Nano PoW — The Essentials

Guilherme Lawless
Sep 23, 2019 · 4 min read

One of the core decisions when designing the Nano protocol was to avoid relying on transaction fees. Instead, transactions require a small Proof of Work (PoW) value to discourage transaction spam.

Spam: transactions with no utility which create undesirable extra load on the network.

Proof of Work: a mathematical problem that is hard to calculate but simple to verify.

This design helps to tackle the emergent centralization issues seen in other currencies and allows more flexibility in who, how, and where costs related to a transaction are managed.

But this setup has drawbacks — anyone with enough computational power can generate a large amount of pre-computed PoW to send lots of transactions aimed at disrupting the network.

With previous Nano node releases, steps have been taken to help mitigate the potential impacts of spam, thus protecting the quality of service on the network. First, the Dolphin V18 release provided the ability to prioritize transactions based on the difficulty level of PoW. Then with the following release, Solidus V19, updates were made to automatically recalculate the PoW for unconfirmed transactions when the network is under heavy load.

With these changes, users can get their transactions prioritized, even when the network is saturated with spam transactions.

None of the updates aimed at mitigating the impact of spam have yet looked at the underlying algorithm used in the Nano network. With V20, we are taking another major step with the introduction of a completely new PoW algorithm, uniquely designed to reflect the speed and latency requirements of the protocol, as well as its simplicity.

We call this Nano PoW.

Why do we need a new PoW algorithm?

The current PoW algorithm is based on computational power, which makes it too easy and cheap to scale for spam. Specialized hardware can be used to mass-compute PoW. A potential solution to this includes increasing the amount of computational work required for nodes to accept a transaction. Although to effectively discourage spam, the difficulty level would have to be raised to a degree out of reach for the everyday user.

To combat this problem, algorithms which primarily use memory elements have been developed. These are more expensive resources that cannot be easily scaled up on specialized hardware, effectively making it much more costly to mass-compute PoW. At the same time, this has a manageable impact on the average user, as the amount of memory required to generate PoW can be tuned to be within the range of conventional devices.

Why not use available algorithms?

All publicly available memory-based PoW algorithms have one or more drawbacks that make them unfit to be used within the Nano protocol:

What makes Nano PoW perfect for our needs?

Does the new algorithm use more energy?

No, in fact, due to memory access being more energy-efficient, energy consumption is lower for an equivalent difficulty level as compared to the current algorithm used by the Nano network.

Who created Nano PoW?

Colin Lemahieu designed and developed Nano PoW. He has been working with the Nano Foundation team and consulted with various other third-parties in the industry to validate and adjust the implementation.

When will it be available?

Our Lydia V20 release will include Nano PoW. The existing PoW algorithm will also remain available for use by nodes after upgrading. At a later date, after the release, the network will complete the transition to Nano PoW as the only algorithm allowed.

Additional details will be communicated in good time, and a separate work generation server will be provided to help services and node operators successfully make the transition to using Nano PoW.

How can I find out more?

Stay tuned for an upcoming article by Colin LeMahieu with a more technical overview of the algorithm design.

Also join us in discussions on r/nanocurrency, and our Discord server.

Nano

The best place for all of the latest Nano updates, developments and interviews. Brought to you by the Nano Foundation.

Thanks to Zach Hyatt

Guilherme Lawless

Written by

Nano Developer, Roboticist

Nano

Nano

The best place for all of the latest Nano updates, developments and interviews. Brought to you by the Nano Foundation.

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