Everyone bitches about Bitcoin’s scalability.
We get it, growing pains suck.
But...one upside to a new, highly competitive ecosystem with obstacles to overcome is that if can further fuel creativity.
Of course, we are more bullish on the future of Bitcoin's layer 2 scaling, and other alternatives, but let’s dive into a different mindset today.
This brings us to today’s review: Nano (formerly known as RaiBlocks LOL).
Let’s dig in…
Nano (Ticker: NANO)
Wtf is Nano?
Nano is taking an approach similar to IOTA (MIOTA? wtf..). Yes, this means there is no PoW mining or fees in the network.
They both use the directed acyclic graph concept, but Nano uses their novel block-lattice method of managing transactions as opposed to IOTA’s DAG (Tangle).
The block-lattice architecture is a solution where each account has it’s own blockchain, resulting in nearly instantaneous transaction speeds. They also claim unlimited scalability.
Each account’s blockchain is called an account-chain. This allows for the chain to update asynchronously as compared to the traditional blockchain, where all nodes agree to update the ledger accordingly.
Only individual account owners can modify their own chain, ie sending NANO. Users transact with each other directly between their respective chains.
Each transaction has its own block. When a transaction occurs, funds are considered unsettled until the receiver signs the block as confirmation. Then each users' balance is updated accordingly. Blocks contain a record of the account's balance, so when each chain adds the next block, they then include this new transaction which updates their balance. So, the receiver would add the transaction, and the sender subtracts it. (wild stuff..)
Additionally, uses UDP (User Datagram Packets) to send messages in the system, which is some seriously old-school shit. UDP is a web protocol created in 1980... and is part of the Internet Protocol suite. UDP is used to send short messages, in a cheap manner between applications while keeping computing costs low. UDP is definitely not known as the most reliable protocol though. It makes no guarantees for delivery or the order of messages and does not confirm or authenticate the sender.
Nano also uses DPoS (delegated proof of stake) to assist in processing transactions. These delegates are generally nodes that would run 24/7 to confirm transactions.
BUT WAIT...each account has its own blockchain. This means that an account owner can choose a delegate to represent them, or we would imagine that in many cases an account owner would be their own delegate.
BUT WAIT....if there are not fees in the network, then why would anyone want to be a delegate? Good f***n question. The average person would not. But, there are merchants and exchanges who would want to keep transactions running, so they can send and receive NANO, and there are also researchers, academics, and hobbyists who do. Shitty answer, and we agree..this is partially the issue with these Tangle type of set ups. There needs to be big incentive beyond just an efficient, cheap solution. Hopefully NANO users are saving more than the costs to use it (granted, it is cheap to use).
So to summarize, Nano is able to avoid fees and PoW by using UDP packets, along with each account having its own blockchain, and users signing transactions directly with each other.
Who tf is behind this shit?
Their founder goes by the name Colin LeMahieu. He doesn’t have the most entrepreneurial background, but according to his LinkedIn, he has 11-12 years of experience as a software developer. He began at a company called eLoyalty and was there for three years until 2010. From 2010-2012 he worked at Dell as a software developer, and then bounced around from: AMD, National Instruments, and Qualcomm over the course of 6 years. After Qualcomm, it was Nano. So, he seems to have the technical background, now let’s hope he's surrounded himself with the proper business talent to keep the project growing.
Ultimately, we see some economic, technical and philosophical issues with these Tangle type of setups. Incentives are low, but we can see why it is attractive to the masses. Hence why IOTA and NANO pumped hard. Nano had a huge dump too...along with IOTA, but damn that NANO dump. Go look at it lol
Anyways, this is a mid-tier shitcoin. As mentioned, we can see why the masses like it, but ultimately we see economic and technical downsides to it, compared to a traditional blockchain.
Hope you learned some shit.
- Mike and Aaron