http://bytemaster.bitshares.org/article/2015/01/13/NuBits-is-a-Ponzi-Scheme/
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NuBit is at best an unsecured IOU from unknown issuers. It only becomes a Ponzi scheme once NuBits is forced to print new NuBits to pay interest on old NuBits. They are not currently doing this, but due to the fractional reserve, naked-shorting that I believe is being practiced it is inevitable. Even Ponzi started out with honest intentions.
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"Even if the NuBit custodians have the best of intentions, we know from their trading volume that they keep a large quantity of BTC on the exchanges. Therefore, we know they have lost 50% of their capital held as BTC.*** If an exchange were to be hacked or compromised then the NuBit custodians would lose a large amount of their capital making them instantly insolvent and unable to peg NuBits to USD.
We can conclude from this that in a declining crypto-currency bear market that the NuBits custodians must be practicing fractional reserves and are therefore insolvent."
We can conclude from this that in a declining crypto-currency bear market that the NuBits custodians must be practicing fractional reserves and are therefore insolvent."
