The need for crypto payment network
In order to gain mass adoption as a means of payments online merchants accept, a cryptocurrency has to be fast. Not many merchants will want to wait hours for confirmation.
What’s more, this cryptocurrency has to be highly scalable. If it works when 100 people use it daily, that’s great, but what happens when the user count jumps to 10 thousand daily? Or even 10 million daily?
Why Bitcoin is not great for payments
At first, Bitcoin seems to be the obvious choice for crypto payments. However, as secure as the world’s first cryptocurrency is, it just won’t cut it in this scenario.
It fails in both speed and scalability.
Only being able to process 7 transactions per second on average is not enough for a global payment network. While niche businesses may accept BTC as a means of payment in order to gain advantage over their competitors, many large retailers are hesitant to do the same.
Why would an ordinary user wait hours for BTC confirmations when he can just use PayPal instead?
What’s more, combined with Bitcoin’s volatility, the long wait time becomes financially risky for both the buyer and the seller.
As for scalability, yes, there are projects aiming to improve this aspect of Bitcoin, but they are all just workarounds that probably won’t deliver the same levels of security Bitcoin’s main blockchain does.
Nano: made for fast, unlimited payments
Unlike some other cryptocurrencies, Nano is being marketed as a payment cryptocurrency. No fancy smart contracts, no Internet of Things devices. Just fast payments.
And it really delivers. Just take a look at this chart:
According to Repnode measurements, the average transaction confirmation time on 17.11.2019 was less than half a second! Of course, some transactions take longer to approve, but even the slowest ones got approved several hundred times faster than BTC transactions.
In practice, transactions in Nano network happen in a matter of seconds. You can check the speed yourself using this tool.
Alternatively, you can create several Nano wallets, buy a little bit of Nano (or just get) and send it back and forth. The average transaction time should be under 10 seconds.
The tech that makes Nano so efficient
Blockchain vs DAG
Blockchains, as used by Bitcoin, for example, get many things right. They are secure and decentralized, for instance. However, they are also not very efficient.
Because the blockchain is stored on every node across the network, the system requires large bandwidth and demands large amounts of storage.
DAG, on the other hand, is much more efficient. Used by IOTA and several other cryptocurrencies, it allows the network to scale naturally as the user count grows – something blockchain cannot do.
Unfortunately, DAG comes with its own set of drawbacks. For example, it is not very secure if the active user count is low – a major problem for new projects.
Another negative quality of the DAG is that it is hard to make it secure while keeping the decentralization. IOTA, for instance, had to use coordinator nodes in its Tangle, essentially making it centralized. It is only in 2019 that the project makes steps in the direction of full decentralization, launching the Tangle coordinator-less testnet.
Block lattice: the love child of the blockchain and DAG
Nano does not use blockchain nor DAG. It uses a system that aims to combine the strong sides of both architectures while eliminating their drawbacks. It’s called block lattice.
But how exactly does it work?
Each account in Nano network has its own blockchain. This blockchain only records transactions that this account sends or receives.
In Nano network, every fund transfer requires a send transaction and a receive transaction. Every send transaction is deducted from the account’s balance, every receive transaction is added to the account’s balance. After each transaction, the information gets recorded into a block and added to the account’s blockchain.
This way, the nodes do not have to store the full blockchains of each individual Nano account. Instead, they can only store the latest block of each account chain, because it contains the total account balance. Clever, isn’t it?
Here is a visualization of the block lattice:
Bye-bye, mining; hello, ORV
Instead of paying miners for securing the network and heavily relying on PoW, Nano uses a different approach. It uses a hybrid system.
In order to minimize spam, the network uses something called Nano PoW (Proof of Work). In short, it is a system that requires network users’ devices to solve PoW problems when creating a new transaction. The PoW is memory-intensive rather than CPU-intensive, making it more efficient. This is the first layer of system’s security.
The second, much more fundamental level of Nano network security is the Open Representative Voting consensus algorithm (ORV for short). In a nutshell, it is very similar to the DPoS consensus algorithm, as used by Lisk, for example. Here’s how it works.
Every Nano account can choose a Representative at any time to vote on their behalf. The Representatives are configured on the nodes that stay online. The more the total balance delegated by the accounts to a certain representative is, the more vote weight it has.
Only the representatives have the power to vote, accepting the transactions. An important note: the transaction only gets accepted if it gets enough vote weight from representatives. Vote count doesn’t matter. This makes it impossible to attack the network just by creating thousands of new nodes.
In some ways, this system is superior to mining, security-wise. If a cryptocurrency that uses PoW is still relatively new with low miner count, it can be attacked by a person who sets up a large amount of miners. In Nano’s case, a similar attack would be impossible, as mentioned earlier.
Development and marketing
Working, right here, right now
Nano is not a cryptocurrency that could work well in intended use cases theoretically. It already does work great.
It is accepted by several tens of merchants selling a wide range of products, including electronics, apparel, software development services and even camera straps. If you want to buy a product using Nano, you can search for a shop in Use Nano directory.
The largest online shops accepting Nano are Travala and AnchorX. The former service can be used for booking hotels and apartments while the latter can also be used to order groceries from Amazon and Whole Foods Market.
Apart from being accepted by merchants, it can also be used for money transfers. With well-developed wallets, great security and a lightning fast transaction speed it is possibly the best-suited coin for this task. What’s more, because of all these qualities, it can also combat systems like PayPal, providing a viable alternative for people not familiar with crypto.
In active development
Some cryptocurrency projects never live up to the expectations. After the initial strong start, the development weakens and users gradually lose interest.
Not the case with Nano.
The project releases new versions of Nano node software at regular intervals – usually once every three or four months. Each of them brings something new to the table. If you want to know more about new Nano releases, check out their blog.
For example, Nano V20 Lydia introduced the Nano Proof of Work algorithm, while the previous version, V19 Solidus, was the first to support Confirmation Height – an important security feature. Of course, each version also comes with numerous smaller functions and bug fixes.
As it can be seen, new Nano versions are released at a brisk pace.
Another way to evaluate the activity of development is to analyze the activity of the project’s GitHub page. With frequent and consistent commits, Nano shines in this regard as well.
The Nano ecosystem gets improved frequently as well. For example, the official Nano website has received a complete overhaul in the autumn of 2019. It is now faster, more SEO-friendly and has a better design than ever before.
The future of Nano
The roadmap & goals
There is a single goal Nano team pursues: to make it a global currency widely accepted. In order to make this goal come true, Nano team split it into a number of smaller goals that are actively being worked on.
Here are some of them:
- Improving Nano protocol – making Nano faster, safer, more decentralized, as well as more developer-friendly.
- Expanding the number of Nano fiat ramps – this should make it easier for new users to purchase Nano.
- Getting more merchants to use Nano – the more sellers support Nano, the more valuable the network becomes.
- Nano exchange listing – pursue the listing of Nano on new exchanges, especially major ones.
Nano has one of the strongest communities in the cryptocurrency field. It is a group of users that truly passionate about the Nano technology and use every opportunity to introduce new people to Nano.
What’s more, the community also builds services that should make using Nano easier and more convenient for beginners. Here are some of these services:
- Nanolinks – a directory of Nano-related websites, including wallets, supporting exchanges and faucets. Gets updated fairly frequently.
- Nanocrawler – real-time Nano network statistics.
- Nanocharts – a service similar to Nanocrawler
- Nanospeed – Nano speedtest. Delivers the real-time information of Nano speed by sending transactions on demand.
Nano (NANO) token price history
When NANO became available for purchase in 2017, its price was under 1 US cent. In the following 6 months, it grew to 10 cents. It remained relatively stable at this level up until the end of November 2017.
However, in December, it experienced a massive bull run. On January 1, 2018, 1 NANO was worth over 35 USD! To put that in perspective: If you bought 100 USD worth of NANO in April, 2017, your holdings would be worth 350 000 USD on January 1st, 2018!
Since then, the price of NANO has fallen significantly. Throughout the 2019, its price has remained relatively stable, fluctuating around 1 USD mark.
Frequently asked questions
Can I mine Nano?
No. Nano team states that mining is not ecological and leads to centralization of forces inside the network. These are also the reasons why it is impossible to mine Nano.
Can I get free Nano?
Where can I buy Nano?
Currently, the ways of buying Nano with fiat are limited. However, you can buy BTC with fiat on Coinmama or LocalBitcoins and swap them for Nano on an exchange.
Which is the best Nano wallet?
If you need a Nano wallet for your mobile device, then the best choice for you will be Natrium. It is easy to use, has a beautiful, responsive interface and has some advanced features, like QR code scanning.
As for desktop Nano wallets, the best one is NanoVault, which is complete with Ledger Nano S hardware wallet support.
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