Hey, guys!
So as some of you may know, I previously covered IOTA in a video.
And I was surprised to find out that the community
didn't seem to like the review, even though
I thought my information was unbiased and honest.
And around the same time a project called RaiBlocks,
which is now NANO, was catching a lot of traction.
That caught my eye, because I was interested
in the DAG technology as it relates to possibly
hedging blockchain tech, but I liked the fact that
NANO used the DAG tech in a different capacity than IOTA did.
So in this video, as the title has already explained to you,
I will be covering NANO.
I already mentioned briefly that it was called RaiBlocks,
but I just want to say that it's been officially
rebranded and is now called NANO completely.
So let's get into a little history.
Colin LeMahieu is the founder of the project
NANO and also the lead developer.
The original whitepaper and also the first beta
implementation of the project were published in December of 2014.
Surprisingly enough, that means it's one of the
first cryptocurrencies to start using DAG tech.
Other notable ones are Byteball and IOTA,
but I'll get into that in a little bit.
That fact stuck out to me a lot because it felt like
RaiBlocks, or NANO, seemingly came out of nowhere.
And to know that the project had been around since 2014
just sparked my interest a lot more.
During the time the network was live
after the genesis of the project,
it had very little development going on.
It also ran into a few technical issues.
At one point, Colin actually stopped
working on development for personal reasons.
Then around 2016 - 2017, people from the community
started to band together to try to push the project forward.
And that's actually how the NANO faucet came about.
A community member proposed this idea because they thought
it would be a good way to distribute RaiBlocks
at the time to everyone with low liability.
He also volunteered to manage it.
At that point, development just started to pick back up
and there's contributors who have been joining more rapidly ever since.
That brings us to present day where we've seen this rapid
momentum and growth that's come out of NANO.
Let's talk about distribution a little bit.
So unlike a lot of other projects,
NANO did not run an ICO.
The original distribution was performed by using an
online mining mechanism, or what's called a faucet.
Essentially it was just a website you would go to,
you would complete a Captcha, and then you would receive
a small amount of the coin as a reward.
Faucets were really popular during the genesis of the cryptocurrency movement.
It gave people a way to get involved in the project,
and have a little bit of the project without any liability
or any of those pesky Know Your Customer requirements.
When NANO started it was premined and all the available coins were kept in a genesis wallet.
And the private key for that genesis wallet was kept
in a safety deposit box that was held by Colin.
Then as distribution by the faucet continued,
he would occasionally have to go to the safety deposit box,
take out the private key, send a transaction to the
landing wallet so that he could fund the faucet,
and then he would put the private key back in the safety deposit box.
The faucet actually managed to reach a lot of people.
The team estimates somewhere in the range of 330,000 accounts accessed the faucet.
Those accounts were hailing mostly out of countries like Venezuela, The Philippines, and Korea.
The faucet became very popular, for good reason, and unfortunately
like all good things it must come to an end.
There was a lot of issues with people accumulating
NANO off the faucet and then immediately going to an exchange and selling it.
They were putting a lot of sell pressure on the exchanges, and this was suppressing the price.
Not to mention, there were endless attempts to hack the faucet which meant
the developers of NANO, instead of appropriately spending their time working on the project,
they were focused on trying to keep the faucet up and running.
NANO actually got delisted from Cryptopia because
the faucet users were abusive toward the exchange support.
But eventually they managed to get listed on Mercatox and BitGrail.
And unfortunately, because of all the issues
that they were running into with the faucet,
they ended up deciding to turn it off early.
Only about 39% of the total original circulating
amount of NANO is out there right now.
They then publicly released the address to the genesis account,
the landing wallet, and the faucet account.
That way there's complete transparency within the community,
and I'll put those addresses below in the description so you can see for yourself.
No portion of the NANO coins have been kept
from the original genesis of the project,
and all the NANO that is in circulation right now is the total that will be distributed.
On to the technology.
NANO is a trustless, low-latency, third generation cryptocurrency.
And unlike a lot of other cryptocurrencies that use normal blockchain,
NANO utilizes what's called a block lattice structure.
NANO's focus is for fast, free, trustless transactions from peer-to-peer.
And that's where they mainly differ from IOTA because IOTA's focus is more machine to machine.
The team has stated that they are more focused on micropayments
instead of dealing with the internet of things,
but they haven't completely ruled that out as a possible
use case if people are interested in doing so.
In my IOTA video I had explained what a DAG was,
which is Directed Acyclic Graph, but I'll quickly summarize again.
Directed means that new transactions validate preceding transactions.
Acyclic means that it's not a circle.
And graph refers to the fact that the block lattice also doubles as the ledger.
When one wallet wants to send a transaction to another, that wallet creates two blocks.
One block will go on the sender's blockchain,
and one block will go on the receiver's blockchain.
When the receiving party comes online,
and their blockchain connects to the network,
the wallet will then pocket the funds and the transaction is completed.
Transferring funds on NANO's protocol creates two separate transactions.
The first one deducts the amount from the sender's wallet,
and then the second one adds the amount to the receiver's wallet.
Each send transaction must reference the owner's
previous block in order to prevent a double spend.
NANO uses a Delegated Proof of Stake system, or DPoS.
If you don't know what that means, pop over to my Crypto 101 video
where I cover consensus protocols so you can get a better idea.
Basically, this just means that users have the ability to choose
a representative node to vote on their behalf.
The voting system is balance weighted.
And what that means is the weight of the representative vote
is directly proportional to the amount of NANO that's linked to their account.
The greater the amount of NANO linked to the representative, the stronger the vote will be.
There's a public list of the representatives,
and I will leave that link in the description.
It's important to note that the NANO architecture
also utilizes Proof of Work in a very minor capacity.
They use it as an anti-spam measure.
Essentially because the NANO network doesn't require transaction fees,
somebody could indefinitely spam it.
With the Proof of Work implementation,
each block requires a very small amount of work.
Five seconds to generate, and one microsecond to validate.
This would force a malicious actor to dedicate
a lot of computing power to carry out an attack,
while simultaneously only requiring a very small amount from individual users,
overall preventing a much bigger problem.
NANO has desktop wallets that are available to Macs, Linux, and Windows.
And there's also the availability of a web wallet.
The team is very active on their Discord server and within their community.
They were a great resource for me to help ask questions to get some information for this video.
Not to mention that they just rebranded,
so I think overall that shows dedication for the project long term.
So that brings us to the present day.
And the current market cap sits at about USD$133 million.
And Nano is at number 23 on CoinMarketCap.
Not to mention the rebranding which I touched on before.
That just happened, well, today.
Looking forward to 2018 on their Roadmap,
they would like to create a lite wallet at some point.
They also said that they would like to do some
chain pruning on the network to reduce the size of it.
On to the Pros.
I would like to start off by saying that the team was very receptive.
Everybody was very easy to get a hold of
and there's a lot of communication going on in the Discord server.
They were also very transparent and forthcoming about the genesis of the project,
how they started, and they were willing to answer questions for me,
the things that I couldn't find online.
I would also like to point out so far there's been no significant drama with the team,
and within the crypto community that's a pretty big accomplishment.
I also love the way that the project started.
I think that utilizing the faucet idea
was a great way to get people involved and distribute the coin
without anybody feeling like maybe there was a risk involved.
Another pro would be their rebranding for me
because I think that the old name
RaiBlocks was a bit of a misnomer
considering they didn't use a traditional blockchain
and they used a block lattice.
And unlike some of it's competitors,
it doesn't have a central authority
managing transactions or maintaining the network.
So this is a fully decentralized cryptocurrency.
On to the Cons.
I would have started off by saying that they need to rebrand, but they already did that.
And in the same light, as much as I like the faucet idea,
it still is essentially a premined coin.
I mentioned this in my IOTA video, so I'll mention it here.
DAG technology does not have the amount of testing let's say that the blockchain does.
So we don't know if it gets to Bitcoin-sized transactions
if the speed or the efficiency of the network
is going to be compromised.
Another issue is if in theory an attacker bought up millions
of NANO they could carry out a voting attack.
NANO does recognize this as a weakness and a possible issue,
but they don't see it as a large threat
because of the fact that an attacker would have to buy up an
extraordinarily large amount of money to pull that off.
All in all, if you're interested
in DAG technology as a hedge for the blockchain,
and you don't really like IOTA, then NANO might be for you.
My normal disclaimer applies to this video and all of my other videos.
Please do not take my opinion as trading advice,
and please do your own research if you're going to invest in something.
As always, I appreciate you guys coming to watch my videos.
If you disagree with me and you want to tell me why,
feel free to come on my Discord and hang out.
We're in there pretty frequently.
And also I've started making podcast versions of these videos.
Obviously, it's just audio only.
But I put them on my Patreon account and they are there for contributors.
So if you are interested, I will link my Patreon in the description.
And again, thank you for coming and stopping by,
and I will see you guys soon.