Near instant, fee-less transactions that are finalized in less than a second and are limited in
number only by network latency. If you’re thinking I must be talking about credit card transactions,
well I’m not. First of all, this is the Exodus channel; we only talk crypto here.
Secondly, credit card transactions aren’t fee-less, at least for the merchants, and
they may take days or weeks to be settled.
I’m talking about Nano, “the digital money for the modern world”, as the Nano Foundation calls it.
But how does Nano support this claim and how does it achieve this efficiency? We’ll get
to that right away, as we answer the question: What is Nano?
Nano was first introduced in 2014, so it’s one of the old players in the cryptosphere.
Back then it was called RaiBlocks and it was rebranded as Nano in January 2018,
a name that was chosen to represent the speed and simplicity of the project.
Nano is a lightweight cryptocurrency that was built for the sole purpose of supporting
near-instant and free transactions. No complex architectures, no staking,
no side-chains or second layers, no fancy dApps or smart-contracts.
None of the things that generate all the buzz these days. Just simple, instant and free
transfers of value. And, of course, decentralized. Basically, what money is supposed to be.
Nano was trying to solve the problem of slow transactions that other cryptocurrencies,
like Bitcoin, have. Some crypto transactions can get quite expensive
and that will discourage people from using cryptocurrencies for everyday transactions.
The Nano team also wanted to create an environmentally friendly cryptocurrency
that didn’t require the electricity consumption of a small nation to produce a block.
Nano introduced a relatively unique architecture, one in fact that breaks the blockchain archetype.
It uses something called Directed Acyclic Graph, also called a DAG or “Block Lattice”.
With Block Lattice, there’s no single blockchain where all transactions are recorded. Instead,
every account, meaning every NANO address, has its own blockchain that only its owner can change and
each block is a single transaction. This is the key feature that enables Nano to be so fast, since
there’s no need to wait for a miner or witness to be selected to validate all transactions.
The validation process of all transactions is performed by computers called representatives. But
since each account controls its own blockchain, their duty is usually as simple as broadcasting
the transaction to other representatives and nodes in the network, which requires minimal computing
resources and energy. This is why the network is able to process thousands of transactions per
second and is limited in practice only by the time it takes for a transaction to reach the majority
of the nodes around the world. And because each transaction is only a few bytes in size,
this happens in a jiffy. In the rare case where there are conflicting transactions, only then
are representatives required to vote on which transaction to keep and which one to discard.
Representatives are chosen with a voting system called Open Representative Voting,
or ORV where users choose their representative and delegate to them their balance. The bigger
the delegated balance a representative has, the more voting power they have. This is similar
to Proof of Stake, but it involves no freezing of funds and a user can change their representative
at any time. Also, there’s no monetary reward for representatives. Instead, their incentive
comes from securing the network where they have an invested interest. This is why representatives are
usually businesses, exchanges or wallets, although anyone can be a representative.
Nano was designed this way so that transactions are free and
to promote decentralization. Besides, all 133 million NANO coins were issued when the network
was launched and no more will ever be created, so no rewards from newly minted coins either.
Although Nano is in the top 100 cryptocurrencies, it hasn’t quite found wide adoption. As a payment
system it relies on companies integrating Nano into their business. Still though, there are
several places and apps where users can spend their Nano and also earn Nano by playing games,
like Counter Strike or Just Cause, visiting places, renting unused bandwidth, participating
in surveys or even going for a jog. If you want to find out more, have a look at this site.
Today there are many fast cryptocurrencies, but it’s still hard to find one that matches the
speed, scalability and simplicity of Nano. So, if you’re interested in fast and free digital
payments, either as a user or as a business, Nano is definitely worth having a look at.
This was all the time we had. Do you think Nano has the potential to become a
widely adopted instant payments system? Let us know your thoughts in the comments below. And
if you liked this video, don’t forget to hit that like button and subscribe to the Exodus channel.
Until next time… Hodl on!