the account that creates the new currency (visible, forging if account unlocked, but unspendable)
- unlockable (usable) only if the account is in possession of all the "new currency" units again and "new currency" is destroyed

Daedelus

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Re: When coins are 'locked', where do they go?
« Reply #4 on: January 07, 2015, 03:06:47 pm »

- unlockable (usable) only if the account is in possession of all the "new currency" units again and "new currency" is destroyed

Ah, I didn't know this. So it is binary, all can be converted back or none? Edit: False, any holder can unlock at any time. See below.

I was wondering if there would be buying MScoins below their Nxt face value and converting them for a small, riskless profit. Binary types would stop this.
« Last Edit: January 20, 2015, 02:44:44 pm by Daedelus »
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LiQio

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Re: When coins are 'locked', where do they go?
« Reply #5 on: January 07, 2015, 03:08:57 pm »

Just my guess! Don't quote me until confirmed by one of the savvy guys  ;)

https://bitbucket.org/JeanLucPicard/nxt/issue/205/monetary-system-documenation -> section "Store of Value"

Riker

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Re: When coins are 'locked', where do they go?
« Reply #6 on: January 07, 2015, 03:34:33 pm »

Say I successfully crowd sourced a coin, NXT2  ;D,  and 500,000 original NXT was locked into it.

Where does this NXT go? Into another account? It can't go to the genesis account, as then you wouldn't be able to unlock NXT2 for NXT at a later date.

Is there a security issue if the account holding the locked NXT gets hacked?

It works like this:
If the currency is Reserveable/Claimable and the required reserve NXT per unit is reached, the currency becomes active and the reserved amount is locked by the founders accounts (i.e. the accounts which payed for the reserve) each one according to its investment reserve amount.
Technically the unconfirmed balance of these accounts is reduced by the amount they reserved so they can no longer spend it. Once an account claims back its NXT the funds are unlocked.

If the currency is Reserveable/Exchangeable, then if the currency becomes active the issuer account is receiving all the funds and no funds are locked.

In both cases if the NXT per unit reserve is not reached at a certain block the funds are released back to the founders.
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Daedelus

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Re: When coins are 'locked', where do they go?
« Reply #7 on: January 08, 2015, 03:17:00 pm »

Thanks Lyaffe.

Regarding this,

Quote
Note: locked NXT do not participate in forging, therefore, in theory its possible that large amount of NXT becomes locked as currency store of value thus reducing the amount of NXT used for securing the network, we are aware of this problem and we'll monitor it closely. We do not expect this to become a major problem any time soon.

... are there any ideas on the table that could potentially solve this at the moment?
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bitcoinpaul

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Re: When coins are 'locked', where do they go?
« Reply #8 on: January 08, 2015, 03:18:36 pm »

Thanks Lyaffe.

Regarding this,

Quote
Note: locked NXT do not participate in forging

... are there any ideas on the table that could potentially solve this at the moment?

I thought they changed it :-\
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Daedelus

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Re: When coins are 'locked', where do they go?
« Reply #9 on: January 20, 2015, 02:45:11 pm »

So, what happens if the value of LTBcoin goes below the NXT that backs it?

People would start to redeem LTBcoin for NXT, could this end up eliminating all LTBcoin in circulation?

If the currency is claimable, any account holding the LTBC currency can claim it back to NXT any time according to claim rate achieved during the activation of the currency (currencyClaim transaction). In other words, this unlocks the NXT locked during the crowd funding period before the coin became active.
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Come-from-Beyond

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Re: When coins are 'locked', where do they go?
« Reply #10 on: January 20, 2015, 04:03:36 pm »

Where does this NXT go?

Into the pocket of BCNext maybe...
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bitcoinpaul

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Re: When coins are 'locked', where do they go?
« Reply #11 on: January 20, 2015, 05:58:20 pm »

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