Launched on October 1st, 2015, Nano is an open-source cryptocurrency focusing on eliminating the problems inherent to Bitcoin and its derivatives and providing its users with a platform to make fast payments on a peer-to-peer basis. With its near-instant transactions and zero fees, Nano has managed to overcome the scalability issue that Bitcoin still struggles with.
The technology underlying Nano is radically different from the one utilized by Bitcoin. While Bitcoin’s ledger uses the chain of blocks to store the transactional data, Nano relies on the block-lattice data structure where every address in the network has its own blockchain. Bitcoin is based on the Proof-of-Work consensus which is quite costly and energy-consuming. Nano eliminates this problem by integrating the Delegated-Proof-of-Stake (DPoS) algorithm where new tokens are issued by the stakeholders and all decisions are made by voting.
The block-lattice structure utilized by Nano is a variant of the Direct Acyclic Graph (DAG) architecture which is considered to be an alternative solution to the blockchain. The key difference between these two technologies is related to the way the data is organized. Instead of creating a sequence of blocks, DAG places nodes according to its own topological order so that all nodes point in the same direction without a chance of a loop. Graphically displayed, DAG resembles a tree of a flow chart where folders branch into subfolders which in turn divide into smaller units.
Nano is not the only project to implement such a mechanism. Among its alternatives are IOTA and Byteball. However, Nano has made a step ahead implementing its own block-lattice structure where each account is linked to a personal blockchain controlled by the private keys known by the account holder. All accounts in the network are described as “account-chains” and reflect their balance histories. Users can update their blocks asynchronously from the main network which allows them not to depend on other participants and instantly verify transactions.
Such an approach gives a number of benefits. First, the amount of data that has to be stored in the network is much smaller than what is contained by the Bitcoin’s blockchain. The network only tracks account balances and doesn’t keep the information about transaction amounts. Second, transactions are verified instantly and with zero fees. Finally, energy consumption drops dramatically compared to Bitcoin where miners have to spend the lion’s share of their profits to pay electricity bills.
There is a security concern associated with Nano as well. Since the network allows conducting instant transactions at zero fees, it can easily fall victim to endless transaction spamming. The project creators have foreseen this danger and implemented an anti-spam feature based on the PoW mechanism which requires an account to conduct a 5-second work to validate every action.
Nano team has developed a dedicated wallet for storing the coins. It is available for download on their official website and also there is a mobile application. Nano is supported by a hardware wallet Ledger Nano S which can be used for increased security of your digital possessions. There are also online wallets on numerous exchange platforms such as Binance, CoinEx, CoinBene, OKEx, Huobi, Kraken and many more where Nano is available for trading.
Nano’s Founder and CEO Colin LeMahieu started working on this project in 2014 and rolled out the production network in 2017. Prior to Nano, LeMahieu has worked as a software developer since 2007 in other companies including Dell, AMD, and Qualcomm which helped him gain a lot of experience in this area.
Formerly known as Raiblocks, the project became the subject of rebranding at the beginning of 2018. The new name Nano was selected with the goal to represent the simplicity and speed of the project. Their new logotype is also pretty simple as it consists of several nodes that connect to form an “N”. This proved to be a reasonable step as the value of Nano cryptocurrency surged by 40% in 24 hours after rebranding was implemented.
Despite all the technical benefits, Nano hasn’t avoided bad incidents throughout its history. Following the massive hack of Nano tokens from the cryptocurrency exchange BitGrail in February 2018, the platform’s owner Francesco ‘The Bomber’ Firano was unsuccessfully trying to convince Nano developers to initiate a hard fork so as to reverse the transaction and get the funds back. This resulted in a $170 million USD lawsuit from Nano investor Alex Brola and a long trial which lasted until October. It was withdrawn after reaching a confidential agreement with the project’s team.