Frequent Questions

General
Do I need to know all the information below to use NuBits?
What advantages do NuBits have over other payment methods and digital currencies?
Where can NuBits be purchased?
How secure are NuBits?
Are NuBits pre-mined?
Does NuBits help Peercoin?
Could NuBits become worth nothing?
There are other digital currencies that are claiming to be worth $1.00 US. Which is the best?
How popular are NuBits?
How is the price of NuBits determined on Coinmarketcap.com?

Technical
How are NuBits created?
How do NuBits maintain their $1.00 US value?
What happens if demand suddenly increases or decreases?
How is interest paid out to parked NuBits?
Are NuBits an “IOU” system?
Can the supply of NuBits be reduced?

NuShares
How do NuShareholders determine who receives NuBits?
Why is there a 10,000 NuShare minimum to vote on the network?
Is it better to split up my NuShares among multiple addresses, or hold all my NuShares in one address?
Why are NuShare dividends paid in Peercoin?
When will my NuShares begin minting?
Is it possible to mint NuShares while keeping them in a cold wallet (offline)?

NuDroid Mobile Wallet
What do I need to do to start using NuDroid?
What Android version do I need to run NuDroid?
Can I receive Bitcoins in my wallet?
Can I scan Bitcoin, Peercoin or other altcoin QR codes?
Can I store a Bitcoin, Peercoin or Dogecoin address in my address book?
How do I know the wallet is synchronised?
What is a trusted peer?
I don’t have any peers. What should I do?
Can I export my transactions?
Why does NuDroid sometimes identify an address as a different coin?

Marketing & Legal
Are NuBits and NuShares legal?
Can I use the Nu logos for a product I’m making?

I don’t see my question listed here.

General

Do I need to know all the information below to use NuBits?

No, absolutely not. The following information is intended as a source of information for people who really, really like understanding cryptocurrency design. For everyone what’s most important is the simple knowledge that one NuBit equals $1.00 USD & the NuBit is protected by a decentralised network democratially controlled via NuShares NSR Shareholders. There’s no single point of failure!

What advantages do NuBits have over other payment methods and digital currencies?

There are many significant advantages depending on how NuBits are used.

Buying – No complex point-of-sale math (paying 0.003287198 BTC for a $1.50 US cup of coffee is not as intuitive as 1.50 NBT for example). No taxable capital gains or losses to be tracked on purchases if NuBits are purchased and used at $1.00 US.

Selling – No vendor fees, no customer chargebacks, and no cost to transfer received funds to another location. Advertising acceptance of digital currency at a place of business is a way to appeal to technologically-literate demographics like Millennials.

Transferring & Remittances – Nearly instantaneous global money transfer that can be completed cheaper than any legacy financial channel. Traditional remittance companies like Western Union could eventually become obsolete.

Saving – No documentation requirements, no geographic limitations, and no cost to download a NuBits wallet. These are all limitations on access to traditional banking services for the 50% of adults worldwide who have no access to formal banking institutions.

Trading – Traders can purchase NuBits as a stable hedge rather than liquidating their holdings to fiat money. These NuBits can then quickly and easily be transferred off exchanges into private wallets. NuBits makes trading digital currencies easier.

Where can NuBits be purchased?

A full list of current NuBits and NuShares exchanges can be found on our Exchange listings pages. Trade NuBits & NuShares

How secure are NuBits?

We have been careful during development to alter the fundamentals of the Bitcoin code base as little as possible so that we inherit the robustness and reliability of the Bitcoin network. Nonetheless, Nu is a revolutionary network built without any precedent. Like all cryptocurrencies & blockchain projects Nu should be considered an innovation that’s certainly not without risk but with endless potential. We as the crypto-currency community are currently participating in a groundbreaking global beta test! Accordingly, we advise on our disclaimer page that no one should entrust the network with any funds they cannot afford to lose or delay investment until the network is even further proven. We have rapidly improved our software/network over the last few years of experience & only expect the security and strength of the distrubuted network to continue to grow.

Are NuBits pre-mined?

No. The only way for new NuBits to be created is if NuShareholders vote to do so. The only NuBits in existence are those that a decentralized body of NuShareholders voted to create. It would be unlikely that a majority of NuShares shareholders would vote to distribute NuBits for irresponsible or selfish reasons, as this would threaten the $1.00 peg and value of their investement/holding. Remember NuShares shareholders are the most vested in the value & integrity of Nu Network & $1.00 USD NuBits peg.

Does NuBits help Peercoin?

Yes! Peercoin is used to distribute dividends to NuShareholders. Many individuals will choose to hold and speculate on Peercoin long-term with the anticipation that future dividends will increase, thereby increasing the value of Peercoin. Best of all, NuBits demonstrates that the Peershares template can be successfully monetized. As more companies begin utilizing Peershares, the expected utility of Peercoin will increase too.

Could NuBits become worth nothing?

Yes, of course. In reality all currencies, stocks, commodities & most investment options carry this risk. Even more-so digital currencies and most blockchain projects being different & new are inherently considered high-risk. Over time many digital currencies & perhaps even bitcoin could become value-less. However as crypto-currencies grow in global Market Share their utility & logevity alone will drastically reduce this risk. We could easily see a day where cryptocurrencies are the staple medium for transactions & transfers of value.

There are other digital currencies that are claiming to be worth $1.00 US. Which is the best?

When choosing to use a product, lots of factors come into play. Some users make their decisions based on branding and marketing, and others decide based on the strength of a community. For those users who care purely about stability, NuBits is the best option. NuBits has maintained its peg at $1.00 US since its release. The Nu network’s introduction of independent decentralized liquidity pools has also ensured that a large amount of liquidity is available for users to redeem a NBT for $1.00 US.

NuBits are still considered a relative new solution for the digital currency community despite approaching our third year in operation. The NuNetwork launched on September 23, 2014 and within the first month NuBits achieved a top 5 rank in traded market volume on CoinMarketCap. We’ve since overcome many obstacles that would have broken most only further proving the strength of our distributed network. The best days are still to come!

How is the price of NuBits determined on Coinmarketcap.com?

NBT/USD trading pairs are very straightforward. 1.00 NBT = 1.00 USD.

NBT/Crypto trading pairs are based on the current exchange rate of the separate crypto/USD pair. These markets (NBT/BTC, NBT/PPC) are updated up to hundreds of times per day to keep in line with the most up to date pricing possible.

Prices are set based on a number of recognized large Bitcoin exchange rates, such as Bitstamp and BTC-e. Primary feeds are checked against secondary feeds for discrepancies, so our NuBot isn’t prone to “following the wrong price” if fed bad data from an individual exchange.

NBT/[Non-USD Fiat] trading pairs are based on the daily exchange rate between FIAT/USD. An example would be EUR/USD. The exchange rates don’t change frequently so NuBot is only programmed to attempt to get prices from the pricing API every 8 to 12 hours.

NuBits has been stable over all timeframes since its release. Coinmarketcap is only accurate as of its latest update. The current price on a given exchange may be different from the pricing you see, because a trade may not have been enacted using the newer values. For example, this is why a user may see the price of NuBits as $0.983982. This price difference away from $1.00 US is a result of the volatility of the crypto trading pairs like BTC and PPC.

Here’s an example:

If a trade just happened on an exchange, and 100 NBT were traded for $100.02 worth of BTC (at a price of $370.00/BTC), you’d expect to see “$1.002/NBT” as the price. If the price of BTC updates to $365.00, Coinmarketcap will update all other crypto prices (that came from X/BTC pairs) relative to that price change.

NuBot will have reset the walls to take into account the new pricing, so when the next trade happens, the new price will be reflected. Until then, you will see the price for NBT on CMC listed as $0.988459.

By necessity, since they can only update after something happens, Coinmarketcap is a lagging indicator of an exchange rate for NuBits.

Finally, it should be noted that at some point in the near future only NBT/USD trading pairs will be supported by shareholder-elected liquidity custodian providers, to ensure maximum price stability.

Technical

How are NuBits created?

There are two ways NuBits are created.

First, when individuals who possess NuShares reach a consensus to grant NuBits to a custodian. A custodian is a person/entity (or persons/entities if multisignature transactions are used) that pledges to use the NuBits in a particular way, such as raising funds for dividend distributions or funding development. Voting occurs among all NuShareholders, and if a custodial grant is successful the NuBits are transferred to a specified address.

Second, when a NuBits user chooses to “park” their NuBits for a set duration in exchange for an interest rate offered by NuShareholders. At the conclusion of the parking period, new NuBits are generated to pay out the interest owed.

How do NuBits maintain their $1.00 US value?

This is an important question! Visit our Price Stability page to see a full analysis of our pegging mechanisms. The short answer is that NuShareholders use various protocol tools to control the supply of NBT in circulation.

A multi-tiered liquidity operations plan has also been formed that the network is currently in the process of implementing. Liquidity operations help ensure that there is plenty of buy- and sell-side support for NuBits at $1.00 US.

What happens if demand suddenly increases or decreases?

Price stability is the core benefit of NuBits and is an important topic. Have a read through our dedicated Price Stability section for more detailed information.

How is interest paid out to parked NuBits?

In the case of interest rates, when a block is found, the client that found it examines all the interest rate votes for the last 2,000 blocks. It publishes these interest rates in the content of the block. If the content doesn’t follow protocol, it is rejected by other clients. Anyone who sent a transaction to park their NuBits in that block will receive the median interest voted for when their parking period is complete.

Are NuBits an “IOU” system?

From Jordan Lee in this forum thread: https://discuss.nubits.com/t/regarding-reserves-and-fractional-reserve/1126

Various members of our community and other communities have at times spoken about reserves and fractional reserve in relation to our network. Some seem to think that 100% reserves are desirable and equate to solvency, while others (including myself) wish to avoid the use of reserves altogether to avoid counterparty risk. Some view reserves as the backing for NuBits, while others see NuShares as the only possible backing for NuBits.

Benjamin contends that reserves cannot be reliably used to back NuBits. I agree. This view implies that solvency and fractional reserve cannot be assessed by the size of any reserve. If there is no reserve, the notion of “fractional reserve” doesn’t even make sense in the context of our network. However, a related concept is the ratio of assets to liabilities as Benjamin pointed out, where NuShares are network assets and currencies issued are liabilities. If the NuShare market cap is 8 million NBT and there are 1 million NBT in circulation, the asset to liability ratio is 8, not counting any reserves that exist. This is a highly solvent state that doesn’t resemble anything like fractional reserve.

It is clear the original design of Nu as articulated in my whitepaper is a network that avoids the use of reserves entirely to eliminate counterparty risk. When a LPC provides their own funding for liquidity operations, they are implementing this zero reserve model. Shortly before our September 2014 release it became clear that NuBot would need to support primarily NBT/crypto pairs instead of just NBT/USD. This was difficult to implement quickly, which means it had some bugs initially and this approach introduces some extra risks which were not well understood and could not be accurately measured at the time. As a result, KTm and Jamie began using shareholder funds to provide liquidity, which may be regarded as reserves in some contexts. It is has been my intention all along that this would be a temporary situation as we would transition back to the original design of LPCs providing their own funds consistent with the zero reserve and zero counterparty risk model. Indeed all custodians besides Jamie and KTm are providing their funds and the transition is well underway.”

Can the supply of NuBits be reduced?

An important goal of the Nu network is to transfer the speculative risk of owning NuBits onto NuShareholders as much as possible. As of August 2015 the v2.0 release of Nu allows NuShareholders the ability to grant new NuShares to custodians who promise to burn a certain number of NuBits. This strengthens the network’s ability to control the number of NuBits in circulation and maintain peg stability in periods of modest demand declines.

As part of the v2.0 release NuShareholders are also now able to vote on variable transaction fees for using the network. Because transaction fees are destroyed by the protocol, this also serves as a deflationary mechanism for the supply of NuBits.

The first recorded use of a custodian burning NuBits (which definitively proved that the supply of NBT can be reduced) occurred on March 9, 2015. The transaction ID and discussion can be found in this forum thread.

NuShares

How do NuShareholders determine who gets NuBits?

Votes are done with the presumption that the first and foremost goal is maintaining the $1.00 US peg. NuShareholders are in the business of maintaining NuBits at $1.00, because they know a constant and stable digital currency delivers the most value to users. This will lead to the network being worth more in the long-term. The white paper can give you more insight into how custodians are voted for.

Why is there a 10,000 NuShare minimum to vote on the network?

10,000 shares is sufficiently small enough that the majority of people will be able to vote, and sufficiently large enough that the blockchain isn’t weighed down by spam. The Nu network has approximately 835,000,000 NSR as of August 2015, growing at approximately 2% per year from Proof-of-Stake rewards.

Is it better to split up my NuShares among multiple addresses, or hold all my NuShares in one address?

The short answer is that minting will work the same and you will mint the same number of blocks whether you choose to split NSR into different addresses or place them all in one address.

The long answer is that in some circumstances splitting NSR into different address may reduce your minting power slightly. By default, the client splits transfers into outputs of 10,000 NSR each. Let’s imagine you have 1,000,000 NSR and you place it all in one address. You will have 100 outputs with 10,000 NSR each. When one of those outputs mints, it cannot mint again for 7 days. However, the other 99 outputs can mint. If the entire 1,000,000 NSR were placed in a single output as is typical for other blockchain technologies, when you found a block, the entire 1,000,000 NSR would be ineligible to mint for 7 days.

Let’s say you split your 1,000,000 NSR into three addresses in quantities of 5,000, 497,500 and 497,500. The address with 5,000 is useless for minting due to the 10,000 minimum required. Each of the other two addresses will have 49 outputs. One output at each address will have 17,500 NSR in it, so that output will have a 75% higher chance of minting compared to the 10,000 NSR outputs, but when it does, you will have 17,500 NSR ineligible for minting for 7 days instead of 10,000 as in most cases.

Because it takes an average of about 5 weeks for an output of size 10,000 at the present difficulty, any NSR in an output in excess of 10,000 will only be 80% as effective as it would be in an output of size 10,000.

Dividing NSR into three address as in my example above would reduce minting power by about 0.6%.

The summarized information is that if you always transfer in increments of 10,000 there will be no loss of minting power from using multiple addresses. If you transfer in amounts less than 10,000 that NSR will be useless for minting. If you transfer in large amounts not divisible by 10,000, the remainder or modulus of division by 10,000 is only 80% as effective.

Why are NuShare dividends paid in Peercoin?

We require an asset external to our system to distribute dividends. The purpose of creating NuBits is primarily to meet increased demand for NuBits in a way that prevents the rise of the NuBit price. If we distributed NuBits to shareholders instead of bringing them directly to market, there would be no way of knowing whether shareholders would hold them or sell them, or for how long they would hold them. It wouldn’t permit the network to tightly control the supply of available NuBits, which is necessary to maintain the pegged price.

So why Peercoin? We do not have confidence in the decentralization or sustainability of proof-of-work assets such as Bitcoin, so we needed a well distributed proof-of-stake asset external to the Nu network. Peercoin is a popular and stable proof-of-stake asset with a strong community backing it, and is notable for having been the first implementation of proof-of-stake.

When will my NuShares begin minting?

NuShares will begin minting after seven days of being undisturbed. “Share days” are accrued by shares if they are undisturbed (not sent or staked) after becoming a verified transaction. After seven days, shares are fully matured, meaning they are usable for minting. Holding shares beyond this date has no impact on the difficulty of minting a block. This creates an incentive for NuShareholders to mint as soon as possible. The client splits transfers up into outputs of 10,000 each as a way to optimize and equalize voting opportunities. This is also why NuShare transaction fees are higher than 1 NSR when transferring large amounts.

Is it possible to mint NuShares while keeping them in a cold wallet (offline)?

It is not currently possible to mint NuShares while they are in a cold wallet. However, it is possible this may change in the future once cold minting is introduced and tested in similar proof-of-stake projects like Peercoin. Don’t worry though: it is safe to mint NuShares in a hot wallet as long as the wallet is encrypted with a strong password of sufficient character length.

NuDroid Mobile Wallet

What do I need to do to start using NuDroid?

Follow these easy steps and you will be using the powerful NuDroid mobile wallet in no time!

1. Download NuDroid from the Google Play store
2. Open it and let it synchronise the blockchain
3. While the blockchain is synchronising, make a backup of your wallet and send it to a USB device, email, or cloud storage. Without a backup you won’t be able to retrieve your coins in case your device is wiped or stolen. Always make a backup and store it on a safe place away from the device.
4. Choose your favourite fiat coin like US Dollars and set it as the default
5. (Optional) Set a trusted peer
6. Buy some NuBits on an exchange and provide your NuDroid wallet address or provide your address or QR code to someone paying you with NuBits.

Now you are good to go and spend your NuBits everywhere Bitcoin and other supported coins are accepted.

Please make sure NuDroid is started on your device and running for a brief period before you make a payment to allow it to synchronise. Synchronising takes less time the more frequently you use NuDroid.

What Android version do I need to run NuDroid?

NuDroid is tested and works with Android version 4.03 and up. Older versions may or may not work but won’t be supported.

Can I receive Bitcoins in my wallet?

That functionality is not currently available in the desktop wallet or NuDroid but is available with Coinomi . We will reimplement this functionality in the future using shapeshift or a similar conversion service.

Can I store a Bitcoin, Peercoin or Dogecoin address in my address book?

Yes, you can. Just save an address you scanned/entered and it will automatically show up in your address book.

How do I know the wallet is synchronised?

You can check the network monitor located at ‘App Settings’ right next to ‘Address Book’ on the home page. There should be one or more peers and the block height should match the height of the peers minus one. The number of minutes ago displayed with the top block should be between 0 and 5. It is normal to have 1 to 5 peers.

What is a trusted peer?

A trusted peer is a peer the wallet would connect to by default. This is either a node you run yourself or one of the seed nodes published by the NuBits development team. It is not mandatory to have a trusted peer and by default there is none. You can provide either an IP address or a hostname/FQDN. A trusted peer also speeds up the blockchain synchronization.

I don’t have any peers. What should I do?

Most of the time this has something to do with your network connection. Make sure you can access a normal website like NuBits.com. If your connection looks good, try restarting NuDroid or mobile device.

Can I export my transactions?

Yes, go to ‘App Settings’ and select ‘Export’. Your transactions have now been exported. NuDroid displays the location where you can find the data in a comma delimited file format (.csv). You can either continue from here and pick up the file later with ‘Dismiss’ or ‘Archive’ and export the file via email or any other Apps you have that will show up.

Why does NuDroid sometimes identify an address as a different coin?

It doesn’t. It just defaults to it. There are a number of coins which share the same address identifier and there is no way for NuDroid to know which coin it is meant to be based on the address. To fix this issue a dropdown appears after the address field is completed where you can select the right coin. Go to the dropdown list and select the appropriate coin if it isn’t being recognized correctly.

Each national jurisdiction will have its own rules and regulations regarding the use of digital currencies such as NuBits and NuShares. A decentralized blockchain like the Nu network does not operate within any one country. Users must exercise their own judgment as to whether the use of the Nu network is legally permitted within their country. This Wikipedia article shows the current legal status of Bitcoin by country, which may or may not be accurate for NuBits and NuShares as well.

In regards to NuShares in particular, care has been taken to ensure that the structure of the Nu network meets the emerging definition of a “Distributed Autonomous Organization” (DAO). While there is no global consensus on the legalities of DAOs, a CoinDesk article stated:

Another use case that the authors view as less problematic through the lens of US law is the use of tokens to create distributed [autonomous] organisations (DAOs).

In this instance, tokens are used to denote membership in an organisation, with the user retaining the expectation that he or she may benefit financial[ly] from the ownership.

The report suggests that, in this case, token owners may have some control over fund utilization, “making them effectively managers and/or partners in the success of the entity”, a factor that makes them less likely to be viewed as securities

”Depending on the nature of the organization and the actual control held by people who have committed capital, ‘shares’ organizations which are structured on the blockchain are likely not to be considered as securities,” the paper suggests.

It is important to note that all initial purchasers of NuShares were selected by lead architect Jordan Lee on the basis of being a potential business partner - someone who was capable of offering skills and abilities that benefited the Nu network. In contrast to public “Initial Coin Offerings” (ICOs) that other projects have attempted - where shares were sold indiscriminately on a public exchange - the initial distribution of NuShares was very selective.

As the article above alludes to, the unique custodial grant, parking rate, and motion voting mechanisms utilized by the Nu blockchain makes all NuShareholders “effectively managers and/or partners in the success of the entity” because “token owners have …control over fund utilization”.

Nu has no legally-recognized management, directors, or employees. It is a global DAO with no national affiliation. The Nu network will operate according to decentralized consensus of all NuShareholders.

Can I use the Nu logos for a product I’m making?

Yes. Our NuBits, NuShares, and Nu logos are free to use under an open-source FLOSS license. Anyone who would like to can freely use our branding to create related products or intellectual property. Want to create a t-shirt, coffee mug or phone case? No problem! Just please be sure to send us a link to your Nu product on discuss.nubits.com. Then lastly, our only requirements are that you don’t slander or attempt to harm the Nu community in any way and that you make no verbal or written representation that states or implies your product is in any way endorsed by the NuShares shareholders or Nu core development team.

Don’t see your question answered here?

Visit our forum to get it answered. We will regularly add questions and answers to this page as we see them asked on the forum.