NANO: Strengths and Weaknesses, --> An altcoin with one of the strongest communities

RaiBlocks was started in 2015 by Colin LeMahieu but has since been rebranded as NANO. It was delivered to all initial via a faucet and not an ICO, this means that the initial coins where not sold by the developers but given away for free.

Unlike Bitcoin which is a proof of work coin NANO is a DAG coin and uses a block lattice (see the bottom of the article for an explanation of the block lattice)

According to NANOs website its main selling points are 1) Instant Transactions, 2) Zero Fees, and being 3)Infinitely Scalable. These strengths are followed by 4) Strong Community, 5) Environmentally Friendly, and 6) Third world adoption

1. Instant Transactions: NANO transactions are near instantaneous meaning there is no time delay when making a purchase. This is necessary if a coin is ever to be used to purchase at a store front. No one wants to wait 30 minutes for a bitcoin transaction to go through when buying a coffee. Binance the largest exchange in the world ranked NANO as the fastest cryptocurrency on their exchange.

2. Zero Fees: The benefits of this speak for itself and along with points 1) and 3) make it an ideal currency to use as a trading pair for exchanges. No more losing a percentage of your coins every time you decide to invest in a new altcoin.

3. Infinitely Scalable: Being able to process 1000x more transactions per second then bitcoin allows NANO to be used by a much greater population, and will allow it to be a currency used for everyday use. Undeterred by many people transacting at the same time. These 3 points together make it the ideal cryptocurrency for developing countries. As many of these countries have low salaries and high inflation, a coin that offers no fees and is infinitely scalable is necessary for mass adoption.

4. Strong community: Currently sitting in the 44th spot in total market cap, NANO has 147835 people involved in its community. Placing it in the 95th percentile of coins for community involvment. One only needs to check out a new exchange listing to see that NANO is constantly being upvote by members to be added as a new coin (coincheckup, 2018). On June 16th, 2018 NANO was ranked number 15 on reddit compared to all coin for the number of subscribers. And many of these community members are on a discord actively creating projects to further promote the coin. To me this was the main selling point that got me into the coin, the amount of people that had faith in it and were actively working for its success.

5. NANO is also the greenest coin on the market , as the redditor, /u/CanadianVelociraptor’s, excellently explained that, The entire Nano network is so efficient that, operating at 7000tps, it can be powered by a single wind turbine. The community is funding to plant a 5 acre forest which will offset the entire carbon footprint of the coin. Check out the site isnanogreenyet.org for more info.

6. One of NANO's biggest undertaking by community members involves their project in Venezuela. Initially to help out the people of this country NANO had donated over $5000 USD to various redditors who used this money to feed their families and their community members, posting photos of the food and medical supplies they purchased with the NANOs. Being country with high inflation and $2 USD average monthly salaries means that even 1 NANO can make all the difference.

This quickly evolved into 2 projects, 1) Sponsor a family, and 2) Achieving mass adoption in Venezuela. Sponsoring a team of accountants, lawyers, developers, and bussiness gurus this project is aimed at enabling medium-sized businesses to use NANO and do it as an organized body of people. As the bolivar inflation increases by over a 1000x a stabler currency is needed. Even with fluctuation a coin like NANO has it is much better option then the bolivar.

Another strategy for mass adoption presented by the community is the SMS interface. In developing countries phone minutes as opposed to fiat has long been used as a source of currency. All over the world you are able to buy a beer from your local pub in minutes, being a much safer and stabler value then the local currency. The SMS interface allows users without access to a smartphone or computer to trade NANO between individuals. Using telephone numbers linked to private keys as the identifiers for individuals. With over 38% of the worlds population being unbanked and 2 Billion people using non-smartphones NANO hopes to be the first cryptocurrency to target these individuals. Check out nanocenter.org for more info.

How it works:

NANOs Weaknesses

Are the following: A) Bitgrail Hack, B) Security, C) Lack of CEO, D) High concentration of the coin in a low number of users

A) At the height of the crypto market (Dec. 2017 - Jan. 2018) Bitgrail was hacked and investors of a variety of coins lost their money. The founder of Bitgrail blamed NANO, a relatively small coin that was new to the exchange. While popular opinion of all involved in the coin was that NANO had nothing to do with this, seeing as how other coins where just as supscebitle to theft the lawsuit goes on. It should be noted since that on every exchange NANO has been listed there have been 0 security issues. This to me is the least worrisome of NANOs weaknesses.

B) Security, THIS IS THE BIG ONE. While NANO has been safe on exchanges the network recently underwent a spam attack causing nodes to go offline. Github user FallerofFalls commented:

"Bitcoin has many flaws but its fee system is very effective at preventing network spam, and it keeps working (albeit expensively) under load.

As we've seen from the recent spam attack, when the network can't cope, many nodes sort of go offline until they can catch up. To me this seems worse than a fee."

Small transactions at a fraction of cent done repeatedly may be able to spam the network causing nodes to go offline.

To which Colin Lemahieu the founder replied: "We have plans for a queueing mechanism weighted on (least recently used account) * (amount) * (PoW difficulty). Nodes will be able to dynamically increase the PoW difficulty they generate to get prioritization."

This essentially means that network users who least recently transferred NANO, transferring the highest amount, and with the highest proof of work will have priority. This satisfied FallerofFalls who commented back: "Wow. That formula is just, genius. Just wow. I'm struggling to think of a scenario where it might not work well."

Of course a 51% attack on the network is still possible should someone buy up all the coins and gain a majority voting power.

C) Lack of CEO, while NANO has a vibrant community an organized project with a uniform direction is more likely to succeed. Having yet to gain, or attempt to gain any partnerships and begin marketing the coin this remains one of the biggest drawbacks seen by most NANO holders.

D) While NANO is decentralized in terms of nodes and voting power, the top 100 accounts currently hold 62% of the total value of the coin. To put this in perspective Bitcoins value for the top 100 is 19%; Ethereum is 34%, Ripple is 81%; Stellar is 95%, Litecoin is 44%. While we are in the middle of the pack having more users is always a bonus. The good news is that for the time being while the marketcap is low enough that a rich person could buy up 51% of the coins, it will be held by developpers and other people with faith in the project to ensure that a 51% attack does not happen.

Should NANO fix their security issues, and problems that arise when the Network is spammed it is my believe that this coin will become one of the biggest cryptos on the market. Stay tuned because the moment that happens I am posting an article about it.

"The block-lattice infrastructure operates like blockchain but with a few key differences. To start, each account on Nano’s protocol has its own blockchain called an account-chain. Only an account-chain’s user can modify his/her individual chain, and this allows each account-chain to be updated asynchronously of the rest of the block-lattice network.

In effect, this means that users can send and update blocks on their account-chain without relying on the whole network. To achieve this, any funds sent on Nano’s block-lattice require two transactions: a sender transaction and a receiver transaction. In order for a transaction to be settled, the receiving party must sign a block confirming that the funds were received. If only the sending party’s block is signed, a transaction is pended as unsettled." (Harper, C. 2017)

References:

1. Github discussion about network security: https://github.com/nanocurrency/raiblocks/issues/990

2. Decentralization of coins: https://arewedecentralizedyet.com/

3. General NANO info: https://nano.org/en

4. Explanation of block lattice: https://coincentral.com/raiblocks-beginners-guide/