Interested in access more free crypto analysis, resources and information like this? Check out these platforms:
Telegram — t.me/CoinEducation
Twitter — www.twitter.com/cryptomedicated
Here in this article, I am going to attempt to give a full review of the $XRB coin. Formerly known as Raiblocks, the team rebranded to Nano in recent weeks. We’ll explore the potential reasons behind this rebrand and what we can expect for the coin going forward. By sheer coincidence, there was a fairly substantial amount of this coin that was hacked just a couple of weeks prior from an exchange. A wealth of evidence that was presented that day appears to corroborate the idea that there was foul play on behalf of the exchange owners and not $XRB. We’ll cover this event as well, its implications for the brand and how they responded to the issue.
The premise of the Nano coin in its original inception was to be an improvement on Bitcoin by offering itself as a means of transfer devoid of any fees while being infinitely scalable. As we all know, the fees for Bitcoin rose to absurd rates in December 2017, so this stands out as a reasonable goal (assuming Bitcoin never addresses this problem effectively).
Another stated purpose of the Nano coin is to be an ‘abstract new system for distributing cryptocurrency’ according to this article written on November 24th, 2017. We’ll really delve into these ideas later and assess the technology deployed and whether or not it presents itself as a viable alternative to Bitcoin and fulfill its stated promises.
So, the main site where you can find the bulk of information regarding Nano can be found at https://nano.org
From the homepage alone, we get a pretty solid gist of what they hope to accomplish.
There’s a 1:30 video that actually provides a pretty solid ELI5 explanation of what their primary innovation is.
Their primary innovation is the block lattice — which we’ll jump into in more depth very soon.
I scrolled down the page and I found the picture that you see above. This is pretty good news. Looks like they have a fully functional (not beta) online wallet as well as an iOS app that users can download. The option for starting a node is offered on the website as well a feature to run a wallet through one’s desktop. Before exploring the network’s topology, I want to dig into the whitepaper though because we can’t make any definitive assessments about the nodes that are running on the network until we get an idea of how this new innovation works.
Here are the purported use cases for Nano coin on their website below as well:
Just in case you can’t make out what’s on that picture above, Nano claims that they’d be perfect as:
-An idea trading pair
-Business to Consumer payments/systems
Social Media Links
It looks like $XRB is active on all social media platforms and they have the links to all of the pertinent information that we would want to find for a coin at the bottom of their website — good news.
I’ll hyperlink these below:
As a feature of any coin that gets covered by me on any article published anywhere, I like to ensure that I give the team a good rundown to ensure that everything is on the up and up (Trigger Warning: this process has been known to hurt people’s feelings. Do not read if you are easily triggered)
Fortunately, we don’t have to dig too far to find the members of the Nano ($XRB) team. They have a link at the top of their website that takes you right to this section.
Here’s the team as presented on their website:
I’m going to only post information down here for Colin LeMahieu. I’ve looked at the whole team and everyone checks out, so doing an overview for everyone would just be redundant.
Colin LeMahieu (Creator & Lead Developer)
This guy is of note. He’s listed as the founder of Nano, originally Raiblocks, in the year 2014. Here’s an AMA on Reddit that he hosted — you can check that out to get a better gist of who he is.
Work history and all that jazz checks out.
His work history precedes him and it seems like he has more than enough prior experience to set about developing such a project with effectiveness.
However, there’s a difference between being able to do something and actually doing it — so, let’s review the whitepaper, shall we?
Actually had to do a little bit of hunting to find this whitepaper. According to the website, the latest release of the whitepaper was distributed on November of 2017.
Here’s the link to it: https://raiblocks.net/media/RaiBlocks_Whitepaper__English.pdf
So, the introduction of the whitepaper starts by outlining the same issues that were discussed in that little video that you can see on their homepage. Basically it states that Bitcoin is too slow, can’t scale, and fees are too high etc. — Classical criticisms (all correct by current assessments at the time of writing by the way). So, *drumroll* Raiblocks (now Nano) was created to solve those issues.
The first outlined difference between Nano and Bitcoin in this paper is their consensus method. They state that they adopted Proof of Stake (PoS) in favor of Proof of Work (PoW). I’m assuming that this decision was made because of their stance against the wastefulness of resources by Bitcoin.
For those that are unsure of how Proof of Stake generally works — check out this guide here. This is something that we’ve seen quite a few times prior, so there’s a good working knowledge of how Proof of Stake is implemented on a blockchain (hopefully).
One of the newer innovations, however, that Nano is built upon is the, ‘Directed-Acrylic-Graph’ (DAG) algorithm.
See the excerpt from the whitepaper below:
What is ‘DAG’?
Its only reasonable that we take a brief intermission from the whitepaper (don’t worry, we’ll come back to it) in order to explore what ‘DAG’ is and how it works.
If you’re someone that enjoys the most super technical, isolated definition of things, then check out this link and then scroll down to where we continue to discuss the whitepaper.
If you’re not super technically oriented, then continue reading. I’ll try my best to break this down in everyday language in a way that makes sense but still gives you an understanding of what this is.
The best way to get an understanding of DAG and the novelty of its approach to cryptocurrency, one must understand how blockchain in general works:
Bitcoin, which uses Proof-of-Work, works like this (very simplified explanation — I used a great graphic that I found from Blockgeeks )
· You’re average guy Joe. You have some Bitcoin. You want to send it to your friend Bob. So, you open your wallet (digital — not a real one), and you look up Bob’s address (think of it like an e-mail address except it has a bunch of random numbers and digits).
Once you find Bob’s address, you send him 1.5 Bitcoins (yeah, you’re rich in this example). When you hit that ‘send’ button, what you’re actually doing is requesting that the transaction be processed.
● Since Bitcoin runs through a decentralized network, everyone with a node hooked up to Bitcoin’s network can see that you made this request. The network then verifies your transaction.
● Miners see the transaction, and they lump into a ‘block’ with a bunch of other TXs and then create a ‘block’ full of them. In order to create this block successfully, miners must solve a complex computer equation, which is more or less similar to brute force hacking. The first one to complete this is the winner. That’s how Proof-of-Work operates.
● Full nodes then ‘check’ the block to make sure that it follows all of the rules and that there are no ‘double-spends’.
● Process repeats.
The strength of the typical blockchain structure is that it allows for competition, provides a clear incentive for wanting to be correct and protect the network, and it makes it exponentially harder to ‘hack’ or compromise the Bitcoin network. It also is entirely trustless and operates heavily on the principle of consensus, because 51% or more of nodes must agree on a block or it is rejected entirely.
DAG is Completely Different
DAG, however, operates on an entirely different principle. It doesn’t use miners and doesn’t need 51% of the network to agree on a particular result.
Specifically, for RaiBlocks, they use an implementation of the DAG called a ‘block lattice’. So, to be specific, RaiBlocks uses a targeted acyclic chart algorithm.
How Does the Block Lattice Work?
Here’s the common picture of a block lattice that you’ll find on almost every article in the world that discusses $XRB (Nano).
According to this article, “All funds transferred by [the] block-lattice require two transactions: the sender and the recipient. In order for the transaction to resolve, the receiving party must ‘sign’ the block confirming receipt of funds. When the same sender confirms, the transaction is complete. All transactions occur over the User Datagram Protocol, which allows you to keep the costs low and allows you to make transactions even if the recipient is offline.” — Source: https://dowbit.com/raiblocks-top-20-crypto/
Thus, in a way, this works somewhat similar to that of the Lightning Network’s proposal. However, this does provide the burden about those that are sending and receiving the TX to confirm the receipt of them and the validity of said TX. Raiblocks also functions on a DPoS model for confirming blocks as well.
This is the primary innovation of RaiBlocks.
Numerous potential flaws within the structure of this system, such as the incidence of double-spending, as outlined in the picture below, have been brought up by different members of the community whom are concerned about the security of RaiBlocks:
Another article that outlines many of the inherent issues within a DAG structure, particularly the block-lattice DAG implementation that RaiBlocks proposes can be found here.
Here is a list of the inherent risk of attacks that RaiBlocks could face here.
For many reasons unknown, the RaiBlock team decided to rebrand itself entirely. There are some reasons that are circulating around in the public, however.
The official reason for the rebrand, according to Nano, was:
Given the fact that the coin, RaiBlocks, was somewhat new at the time of this announcement — this rebranding came as somewhat of a surprise, but a welcome one for most.
Their rationale of wanting a name that more accurately reflects the nature of the features for their coin makes one wonder why the developers didn’t take this into account when originally deciding to conjure a name for the coin. This, in conjunction with the fact that there still does not appear to be a ‘final’ version of the whitepaper, begs the question of whether the Nano team is truly organized enough to scale itself to a level capable of reaching true adoption at any point.
As mentioned earlier, the link to the whitepaper on their website led to a dead link prior (when author was initially compiling the paper). However, it appears that this link has been restored. There is no explanation as to why this occurred by the Nano team that I was able to personally source.