Nano is probably one of the most promising “payment” cryptocurrencies in the altcoin space today.
The coin makes use of some really advanced technologies including doing away with the notion of a public blockchain. This means that they are able to overcome a number of the scaling concerns that are plaguing some of the more established networks such as Bitcoin and Ethereum.
Despite these benefits, adoption has been rather slow and the price of NANO has followed the rest of the cryptocurrency market. Does this mean that Nano could be a good buying opportunity?
In this comprehensive Nano review, we will give you everything you need to know about the coin. We will take a look at the team, the technology, adoption and token price potential.
What is Nano?
Nano is a new name, but far from a new project. It was formerly known as Raiblocks, but was rebranded to make the name less technical and more easily understood by the masses.
Benefits of Nano cryptocurrency
Nano is a trustless cryptocurrency with low latency, and rather than being based on a blockchain it uses directed acyclic graph (DAG) technology and block-lattice architecture. This also allows each account to have its own blockchain, which is a very unique feature of Nano.
The consensus mechanism used by Nano is Delegated Proof-of-Stake (DPoS). One benefit to using DAG technology is unlimited scalability along with instantaneous transactions and no fees. The lack of resource intensive mining to secure the blockchain is what enables Nano to operate without fees.
One recent development for Nano is that it was rebranded from RaiBlocks at the start of 2018. The rebrand was done because there was some confusion over how to pronounce the name “RaiBlocks”, and to make the name less technical sounding as well to help foster increased adoption.
Much of the push for the rebrand came from the user community, and it’s quite encouraging to see the developers listening so closely to their user community.
The Nano Team
The creator of Nano is Colin LeMahieu and he’s been working on the project since 2014, coding seemingly endlessly for nearly 4 years. Working alongside him since that time have been Mica Busch as the web and mobile developer, James Coxon as the Services and Integration developer, Zack Shapiro as the iOS mobile developer, and Sergsw/byte16 as a core contributor to wallet development.
Senior Nano team members
You can see the amount of work that’s done for the network by going to the Nano Github, which is extremely active relative to the size of the development team. Nano also has an active user community over at Reddit, and the development team has been very communicative over the years, keeping the community updated every step of the way.
All of the main developers also remain active on Twitter and to a lesser extent LinkedIn. There are also several community managers for the project, and they are located around the globe.
As mentioned above, Nano is built on Directed Acyclic Graph (DAG) technology and utilizes a block-lattice architecture that has each account or address possessing its own blockchain. Unlike blockchain’s that track transaction amounts, Nano records account balances, and this allows for a far smaller storage requirement.
Each individual blockchain can only be updated by its owner, and it reflects that individuals balance history, sharing it with the network. One unique feature is that this architecture allows each blockchain to be updated asynchronously to the rest of the network. Each transaction is processed by the individuals blockchain and there’s no need for a consensus protocol for distributed agreement.
Nano account blockchains and block lattice architecture. Source: Nano whitepaper
This network is completely decentralized, and Nano is setup as the perfect way to transfer funds instantaneously and without any fees. It also theoretically has infinite scalability, and if the developers make this aspect a reality Nano could change the entire cryptocurrency ecosystem for years, if not decades.
A transfer on Nano’s network creates two separate transactions. One is a send transaction that deducts the amount from the sender’s ledger, and the second is a receive transaction that adds the amount to the receiver’s ledger. Each send attempt reference the previous block on the sender’s blockchain.
A double spend would occur if the same previous block is being referenced by two different send transactions. If this occurs, the network nodes vote for which transaction to retain, and the other is discarded.
Nano Representative Nodes
Because there is no mining the network doesn’t require transaction fees. Instead, the ledger is secured with a Delegated Proof-of-Stake (dPoS) protocol, where users can choose the node they wish to represent their votes. Representative nodes take on tasks such as verifying block signatures and voting for valid transactions in the event of a conflict. Voting is weight balanced, with each node having a vote weight equal to the amount of Nano linked to the node.
You can find a current list of representatives on the official Nano website.
List of top 8 representative Nano Nodes
An interesting part of the architecture is the use of Proof-of-Work, but not as an agreement protocol. Instead it is used as an anti-spam measure to avoid attacks. The lack of fees means an attacker could spam the network indefinitely, but with the PoW implementation Nano has a small amount of work associated with each block. This work takes 5 seconds to generate and 1 microsecond to validate.
Because of this an attacker would need to dedicate a significant amount of computing power to carry out an attack, while normal users need only use a small amount of computing power. The network even has methods for pruning spam transactions, which limits the amount of storage that can be used by an attacker.
One criticism of this setup is that there is no incentive to run a Nano node. The developers have addressed this by stating the incentive for running a node is the usage of the coin. Running a node increases the security of the network, and it also ensures instantaneous transactions and no fees.
Running one or several nodes makes complete sense for a business or merchant using Nano, especially since it’s estimated that setting up a node only costs roughly $3 per month. The number of nodes is also increased because each wallet acts as a node.
How Nano Improves Crpytocurrency Usage
Nano is a nearly ideal cryptocurrency from a users perspective as it is free of fees, transactions are instantaneous, and it can scale infinitely.
The instantaneous transaction time is a dramatic improvement over the most popular cryptocurrency, Bitcoin. With Bitcoin users experience a minimum of 10 minutes for a transaction to process, but that can increase to hours, and if network traffic is extreme there have been cases where a Bitcoin transaction took days to validate.
Personal Blockchains and Representative Nodes
This is because each block only has room for so many transactions, and it takes 10 minutes for each block to be mined. Nano gets around this by making every transaction its own block and by having blocks instantly processed.
Nano also improves on security with the delegated Proof-of-Stake protocol. An attacker would need to control 50% of the Nano tokens to make a successful network attack. That would require a huge financial investment that’s beyond nearly everyone.
And of course the dPoS system avoids the huge energy consumption and expensive mining hardware required by Proof-of-Work cryptocurrencies.
Nano Consensus Method
The delegated Proof-of-Stake protocol allows for voting based on the account balance, with larger account balances having greater voting weight. The development team felt this made logical sense since those with more assets in the system have a greater incentive to keep the system honest to protect their wealth.
This differs from how other cryptocurrencies handle consensus. For example, IOTA determines consensus by stacking transactions via Proof of Work. This calls for a maximum continuous hash rate, which is paid for by miner’s electricity costs. Nano doesn’t require PoW for consensus or security, lowering operating costs significantly.
Nano Tokens (NANO)
When it was first released as RaiBlocks the token symbol was XRB and some exchanges still use that symbol, but the real symbol for Nano tokens is NANO. It has a circulating and total supply of 133,248,290 NANO. This is the maximum supply and no additional NANO will be created.
Initially the supply of NANO was released via faucet, but that faucet ran dry and there is now no way to get NANO other than buying it. The Binance exchange is the largest exchange for NANO, but it is also offered for sale at KuCoin, Mercatox and a few others. Nano cannot be purchased with fiat currency and the most common purchases are made with BTC, ETH or USDT.
NANO is currently (September 6, 2018) valued at $2.36 and had an all-time high of $34.43 on January 1, 2018. The value has dropped significantly throughout 2018 as the cryptocurrency markets have suffered a broad based bear market.
Once you have your Nano tokens, you need to be able to store them. There are Nano wallets available for Windows, iOS and Linux and for Desktop, mobile or online. All the wallets are available for download from the Nano website. That includes both full node wallets and lite wallets that don’t require you to download the entire ledger.
The Nano Roadmap
Nano has recently released an updated roadmap outlining their goals and progress in the coming year. The roadmap includes such things as integrating fiat currency exchange, increased participation in global markets, increased merchant adoption and an alpha release of a point of sale system.
Regarding the protocol itself the team is looking to implement ledger pruning to reduce the size of the database. This is dependent on the implementation of universal blocks.
Nano Roadmap and upcoming Universal Blocks
Universal block support was included with Nano v11 and the code review is ongoing since February 2018. Universal blocks will incorporate the current four block types: send, receive, change and open, into one block type. This will improve internal bookkeeping and will open the door on many new improvements.
The development team is also continuing work on Smart Cards, which are essentially pocket sized cards that have embedded computer circuitry. They are literally the future of cryptocurrency adoption, allowing users to spend and receive Nano without having to understand the underlying technology.
Ongoing Bitgrail Issue
In February 2018 a hacker or group of hackers stole roughly $150 million worth of XRB tokens from Italian cryptocurrency exchange Bitgrail. At the time it was the largest XRB exchange. The aftermath was particularly ugly, with Bitgrail blaming the developers and code base of XRB, while the Nano/RaiBlocks developers blamed the lack of security at Bitgrail. There were even some accusations against the founder of Bitgrail as being involved in the hack and theft.
There remains an outstanding lawsuit against Nano over funds lost during the hack. The lawsuit is being brought against Nano because investors say they knew Bitgrail had problems, yet failed to distance themselves from the exchange. Those who had funds stolen want Nano to hard fork, so they can recover their lost tokens.
It’s definitely a gray legal area, and the result of the lawsuit is likely to set several precedents for future hacking cases.
Nano has an interesting history, and an even more interesting use case. There’s nothing complex about what they’re trying to do. It’s a simple use case, and considering that they’ve conquered the scalability and speed issues Nano could end up being the cryptocurrency that finally gains mainstream adoption.
At this point they need a better marketing plan and a way to spread their usage far and wide. Smart cards could be one part of this puzzle, as it would allow users to spend and receive Nano without needing to understand anything about private and public keys, wallets or cryptocurrency security.
It will be interesting to see how the project develops going forward. It’s always been an active group of developers, so the technical side of the project development shouldn’t be an issue. If they can add a solid marketing plan that spreads usage to both merchants and end users it could be an exciting future for Nano holders.
Featured Image via Fotolia and Nano