What Is Nano (NANO)?

Nano (NANO) is an “infinitely” scalable cryptocurrency that allows users to conduct fast and zero-fee transactions. Instead of using the energy-intensive process of mining to validate transactions (like Bitcoin and other proof-of-work cryptos), the Nano platform utilizes a technology called the block-lattice to settle transactions on its network.

According to an explainer video on Nano’s website, the block-lattice technology allows transactions of “any size” to be processed instantly without any fees. There’s no limit to the number of transactions that may be processed simultaneously (at a given time).

Making It Easier to Pay for Daily Transactions with Digital Currencies

As noted by its developers, the Nano platform was created in order to bring digital currencies to “the masses.” The Nano development team is building innovative applications that will make it easier and more convenient for people to use digital currencies to pay for goods and services.

Nano’s creators have developed an online wallet that lets users securely store their funds – as they remain in control of their private keys. The Nano wallet may used to conduct secure transactions without having to download the ledger – which contains the history of all transactions.

Users’ Private Keys Is Not Shared Across Networks

The developers of Nano have also created a “security-focused” open-source wallet, called NanoVault. All “sensitive operations” only take place in users’ browsers – when conducting transactions via the NanoVault.  This means that the seed and private keys associated with an account are never stored on servers or shared across networks. 

Server-based credentials verification such as two-factor authentication (2FA) is not required 

because users’ private account information is never shared across networks. 

Users’ Information Is Never Stored on Servers

Described as a “no strings attached” wallet, NanoVault’s developers note that users don’t have to log into their accounts or use an email address to maintain their wallet. NanoVault users may create as many wallets as they want and also switch easily between accounts – as users’ credentials are never stored on servers.

Nano’s NinjaVault wallet lets users send and receive Nano from web-based wallets or desktop versions – which are available for Windows, Mac, and Linux OS users. 

Unlimited Scalability and “Near Instantaneous” Transactions

According to its whitepaper, the developers of Nano have created a fee-less distributed cryptocurrency network. As explained, the Nano platform uses a novel block-lattice architecture that creates a separate blockchain for each account on the network.

By allowing each account to have its own blockchain, the Nano network is able to achieve “near instantaneous” transaction speeds and (theoretically) unlimited scalability. Because each user account has its own blockchain, asynchronous updates can be made to the ledger and the network. 

As explained in Nano’s whitepaper, transactions on the crypto network keep track of users’ account balances instead of the amount transferred in a transaction. This type of account management allows for “aggressive data pruning” while maintaining the security of the Nano network.

Notably, the Nano network has settled more than 4.2 million transactions – with a relatively small “unpruned ledger size” of 1.7 GB.

Nano’s Latest Software Makes Network Nodes “Smarter”

On July 12, 2019, Andy Johnson, the Communications Manager at the Nano Foundation, published a blog post in which he noted that Nano’s developers had performed one of the “most extensive” upgrades to the cryptocurrency’s protocol. 

Johnson, who’s also the Co-Founder of the Nano Center, an organization focused on spreading awareness about the Nano cryptocurrency, mentioned that the latest version (V19.0) of the Nano platform node software, called Solidus, makes the network nodes “smarter.” 

He explained that the updates made have enabled “more efficient notification mechanisms”, which allows nodes to communicate more effectively. 

“Mitigating” the Impact of Spam with “Dynamic” Proof of Work

Other updates to Nano’s network include the integration of a new algorithm, called Dynamic proof of work, which allows the crypto platform to reduce the potentially negative impact of spam messages. 

Because the Nano platform allows users to conduct fee-less transactions, it’s possible to spam the network. However, Nano accounts must perform a small amount of proof of work (PoW) before conducting transactions. This can “mitigate” the impact of spam, according to Nano’s developers.

Block Lattice Architecture Allows for Faster Block Times “Without Conflict”

As a decentralized digital payment protocol, the Nano cryptocurrency has been designed to solve the various problems associated with other major digital currencies. Nano’s block lattice architecture allows blocks to be processed quickly “without conflict”, and sent to the cryptocurrency’s network for final confirmation.

Nano Transactions Separated Into Two Actions

As noted in Nano’s documentation, transactions on the crypto network between different accounts are separated into two actions. The first action involves the sender, who debits his account by publishing a new block that contains the amount they will transfer to a receiving account.

The second action involves the receiver, who credits his account by publishing a “matching” block that contains the amount received from the sender.

Once a transaction block has been confirmed on the Nano network, it is placed in a pending state and it cannot be rolled back (or reversed). The recipient of the transaction may go offline while the funds remain in a pending state. In order to confirm the transaction, the recipient must publish a matching block that accepts the transferred funds to their account.

Nano Blocks Contain Small, “User-Generated” Proof of Work Computation 

Each block on the Nano network is associated with a structure that keeps updated information about the account – including the account number, current balance, and representative (chosen to verify transactions by Nano account holders).

As explained, each block contains a small, “user-generated” proof-of-work computation that allows transactions to be processed in an efficient and consistent manner. According to Nano’s developers, the PoW computation for transactions only takes a few seconds to complete on most desktop computers.

Open Representative Voting (ORV)

The Nano network uses a consensus mechanism called Open Representative Voting (ORV), which allows account holders to choose a Representative who may cast votes on their behalf. The Representatives are allowed to vote while their delegating accounts are offline.

Representative accounts are managed by nodes that cast votes on the validity of transactions that are broadcasted on the Nano network. Voting weight, or power, is calculated by adding all the current balances of accounts that have delegated responsibilities to the Representatives.

Transactions Confirmed in Seconds 

Accounts with enough voting weight may become a Principal Representative. These accounts may send votes across the network to other nodes, who may rebroadcast the same votes.

All votes are tallied up and “compared against the online voting weight,” Nano’s website notes. 

The Nano network confirms a block after it has received enough votes to “reach quorum.” 

Confirmation for transactions can be reached within seconds because of the “lightweight nature” 

of blocks and votes on the Nano network.

Nano Is Decentralized Because Users Have Control “Over Who Has Power”

The Nano development team has clarified that delegation of voting does not require staking funds – as the accounts delegating may use their funds without any restrictions.

Nano’s developers argue that the crypto network is more decentralized than other platforms because users have more control “over who has power.” This, as Nano accounts may decide the amount of voting power (or weight) they want to delegate to Representatives.
Because there is no “direct monetary incentive for nodes,” the Nano protocol is able to remove “emergent centralization forces for longer-term trending toward decentralization of the network.”