Motion RIPEMD160 hash: e0b3f80e5d9f58d3c3df27e346b61233b9cd5153

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Each NuShare (1.0000 NSR) should be re-denominated from 10,000 satoshis to 100,000,000 satoshis. This adjustment will make 1 “new” NSR equivalent in size to 10,000 “original” NSR. This change will reduce the total supply of NSR in circulation by a factor of 10,000. The new 1.00000000 NSR unit will retain the term “NuShare” without any additional qualifiers such as “new”, “improved”, “kilo”, etc. The default NSR transaction fee and NSR mint reward should be adjusted proportionally by a factor of 10,000.

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Relevant/tangential previous discussion: Use units of kNSR in end-user messaging and user interfaces by @woodstockmerkle. This motion is slightly different but addresses many of the concerns raised there. I hope woodstockmerkle considers reactivating his motion if he or others prefer it to this motion.

I am proposing each NuShare (1.0000 NSR) should be re-denominated from 10,000 satoshis to 100,000,000 satoshis. This adjustment will make 1 “new” NSR equivalent in size to 10,000 “original” NSR. This change will reduce the total supply of NSR in circulation by a factor of 10,000. The new unit would retain the term “NuShare” without any additional qualifiers such as “new”, “improved”, “kilo”, etc. This switch would occur by increasing the number of decimals displayed in NSR from four to eight. This would not be a protocol switch requiring a hard fork; it would be a change in the commonly-accepted denomination of NSR. The total number of satoshis in circulation would remain the same, but the client wallet would switch from displaying ~835,000,000 NSR to ~83,500 NSR. @JordanLee has confirmed that the actual development costs involved with making this switch would be minimal, although perhaps he can offer a revised estimate.

After observing the benefits of a smaller BlockShares supply for B&C Exchange, I am convinced NuShares should also adjust to a lower supply. In my view it is the most important structural change we can make to the Nu network right now along with @Nagalim’s proposal to implement volume-dependent transaction fees. There are several benefits resulting from this proposal that would make Nu more competitive.

Benefits

1) More intuitive NSR pricing. We would see NSR priced at 19.45 USD per share rather than 0.001945 USD per share. This whole-number price would make NSR easier to discuss and promote, especially among newcomers to cryptocurrency who casually browse coinmarketcap.com. It would also make each share feel more valuable and rare. Bitcoin has shown that perceived scarcity is very important in attracting speculators.

2) Minimum voting requirement would be 1 NSR, not 10,000 NSR. A user would require 1 NSR to mint a block (and possibly cast a vote) rather than 10,000 NSR. This simplifies our marketing considerably. I can’t think of a single reason why we should prefer 10,000 NSR over 1 NSR as a voting requirement.

3) NuShares would have the same number of decimals (eight) as Bitcoin. This would help reinforce the idea that using Nu is very similar to using Bitcoin and based on the same technology.

There are a number of potential drawbacks and concerns identified in woodstockmerkle’s motion thread. Here are a few of the raised concerns.

Perceived Drawbacks

"The price of NSR will be too high in the future”. This argument suggests it would be a problem if the market cap of NSR hits one billion dollars in the future because the price per share would be above 10,000 USD. Supporters of Bitcoin are quite comfortable with the prospect of Bitcoin reaching 10,000 USD in the future, despite their belief BTC should be used as a day-to-day currency. The requirement for a low price-per-unit for a cryptoequity is even less important. I believe it is not a problem to have equity priced in the thousands or tens of thousands of dollars; at a NSR market cap of one billion dollars professional investors would be involved who only care about the fundamental value of an asset. The current price of a Berkshire Hathaway Class A share is 192,000 USD and investors still flock to it. A high NSR price would prove that the Nu network has achieved success – the best problem to have. “It will be viewed as a pricing gimmick”. I don’t agree with this argument either. There are three clearly defined benefits above that, if included in a brand new cryptoequity, everyone would understand the rationale behind. A gimmick is an attempt to obfuscate the true value of an asset through empty tricks. In contrast, this denomination change will make it easier for shareholders to discuss and evaluate their own network. It is not a gimmick to improve the business design of our network. “There is a significant risk to exchanges”. This risk is the one I agree is significant. For example, hypothetical User A who has 30,000 NSR on deposit with Exchange ABC should have 3 NSR after the switch. Should an exchange not update its internal accounting system, its NSR reserves could be depleted if User A withdrew 30,000 “new” NSR (which were formerly 300,000,000 NSR).

To mitigate this risk, I would like to suggest a 60-day implementation schedule that is very similar to what would be done for a hard-fork protocol change.

Proposed 60-Day implementation schedule

Day 0 - passage of motion: A master thread will be created for all exchange compliance activities. It should be announced that at 14:00 UTC on Day 60 all exchanges should halt NSR trading and wipe their order books. They will be told not to reactivate their NSR markets until they are confident their internal accounting systems have been updated and appropriate messaging provided on each section of the site NSR is mentioned. Coinmarketcap.com will be warned that the supply of NSR will switch at 14:00 UTC Day 60.

Day 1-7: Shareholders will identify all exchanges and services that use NSR. 99% of all NSR volume is consolidated on a handful of exchanges, but there is a chance that an obscure service we are unaware of processes a small amount of NSR. Active shareholder research will be able to identify all these services. Detailed instructions will be provided to exchanges to help them. A tracking list will be used by all shareholders in the master forum thread to confirm exchange intentions for compliance.

Day 8-60: Daily emails, contacts, and shareholder messages will be sent to all identified exchanges and services. The tracking list will continue to be updated. If an exchange/service cannot make the upgrade in this 52-day long window despite a flood of warnings, messages, and notifications, it is unlikely they will survive long anyways. Shareholders will conduct a secondary check of exchanges and services on Day 50-55 for any new exchanges/services that need to be warned. Any exchange who has not explicitly confirmed with us that they have a plan in place will be removed from nubits.com on Day 59 until we confirm they have upgraded, and active warnings will be distributed through all Nu social media channels.

Day 60: At 14:00 UTC new NuBits clients will be posted on nubits.com and a message sent to coinmarketcap.com requesting a new updated NSR supply.

I’m certain that some shareholders will still be against this proposal even after considering the above analysis, and so I’m expecting this to be a contentious debate just like the open-source motion was. It is important to remember that we recently saw a successful hard fork on the Nu network with 90% of nodes upgrading on schedule. This successful transition suggests that our network is small and active enough to make this denomination change with proper planning and execution. We may not have that luxury one year from now if our growth continues. I urge all shareholders to vote for this motion to improve the design of NuShares.

Comments, proposed edits, and complaints are all welcomed.