JL777's Post on NXT Forum Ignites NXT 2.0 Debate
It has been a while but I have continued to support NXT within SuperNET (MGW, mynxt.info, instantdex), I just dont have the energy to be attacked when I try to help.
I warned that breaking Backward Compatibility is a bad idea, specifically that I literally didnt have any more time in the day to redo my software due to API changes. Then the data became prunable and permanent data 10x more expensive. A hardcap of 160 bytes was justified to keep the size of the blockchain low. OK, fine. I have no influence and it was made clear I wasnt welcome here, so I just did what had to be done to keep the SuperNET services working.
However I stated that as long as NXT didnt break the way assets work that there was no reason to change from the NXT as the financial platform.
fNXT model breaks the way assets work. I am not talking about any onetime distribution issue, that is not the problem. The asset selloff for the expected NXT pump, that also is not an issue.
The primary issue is that assets will be using NXT as the reference currency. A NXT that is a childchain subordinated to fNXT, the preferred stock that has all the power. If a stock does a 2:1 split, the price is automatically adjusted so everyone ends up with the same value. In the upcoming fNXT:NXT split, there is no such mechanism, all asset will immediately lose half their value, but will the hardfork double all AE bids/asks, I doubt it. So will the market readjust the prices back to where it was? In a perfectly efficient market, yes, but we have the cost of tx to cancel and submit a new quote and the extra effort it would take. But the biggest issue is that there simply isnt enough liquidity. I am not talking about asset liquidity, I am talking about NXT liquidity. There just is not enough NXT to allow a doubling of the prices. Primarily because there isnt an extra billion NXT, it is an extra billion fNXT. So irrespective of an asset's quality there will be a massive liquidity squeeze. This magnitude of a liquidity crisis is seldom seen in the real world, maybe the gold shortage caused depressions in the 1800's. The reality is that to make the fNXT plan neutral from the immediate 50% haircut, all AE prices need to be doubled. And to do that would require doubling the NXT supply and issuing another billion NXT. But still that doesnt balance out the loss of future growth due to fNXT present and future value, so the extra billion NXT is just the start. Of course, it probably wont work to just double the supple, though I heard ripple did it and it worked out fine.
But supposedly NXT will gain value from 2.0, but how? NXT isnt the main chain anymore. NXT doesnt benefit directly from childchains and might even be hurt by them, or simply priced out of existence. NXT doesnt have the forging power any more, so it basically becomes like an asset or MS coin is now. Nothing wrong with that, but this does nothing to strenghten NXT and that is what the assets were issued on. NXT and its future. That future is now inside fNXT.
JL777's writes...
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