CORE MAGAZINE March 2016 | Page 11

3) fNXT revenue: The anticipation childchains that will suit the needs of real life businesses is an exciting prospect. Every childchain will need to do it's own PoS using it's own tokens. The asset issuer of the child chain in return will need to pay fNXT holders to use the NXT blockchain. This will lead to speculation on fNXT as a potential investment. As childchains are created, the greater the revenue for fNXT holders.

4) It's Time to Think Outside the Box: Ethereum has revolutionized the way we should think about cryptocurrencies. Although we as lovers of NXT are critical of the "real" progress being made by Ethereum, the marketing and approach is unique which is the probably the reasoning behind it's initial success. NXT provides a unique approach for the future; one that is business ready.

The Bad Points

1) Liquidation of Assets: As the distribution of fNXT is only dependent of NXT holdings, current asset holders fear that there will be a mass exodus of dumping assets in order to maximise fNXT holdings. The distribution is not planned for another year so there is time for asset holders to slowly readjust their positions. With the asset markets having little liquidity, we may see promising assets, even backed assets, to be reduced to pennies.

2) NXT Value: At the distribution of fNXT, the rate is 1 fNXT for every 1 NXT in possession. If you put the two blockchains together, this doubles the supply by 2. 1+1=2. It is clear that fNXT's value will be from it's speculation of possible future revenue, but where does that leave NXT? Remember, every childchain has the ability to use all NXT features. NXT now has no exclusive features.

3) Security Risk: In order for the NXT Blockchain to remain secure it must have forgers. At the NXT 2.0 fork, forging will be exclusively done by fNXT. The price of fNXT is debatable. Initially it is not valuable as there are only a very limited amount of assets and businesses on the blockchain. In order for fNXT to be a good investment there must be adoption and there is no time limit on when that will happen. A drop in the price of fNXT may see the whole NXT blockchain vulnerable to a potential security risk. fNXT only being backed by speculation is very dangerous and a snowball effect is realistic if investor expectations are not met.

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