What is Nano?
Nano is a cryptocurrency that was created with a focus on addressing the inefficiencies that riddle many other cryptocurrencies. It was designed to be fee-less, eco-friendly and instant. Instead of using blockchain like other cryptocurrencies, Nano uses a system called direct acyclic graphs (DAG) to settle transactions across the network. And interestingly, each Nano account in the network has its own blockchain called side-chains.
The Nano team had another interesting design choice and this included using a CAPTCHA faucet system for the initial coin distribution instead of going for a ICO or airdrop. The faucet system allowed anyone with a computer to be a part of the project and helped Nano become more accessible to everyone. This unique approach was a great way to promote itself to people who have never used any crypto. And in addition to building communities in Europe and North America, active communities were built in Central and South America, including in Brazil, Venezuela and within Southeast Asia, especially in Indonesia. The crypto was launched in 2015 as RaiBlocks (XRB) and later rebranded in 2018 as Nano.
So far, Nano Foundation is responsible for the global adoption of the Nano cryptocurrency. To achieve this goal they focus on strengthening, supporting and spreading awareness of the Nano network. They are also involved in activities including protocol development, providing supporting services and educational resources. These efforts from The Nano Foundation have played a major role in helping make Nano a secure, green, decentralized network that has ultrafast transactions and zero fess which makes it ideal for everyday transactions.
Nano which was originally known as Raiblocks (XRB) was created by Colin LeMahieu. Unlike other crypto assets which usually utilize distribution methods like Initial Coin Offerings (ICO), airdrops, and mining, Nano began with a novel CAPTCHA faucet system to distribute the coins as fairly and organically as possible. The faucet allowed anyone with a computer to participate in the distribution process instead of having the users go for less sustainable distribution methods like mining.
The faucet which was started in 2015 required users to complete complex CAPTCHA tests in order to earn coins. It was shut down in 2017 after 126,248,289 Nano was distributed. Along with the 7,000,000 Nano that was set aside as developer fund, the total number of Nano in circulation was 133,248,297 Nano. This made up 39% of the initially planned supply. The remaining 207,034,069 undistributed nano was sent to an inaccessible burn address.
What Is Special About Nano?
Nano’s design includes new data structures, consensus mechanisms and other features which has helped it gain some key advantages over other competing cryptocurrencies:
- Fee-less and easy to use: Nano was designed to make digital money or cryptocurrencies simple and easy to use. By focusing on transferring value as efficiently as possible, Nano has managed to keep the transactions on its network fee-less. This has helped the users of Nano to easily access the empowering and cost-saving qualities of digital currencies.
- Eco-friendly: A lot of the cryptocurrencies use wasteful designs that consumes a lot of energy to secure their networks. But Nano was smartly designed to eliminate the need of such resource-intense mining processes. Instead, the network uses Open Representative Voting (ORV) protocol that was designed to be a more efficient consensus mechanism with minimal energy use.
- Instant: Nano has made it possible for transactions to be completed in under a second. Regardless of whether the transaction is related to buying goods at a store, transferring money across borders or making online payments, the transaction is completed instantly. And these payments are fully settled on the network without any delay.
How Does Nano Work?
Nano Block Lattice
One key aspect of Nano’s design is the difference in the way it works compared to other cryptocurrencies. Nano uses a system called Block Lattice, in which each account has its own Nano blockchain (called an account-chain)that can only be updated by the owner. Every “block” in Nano is just a transaction, and instead of keeping a full record of its transactions, the blocks in the blockchain contains only the account’s current balance and their associated transaction amounts. This allows for the blocks to be added quickly without conflicts and send to the network for confirmation.
This is in sharp contrast from other cryptos like Bitcoin and Ethereum, in which all transactions are recorded and batched together before being included in a block. And if the blocks of the blockchain have a finite capacity, these transactions have to bid for inclusion in a block, and fees generated are distributed among the nodes who create these new blocks. This bidding process is also known as mining. The elimination of this resource intense bidding process or mining, is how Nano manages to keep its network fee-less.
And since each account is only responsible for its own blockchain, or transaction history, Nano users do not have to wait for every node in the network to add the transaction to the shared, universal blockchain. Users can send, receive and update the blocks without using the entire network. And this allows for instantaneous transactions.
Every cryptocurrency uses a consensus algorithm to ensure that all the nodes in its system are in sync to prevent users from breaking its software rules. When it comes to Nano, it uses a variation of delegated proof-of-stake (DPoS) which is called Open Representative Voting (OPV).
The process uses voting to create blocks instead of mining and the nodes on the network that has the votes are called representatives. Every account is allowed to freely choose a representative to vote on their behalf. And the voting weight of a representative is proportional to the Nano in its account and the votes that were allocated to them by other nodes or account owners.
Though the votes are allocated to the representatives, the account owners can still use funds without any restrictions as there is no staking involved and the representatives have no control over the funds. Representatives are also not paid to vote on the validity of Nano transactions. And since the blocks that are created are incredibly small, these transactions get confirmed instantaneously and does not consume a lot of resources.
How To Earn Nano?
Can Nano Be Mined?
The Nano protocol was specifically designed to avoid reliance on mining. This design decision was made to eliminate the unnecessary use of massive computing power and to avoid centralization that is usually caused by mining activities.
Instead of being distributed through mining, the entire supply of Nano in the world was created at once and distributed through the original Nano faucet. The maximum supply of Nano was fixed at 133,248,297.
Since Nano cannot be mined, another way of acquiring Nano is through a cryptocurrency exchange. A crypto exchange is an online platform that acts like an intermediary between buyers and sellers. Some of the major exchanges include:
- Binance – Best overall and low fees
- Kraken – Best customer service
- Crypto.com – Best all-in-one platform
Crypto faucets are apps or websites that distributes small amounts of cryptocurrencies as rewards for completing simple tasks. The idea behind faucets is to give free cryptos to generate interest among people so that they take the time to learn about it and hopefully invest in them. With a vibrant community built around Nano, there are several Nano faucets.
While crypto exchanges make it possible to trade cryptos, a crypto wallet is used to store those coins. In the case of Nano, it has wide range of third-party wallets with each providing its own balance of functionality and security. Some of the wallets that are featured on the official website include:
- Atomic Wallet
Nano Future and Price Prediction
Recently, with a lot of concerns regarding the environmental impact of cryptocurrencies like Bitcoin, Nano has been receiving a lot more attention. With reports that Bitcoin mining consumes more electricity than entire countries, and with its historically high fees and delayed transactions, cryptocurrencies like Nano has started to gain more significance.
Having conquered issues like speed, transaction costs, scalability and sustainability, Nano could end up being the cryptocurrency that finally gains mainstream adoption.
As for the Nano price prediction, a lot of experts express the opinion that if the company keeps on advancing their technology and stay focused on their current plan of keeping the network “feeless, eco-friendly and instant”, the price will continue to increase in the coming years.