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MrV777

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Re: NxT Market Report
« Reply #40 on: May 15, 2014, 02:14:21 pm »

Thanks lightspeed!!
It does look like they are trying to prevent it from going below 0.75 again, there's a wall at BTER:

0.00007500 462962.779NXT 34.72221BTC

It will be interesting to see if the conference starting today will influence the price much with possible newcomers.
Thank you again!
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rlh

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Re: NxT Market Report
« Reply #41 on: May 15, 2014, 07:23:22 pm »

I have discovered an anomaly
I am hoping some valuation experts can solve this.

With NXT AE it is possible, actually almost certain, that the total value of all the assets will be worth well in excess of a billion NXT

This is in spite of each asset being fairly valued. I know this means that nobody can purchase all the NXT assets, ever, so it is kind of immunity against financial attack on NXT assets, but does anybody else find this a little confusing?

How can NXT have NXT assets such that the sum of the NXT assets values are well in excess of a billion NXT. Wouldnt this cause a dramatic shortage of NXT. Currently we are well below this mark, but I predict in a few months we will cross that threshold. And there is nothing that stops more and more assets from being issued. The total asset values could well exceed 100 billion NXT down the road.

I predict at that point, the scarcity of NXT (assuming 1% of assets per day trade) will lead to a critical shortage of NXT. The "problem" is that the spike in NXT price will attract more asset issuers making the problem worse. It feedsback on itself...

James

What you have seen isn't anything that I've considered well before the AE was released.  Since NXT has a fixed amount (well, slowly decreasing considering lost accounts and that Nxt sent to the genesis block are essentially destroyed) then Nxt is essentially deflationary.

This means that Assets based on service organizations (i.e. representing corporatized behavior) or physical assets (i.e. gold or silver) can increase in utility value, but with time will potentially decrease in Nxt value.

Consider this as an example of what I'm talking about.  Company Txn is a private company that sells physical goods and they make a ton of money (in the billions of dollars.)  After discovery crypto-currency and Nxt, they decide to "go public" on the NXT AE, as well as start selling good for Nxt.

Since this company is a multi-billion dollar company, people want to get into Nxt because this increases the value of Nxt.  The value of one Nxt immediately jumps from $.031 to $1.00!  This is more than a 30x increase in worth!

So, what happens to the remaining assets and their value?  Smaller assets will diminish in value because they aren't, all of a sudden, worth 30x their original valuation from a day earlier, just because a new company with deep pockets decided to support Nxt.

Nxt may be worth a lot more, but companies that use the AE will not gain in value simply because this is their currency of choice.

For this very reason, in today's market, I'm very selective of which assets that I invest in and I will most likely only invest in the short term (in a more traditional sense.)  Why?  Because I think the value of Nxt will increase with time.  I don't think a 30x increase will happen over night, but within a year I could certainly see that occurring.

What assets will need will be a stable "value" of Nxt.  This isn't necessarily a comparison against other cryptos but against fiat or against commodities with very-low rates of fluctuation in value.

FYI, this isn't a post of negativity but it is "food for thought".  Don't be so anxious to buy into some hot AE asset.  If you have a long-term, positive view of Nxt and the asset, your asset may have a minor loss in value if the value of Nxt out-paces the asset you've invested in.
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MrV777

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Re: NxT Market Report
« Reply #42 on: May 15, 2014, 07:34:01 pm »

rlh, this also crossed my mind when the AE opened and made it complicated for me to decide what to invest in and for how much.  I believe the 1000 NXT I invested in a company may only be worth ~$30 now, but I can see it easily being worth $300 before we know it
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Cassius

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Re: NxT Market Report
« Reply #43 on: May 15, 2014, 07:44:18 pm »

I've thought a little about this, too. I don't think it's going to be a problem.
The total value of companies listed on the stock market is immense - surely much larger than the monetary base. What I assume will happen with NXT is that the value of NXT will rise as the value of the companies on the AE rises. Since they should be spending the money they receive from investors, hopefully the whole NXT economy will grow as the money goes round. This is why I think NXT will grow faster than other cryptos: the digital economy is built into its DNA rather than tacked on afterwards.
Still, I do wonder about deflation if money is tied up in companies, and where that could end up.
I guess that's one of the things that's so interesting about the whole experiment!
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DoM P

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Re: NxT Market Report
« Reply #44 on: May 16, 2014, 10:10:04 am »

Here is the updated ratios chart :



We see Darkcoin rising fast, and Nxt catching up with Doge
Soon, we'll secure the fifth place before going after Peercoin.
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farl4bit

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Re: NxT Market Report
« Reply #45 on: May 16, 2014, 10:27:12 am »

So, what happens to the remaining assets and their value?  Smaller assets will diminish in value because they aren't, all of a sudden, worth 30x their original valuation from a day earlier, just because a new company with deep pockets decided to support Nxt.

Nxt may be worth a lot more, but companies that use the AE will not gain in value simply because this is their currency of choice.
Thank you for your vision. I understand your way of thinking and you could be right.

I want to point out that the other 'normal' company's on the AE maybe loss value in NXT (because of the big enterprise joining AE), but because NXT is much more worth, in the end it has the same value in fiat/BTC.
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Cassius

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Re: NxT Market Report
« Reply #46 on: May 16, 2014, 10:47:32 am »

So, what happens to the remaining assets and their value?  Smaller assets will diminish in value because they aren't, all of a sudden, worth 30x their original valuation from a day earlier, just because a new company with deep pockets decided to support Nxt.

Nxt may be worth a lot more, but companies that use the AE will not gain in value simply because this is their currency of choice.
Thank you for your vision. I understand your way of thinking and you could be right.

I want to point out that the other 'normal' company's on the AE maybe loss value in NXT (because of the big enterprise joining AE), but because NXT is much more worth, in the end it has the same value in fiat/BTC.

This is true. One interesting qualification is what happens during the process of an IPO? What if a company is trying to raise 1 million NXT (0.1% of the total money supply) and it takes them a month - during which time the price of NXT may appreciate significantly?
One thing is that the money they raise is tied up until they have it all and can start using it. This alone may place a deflationary pressure on the NXT economy.
The other is that the amount of money they raise might increase by the time it all comes in. Thus it may make more sense to raise money as fiat-equivalent, at least to begin with, and issue shares proportional to its value at the time of purchase.
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mikesbmw

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Re: NxT Market Report
« Reply #47 on: May 16, 2014, 11:04:36 am »

It's a weird situation anyway. Think of this:

1 BTC = $500, 1NXT = 0,1 BTC, Company X (worth) = 100 NXT

What happens when 1 BTC = $1000? NXT won't half in value to 1 NXT = 0,05 BTC, that just doesn't happen. Look through the history of the past few months, it simply doesn't, which is weird in itself. Okay, so the Company now is worth DOUBLE the amount in fiat, just by being valued in NXT...

Doesn't seem right heh?

Basic economic principles don't seem to apply (yet) to crypto-economies. They have a dynamic of their own.

In the real world when an exchange rate changes, the currency that looses value gains financial interest and grows, the one that gains value shrinks. This is why countries try to keep their exchange rates low, so their economy doesn't lose the advantage of being cheap.

Could be that I'm missing something(s) though, please correct me when I'm wrong.  ;)
« Last Edit: May 16, 2014, 11:08:24 am by mikesbmw »
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jl777

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Re: NxT Market Report
« Reply #48 on: May 16, 2014, 11:40:11 am »

It's a weird situation anyway. Think of this:

1 BTC = $500, 1NXT = 0,1 BTC, Company X (worth) = 100 NXT

What happens when 1 BTC = $1000? NXT won't half in value to 1 NXT = 0,05 BTC, that just doesn't happen. Look through the history of the past few months, it simply doesn't, which is weird in itself. Okay, so the Company now is worth DOUBLE the amount in fiat, just by being valued in NXT...

Doesn't seem right heh?

Basic economic principles don't seem to apply (yet) to crypto-economies. They have a dynamic of their own.

In the real world when an exchange rate changes, the currency that looses value gains financial interest and grows, the one that gains value shrinks. This is why countries try to keep their exchange rates low, so their economy doesn't lose the advantage of being cheap.

Could be that I'm missing something(s) though, please correct me when I'm wrong.  ;)
It is the island effect
There is very little trade (relatively speaking) between fiat and NXT
when two economies dont have a path that connects them, price changes in one has little effect on the other

Also the whole artificial managing of fiat currencies to be able to export goods to other countries doesnt seem to apply. Its not like we want to export NXT created farm products into BTC land.

A purely NXT based company will necessarily bounce around in value as BTC and BTC/fiat changes, but maybe its the other way around? Maybe its the fiat that is bouncing and NXT is staying the same?

James
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frohlocke

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Re: NxT Market Report
« Reply #49 on: May 16, 2014, 11:50:24 am »



In the real world when an exchange rate changes, the currency that looses value gains financial interest and grows, the one that gains value shrinks. This is why countries try to keep their exchange rates low, so their economy doesn't lose the advantage of being cheap.

Could be that I'm missing something(s) though, please correct me when I'm wrong.  ;)


I think FOREX are very complex. Basically and understanable is that the exchange rate is somehow limited by arbitrage of goods.
E.G. if the price difference between two goods differs more than the transaction costs, people could import/export it and sell/buy in the cheeper/more expensive country.

A fast idea:
So if these assets are listed also in BTC and a price difference will occur. Arbitrage could be made.
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Tosch110

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Re: NxT Market Report
« Reply #50 on: May 16, 2014, 11:53:02 am »

Maybe its the fiat that is bouncing and NXT is staying the same?

Thats what I always thought. The bitcoin price is the most stable currency existing. All the other fiat currencies are just pretty unbalanced

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Re: NxT Market Report
« Reply #51 on: May 16, 2014, 11:57:25 am »

It's a weird situation anyway. Think of this:

1 BTC = $500, 1NXT = 0,1 BTC, Company X (worth) = 100 NXT

What happens when 1 BTC = $1000? NXT won't half in value to 1 NXT = 0,05 BTC, that just doesn't happen. Look through the history of the past few months, it simply doesn't, which is weird in itself. Okay, so the Company now is worth DOUBLE the amount in fiat, just by being valued in NXT...

Doesn't seem right heh?

Basic economic principles don't seem to apply (yet) to crypto-economies. They have a dynamic of their own.

In the real world when an exchange rate changes, the currency that looses value gains financial interest and grows, the one that gains value shrinks. This is why countries try to keep their exchange rates low, so their economy doesn't lose the advantage of being cheap.

Could be that I'm missing something(s) though, please correct me when I'm wrong.  ;)

I humbly think you're indeed missing a point.

A company has an intrinsic value, mostly independent from the currency in which it is described. If company A is valued 1 million Nxt today, it would also be worth about $30000.
But what happens if the value of Nxt is multiplied by 10 ? Well, the company won't be worth $300000. Because a company is valued based on its assets and potential. Those could be sold, and if we want to know the value of A, me must not concentrate on how many Nxt it was created with, but what its assets are worth today and how much income it can generate. This value can then be estimated in Nxt, BTC, dollars, or whatever else.

This "problem" has nothing to do with crypto currencies, but with currencies in general. It all works out through market rules as long as no one decides of fixed exchange rates between two currencies or of a fixed price for those assets.
It's what happened to Argentina a couple of months ago with the peso crashing.

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mikesbmw

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Re: NxT Market Report
« Reply #52 on: May 16, 2014, 12:08:56 pm »

It is the island effect
There is very little trade (relatively speaking) between fiat and NXT
when two economies dont have a path that connects them, price changes in one has little effect on the other

You would assume that people pay more attention at he value (in fiat) of one crypto currency to the other, because everyone (well almost everyone) wants to gain money in fiat.

I just had an argument with a friend and my conclusion was that crypto currencies are no currency, but shares.

If a company gains value (through whatever means), the demand for their shares increases (same as NXT/Bitcoin etc.).
When a currency gains value, people buy less of them and the economy shrinks.

Quote
Also the whole artificial managing of fiat currencies to be able to export goods to other countries doesnt seem to apply. Its not like we want to export NXT created farm products into BTC land.

We export services and technology.

Quote
A purely NXT based company will necessarily bounce around in value as BTC and BTC/fiat changes, but maybe its the other way around? Maybe its the fiat that is bouncing and NXT is staying the same?

It's not the other way around  ;)
Perhaps that time will come, but that's still far far away ((c) Lord Farquaad)  :D
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mikesbmw

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Re: NxT Market Report
« Reply #53 on: May 16, 2014, 12:19:07 pm »

I humbly think you're indeed missing a point.

A company has an intrinsic value, mostly independent from the currency in which it is described. If company A is valued 1 million Nxt today, it would also be worth about $30000.
But what happens if the value of Nxt is multiplied by 10 ? Well, the company won't be worth $300000. Because a company is valued based on its assets and potential. Those could be sold, and if we want to know the value of A, me must not concentrate on how many Nxt it was created with, but what its assets are worth today and how much income it can generate. This value can then be estimated in Nxt, BTC, dollars, or whatever else.

This "problem" has nothing to do with crypto currencies, but with currencies in general. It all works out through market rules as long as no one decides of fixed exchange rates between two currencies or of a fixed price for those assets.
It's what happened to Argentina a couple of months ago with the peso crashing.
Yes, please, proof me wrong. I like to learn.
Especially in crypto currencies a lot of the economic rules I was taught in school don't seem to apply...

I still don't agree that the normal market rules apply though. I need some more convincing (please!)  ;)
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Re: NxT Market Report
« Reply #54 on: May 16, 2014, 12:35:15 pm »

I humbly think you're indeed missing a point.

A company has an intrinsic value, mostly independent from the currency in which it is described. If company A is valued 1 million Nxt today, it would also be worth about $30000.
But what happens if the value of Nxt is multiplied by 10 ? Well, the company won't be worth $300000. Because a company is valued based on its assets and potential. Those could be sold, and if we want to know the value of A, me must not concentrate on how many Nxt it was created with, but what its assets are worth today and how much income it can generate. This value can then be estimated in Nxt, BTC, dollars, or whatever else.

This "problem" has nothing to do with crypto currencies, but with currencies in general. It all works out through market rules as long as no one decides of fixed exchange rates between two currencies or of a fixed price for those assets.
It's what happened to Argentina a couple of months ago with the peso crashing.
Yes, please, proof me wrong. I like to learn.
Especially in crypto currencies a lot of the economic rules I was taught in school don't seem to apply...

I still don't agree that the normal market rules apply though. I need some more convincing (please!)  ;)

I would start with a general rule : Nowhere, ever, the basic rules of the economy were proved wrong, no even in USSR, where the black market was taking care of that.
Why am I saying this ? Well, because it helps finding reasoning errors. If things don't add up, then we're missing something.

So, if you want me to tell you why a specific market rule seems not to work though it does work, please tell me which one, in which case, and I'll try my best.


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mikesbmw

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Re: NxT Market Report
« Reply #55 on: May 16, 2014, 01:18:48 pm »

I humbly think you're indeed missing a point.

A company has an intrinsic value, mostly independent from the currency in which it is described. If company A is valued 1 million Nxt today, it would also be worth about $30000.
But what happens if the value of Nxt is multiplied by 10 ? Well, the company won't be worth $300000. Because a company is valued based on its assets and potential. Those could be sold, and if we want to know the value of A, me must not concentrate on how many Nxt it was created with, but what its assets are worth today and how much income it can generate. This value can then be estimated in Nxt, BTC, dollars, or whatever else.

This "problem" has nothing to do with crypto currencies, but with currencies in general. It all works out through market rules as long as no one decides of fixed exchange rates between two currencies or of a fixed price for those assets.
It's what happened to Argentina a couple of months ago with the peso crashing.
Yes, please, proof me wrong. I like to learn.
Especially in crypto currencies a lot of the economic rules I was taught in school don't seem to apply...

I still don't agree that the normal market rules apply though. I need some more convincing (please!)  ;)

I would start with a general rule : Nowhere, ever, the basic rules of the economy were proved wrong, no even in USSR, where the black market was taking care of that.
Why am I saying this ? Well, because it helps finding reasoning errors. If things don't add up, then we're missing something.

So, if you want me to tell you why a specific market rule seems not to work though it does work, please tell me which one, in which case, and I'll try my best.
I'm starting to see where my reasoning is wrong from your example.
But still:

What happens when someone bought a share on the AE for 10nxt. That would equal $0.35 now.
NXT rises tenfold. That person sells the share. Do you think he would ask 1nxt for it? My guess is: no way.
That would mean that the market cap of that company would increase solely through the rising of the currency it is expressed in  ???

To me that seems ridiculous, because I value the things I buy in the currency that is of most use to me (euro or dollar).

Perhaps I need a good night's sleep  :-\
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Tosch110

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Re: NxT Market Report
« Reply #56 on: May 16, 2014, 01:41:14 pm »


What happens when someone bought a share on the AE for 10nxt. That would equal $0.35 now.
NXT rises tenfold. That person sells the share. Do you think he would ask 1nxt for it? My guess is: no way.
That would mean that the market cap of that company would increase solely through the rising of the currency it is expressed in  ???

that would be as I see it aswell.

If you want to get money out of NXT and think it will rise in price, you should not use the Asset Exchange to convert them into Assets.
Otherwise if you think those Assets could be worth more than the actual price, then you should buy them.

If nxt raises in value, the asset should logically be worth less nxt. Else the price would be a simple blowup, or not?

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Re: NxT Market Report
« Reply #57 on: May 16, 2014, 01:49:10 pm »

I'm starting to see where my reasoning is wrong from your example.
But still:

What happens when someone bought a share on the AE for 10nxt. That would equal $0.35 now.
NXT rises tenfold. That person sells the share. Do you think he would ask 1nxt for it? My guess is: no way.

This is where you're wrong, imo. If I spend 50 Nxt today for an apple, and Nxt is multiplied by 100 overnight, I won't be able to sell my apple 50 Nxt tomorrow.
It's the value of Nxt which increased, because it offers more services to its users. But the apple's value hasn't changed one bit, it won't feed any more that the day before.

Let me take another example : Anon's silver. Let's suppose I buy 1 token of Anon's silver asset. That's the equivalent of 1 troy ounce of .999 silver.
At today's price, it's almost $20. Let's round it to 600 Nxt.
And let's wait one full year. Nxt will be worth $10 (yeah, right... ;)). If then I try to sell my 1 token for 600 Nxt, nobody will buy it. People would rather cash out their 600 Nxt, obtain $6000, then buy 300 troy ounces of silver at market price (provided the troy ounce of silver is still at about $20)
And what if, in the meantime, the dollar crashes because the Fed goes on with its stupid politics ? Let's imagine its price on the market is halved. Today, you can get $1 with 0.73€. But then, it would be worth only 0.36€.
In this case, you can bet that, speculation apart, the value in dollars of a troy ounce would have doubled (=$40) but would still be worth 14.6€, all other things being equal.
So... How much is a troy ounce of silver worth ?
Now, I would say 600 Nxt, $20, or 14.6€, whichever.
And in one year from now, if the dollar crashes as described and the value of Nxt increases to $10, I would say a troy ounce would cost 4 Nxt, $40, or 14.6€.

Quote
That would mean that the market cap of that company would increase solely through the rising of the currency it is expressed in  ???
Clearly not. As I said, the market cap of a company is linked to its intrinsic value, not the one of the currency with which it is described.

Quote
To me that seems ridiculous, because I value the things I buy in the currency that is of most use to me (euro or dollar).
Not exactly. You value things in the currency you trust most, therefore use most.
If the dollar starts crashing, you'll stop thinking in dollars because it would stop being a reference.

Quote
Perhaps I need a good night's sleep  :-\
Never hurts :D


What happens when someone bought a share on the AE for 10nxt. That would equal $0.35 now.
NXT rises tenfold. That person sells the share. Do you think he would ask 1nxt for it? My guess is: no way.
That would mean that the market cap of that company would increase solely through the rising of the currency it is expressed in  ???

that would be as I see it aswell.

If you want to get money out of NXT and think it will rise in price, you should not use the Asset Exchange to convert them into Assets.
Otherwise if you think those Assets could be worth more than the actual price, then you should buy them.

If nxt raises in value, the asset should logically be worth less nxt. Else the price would be a simple blowup, or not?

Nope. When you buy an asset with Nxt, Nxt is only a temporary value carrier. Once the exchange is made, you own an asset, not Nxt. To take the same example again, my 1 token of silver, once bought with 600 Nxt, can be sold $20. It's not exchangeable in Nxt only, that would be a very good way to kill the AE right from the start.
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Cassius

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Re: NxT Market Report
« Reply #58 on: May 16, 2014, 01:56:37 pm »

Interesting... and a complicating factor is that different companies will hold different amounts of NXT in reserve at different times, thereby impacting their fiat-exchange value. Some will choose to hedge by converting a proportion to fiat, some will not.
It strikes me that in the interests of transparency, it would be good practice for companies to state what currencies they are holding their reserves in.
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Re: NxT Market Report
« Reply #59 on: May 16, 2014, 02:00:13 pm »

Interesting... and a complicating factor is that different companies will hold different amounts of NXT in reserve at different times, thereby impacting their fiat-exchange value. Some will choose to hedge by converting a proportion to fiat, some will not.
It strikes me that in the interests of transparency, it would be good practice for companies to state what currencies they are holding their reserves in.
That is already what they're supposed to do. The Enron scandal is all about hiding this kind of stuff.
To be properly valued, a company must state what it owns, including currencies.
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