NANO , a Pure Cryptocurrency
NANO, previously known as Raiblocks ($XRB) is pure cryptocurrency when it comes to its use, its only use and where it is good at is transactions and its what it was built aimed for. Being a cryptocurrency with fee-less transactions might worry most of those that didn't took their time to read about NANO.
Nano is different from most cryptocurrencies when it comes to how it uses Blockchain, unlike Bitcoin where everything, every transaction, is kept on the same Blockchain, Nano has a separate Blockchain for each account created controlled by its owner's private key, thats whats called Block-lattice.
Block-lattice is the system Nano uses to be able to provide instant and fee-less transactions, since this is a bit hard to visualize, thanks to Lucas Santos who made a video to provide an easy way to see how it works we will be able to look at it in more graphical way.
This is how the Block-lattice looks like:
Image by Lucas Santos
Nano is able to provide a fee-less and almost instant transactions thanks to the its proof of work and proof of stake hybrid, yes Nano uses both algorithms but when it comes to proof of work the amount of work needed to compute a transaction is minimal and even a mobile phone can do it in several seconds, Nano also allows for pre-computation of the proof of work needed, when it comes to proof of stake, each account can choose a representative to vote for the choosing of the blocks, and thanks to Lucas Santos we will also be able to visualize how the voting through proof of stake goes.
Here is how the voting works on conflicting blocks:
So, first lets try to explain the basics, Nano works with blocks just like Bitcoin but Nano has 4 different block types, we have a Send block, created by the account sending Nano to another account, a Receive block created by the account receiving Nano, and a Change block which will allow the account to change its representative, and the Open block which is the genesis block for each account on the Nano Block-lattice.
Each transaction will need 2 blocks a Send and a Receive block in 2 different accounts.
So now lets see how it looks:
By using the Block-lattice system, it also allows for Ledger Pruning, so instead of keeping the entire history of the blockchain, so for each account you only have to keep the history until the last Send block in order to keep a full working network, only historical nodes and accounts which choose to have to keep the full network history.
Ledger Pruning looks like this:
This allows to keep the memory needed to store the network really low and only some nodes need to keep the whole history in case of attacks to the network.
So, as I said, many people are probably worried with some attacks that can occur on the Nano network thanks to transactions being almost instant and fee-less, which would probably be Transaction Flooding the network, and Penny-spend spam attack.
The defense for both of this attacks is the amount of proof of work you need to do to send a transaction, even that amount costs almost no time and requires almost no effort, it is enough to defend the network when it comes to this attacks.
Another attack that people might be worried about is the Sybil attack, where an attacker creates tons of nodes to turn the voting into is side, but the defense is simple because Nano's voting system uses the account balance to decide each nodes voting power.
If you want to check out other attacks and get a bit more in-depth knowledge about them check Nanocurrency Github
Nano is also a highly scalable cryptocurrency but theres not much to say there so I will leave you with this article where it shows some of the stress tests made to the Nano network and the TPS achieved.
Also something fun, the way Nano was distributed when it first appeared, was not the regular way by doing an ICO or Airdropping it, it was actually distributed through a faucet, I found that funny, also wish i had been around.
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