What is Nano?
Before we ask ourselves what is Nano? We should ask: "What is money"?
Since the dawn of time, society has strived to improve their quality of life in order to reach a state of complete comfort and happiness.
To enable this journey of achieving an ever higher state of jubilance, mankind created a system of labour exchange.
There have been several iterations of this labour exchange system over the many years.
The first iteration of this labour exchange was the barter system in which a shepard would exchange wool in return for grains from a farmer. A dairyman would exchange milk in return for some pots from a potter and so on. The caveats of this system were various.
The second iteration was assigning an agreed upon value to a metal such a gold or copper and using this as a common medium of labour exchange. This had various advantages such as durability (Gold lasts long) , portability due to size of gold coins etc. This method became so popular that even in the 21st century people still use Gold as a store of value. However gold had its limits, the prime issue being that it is not fungible in nature i.e. you cannot easily divide gold into smaller pieces. Further it is physical in nature which makes it cumbersome to transfer wealth across the world.
The third iteration is what most of you are aware of and can relate to using on a daily basis, which is centralized government backed currencies such as the Indian Rupee, the US Dollar, the British Pound etc. This system has various forms such as hard cash in hand, bank accounts i.e. regulated and centralized database ledgers containing account balances and transaction histories, private companies providing internet based but centralized systems (PayPal, CashApp), credit and debit cards etc.
However all these systems are centralized and each entity controls their own ledger. Further the backend confirmation processing of these transactions is still using archaic technologies and inefficient algorithms which directly impacts the end user experience in a drastic manner. In current day and age an international wire transfer can take several days and costs high fees.
Why should changing a database record through the internet take a lot of time (several days) and cost insane fees to do so? This is happening in an age where we have gigabit ethernet and where WiFi is ubiquitous and even free in many public spots.
In 2008, right in time when the global financial crash occurred and people realized central banking systems can cause havoc and cannot be trusted, Satoshi Nakamoto an anonymous figure/entity released a white paper explaining a decentralized system over the internet titled - Bitcoin: A Peer-to-Peer Electronic Cash System. This introduced blockchain technology to the world.
It was a revolutionary system that challenges the giants of the financial world and proposed a safer, decentralized system for exchange of money which solved the issue of ensuring a transaction can be validated without having to trust any central authority to do so. This was the 4th iteration that mankind attempted to solve the labour exchange crisis.
However, even this system has its caveats. Bitcoin, the currency that was built upon the principles laid down by Nakamoto, has a lot of issues namely:
- Long confirmation times - on average 10 minutes for confirming a transaction.
- Energy Inefficient - 1 Bitcoin transaction uses ~741 kWh of energy per transaction.
- Fees - so called 'miners' collect fees as a payment for confirming transactions.
This just touches the tip of the iceberg on the issues with this revolutionary system however solving these three primary issues would take us very close to the final version of labour exchange system that humans can use reliably.
This is where Nano enters the picture.
Nano was created by Colin LeMahieu in 2015 while being motivated to solve the above mentioned issues.
Nano claims to be fast, feeless and green (energy efficient).
How does Nano achieve this?
Nano is a payment protocol/crypto currency that uses block lattice instead of a blockchain. Every Nano account has its own chain of transaction blocks and is connected to other Nano accounts as directed graphs.
Further Nano doesn't use miners to confirm transactions, instead it uses a system called Open Representative Voting. In this system each Nano account delegates their account balance as a voting power to any Nano Network Node of their choice.
When an accounts broadcasts to the Nano Network that it wants to send/receive a transaction, these Nano Nodes then vote on the transaction whether it is a genuine and a valid transaction or not. And each Node has the equivalent voting power that was assigned to it by its delegators.
Once a transaction receives majority votes, its confirmation status changes to either confirmed or not confirmed depending on the validity of the transaction.
On average Nano transactions get confirmed at sub-second speeds. This includes everything from broadcasting a transaction to the network to the network confirming the same.
As there are no complex calculations happening to confirm a transaction, i.e. no miners, there are NO fees. Instead Nano Node operators are incentivized for running a node for other reasons such as for interacting with the Nano network, safeguarding corporate funds, business operations etc.
Lastly, for a global payment system to be adopted widely it needs to be scalable to accomodate for the ever increasing demands of the real world. To show for that, Nano is highly scalable and highly energy efficient. One Nano transactions uses 0.000112 kWh as they are simple network calls and no complex calculations. Further note that 1 Bitcoin transactions consumes the same amount of energy as approximately 6 million Nano transactions.
Even though Nano has achieved the title of fast, feeless and green cryptocurrency it still has few final straws left to reach complete commercial grade status.
Currently, Nano developers are working hard to make the network highly spam resistance among other things.
However, financial giants like Visa and Mastercard quiver at their knees just by looking at Nano even in its current 90% commercial grade status. As even right now Nano is capable of directly competing with Visa and Mastercard Networks (equivalent TPS can easily be achieved).
According to us, Nano is going to be the beginning of the end in the battle of achieving the final version of the labour exchange system that humans will come to be familiar with for eons from now. Keeping your money safe and being able to transact at will for every individual on this planet is considered a basic necessity by us.
We, at NanoPay are striving to make that reality happen sooner than later.
If you want to experience Nano's power for yourself please checkout the following public faucet: https://freenanofaucet.com