How to Create a Digital Currency for the Real World
Nano — An ultrafast, fee-less, scalable currency
We recently spoke with Colin LeMaheiu, creator of Nano, and founder of the Nano Foundation, about the tech behind one of the most impressive solutions to digital money.
Hi Colin, can you give us a quick introduction to the project — what’s its purpose?
Of course, the purpose of Nano is very simple: We aim to revolutionize the world economy through a sustainable and secure global digital currency that is open and accessible to everyone. We can do this through energy efficient, ultrafast and fee-less transactions that allow anyone with a basic internet connection to participate in a global economy.
Interesting, but how exactly do you manage to do this?
The important underlying technology that differentiates Nano from other cryptocurrencies is the Block Lattice. I created the Block Lattice so that every account would have its own blockchain, rather than the network sharing one single chain into which everyone is competing to get their transactions. By allowing simultaneous transactions, there is no limit to how many can be processed at once, resulting in incredibly fast transfers and huge scalability that can be achieved with very little energy expenditure.
Who’re the founders, and what’s your history from way back in the RaiBlocks days?
As a software engineer who has always been interested in economics, when I first saw bitcoin way back in the day, I realized that digital currency has amazing potential to make a positive impact in the world. I watched for a few years, before deciding to try and break down and address the inefficiencies that I thought would eventually limit the global adoption of Bitcoin. So in 2014, I created Raiblocks and worked on it in my spare time until finally leaving my Software Engineer position at Qualcomm in late 2017 to concentrate all of my energy into the development of Nano. Since then I have focussed on assembling a high-quality team and establishing the Nano Foundation, a non-profit software company chartered with shepherding the development of the protocol to be as robust as possible.
Can you run through a list of use cases for Nano — what’s the grand picture?
Sure, having such a simple purpose means the potential use-cases of Nano are vast. In solving basic peer to peer transfer of value, Nano can be applied to any most of the use cases of fiat currency and since our system is so light, it opens opportunities to use currency in ways that haven’t been possible before. Nano can address big picture problems like the reduction of fees attached to international remittance, provide communities and countries with the necessary tools to create local economies and provide financial empowerment to people currently without access to the global economy.
Nano is also well positioned to evolve alongside people’s changing attitude towards money and payment. The protocol provides a platform for efficient microtransactions that can be easily integrated into existing services such as Twitter and Reddit which I think will play a really important part in the early adoption of digital currencies.
Being ultrafast, fee-less and green — how do you compare yourself to for example the Lightning Network protocol with virtually zero fees that has an actual economic incentive for participants?
At a glance, Nano and the Lightning network appear to be very similar technologies attempting to address the same problem, however, the underlying technologies are very different. Nano’s point-to-point transactions settle directly and extremely fast. Second layer solutions require a system of credit lines in order to emulate fast settlement which is simply unnecessary overhead, when it can be solved natively in the protocol, like Nano.
With regard to the economic incentives in various cryptocurrency consensus models, participants can either be rewarded either through payment or a decreased expense. Nano adopts the latter, and by saving the participant banking expenses, they have an incentive to keep the network operating correctly as it serves a core function of their business.
I understand the prevailing school of thought in the cryptocurrency space considers direct financial incentives to be important in providing secure consensus, but this method will not scale in the way in which a global decentralized currency will require, without facing serious problems. So we are excited to take the lead in helping to change the status quo to a more sustainable and genuinely decentralized model.
Multiple solutions are being worked out for LN’s problem with large scale transactions — how does Nano cope with this? Are transactions on Nano limited in any way?
This problem doesn’t exist for Nano because our transactions are fast, direct, and point-to-point. By fundamentally solving the settlement problem in the protocol, it’s unnecessary to tinker with additional functionality.
Your online wallet on nanowallet.io is trustless, correct? How’re the user’s funds secured and how do they store their private keys?
The Nano ecosystem has a wide range of third-party wallets, with each providing its own unique balance between functionality and security. There is no officially supported light wallet offered by the Nano Foundation
What’re your 3–5 most interesting upcoming bullet points from the roadmap?
After recently reducing average transaction time to less than a second in our Dolphin update, we are focussed on further strengthening the protocol and creating an even more robust and efficient network, before making a concerted push towards adoption. So coming up we will be adding Confirmation height — which will allow us to write better network code to reduce communication traffic. We are adding 2-phase durable confirmations facilitating vote snapshotting. We will be switching from UDP to TCP which will give better flow control, reduce redundant network communication, and traverse firewalls better making Nano significantly more efficient and easier to integrate into modern systems.
We are also planning a reworked network overlay which will reduce peer connection count and allow more efficient publishing of transactions and a new RPC system supporting protocol buffers giving easy access to language bindings.
What’s the plan for the next 3–5 years, how do you position yourself in the general market, expecting you move beyond being just another crypto coin for the people outside of crypto?
Our immediate plan is to remain on the cutting edge of blockchain technology and adoption, while always looking to move and grow within the space, as we perceive it. Cryptocurrency is a very dynamic and unpredictable industry in its current state, so being overly committed to a specific plan for the next 5 years is rather naive. Instead, we look to remain agile and flexible and being loosely prepared for most eventualities. Having a flexible narrative that remains true to our core goals appears to be a wise strategy at this point in time.
Where can people connect with you online, or otherwise support your business?
Our team is always available and ready to connect on our Nano subreddit and Discord. We have an incredibly active community of developers, entrepreneurs, designers, all building out the ecosystem, anyone is welcome to join the community and pitch in with their own ideas and skills. For business, integration, service or media related communications we invite people to contact us through nano.org
Where can people download your apps or acquire your currency?
People can find all the relevant info at https://NanoLinks.info , which is a community website that compiles everything from the Nano related into one easily searchable directory. It has over 250+ links to all of the wallets, exchanges, services, and resources to help people navigate the ecosystem and familiarize themselves with Nano.
Thank you for your time Colin, it was a pleasure to talk to you!