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How does the NXT monetary system work?
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Author Topic: How does the NXT monetary system work?  (Read 23036 times)

verymuchso

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How does the NXT monetary system work?
« on: April 01, 2014, 07:36:43 pm »

On march 30 2014 Come-from-beyond checked in the following commit with the title "Prepared nxt/Account for implementation of Monetary System."
https://bitbucket.org/JeanLucPicard/nxt/commits/bcce245fce855f9c1df770b0ec911338edf13c2c

On bitcointalk CfB described it as..

Code: [Select]
In short Monetary System will allow to create currencies backed by NXT. New coins r created by "burning" NXTs. Actually these NXTs r not burned but locked. Anytime u can destroy created coins and get the NXTs back.https://bitcointalk.org/index.php?topic=345619.msg5996758#msg5996758

What I was wondering is..

1. How can NXT users create their own currency?

2. How does the locking work?

3. You can take-out NXT from the locked account (by burning NXT) but can you also later put in NXT and get more of that currency.

4. Will this be integrated with the Asset Exchange (will there be a forex to trade between the different currencies)?

5. Who will make this? Are you building this Come-from-Beyond?

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Come-from-Beyond

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Re: How does the NXT monetary system work?
« Reply #1 on: April 01, 2014, 09:22:01 pm »

1. How can NXT users create their own currency?

By issuing a single transaction that says "At height X lock all nxts spent for creation of currency Y and issue Z coins".


2. How does the locking work?

All "burned" NXTs r locked until newly created coins not destroyed. If u destroy 7% of the supply then u get 7% of the locked NXT to ur account.


3. You can take-out NXT from the locked account (by burning NXT) but can you also later put in NXT and get more of that currency.

Only take-out, u can't inflate the supply by locking more nxts.


4. Will this be integrated with the Asset Exchange (will there be a forex to trade between the different currencies)?

All transaction types that use NXT can be used with such "subcurrencies", but transaction fee will paid in NXT anyway.


5. Who will make this? Are you building this Come-from-Beyond?

Me. I'll wait when Jean-Luc adds "satoshi" and then continue.
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verymuchso

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Re: How does the NXT monetary system work?
« Reply #2 on: April 01, 2014, 09:26:51 pm »

5. Who will make this? Are you building this Come-from-Beyond?
Me. I'll wait when Jean-Luc adds "satoshi" and then continue.

So you are not satoshi?
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Come-from-Beyond

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Re: How does the NXT monetary system work?
« Reply #3 on: April 01, 2014, 09:28:03 pm »

So you are not satoshi?

What do u mean?
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IveBeenBit

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Re: How does the NXT monetary system work?
« Reply #4 on: April 01, 2014, 09:34:12 pm »

What is the point of this? Why have a "sub currency" backed by Nxt on the Nxt blockchain, when you can just use Nxt insted?

IOW, why would I make Pyramidcoins, each backed by 5 NXT when I can just spend the 5 NXT directly?
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verymuchso

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Re: How does the NXT monetary system work?
« Reply #5 on: April 01, 2014, 09:34:58 pm »

1. How can NXT users create their own currency?
By issuing a single transaction that says "At height X lock all nxts spent for creation of currency Y and issue Z coins".

So basically all NXTs in some account?

2. How does the locking work?
All "burned" NXTs r locked until newly created coins not destroyed. If u destroy 7% of the supply then u get 7% of the locked NXT to ur account.

How will the destroying work? Another transaction that says destroy N amount of subcurrency-coins?

4. Will this be integrated with the Asset Exchange (will there be a forex to trade between the different currencies)?
All transaction types that use NXT can be used with such "subcurrencies", but transaction fee will paid in NXT anyway.

So you basically have to change all transactions in the code and lot more. That's a lot of work, do you dare to predict when this will be done?
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verymuchso

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Re: How does the NXT monetary system work?
« Reply #6 on: April 01, 2014, 09:36:11 pm »

5. Who will make this? Are you building this Come-from-Beyond?
Me. I'll wait when Jean-Luc adds "satoshi" and then continue.

What do U mean?
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forkedchain

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Re: How does the NXT monetary system work?
« Reply #7 on: April 01, 2014, 09:38:39 pm »

What is the point of this? Why have a "sub currency" backed by Nxt on the Nxt blockchain, when you can just use Nxt insted?

IOW, why would I make Pyramidcoins, each backed by 5 NXT when I can just spend the 5 NXT directly?

its a method to create a 'coin' not using AM or parallel chain method by use of AE.  but instead of creating lots of QTY of an AE, these particular ones are 'backed' by NXT
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IveBeenBit

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Re: How does the NXT monetary system work?
« Reply #8 on: April 01, 2014, 09:46:15 pm »

What is the point of this? Why have a "sub currency" backed by Nxt on the Nxt blockchain, when you can just use Nxt insted?

IOW, why would I make Pyramidcoins, each backed by 5 NXT when I can just spend the 5 NXT directly?

its a method to create a 'coin' not using AM or parallel chain method by use of AE.  but instead of creating lots of QTY of an AE, these particular ones are 'backed' by NXT

My question would be what utility would these "backed by Nxt" coins have that a NXTcoin doesn't have in the first place? Why add the complication? Where is there a demand for this?
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Come-from-Beyond

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Re: How does the NXT monetary system work?
« Reply #9 on: April 01, 2014, 09:58:16 pm »

What is the point of this? Why have a "sub currency" backed by Nxt on the Nxt blockchain, when you can just use Nxt insted?

IOW, why would I make Pyramidcoins, each backed by 5 NXT when I can just spend the 5 NXT directly?

To keep Nxt users more decentralized IMO.
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Come-from-Beyond

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Re: How does the NXT monetary system work?
« Reply #10 on: April 01, 2014, 10:02:02 pm »

So basically all NXTs in some account?

Not account, in void.


How will the destroying work? Another transaction that says destroy N amount of subcurrency-coins?

Yes.


So you basically have to change all transactions in the code and lot more. That's a lot of work, do you dare to predict when this will be done?

U don't need to change the transactions. A special type of transaction will be added. It will create an "envelope" that will contain another transaction(s), the envelope will change used currency from NXT to something else. For the core it will look like this: it sees the envelope, changes pointer to currency and then processes the transaction from the envelope.
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Come-from-Beyond

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Re: How does the NXT monetary system work?
« Reply #11 on: April 01, 2014, 10:03:58 pm »

What do U mean?

Jean-Luc is working on adding "satoshis" (10^-8 NXT units). After he does it I'll be able to continue working on MS.
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voldemort628

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Re: How does the NXT monetary system work?
« Reply #12 on: April 01, 2014, 10:08:28 pm »

Imho, at some point in time in the future,one can create his own blockchain secured by NXT main chain and his own currency backed by NXT. Used to be the case that only certain authorities can do this. Now anyone can!

Isnt it cool guys??
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verymuchso

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Re: How does the NXT monetary system work?
« Reply #13 on: April 03, 2014, 08:38:30 am »

What do U mean?
Jean-Luc is working on adding "satoshis" (10^-8 NXT units). After he does it I'll be able to continue working on MS.

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Daedelus

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Re: How does the NXT monetary system work?
« Reply #14 on: April 07, 2014, 12:58:49 pm »

Added to the Nxt Glossary, part of the Nxt Wiki

Fact check please  ;D ;D ;D


****

MS
See Monetary System.


Monetary System
Monetary System will allow you to create currencies backed by NXT. New coins are created by "locking" NXTs. This could be thought as similar to “burning” Nxt but this is inaccurate as the process can be reversed. If you destroy 7% of the supply the created coins then you get 7% of the locked NXTs back. You are unable to lock more NXTs into the coin once it is created so the supply can’t be inflated. Transaction fees for coins created in the Monetary System can only be paid in NXT. To join the discussion, see the Nxtforum.org dedicated subforum at https://nxtforum.org/monetary-system/.

****


Bookmark the Nxt Glossary for future reference here >>>> http://wiki.nxtcrypto.org/wiki/Glossary
55 entries and counting  :D




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ChuckOne

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Re: How does the NXT monetary system work?
« Reply #15 on: April 12, 2014, 09:13:29 am »

What is the point of this? Why have a "sub currency" backed by Nxt on the Nxt blockchain, when you can just use Nxt insted?

IOW, why would I make Pyramidcoins, each backed by 5 NXT when I can just spend the 5 NXT directly?

To keep Nxt users more decentralized IMO.

Technically it is just coloring and de-coloring coins.

For users, it is like having the gold standard. The only difference is: Nxt gold can be transferred with ease in contrast to real gold.

There might be no real advantage to create such a currency. However, once somebody created such a currency and even more somebodies used it, destroying it would only favor those not destroying because the value of this coin with respect to the goods you can buy with it will increase. There is no incentive to destroy coins (except if you are in utter need of NXTs).

So, why would anybody create such a currency in the first place?
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ChuckOne

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Re: How does the NXT monetary system work?
« Reply #16 on: April 12, 2014, 09:25:10 am »

4. Will this be integrated with the Asset Exchange (will there be a forex to trade between the different currencies)?
All transaction types that use NXT can be used with such "subcurrencies", but transaction fee will paid in NXT anyway.

Maybe you could answer verymuchso's question more directly. Will subcurrencies be tradable (like assets) on the Asset Exchange?

I understand one can buy/sell assets on the Asset Exchange with every subcurrency. However, can one also trade one subcurrency for another subcurrency directly? << (That is the forex part of verymuchso's question.)
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Come-from-Beyond

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Re: How does the NXT monetary system work?
« Reply #17 on: April 12, 2014, 10:27:02 am »

Maybe you could answer verymuchso's question more directly. Will subcurrencies be tradable (like assets) on the Asset Exchange?

I understand one can buy/sell assets on the Asset Exchange with every subcurrency. However, can one also trade one subcurrency for another subcurrency directly? << (That is the forex part of verymuchso's question.)

Cross-trading is not planned. Feel free to add this feature.
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jl777

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Re: How does the NXT monetary system work?
« Reply #18 on: April 12, 2014, 11:08:39 am »

Maybe you could answer verymuchso's question more directly. Will subcurrencies be tradable (like assets) on the Asset Exchange?

I understand one can buy/sell assets on the Asset Exchange with every subcurrency. However, can one also trade one subcurrency for another subcurrency directly? << (That is the forex part of verymuchso's question.)

Cross-trading is not planned. Feel free to add this feature.
I will be supporting trading anything against anything, plus even some things that dont even fall into that category

James
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bitcoinpaul

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Re: How does the NXT monetary system work?
« Reply #19 on: April 12, 2014, 12:35:04 pm »

Nothing against anything? I like it!
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