Why Nano could become the world’s digital currency
897. That’s how many digital currencies exist today. I admit I don’t know all of them, but most require mining and behave pretty much like our old friend called Bitcoin, which is good but not great.
If we want to revolutionize the world’s economy we need all the benefits of blockchain based coins without the downsides. Because yes, today there are still many downsides:
- Mining requires ridiculous amounts of energy. It’s getting out of hand and as the rigs get more expensive and rewards less, people might back-out.
- (BitCoin) mining in particular is becoming too centralized. As more miners join huge mining pools to increase chances on solving crypto-challenges and receive block-rewards, they could eventually endanger the integrity of the chain.
- As much as I love them, privacy-focused coins will never get rid of their ‘illegal’ image. They will always co-exist in my belief, but i don’t see the ECB, World Bank or other financial institutions saying ‘great, an anonymous digital coin, that’s what we need.’ (sadly enough…).
- Distribution: some coins have too much supply stuck at just a few players. Usually the creator(s).
- The speed is often still too slow for everyday use in brick-and-mortar stores.
- If you only earn a few dollars per day or process thousands of transactions, any fee is too much.
- Spam-attacks can still cripple networks. We don’t want this happening on Black Friday or pre-Christmas.
- Blockchains are becoming huge on the long term. Becoming a node will require many hundreds of gigabytes and massive internet bandwidth.
- Some online crypto-based payment systems still require middle-men companies processing the actual exchange and taking an extra percentage of fees on top of existing fees…
So what makes this relatively ‘new kid on the blockchain’ called Nano (formerly Raiblocks) so special?
First of all, it’s relatively fairly distributed. The total supply of Nano (133,248,289 XRB) got distributed through a faucet everybody could use by filling out Google Captchas. It’s like ‘human mining’. At the time ‘Raiblocks’’ was still worth next to nothing, one had to -manually- solve small puzzles and a bit of ‘XRB’ was given as a reward. This meant anybody with a simple computer was given an honest chance to earn some. I like that idea. No need for huge investments in mining rigs, Master Nodes or anything like that. People all over the world used it, and that’s why it’s also quite popular in developing countries like the Philippines. The developers are said to own about 4.8% of the supply. Of course, what we don’t know is is whether or not some people took advantage of this system to create masses of XRB through clever systems solving thousands of captcha’s. It could mean some individuals have beyond reasonable amounts of XRB today. Another flipside to this faucet is that this finite supply could mean there is not much incentive to actually use XRB, as most people might try to ‘hold’ their coins, expecting them to rise in price over time (like Bitcoin). Perhaps some healthy inflation to make up for lost coins and to give newcomers a chance to get some might have not been such a bad idea. (Thanks for pointing these counterarguments out Bernard Kolobara)
Next to this, Nano is free to use. There is 0 fee for any transaction. If you want to send 1Rai ( 0.000001 XRB) or even just 1 Raw (10²⁴ Raw = 1 XRB!) from one point on the planet to another, it costs you zero, except for the small amount of energy used by your CPU to do the required PoW (Thanks for pointing that out Bernard Kolobara). As you can see the total supply of XRB is enormous if you consider the total supply of Rai or even Raw. This makes the entire system incredibly scalable.
Its total energy consumption is very low. Currency shouldn’t cost tons of energy (and thus money) to exist. Whereas 1 BTC transaction needs +330kWh to process, 1 XRB transaction needs less than 0.001kWh = 1Wh! Nano is one of the most environmentally friendly cryptocurrencies. (ref. their website) As I’ve understood, Stellar Lumens uses even less energy.
Since it’s a blockchain based currency we need nodes verifying every transaction. The protocol is incredibly lightweight and the cost of running a node is miniscule. When you open your wallet you’re a node and at the moment it requires the occasional 1~2% of cpu power, usually 0%. So I don’t mind running this wallet on boot to support the network (and neither do these kind folks). One transaction fits within a single UDP packet, and transactions are handled independently, which means there is NO block size issue.
The Transaction speed is incredible. Your wallet pre-caches the necessary PoW (Proof of Work) for the next transaction once a transaction is sent, which makes transactions instantaneous. The amount of PoW is trivial compared to other cryptocurrencies and is primarily used as an anti-spam technique. Next to this, Nano uses a PoS (Proof of Stake) technique with representatives and voting to ensure the validity of the network. Brian Pugh recently ran an elaborate stress-test and the conclusions are incredible: Never was the network crippled and the blockchain grows just a ridiculously small amount (update: here’s part 2). Nice to know: the network has a theoretical capacity of +7.000 transactions per second without limits.
If you try using Nano you’ll fall in love immediately. It’s as fast, if not faster than using Paypal or your ATM card. Only in this case neither you or the merchant needs to pay any fees. Because keep in mind, every merchant pays quite a lot for accepting your plastic! Obviously they are no charity so they charge the extra percentages per transaction through to you.
This means merchants worldwide would immediately benefit form accepting Nano and just leaving their wallets open. They could even run a VPS-based Nano Representative Node for a few bucks per month and still save hundreds if not thousands every month on reduced transaction fees. People often wonder ‘Why would I run a Node if I don’t get paid?’ Well; saving a lot of money is also a form of reward and a great incentive.
Nano serves just 1 purpose, it’s a digital currency, and it does so perfectly. Don’t expect smart contracts or dApps, dEX, BaaS and all that technical mambo jambo from the Rai devs, expect 1 huge problem to be solved for good.
Update: In the Nano Roadmap the developers mention Smart Card development. This could mean regular plastic cards with a small chip integrated, can be used to pay with Nano. The merchant only needs to have the correct software installed for his terminal.
Active development for Nano?
The Nano team has proven to be extremely active and is working hard on integrating its currency in many exchanges such as Binance. This hasn’t been easy, but it’s inspiring to see such quick response and agility. The ultimate goal would be making Nano the main trading pair on any exchange because it’s fast, free and efficiënt.
For merchants to adopt new technology, integration should be dead simple and end-users should not experience any unnecessary obstacles.
Many developers have started to work on easy-to-integrate tools to work with any e-commerce platform. The best example is BrainBlocks.io, developed by Daniel Brain and Jill Robinson. It is -for any developer- quite easy to integrate BrainBlocks and to start accepting Nano on your online shop. The exchange rate from USD is automatically calculated into amounts of XRB and all your customer needs to do is to send said amount of XRB within 2 minutes. No sign-up, no passwords, no hassle.
If you are no developer, and are using the very popular and completely free Woocommerce for Wordpress, a new plug-in has emerged called “Brainblocks for Woocommerce”. Just add your Nano wallet address and you’re set-up. Boom! The plug-in is still in development but can already be used:
There are many more similar projects (check ‘infrastructure’) in active development. For example ArrowPay.io communicates directly with the webwallet Raiwallet.com to allow payments (but asks for a 0.5% fee), Getxrb.com allows you to create invoices in Nano, and so on… It proves that the community is very strong.
Update: The iOS wallet is coming soon and seems to be making true on it’s promises of being instant. In the following video, 2 people -one based in the US, the other in the UK- ping-pong some Nano-transactions to one-another over the beta iOS-App. It seems to work flawlessly.
Conclusion: a bright future
Over the past year I’ve used many cryptocurrencies, but many of the above stated arguments held back my belief that one of them could eventually break through as ‘the internet’s spending money’. With Nano it seems to me the technology is finally ready to take on the world. I really can’t wait to use this in my local Belgian Frituur or to order a great beer.
If you want to get started with NANO, or just play around to see if it really walks the talk, you can get a small amount of free NANO to play around with on https://nanofaucet.org. Just create a wallet online or download the official wallets on https://nano.org and have fun.
I enjoyed writing this article because I love Nano. If you feel like contributing or buying me a pint, any amount would be greatly appreciated: xrb_1z3tak5dxtf4iw919ykksds7fd84f8xqmydwradgo47qxp9dcxmia9h8gj1g
Disclaimer; Yes, I own a few Nano and this is NOT investment advice. I hope I didn’t make any mistakes in this article, I only try to inform. However nobody’s perfect and if you do find some, please point it out in the comment section and I will adjust accordingly asap. Thank you