If you know what Bitcoin is, you would know for how long the scalability debate has raged on with regard to the first viable cryptocurrency of the world. While many altcoins are trying to solve the scalability issue, one of them is making quite an impression in terms of building a highly scalable cryptocurrency solution. That coin is Nano (XRB). In this beginner’s guide, we take a look at what Nano really is, how it works and what makes it unique.
What is NANO?
Nano is a virtual currency developed with the primary aim of giving users ease and speed in transactions. The crypto coin is also an extremely cost-effective option as the users have to pay absolutely no transaction fees. With the high speed and zero cost, Nano makes for a highly scalable alternative to traditional cryptocurrencies such as Bitcoin itself. What is interesting about Nano is the fact that does not just use blockchain technology at its core. Instead, it also uses DAG technology or direct acrylic graph technology. Nano has a niche of loyal supporters and community members who are extremely impressed by the speed, efficiency, scalability and low cost of Nano. With an efficient block-lattice structure, Nano is excellent for micropayments. According to the official website of Nano (XRB), it is a
“Digital currency for the real world-the fast and free way to pay everything in life”.
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Nano Cryptocurrency: How it Works
Nano cryptocurrency does not have a traditional blockchain architecture. Instead each account holder has a standalone blockchain network of its own. Once the user sends over a certain amount, then a “send” block is added to that chain. Similarly, the recipient’s chain gets updated with a “receive” block. These changes are not reflected across the network, a feature necessary to make sure it does not get too jammed and can work at a lightning speed.
With regard to how transactions are validated on the Nano blockchain, it does not use one of the common forms of consensus protocols used in blockchain like Proof of Work or Proof of Stake. Instead, it uses the comparatively new DPoS or Delegated Proof-of-Stake model, where delegates are given the task of validating transactions, thereby reducing the possibility of centralisation. Nano has a fixed supply cap of 133,248, 290 coins and the limit has been reached, with all coins in circulation, except the 10% that were lost from crypto wallets on the BitGrail exchange owing to a hack earlier this year.
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Uses of Nano
Nano, with its zero transaction fees, is a great option to make extremely small payments with. For coins like Bitcoin, the substantial transaction fee makes it untenable to be used in smaller transactions. Therefore, if you are taking an online subscription for a short period, say a month, it would make more sense for you to use Nano instead of Bitcoin or one of the older cryptocurrencies that charges a substantial amount of transaction fee.
2. Peer-to-Peer Payments:
Because of the ease of payment and negligible costs, the technology is particularly suitable for transferring amounts to small businesses, friends, landowners or professional contacts.
3. Nano Is Suitable As A Trading Cryptocurrency:
Since Nano is a lightweight cryptocurrency that charges no fees, it is a great option for traders to use as a bridge cryptocurrency for buying, selling and exchanging other cryptocurrencies at exchanges. If you do purchase and store Nano for trading and investment purposes, make sure to choose one of the best cryptocurrency wallets of 2018 for storing your XRB coins, lest another incident like the BitGrail hack threatens the security of your cryptocurrencies.
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