Rodion Kovalenko

Five shades of NXT: the New Era of Cryptocurrency Bitcoin revolutionized the way we utilize currency. It has given us complete privacy within web payments and the ability to create our own money independent of governments and banks. Not bad for Snowden and Wikileaks generation. Cryptocurrency NXT (or ‘next’) develops Bitcoin’s ideas, combining the modern approach with cutting edge security technologies. What I’m going to tell you about ● ● ● ● ● 51% attack protection and Proof-Of-Stake concept “Mining” available for all devices. Yes, mobile too Java based NXT written from scratch Brainwallet technology Future perspectives of new approach POW vs. POS If you’re familiar with Bitcoin then you might know it uses ​Proof of Work ​concept. In other words, computing power of each active participant (or ‘miner’) guarantees network safety. The possibility of getting coins is directly proportional to your own hardware. It makes networks vulnerable to so-called 51% attack. When you obtain 51% of power in the network, you may use coins twice while generating fake blocks into the blockchain. That doesn’t actually destroy the whole network, but shatters the confidence (as happened to ​FeatherCoin​). The alternative — ​Proof of Stake ​was announced​ almost four years ago. The concept is as follows: the more money you have, the more likely you will create a block and accrue a transaction fee. Billion of NXT coins have already released and the money has spread throughout the network. Greenpeace will be happy Says the author of NXT at his very ​first announcement​. His joke refers to an enormous energy consumption, which is synonymous for huge Mining Data Centres of Bitcoin. POW concept turns mining into an arms race since every miner tries to increase computing power. Alongside nature comes emission — soon, the coins that are mined are less valuable than the one gigawatt of power needed to extract them. Therefore miners would maintain only profitable transactions with higher fees. Contrarily, NXT is 100% Proof of Stake, so ​there’s no mining​ in it. Participants get transaction fees paid by other users. That said, your computing power doesn’t matter anymore and you can use mobile devices to maintain transactions. Consequently, having zero emissions fixes the problem of fees, because all money are already mined. For example, the current transaction maintenance fee is 1 NXT and there’s no reason for it to increase. Security matters When NXT only started in 2013, all money had been distributed to contributors around the world. Is it possible to obtain 51% of this sum and perform an attack? Hardware expenses do not stand the expenses for currency exchange. If someone attacks, the owner would find himself with a bunch of non-valuable coins (since confidence is shattered). As a result, the attack becomes much more expensive and ineffective. POW based systems defend themselves through network expansion, pure POS resolve the problem of 51% attack with a further distribution of funds. NXT was written from the scratch on Java and is not the same old Bitcoin fork. It is the most up-to-date decentralized trade platform than any other. I will say a few words about it at the end, but first, let me talk about how your money are stored. Wallet in your brains Brainwallet​ is a technology for saving money without turning your PC into a file dump. To create a wallet, you should think of a simple passphrase. Really dull one with extra symbols and I’m not kidding. Do you really think that no one knows your favorite quotation? My home library contains only 40 bits of information at all and I imagine it would not be a problem for a miner with powerful hardware to pick the right book and steal my money. As long as you remember your phrase, money is in your brain and you may enter the wallet from any network. SHA256 algorithms turn these phrases into private keys, which would be used to open it. Remember: you should pick the one that is neither written or spoken. The security of your money is reliant upon your imagination. Silk Road for the 2020 So, a quick view of the main NXT features shows it to be a true descendant of Bitcoin. New age currency is private, secure and doesn’t affect the environment. That means the rules on the cryptocurrency arena are going to change soon. Is there a way to use NXT for decentralized trade? “Founding father” BCNext is already aiming to create a new trading platform. At the current moment it has proved to be a great alternative to existing markets. Will it surpass its competitors? If it happens, we will probably see a revolution in a cryptocurrency world. Time will tell.