in Nano (NANO), Asset Explainers, Learn
The complete guide to Nano coin, the near-instantaneous and feeless cryptocurrency!
What is Nano Coin?
Nano (NANO) is a popular cryptocurrency that’s known for having no fees to send or receive as well as for its instant transfer speed.
Nano Coin History
Nano was originally known as Raiblocks (XRB). The Nano team changed the crypto’s name from Raiblocks to Nano in January 2018.
Colin LeMahieu, Nano’s creator, announced Nano (then Raiblocks) to the world in October 2015, on the popular cryptocurrency forum Bitcointalk.
Unlike other crypto assets, which usually begin with distribution methods like Initial Coin Offerings (ICOs), airdrops, and Proof-of-Work mining, Nano used a CAPTCHA faucet system to initially distribute Nano.
That’s right - those annoying CAPTCHA verifications you see when using the Internet were how you could’ve earned Nano in the early days!
However, it wasn’t until the latter half of 2017, during the 2017 crypto bull run, that Nano became more popular.
At the time, Bitcoin was struggling with scalability issues (ability to handle many transactions at once).
It was getting to the point where Bitcoin transactions were taking hours or even days to go through! Transaction fees weren’t much better, with the average transaction fee towards the end of December 2017 hitting ~$55 per transaction.
With that in mind, the community quickly took notice of Nano, which allowed users to send crypto to others both free and instantaneously. In the span of about a month, from early December 2017 to early January 2018, the price of a single Nano coin increased by more than 100 times (10,000%+).
Nevertheless, while some users were able to benefit from the drastic price increase, many users weren’t as fortunate. In February 2018, Bitgrail, one of the only exchanges where you could purchase Nano at the time, got hacked and users lost $170 million in Nano coins.
Time and time again, users who choose to leave their crypto on a centralized exchange end up losing their crypto due to hacks, exit scams (exchanges running off with user funds), and general mismanagement.
If you don’t want to entrust your Nano to someone else and potentially lose millions of dollars of crypto, as many users did, we recommend using a Nano wallet where you control your Nano.
Nano Coin Block Lattice
While we’ve discussed Nano’s basic characteristics and a brief overview of its history, the way Nano works is quite interesting.
Instead of a blockchain that all nodes (computers or servers) on a network have to store, Nano uses a block lattice system. In this system, each individual only stores their own blockchain (called an “account-chain”).
Since each account is only responsible for its own account-chain, or history of transactions, users don’t have to wait for their transaction to be added to a shared, universal blockchain by every node in the network. This allows transactions to happen very quickly as well as asynchronously.
Each block in an account-chain also contains the account-chain’s balance, meaning that one only has to store the latest block and not one’s entire transaction history of blocks (let alone that of the entire network). This lets users use Nano without having to download transaction histories that are monstrous in size (e.g. Bitcoin’s blockchain is ~250 gigabytes in size, as of writing).
As long as the NANO in all account-chains adds up to the NANO balance in Nano’s genesis account-chain, which initially contained all NANO, users can be sure that there isn’t anything suspicious going on, like counterfeiting of NANO.
To make sure that this is the case, each Nano account-chain chooses a Representative to vote on the validity of Nano transactions. Each Representative’s voting weight is the sum of all account-chain NANO balances delegated to it. Since blocks are incredibly small in size, Representatives are able to confirm transactions near instantaneously.
Another thing to note is that since there is no race between miners to add blocks, or groups of transactions, to the blockchain in order to win a block reward, as with networks like Bitcoin, the Nano network uses barely any energy to stay running.
This is very different from Bitcoin, where miners use up tons of computing power (and electricity) in order to solve the mathematical problems that allow them to add blocks to the blockchain.
Nevertheless, while Nano is incredibly innovative in that transactions are near-instant as well as free and energy usage is basically non-existent, there is no economic incentive, such as a Bitcoin or Ethereum block reward, for Representatives to validate Nano transactions.
Could the lack of economic incentives lead to the centralization of Representivatives? After all, without an inherent economic incentive built into the protocol to reward transaction validators, the network risks a lack of participation from a wider pool.
However, the Nano team points out that networks that use a reward system similar to Bitcoin's or Ethereum's usually trend towards centralization. The example they give is Bitcoin's hashrate (mining computing power) distribution primarily among a few select mining pools or groups:
What Nano proposes, then, is "natural" incentives, as opposed to economic ones. Because Nano nodes are so light and cost-effective to run (vs. Bitcoin ones, which require a lot of investment in computing power and electricity), node operators, such as companies could be incentivized to run Nano nodes. By doing so, they stand to benefit from Nano's elimination of point-of-sale fees and other types of overhead costs.
Where to Buy Nano Coin
If you already have crypto
If you already have crypto, you can use Exodus crypto wallet to exchange cryptocurrencies like Bitcoin and Ethereum for Nano.
For a guide on how to do that, see our article on how to exchange assets in Exodus.
If you don’t have crypto
If you don’t have crypto, you can use centralized exchanges like Coinbase, Kraken, and Bitstamp to purchase cryptocurrency with your local government currency, such as the US dollar or Euro. On some exchanges, you can buy Nano directly with government currencies. Otherwise, you might have to buy more popular cryptocurrencies like Bitcoin and Ethereum first before exchanging for Nano in Exodus or on centralized exchanges.
Where to Store Nano Coin
As incidents like the Bitgrail hack have shown us, it’s important to store your Nano in a wallet that you control.
Nano Coin Wallet
If you prefer to use a wallet that only supports Nano, wallets like Natrium (mobile), NanoVault (web, desktop, hardware wallet), and BrainBlocks (web) are some good options.
If you want a more full-featured wallet that supports 100+ other crypto assets and is easy to use, Exodus wallet might be for you.
How to Send Nano to your Nano Wallet
While the process for sending Nano to your Nano wallet looks different for each wallet, the process for doing so with Exodus is quite simple:
- Open your Exodus wallet
- Select Nano
- Get your Exodus Nano wallet address by hitting the Receive button
- Send Nano to your Exodus Nano wallet address
For a more detailed explanation, check our guides to receiving assets on desktop and mobile.
Earn Nano Coin
Want to earn Nano coin instead of buying it with your local currency?
Nano Coin Faucet
Your best bet for earning Nano is by using a faucet. While today’s Nano coin faucets don’t give nearly as much Nano as the original Nano coin faucet, you can still receive a bit of Nano to experiment with.
A few different Nano faucets you can try include the following:
Mine Nano Coin
Unfortunately while you can earn Nano through methods like using a faucet, you can’t mine Nano the same way you can mine other cryptos like Bitcoin and Ethereum. Instead of being distributed through a mining process like Bitcoin and Ethereum, all of the Nano in the world was created at once and distributed via the original Nano faucet.
Where is Nano Coin Used
Nano places an emphasis on being used as digital cash, as opposed to being used as “fuel” for smart contracts like Ethereum or some other cryptocurrency use case.
As such, the Nano team has put a lot of work into making Nano usable for various purposes. For the full list of where you can use Nano, check the site Use Nano.
How Does Nano Coin Make Money
The Nano Foundation, or the team behind Nano, does not make money in the way that a traditional business would. Instead, the Nano Foundation is funded by a development fund of 7 million Nano, which was created in October 2017 from the total Nano supply of 133,248,297 NANO. The fund was created after the original Nano faucet was shut down so that Nano creator Colin LeMahieu could focus more on Nano’s development.
Aside from this development fund, the Nano Foundation does not seem to have any source of regular income, which could prove to be an issue down the line.
Nano Coin News
For the latest Nano news, you can check Nano’s Medium blog.
Looking for the official place to discuss all things Nano? The Nano team has recently launched an official Nano forum.
Perhaps due to Nano's innovative features, Nano has a very strong and supportive community on the Internet. Their presence is felt on places like Reddit, where they are quite vocal in the main r/Cryptocurrency subreddit as well as Nano’s own subreddit community.
Another place you can discuss Nano is the Exodus public Slack!
Nano Coin Twitter
If you’d prefer to keep up with the latest on Nano via Twitter, you can follow Nano at @nano.
Though Nano already does a great job at being a fast and free means of crypto payment, Nano still seems to have many future goals in their roadmap, including the following:
- Recruiting community managers to build awareness in various global markets
- Making their website and whitepaper documentation available in more languages
- Making it easier for merchants to adopt Nano - even in real life
- Adding more fiat on-ramps, or ways for users to buy Nano using government currencies like the US Dollar, Euro, Japanese Yen, and Korean Won.
All in all, Nano has come a long way and we’re excited to see what this innovative cryptocurrency does next!
If you want to experience Nano for yourself, you can download Exodus to secure, manage, and exchange one of the world’s fastest (and no-fee) cryptocurrencies.
This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.