Nano - Feeless Currency Focused Crypto
About a week ago I wrote about what I think the perfect crypto platform would be. I mentioned a few projects I like that come close in some aspects. Then a few days ago I wrote about Nimiq to give more detail. Yesterday I talked about Xaya. And today I'm shifting over to the first feeless coin I found, Nano.
To start, nano is NOT a blockchain. At least not in the same way Bitcoin and others are. It is direct acyclic graphs or DAG for short. What this means is instead of a single chain shared across the network that must remain in sync, nano uses a lot of asynchronous branches of a main network. This makes it possible to process transactions much faster than a traditional blockchain. I've seen reports of nano pushing through millions of transactions and confirming at hundreds of thousands per second. I've never personally looked into the claims but there was a site that was showing the catch up after the network suffered a pretty severe spam attack. That was kind of cool.
Nano has a pretty big and active community on Reddit. So you can find all kinds of information over there. When I first found nano it was going for around $0.40 if I remember right. It is up to $6-7 now.
Nano's primary purpose and the goal of the foundation is to do one thing and do it really well. That is be a currency. So while other competitors are building ecosystems, smart-contracts, etc... nano is focusing all efforts into being a payment processor and cash-like currency. And they're doing it pretty well. With feeless transactions and a constantly growing network with pretty decent spam resistance (once all the safeguards developed from the last attack are in place) they seem to have one of the most stable and heavily trafficked networks in the space.
So if all your looking for is a stable, free, payment system, nano may be for you!
And here's where I start getting negative. Like most crypto projects, the community and developers really think what they're doing is right and are not super open to other opinions. I have seen many people bring up second layers or platform expansion only to be shot down and ridiculed.
Even if you accept the premise that nano is trying to be just a currency and that is a good thing, there are still flaws. Some have been pointed out, some less so. All have been met with fanboyish, often illogical, resistance. In fact, a lot of things these people praise about nano, are actually contrary to the goal of nano.
One obvious flaw, the fact that it is not pegged to anything makes it extremely volatile, with an all time low of something like $0.03 and an all time high of something like $34. The holders of nano of course are hoping this price goes 'to the moon'. This is NOT good for a currency. How can someone run a shop that functions on nano if it is constantly being compared to fiat and therefore constantly changing in value? If the owner priced something at 3 nano that he purchased for $10, hoping to make a profit, and the price of nano plummets to $1. That shop owner is going to go out of business really fast. The argument to this is that once nano gets enough adoption it's value will stabilize. This is wishful thinking at best. The most adopted crypto is still extremely volatile.
Another flaw in the attitude of the community and goals of nano is the idea they're going to achieve mass adoption without having an ecosystem or smart-contracts and such. I'm not going to say these things are needed, in fact I question it a lot, but another question needs to be asked. Why would the world adopt nano? Yes, it is a nice system and has a couple huge advantages over the current financial system, but is it enough? The fact that Visa for example, exists. Nano is fighting an uphill battle. And the only things it offers over the existing mega-infrastructure of the world's payment systems is no fees and easier cross-border payments. Don't get me wrong. These are great things but when the existing infrastructure is entrenched as much as it is AND has all the money, it is going to take a lot more than that to achieve mass adoption.
Further, with the tunnel-vision that nano has, it is already, and will continue to be, outpaced by other projects. Projects that offer the same features and more. Even if you don't consider the existing options, anyone could take the nano project and adapt it to allow smart contracts or whatever new features, and end up ahead. Another fact that is routinely brought to their attention and dismissed. Usually because the projects being used to compare are slightly behind in some area of development. Like Iota, which I'll talk about more soon, basically has everything nano does plus an entire ecosystem being built up around it. But since Iota has used a centralized coordinator for years, they will dismiss it. Iota is ditching the coordinator VERY SOON. It is in the test phase right now and seems to be going well. So what is the counter argument going to be then?
Another issue with it is there is no distribution method. All nano was created and sent out already. They praise this as anti-inflationary and such. In reality this is not really a good way to go. When you're looking for mass adoption, i.e. needing new users, and those new users say okay! How do I get some? And the answer is, well... it has all been given out so you either have to buy it for ever-increasing prices or hope those that own it are giving it away somewhere. But don't worry! That's a good thing because its scarcity will not diminish! The new person will be like okay... but I don't have any so, I'm just going to buy things with the currency I have and go look for other crypto I can still get and use for something other than hoping the price goes up after I buy it.
Yet another problem is centralization. They're to the point where some people are okay with it being more or less centralized and questioning the value of trying to not be. Not everyone of course but the question of how decentralized it is has become more and more tenuous. Which is funny considering it is their only argument against using Iota instead. Basically it is built on a delegated proof of stake system. Which IMO is not the most decentralized in the first place. But nano's is getting even worse. I think it is Binance and Kraken control like 70% of the network. So if you've ever heard of a 51% attack, then you know that's pretty bad. Also, the spam resistance from what I understand also comes at a cost to this. A 51% attack isn't even necessary. From what I have heard (and I cannot confirm this because I haven't dug deep enough) the system is actually set up so 1/3rd of the network is all that is needed to cause problems now... even if that's not true though, overall nano is becoming far too centralized, and more and more okay with it.
If it sounds like I am ranting and being overly critical, it is because I am. A little. Nano's core technology is, IMO, among the best and most developed of any on my short list. But the fact that you can't really do anything with it, unless you put in a ton of work to build an entire system over it, is just a bit annoying. And this is why nano comes up short.
So why even list it and talk about it if it has all these problems?
Because it is still a really good project. It is one of, if not the oldest feeless transaction cryptocurrency. It is one of the most stable and production tested as well. And it has one of the most enthusiastic communities out there. They've been pushing for top 100 coins for a long time now and they just might finally get it this year.
It also may be worth keeping an eye on for investment and payment processing. Despite all its flaws it seems to gain often. And if you don't mind constantly adjusting your nano prices based on your local fiat, then accepting nano as payments is pretty cool and relatively well established. There are client codebases for quite a few languages. There is even an Unreal Engine plugin I think. So you could theoretically take in-game payments, and this is something I don't think any other crypto on my list can do yet. Though I may start working on a Hive Unreal Engine plugin soon...
When it comes to app and game development though, I decided to move along. I want to do more with the network than just send/accept payments.