Nano (cryptocurrency)

Last updated
Nano
Nano logo.svg
Denominations
Symbol Ñ (Unicode: U+00D1)
CodeNANO
Precision10−30
Superunits
1000Gnano
Subunits
11,000knano
11,000,000nano
1109mnano
11012μnano
11030raw
Development
Original author(s)Colin LeMahieu
White paper "Nano: A Feeless Distributed Cryptocurrency Network"
Initial release4 October 2015(5 years ago) (2015-10-04)
Latest release V22.1 / 11 June 2021(3 months ago) (2021-06-11)
Code repository github.com/nanocurrency
Development statusActive
Written in C++
Developer(s) Nano Foundation
Source modelOpen source
License FreeBSD
Website nano.org
Ledger
Hash function Blake2
Issuance scheduleCaptcha faucet (ended)
Circulating supply133,248,297
Supply limit133,248,297

    Nano (NANO) is a peer-to-peer digital currency. It is a decentralized, open-source cryptocurrency based on directed acyclic graph (DAG) architecture with an Open Representative Voting (ORV) consensus mechanism. It operates without intermediaries by using a distributed ledger with a block-lattice data structure. [1] [ unreliable source? ] [2]

    Contents

    Nano was launched in October 2015 by Colin LeMahieu, with the aim of addressing blockchain scalability limitations that can result in restrictive fees and increased transaction confirmation times under load. [3] It has feeless transactions that typically achieve full confirmation in under one second. [4]

    History

    Development of Nano began in 2014 by Colin LeMahieu, under its original name of RaiBlocks. [5] On 31 January 2018, RaiBlocks rebranded to Nano. [6] Nano was distributed for free through a Captcha-based faucet which started in 2015. The faucet was shut down in 2017 after 126,248,289 NANO were distributed. Along with a 7,000,000 NANO developer fund, this fixed the total supply to 133,248,297 NANO. [7]

    On 9 February 2018, the Italian cryptocurrency exchange BitGrail announced its shutdown after being hacked. There were unaccounted losses of 17 million Nano from its wallets, preventing users from accessing assets stored on the platform. [8] The victims sought recoupment through the Italian court system, and supported by the Nano Foundation, launched a class-action suit against BitGrail owner Francesco Firano. In January 2019, the Court of Florence found Firano liable for the losses after discovering that the exchange had failed to implement any meaningful safeguards to ensure the safety of their customers' funds and failed to report losses from as early as July 2017. [9]

    Design

    Nano uses a block-lattice data structure, where every account has its own blockchain (account-chain). [10] [ non-primary source needed ] It is the first cryptocurrency created on a directed acyclic graph (DAG), [11] [ unreliable source? ] where a "block" is just one transaction, and each transaction contains the account's current balance. [12] [ unreliable source? ] [10]

    Consensus is reached through an algorithm similar to proof of stake named Open Representative Voting (ORV). In this system, the voting weight is distributed to accounts based on the amount of NANO they hold: accounts then freely delegate this weight to a node of their choice. In the event that two contradictory transactions are broadcast to the network (as in a double spend attempt), nodes vote for one of them and broadcast their vote to the other nodes. The first transaction to reach 67% of the total voting weight is confirmed, and the other discarded. [13]

    This architecture allows Nano to function without direct monetary incentives to users or validators. Because certain entities benefit from the network indirectly (cryptocurrency exchanges through trading fees, merchants avoiding the fees associated with credit card companies, etc.), there is an interest to keep it healthy and decentralized by running a node. Since there is no direct incentive to accumulate voting weight, this also helps avoid the centralizing tendencies inherent to economies of scale such as traditional proof of work and proof of stake architectures. [14]

    Related Research Articles

    Double-spending is a potential flaw in a digital cash scheme in which the same single digital token can be spent more than once. Unlike physical cash, a digital token consists of a digital file that can be duplicated or falsified. As with counterfeit money, such double-spending leads to inflation by creating a new amount of copied currency that did not previously exist. This devalues the currency relative to other monetary units or goods and diminishes user trust as well as the circulation and retention of the currency. Fundamental cryptographic techniques to prevent double-spending, while preserving anonymity in a transaction, are blind signatures and, particularly in offline systems, secret splitting.

    Cryptocurrency Encrypted medium of digital exchange

    A cryptocurrency, crypto-currency, or crypto is a binary data designed to work as a medium of exchange wherein individual coin ownership records are stored in a ledger existing in a form of a computerized database using strong cryptography to secure transaction records, to control the creation of additional coins, and to verify the transfer of coin ownership. Some crypto schemes use validators to maintain the cryptocurrency. In a proof-of-stake model, owners put up their tokens as collateral. In return, they get authority over the token in proportion to the amount they stake. Generally, these token stakers get additional ownership in the token over time via network fees, newly minted tokens or other such reward mechanisms. Cryptocurrency does not exist in physical form and is typically not issued by a central authority. Cryptocurrencies typically use decentralized control as opposed to a central bank digital currency (CBDC). When a cryptocurrency is minted or created prior to issuance or issued by a single issuer, it is generally considered centralized. When implemented with decentralized control, each cryptocurrency works through distributed ledger technology, typically a blockchain, that serves as a public financial transaction database.

    Proof of stake (PoS) protocols are a class of consensus mechanisms for blockchains that work by selecting validators in proportion to their quantity of holdings in the associated cryptocurrency. Unlike a proof of work (PoW) protocol, PoS systems do not incentivize extreme amounts of energy consumption. The first functioning use of PoS for cryptocurrency was Peercoin in 2012. The biggest proof-of-stake blockchain by market capitalization is Cardano.

    Ethereum Open-source blockchain computing platform

    Ethereum is a decentralized, open-source blockchain with smart contract functionality. Ether is the native cryptocurrency of the platform. Amongst cryptocurrencies, it is second only to Bitcoin in market capitalization.

    Nxt

    NXT is an open source cryptocurrency and payment network launched in 2013 by anonymous software developer BCNext. It uses proof-of-stake to reach consensus for transactions—as such there is a static money supply. Unlike Bitcoin, there is no mining. NXT was specifically conceived as a flexible platform around build applications and financial services, and serves as basis for ARDR (Ardor), a blockchain-as-a-service multi-chain platform developed by Jelurida, and IoTeX (cryptocurrency) the current steward of Nxt as of 2021. NXT has been covered extensively in the "Call for Evidence" report by ESMA.

    Dash (cryptocurrency) Cryptocurrency

    Dash is an open source cryptocurrency. It is an altcoin that was forked from the Bitcoin protocol. It is also a decentralized autonomous organization (DAO) run by a subset of its users, which are called "masternodes".

    Blockchain Distributed data store for digital transactions

    A blockchain is a growing list of records, called blocks, that are linked together using cryptography. It's also described as a "trustless and fully decentralized peer-to-peer immutable data storage" that is spread over a network of participants often referred to as nodes. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. The timestamp proves that the transaction data existed when the block was published in order to get into its hash. As blocks each contain information about the block previous to it, they form a chain, with each additional block reinforcing the ones before it. Therefore, blockchains are resistant to modification of their data because once recorded, the data in any given block cannot be altered retroactively without altering all subsequent blocks.

    Hyperledger is an umbrella project of open source blockchains and related tools, started in December 2015 by the Linux Foundation, and has received contributions from IBM, Intel and SAP Ariba, to support the collaborative development of blockchain-based distributed ledgers.

    A decentralized application is a computer application that runs on a decentralized computing system.

    A distributed ledger is a consensus of replicated, shared, and synchronized digital data geographically spread across multiple sites, countries, or institutions. Unlike with a centralized database, there is no central administrator.

    Ethereum Classic Open source blockchain computing platform

    Ethereum Classic is an open source, blockchain-based distributed computing platform featuring smart contract (scripting) functionality. It supports a modified version of Nakamoto consensus via transaction-based state transitions executed on a public Ethereum Virtual Machine (EVM).

    A cryptocurrency wallet is a device, physical medium, program or a service which stores the public and/or private keys for cryptocurrency transactions. In addition to this basic function of storing the keys, a cryptocurrency wallet more often also offers the functionality of encrypting and/or signing information. Signing can for example result in executing a smart contract, a cryptocurrency transaction, identification or legally signing a 'document'.

    NEO (cryptocurrency) Cryptocurrency

    Neo is an open-source decentralized blockchain decentralized application platform founded in 2014 by Da HongFei and Erik Zhang. Since its rebranding to Neo from Antshares in 2017, the project's vision is to realize a "smart economy" by utilizing blockchain technology and smart contracts to issue and manage digitized assets.

    IOTA (technology) Open-source distributed ledger and cryptocurrency

    IOTA is an open-source distributed ledger and cryptocurrency designed for the Internet of things (IoT). It uses a directed acyclic graph to store transactions on its ledger, motivated by a potentially higher scalability over blockchain based distributed ledgers. IOTA does not use miners to validate transactions, instead, nodes that issue a new transaction on the network must approve two previous transactions. Transactions can therefore be issued without fees, facilitating microtransactions. The network currently achieves consensus through a coordinator node, operated by the IOTA Foundation. As the coordinator is a single point of failure, the network is currently centralized.

    Hashgraph is a distributed ledger technology that has been described as an alternative to blockchains. The hashgraph technology is currently patented, and the only authorized ledger is Hedera Hashgraph. The native cryptocurrency of the Hedera Hashgraph system is HBAR.

    A blockchain is a shared database that records transactions between two parties in an immutable ledger. Blockchains document and confirm pseudonymous ownership of all existing coins within a cryptocurrency ecosystem at any given time through cryptography. After a transaction is validated and cryptographically verified by other participants or nodes in the network, it is made into a "block" on the blockchain. A block contains information about the time the transaction occurred, previous transactions, and details about the transaction. Once recorded as a block, transactions are ordered chronologically and cannot be altered. This technology rose to popularity after the creation of Bitcoin, the first application of blockchain technology, which has since catalyzed other cryptocurrencies and applications.

    Decentralized exchange Type of cryptocurrency exchange

    Decentralized exchanges (DEX) are a type of cryptocurrency exchange which allows for direct peer-to-peer cryptocurrency transactions to take place online securely and without the need for an intermediary.

    Robert A. Küfner is a German entrepreneur, author and investor. He is mentioned as a pioneer in the field of Bitcoin and blockchain technology.

    Decentralized finance is a blockchain-based form of finance that does not rely on central financial intermediaries such as brokerages, exchanges, or banks to offer traditional financial instruments, and instead utilizes smart contracts on blockchains, the most common being Ethereum. DeFi platforms allow people to lend or borrow funds from others, speculate on price movements on a range of assets using derivatives, trade cryptocurrencies, insure against risks, and earn interest in savings-like accounts. DeFi uses a layered architecture and highly composable building blocks. Some DeFi applications promote high interest rates but are subject to high risk. By October 2020, over $11 billion was deposited in various decentralized finance protocols, which represented more than a tenfold growth during the course of 2020. As of January 2021, approximately $20.5 billion was invested in DeFi.

    Algorand is a blockchain-based cryptocurrency platform that aims to be secure, scalable, and decentralized. The Algorand platform supports smart contract functionality, and its consensus algorithm is based on proof-of-stake principles and a Byzantine Agreement protocol. Algorand's native cryptocurrency is called Algo.

    References

    1. Bencic, Federico Matteo; Podnar Zarko, Ivana (2018). "Distributed Ledger Technology: Blockchain Compared to Directed Acyclic Graph". 2018 IEEE 38th International Conference on Distributed Computing Systems (ICDCS). pp. 1569–1570. arXiv: 1804.10013 . doi:10.1109/ICDCS.2018.00171. ISBN   978-1-5386-6871-9. S2CID   13741873.
    2. "Living Whitepaper - Nano Documentation". Nano Docs. Retrieved 2021-09-10.
    3. Easley, David; O'Hara, Maureen; Basu, Soumya (2019). "From mining to markets: The evolution of bitcoin transaction fees". Journal of Financial Economics. 134: 91–109. doi:10.1016/j.jfineco.2019.03.004.
    4. Morais, Rui; Crocker, Paul; Melo De Sousa, Simao (2020). "A Tool for Implementing Privacy in Nano". 2020 IEEE International Conference on Decentralized Applications and Infrastructures (DAPPS). pp. 159–163. doi:10.1109/DAPPS49028.2020.00021. hdl:10400.6/7645. ISBN   978-1-7281-6978-1. S2CID   209471367.
    5. Baldwin, Rosecrans (2019-11-26). "Cryptocurrency Will Not Die". GQ. Retrieved 2020-12-22.
    6. Nano (2018-01-31). "Nano Rebrand Announcement". Medium. Retrieved 2021-02-27.
    7. Nano Foundation (11 November 2019). "The Nano Faucet". Medium. Retrieved 1 March 2021.
    8. Vigna, Paul (2018-02-10). "Cryptocurrency Worth $170 Million Missing From Italian Exchange". The Wall Street Journal. Retrieved 2019-12-18.
    9. Canellis, David (2019-01-28). "Italian court forces BitGrail CEO to repay $170M in 'lost' cryptocurrency". The Next Web. Retrieved 2019-12-18.
    10. 1 2 Shahaab, A.; Lidgey, B.; Hewage, C.; Khan, I. (2019). "Applicability and Appropriateness of Distributed Ledgers Consensus Protocols in Public and Private Sectors: A Systematic Review". IEEE Access. 7: 43622–43636. doi: 10.1109/ACCESS.2019.2904181 . S2CID   108390582.
    11. Masood, Faraz; Faridi, Arman Rasool (2018). "Consensus Algorithms in Distributed Ledger Technology for Open Environment". 2018 4th International Conference on Computing Communication and Automation (ICCCA). pp. 1–6. doi:10.1109/CCAA.2018.8777695. ISBN   978-1-5386-6947-1. S2CID   199057702.
    12. Werner, Robert et al. (2020). "Anonymization of Transactions in Distributed Ledger Technologies". Twelfth International Conference on Adaptive and Self-Adaptive Systems and Applications. p. 69. ISBN   978-1-61208-781-8.
    13. Nano. "Protocol Design - ORV Consensus". nano.org. Retrieved 27 February 2021.
    14. Nano (26 May 2020). "The Incentives to Run a Node". Medium. Retrieved 27 February 2021.