Nano PoW — The Essentials

Guilherme Lawless
Sep 23, 2019 · 4 min read

Update, Mar 6, 2020: While research continues into the viability of Nano PoW and the potential application of other algorithms, including Equihash, we have announced plans to optimize the tuning of the current algorithm for Athena V21.

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?

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?

  • Verification is too costly, creating an impractical burden on all node operators
  • Resulting proofs are too large, impacting the size of blocks and bandwidth usage
  • Shortcuts can be found which create unfair and exploitable advantages
  • Complex specifications and implementations, making use impractical

What makes Nano PoW perfect for our needs?

  • Small proof size — With blocks designed to fit into a single UDP packet, all data must be as small as possible. With Nano PoW, the proof has a size of 10 bytes, which still fits in the same payload.
  • Memory-hard — Scales based on memory rather than compute elements. Much more expensive to scale and using less energy to generate.
  • Simple — Both in specification and implementation. Simplicity makes it easier to create and validate, along with reducing the probability that issues will be found later.

Does the new algorithm use more energy?

Who created Nano PoW?

When will it be available?

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?

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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