 Welcome to the Daily Decrypt, where currency competition does threaten to or whelm. I am your host, Amanda B. Johnson, and today's episode is brought to you by Exmo. NewBits is a cryptocurrency network where every token, every newbit is pegged to the value of a US dollar, and this is achieved via supply manipulation. How does this work? Or, as I've heard it put before online, what black magic is this? To find out, I've spoken with Pascal Hadiki-Hamanic, who is a core team member. First, I asked about his role there. Basically, I'm helping with marketing in Japan and also recruiting engineers for programmers for the development. NewBits was launched in the fall of 2014 and is based on Peercoin, which was the first proof-of-stake network. NewBits incorporates a template called PeerShares, which creates two tokens for a network. The intended currency token, in this case the newbits, and the intended shareholder and voting token, NewShares. And why would anyone want to be a new shareholder? Well, based on the performance of the network, NewShares tokens pay dividends in Peercoin. NewShares is just a share of the network that represents some kind of ownership. People are holding those new shares in order to vote. Let's say you have 1% of the new shares, then you would have 1% of voting power. You use that for voting anything. You can vote for grants, or you can vote for any kind of proposal that has a hash, or you can vote for transaction fees, this kind of stuff, or even parking rates. What's the parking thing? What's that? Parking rates, basically, shareholder can vote for, well, it's currently not used. It hasn't been used for one year because we have had enough liquidity to maintain the peg, but let's say that we see a decrease in the buy side liquidity, then it means that the peg could be in danger. And then we incentivize people to basically park the new bits, freeze the new bits into the blockchain so that those new bits are not on the market. And then people will get some reward for that, and it corresponds to the parking rate. And just how does one become a shareholder, a new shareholder in the new network? In new, anybody can be a shareholder, at least if she or he has 10,000 shares, new shares, which is not that expensive right now because one share is one, I think it's 0.2 cents. So anybody with some little bit of money can be a shareholder and can vote. In addition to the parking of new bits to maintain the dollar peg, Pascal then went on to describe how new shareholders are also tasked with voting on budget proposals or making grants. They asked for grants, so they would ask for, I don't know, depending on the job, 1,000 new bits or 5,000 new bits or even 20,000 new bits for a project. And so they would basically write a proposal on the phone. They would hash the text so that we have some kind of identification. And then they would wait for, I mean, they would try to get the vote from the shareholders, right? So the shareholders would want to vote for this proposal. They would just put the hash into the client. And then if it reaches more than 50% of the vote, then the grant would be, I mean, the grant would be automatically generated in the blockchain. And then the person would just receive the new bits into the address that she or her CEO has specified. If the demand for new bits at any given time is not going up, but rather going down, are the people running nodes and the new shareholders, are they just not paid at that time? Is that how it has to work? No, I mean, you would still receive a meaning reward, of course. And do they get paid in new bits or? No, it's new shares. The block reward is in new shares. The block reward is in new shares. Yeah, but if the demand increases a lot, which means that the pay could be in danger, then we'll have to, I think right now, the ultimate solution would be to use you to produce new new shares, so that we can, you know, I mean, so it would cause some delusions, but shareholders would be able to get some, you know, some funding, you know, from Bitcoin and then we'd be able to replenish the buy side from there. And so with the block reward of being new shares, not new bits, can new bits just be, like, created on demand the way they can be, like, parked on demand? Yeah, yeah, of course, yeah. But we have to have some kind of, I mean, to have some consensus, right? So people would have to vote for that. So if you don't get the 50% vote, then nothing is happening on the blockchain, right? I then asked how in light of the peg to the dollar, grants that is newly created new bits could possibly be issued to developers and workers and still keep the peg. If there are, let's say, 50,000 new bits that are issued, then the network should, I mean, be able to, you know, maintain the peg for those 50,000 new bits, right? Well, basically, the stability of new bits is enabled by, you know, maintaining huge sales and sell and buy walls on markets. So we would make sure that, you know, we have enough liquidity all the time. Basically, right now it's all done manually. I mean, we have some, of course, some indicators. We have, we can get to know the, in real time, the liquidity situation. So liquidity is everything, I mean, in new bits, you know, if you want to know the health of the peg. So we will know exactly how much new, how much sell side and how much buy side liquidity we have. Sell side means, you know, how much new bits are solved into the market, you know? And buy side means, you know, how much BTC or buying new bits into the market. So depending on the balance that we have between the sell side and buy side, then we will get to know the health. Let's say that we have much more buy side than the sell side. That means that there is some demand for new bits. And then we will replenish the sell side by using new bit, new new bits. But on the contrary, if we have much more sell side than the buy side, that means, you know, people are selling more new bits than they are buying. That means, you know, it could be in danger and then we would basically replenish the buy side by, you know, transferring some bitcoins from the reserve that we have into the buy side. Or if we don't have enough BTC, then we will start to, you know, to increase the repacking rates. And if it's not enough, then we will have to issue new new shares so that we can, you know, have some funding and then, you know, replenish from there. The decision are taken, you know, by, you know, discussing the things. So it would be in the forum right now. But in the future, we are thinking about, you know, making automatic some aspects of that. So, you know, especially there is some, what we call a float reserve, which is, you know, basically float means, I don't remember its first liquidity, something. It's a set of users or, you know, shareholders that control multi-sig wallets that contain some reserves. So right now, if there is some lack of buy side, then we will decide to, the float team would decide to, you know, unfreeze some bitcoins from the reserve. So, and they would be done like manually. But in the future, it could be some aspect of it could be done automatically by using some kind of script. I then asked Pascal about the risks of being pegged to a fiat currency like the US dollar. Should some sort of hyperinflationary event take place, what would the new network do? Maybe it's pegged to the US dollar and the US dollar is like, you know, it could be, might be in the future, hyperinflated. Personally, I don't see that happening, you know, but if it happens, then we'll have to decide to pegged to something else. So, we are, we have plans to create new, new pegs like to, to the Yuan and to the Euro, which could be also hyperinflated, you know, as a new, but, and also to the SDR, which is the, as you said, as you know, the special drawing rights, right? So in that case, we hope to have a more stability. But at the end, I mean, it could be also to, to something else like a basket of commodities or, you know, as long as we have a way to, you know, to have some, to have some external, you know, indicators of the price, then we could do that. And could you stay on the same network and just do like a fork, basically, like it would, it would be same, same blockchain, just fork it to track a new commodity? Yeah, exactly. Yeah, we can include new currency inside the blockchain, yes. And in fact, pegs to other fiat via other networks is exactly where the new team is headed. Right now, I mean, we have, first of all, we have, we are renaming the Nubets, the US Nubets, you know. So, and so, because in the future, in the future, we'll have Chinese Nubets and also the SDR Nubets and the European Nubets. So right now, the NBT is being rebranding or renamed US NBT. All right. Well, thanks for your time, Pascal. Thank you. Thank you for your time, Amanda. Yeah. All right. Best of luck to you. Thank you. Bye. Bye-bye. Today's episode is brought to you by Xmo.com, a fiat and cryptocurrency trading platform that's beginning a week-long Dash giveaway today. If you are a member of dashtalk.org and you have between 50 and 100 profile posts, send a private message to Xmo, and you'll receive Xcode in return, which can be retrieved for real Dash at Xmo.com. And dear Daily Decrypt viewers, I would like, if you would oblige me, for your music suggestions in the comment section today. I can't promise anything, and I am confident that some, if not many of you, have what I would consider to be poor taste in music, but I am looking to spice things up all of the time and would appreciate your input should you care to give it. Bye-bye. Today we've spoken with Alejandro Colorado, Alex for short. I'm not used to doing fiat to Bitcoin, and I was doing hedging. But it was always like this thing, like, well, I'm going jumping in and out of crypto, and it will be great if you can just do it crypto-to-crypto. Because I'm only interested on the value, on the valuation of the coin. So, when I learned about Bitcoin thanks to you, I was like, well, this might be a great thing. Thank you for watching.