What makes nano one of the most energy efficient currencies?
This article is written by a community contributor.
When Colin LeMahieu created nano in 2015, his goal was to create a cryptocurrency that could be used for daily payments by everyone, without the carbon footprint that comes with Bitcoin. He designed nano to be the world’s most efficient digital currency - simple to pay with, easy to accept and open to all.
What makes nano so efficient?
To accomplish this, Colin came up with a new architecture for nano. Rather than having one big blockchain, where everyone competes for space in the next “block” to be mined, nano utilises something called the Block Lattice. Instead of competing for space, users add blocks to their own chain and broadcast this addition to the network.
Nano combines the block lattice architecture with Open Representative Voting (ORV). Every nano holder votes for a Representative using their nano balance. Anyone can be a Representative, and anyone can change their vote at any time. These Representatives confirm transactions (67% consensus needed) as soon as they see a transaction, which means that nano’s speed is mostly limited by internet connection latency (practically the speed of light). This is what allows the nano network to confirm transactions within a second.
In mining, energy is expended to be the first to mine a block. In nano, there is no such competition. Because there are no mining rewards and no fees, the network is cooperative. In mining chains, hardware resources are used for competition. In nano, every available resource is used to confirm transactions as securely and quickly as possible. If Representatives upgrade their hardware, the throughput of the nano network increases. This focus on pure efficiency and lack of waste makes nano a green option that uses very little energy.
Summarising, Nano uses a block lattice where each person has their own chain, rather than one big chain. Anyone can add blocks to their own chain, at any time, and Representatives (validators) confirm these transactions as soon as they see them. Because of this, Nano manages to be instant, fee-free, scalable, and incredibly energy efficient.
The goal of Nano
Nano is intended to be digital money for the modern world. It was freely given away to anyone willing to solve CAPTCHAs. Because of this, Nano was distributed broadly and fairly, mostly to people in poorer countries. Because of it transacts without fees, it’s well suited for lower-income countries. Because of being instant, it works as a medium of exchange, as money. Because there are no fees and there is no inflation, no money is lost when either storing value in Nano, or when using Nano.
The vision of Nano is broad. It allows for cheap remittances. Foreign workers pay an average of 6.8% in fees to transfer money home. Nano can do this far more efficiently, both at lower cost and faster. It allows merchants to start accepting payments anywhere in the world, instantly, without fees. It enables content creators to receive fee-free tips, enables businesses to instantly take small (or large) payments for their works. It enables anyone suffering from hyperinflation to securely store their money in a currency whose supply can’t be increased. It allows charities to take donations from all over the world. This means less money going to middlemen, and more money arriving directly where it’s needed.
Ultimately, nano makes money efficient, frictionless, secure and borderless.
Senatus is a crypto enthusiast and long-time member of the Nano community. You can find more of his writings on Substack.
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