Quote from: Hyena on January 16, 2015, 07:50:18 PM

Quote from: toast on January 16, 2015, 07:43:30 PM

Quote from: Hyena on January 16, 2015, 07:31:57 PM

Quote from: toast on January 16, 2015, 07:23:54 PM

Quote from: Hyena on January 16, 2015, 07:22:03 PM

This is exaggerated FUD that contains misinformation. Why on earth would the reserves to guarantee 1 USD peg to be held in bitcoin? That's just stupid. These reserves are mainly in USD and only a small amount is available in BTC.

Jordan specifically said their *goal* is 0% reserves, which means they are really backing it with NSR's ability to inflate to buy back NBT

The main trading pair is NBT/USD. They hold USD to maintain the peg. Bitcoin can go to zero, it doesn't change the amount of dollars available for maintaining the peg of 1 NBT per 1 USD.

Right now they do, but again Jordan said their plan is to have NO reserves at all.

Quote

There are some reserves right now. My point is that because reserves equate to counterparty risk and are not necessarily useful in backing NuBits, we are aiming for 0% reserves, not 100%.

So the only mechanism there to support nubit price if it starts falling is to NBT to NSR burn (equivalent to inflating NSR to buy back NBT), which is in the process of being implemented.

I think you misunderstood what Jordan might have meant by having no reserves. It means that the "reserves" are actually in use by the custodians to maintain the peg. There are no reserves just sitting somewhere in a vault waiting for a bad day. The latter would be just stupid. Instead, this money is constantly being used to maintain the buy side walls. I think you should clarify for yourself what exactly is meant by reserves. If you find that out, enlighten me too, please.

This is further proof that the collateral backing nubits has been sitting as bitcoin, and has thus been severely hit by the 33% fall where thousands of bitcoin was dumped on the "trusted" custodians.

NuBits = Fractional reserve