Nano (formerly Raiblocks) is a cryptocurrency built for almost instant, fee-less, transactions. It aims to improve on the performance of Bitcoin, which attracts transaction fees. As is the case with many alternatives to Bitcoin (dubbed ‘altcoins’), Nano threw out Bitcoin’s mining concept to minimize energy usage and the cost of running the network.
The problem with many of these cryptocurrencies (except Nano) is that they don’t address the problems that Bitcoin’s mining (PoW/Proof-Of-Work) concept does without creating other problems. Examples of such problems including centralizing control in the hands of few people who could abuse that power (a poorly-implemented PoS system can cause this, but some designs may avoid this).
Nano, on the other hand attempts to strike a balance. It uses a neat little PoW (despite being minerless) trick to deter spamming, but it doesn’t consume the colossal amount of energy that mining does. When initiating a transaction, Nano Wallet makes your computer generate a nonce, so there is a considerable price to pay if you attempt to flood the network with transactions, but almost nothing if you’re a legitimate user.
That cost is processing power and electricity. The energy cost to send one transaction is minuscule and only lasts a couple of seconds, but it will add up if you’re a spammer. Bitcoin’s approach uses mining fees (which have fallen dramatically this year) via the Proof-Of-Work consensus algorithm, which has proven to be solid and impressively secure.
Nano uses what resembles a partial PoS system, because voting power (for conflicting transactions) is weighted based on your account balance. The whitepaper referred to it as a “balance-weighted vote on conflicting transactions”. Nano’s reliance on this staking system is limited, which is a good sign.
I used the Nano Wallet (running a full node) to become more acquainted with the cryptocurrency, and the synchronization process was memory and CPU intensive (bear in mind that I used a slow computer). After that was done, it was smooth sailing.
Memory usage fell to 23 MB and CPU usage also fell to a comfortable range (the teens), so the dual-core 2.9GHZ PC with 6GB of RAM had no problem running the wallet/node. Nano has also taken a step in the right direction by reducing its blockchain size and it doesn’t have to store the entire blockchain on your PC (only the last few blocks, according to page 2 of the Nano whitepaper). Both of these points are important, as nodes help to support the network and we want people to run them.
As for transaction speeds. It lived up to its promise of rapid transactions. I initiated a few transactions between wallets using the Canoe wallet app and Nano Wallet and they were the fastest cryptocurrency transactions i’ve done yet. They were completed (including confirmations) in seconds.
Transfers from exchanges took much longer (because they’re exchanges and not intended for regular transactions), so i’d recommend getting the official Nano Wallet app if you want to secure your coins and take full advantage of its performance (and avoid exchange-related fees). It supports Linux, Windows, and Mac.
The user interface of Nano Wallet is very simple and functional, and will display your transaction history, provide an account lock, and make it very easy to generate new wallet addresses for your security and privacy. it also makes it easy to backup your wallet seed, which is a must for any cryptocurrency wallet.
With regards to investment, Nano’s economical, performant technology should help it stand the test of time, and that is generally good news for investors holding it over the long term. However, anything can happen. This is not investment advice!
Image obtained with thanks from Marco Verch on Flickr.