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Nano (NANO) is a digital currency designed to provide fast transactions, zero fees and a high level of scalability. Originally known as RaiBlocks (NANO), it uses a combination of blockchain and directed acyclic graph technology and assigns every account its very own blockchain.
As a result, Nano has developed a solid following in the crypto community. To find out how this digital currency works and whether you should consider buying any NANO, read on.
Nano is a digital currency that aims to offer an effective, viable alternative to fiat currencies. Using a unique block-lattice structure (more on this below), Nano promises several key advantages over other payment currencies, including the following:
This makes Nano an attractive option for peer-to-peer transactions and micropayments, and the team’s stated mission is to become a global currency. Nano has reached its maximum supply of 133,248,290 NANO, with the full complement of Nano tokens in circulation. Nano tokens were originally distributed via a captcha-based faucet distribution system, but this ended in October 2017.
When it was originally launched in 2017, Nano was known as RaiBlocks (NANO). However, on 31 January 2018, RaiBlocks became Nano as part of a comprehensive re-branding, and its ticker symbol was updated to NANO on most exchanges.
Why the new name? Nano was chosen as part of the Nano team’s plans to target mainstream adoption. As explained in the official re-branding announcement, “Feedback from the community suggested that improvements could be made to better resonate with the public and a mainstream audience.”
Following the announcement, the price of NANO rose 20% in 24 hours.
The majority of cryptocurrencies use blockchain, the distributed ledger technology made famous by bitcoin. The major competitor to blockchain is a data structure called directed acyclic graph (DAG), which is used in projects like IOTA and ByteBall.
What’s unique about Nano is that it combines blockchain technology with DAG, a structure which sees individual transactions directly linked to one another rather than grouped together for processing in blocks. This so-called “block lattice” architecture is designed to offer the best of both worlds – the scalability of DAG and the security of blockchain – while avoiding some of the drawbacks of each approach.
As we touched on above, Nano combines elements of blockchain with a DAG, or directed acyclic graph, algorithm. Under this structure, each Nano account has its own blockchain that stores its transaction and balance history. This is known as an account-chain and only the owner of the account controls it. Each account-chain can be updated asynchronously of the rest of the Nano network.
When an account owner sends some NANO, a “send block” is added to their account-chain and updates their balance. The receiving account then adds a “receive block” to its account-chain to update its balance. As a result, the most recent block on any chain contains that account’s current balance. This in turn allows the Nano system to remain lightweight and ensures faster processing speeds than many other digital currencies.
Most cryptocurrencies rely on one of two main consensus algorithms: proof of work or proof of stake. However, Nano relies on a hybrid model called Open Representative Voting (ORV), which doesn’t use mining.
Every account can freely choose a Representative at any time to vote on their behalf, even when the delegating account itself is offline. These Representative accounts are configured on nodes that remain online and vote on the validity of transactions they see on the network.
Because Nano accounts can freely delegate their voting weight to representatives at any time, the users have more control over who has power with consensus and how decentralized the network is. This is a key advantage to the design of Open Representative Voting (ORV). With no direct monetary incentive for nodes, this helps mitigate the natural tendency towards centralization among revenue-earning nodes.
What can Nano be used for? The team points to several potential use cases:
Nano was developed by Colin LeMahieu, a software engineer with prior experience at tech giants like Dell and AMD. He founded RaiBlocks in 2014, launched the currency in 2015 and turned his attention to the project full time in 2017.
In the whitepaper introducing Nano, LeMahieu outlines three core drawbacks of bitcoin that he wants to overcome:
LeMahieu is currently Nano’s lead developer and focuses on the development of the currency’s core protocol. For details on the rest of the team behind Nano, check out the Team page on the coin’s website.
Rather than a one-page graphical timeline of milestones for the year ahead, Nano’s roadmap is more of a living website. While there are no dates listed, it does detail all the areas the Nano Core Team is working on as part of its mission to “become a global currency built on a secure, decentralized network”. At the time of writing (September 2019), the completed areas include the following:
The steps partially completed include:
It’s also worth pointing out that there are other projects at various stages of development that could offer everything Nano does, including fast transactions and no-fee or low-fee transfers, as well as a host of other uses. Once platforms like IOTA and Cardano reach later stages of development, they could also pose a threat to Nano’s potential growth.
Read our prediction for where Nano’s price could be heading this year.
In February 2018, the news that 17 million NANO, 10% of the total supply, had gone missing from cryptocurrency exchange BitGrail sent shockwaves through the crypto community. It’s not yet entirely clear whether the fault for the hack lies with lax security measures from BitGrail or due to an issue with Nano’s blockchain, with both parties pointing the finger at one another.
In fact, in April 2018, the Nano Foundation announced that it would sponsor a legal fund to provide all victims of the hack with equal access to representation.
For more information on how to keep your Nano safe, see our comprehensive guide to Nano wallets.
One of the key things in Nano’s favour is simplicity. In a world full of complicated and overly technical projects that are a little beyond the comprehension of the average Joe, Nano is simply a payment coin based on solid fundamentals – instant, feeless transactions and impressive scalability.
However, Nano does face an uphill battle for mainstream acceptance in an increasingly crowded marketplace, so gaining acceptance as a legitimate payment method in as many places as possible will be crucial to its success.
Images: Shutterstock
Disclosure: At the time of writing, the author holds IOTA and XLM.
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