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NXTBank Credit Rating System
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Latest Stable Nxt Client: Nxt 1.12.2

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Author Topic: NXTBank Credit Rating System  (Read 5889 times)

nxtgt

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Re: NXTBank Credit Rating System
« Reply #20 on: June 13, 2014, 02:15:19 pm »

yes, this sort of 'stickyness' does contribute to NXT value and yes... price.

-bm

That whitepaper was interesting but it seems like we're getting ahead of ourselves with issuing bonds as mechanism for deposits and withdrawals. Bonds are rather complex instruments and the market would just be a mess if all people are trying to do is deposit and withdraw their money, or borrow. I'll save you the lengthy technical explanation but pricing bonds involves a lot of financial mumbo jumbo that isn't as forthcoming as understanding a fixed interest rate. Changes in interest rates impact bond value, as well as term to maturity, timing of interest payments, duration, convexity, etc. We'd have a scenario where people are trying to redeem bonds and not getting all the money they deposited and not understanding why.
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bluemeanie1

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Re: NXTBank Credit Rating System
« Reply #21 on: June 13, 2014, 04:26:22 pm »

yes, this sort of 'stickyness' does contribute to NXT value and yes... price.

-bm

That whitepaper was interesting but it seems like we're getting ahead of ourselves with issuing bonds as mechanism for deposits and withdrawals. Bonds are rather complex instruments and the market would just be a mess if all people are trying to do is deposit and withdraw their money, or borrow. I'll save you the lengthy technical explanation but pricing bonds involves a lot of financial mumbo jumbo that isn't as forthcoming as understanding a fixed interest rate. Changes in interest rates impact bond value, as well as term to maturity, timing of interest payments, duration, convexity, etc. We'd have a scenario where people are trying to redeem bonds and not getting all the money they deposited and not understanding why.

my thought is that all these underlying functions can be shielded from the end user.  I certainly dont imagine the average user issuing or marketing bonds.

-bm
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nxtgt

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Re: NXTBank Credit Rating System
« Reply #22 on: June 17, 2014, 06:28:24 pm »

Does it make sense to start with localized reputation management using the network/trust line model rather than global ratings? For example, a mechanism could be developed such that if A "trusts" B, trust information contained within A's network would flow to B. Then level of trust can range from strong to weak based on history of on-blockchain transactions or hypothetically, completion of "smart" contracts between A and B?
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