Nano crypto isn’t like most traditional crypto. For example, unlike Bitcoin, it doesn’t need to be mined. It’s based on something other than classic blockchains. And it’s goal is to eliminate inefficiencies that plague other cryptocurrencies.
In this article we delve into all aspects of Nano crypto, including:
• What is Nano Crypto?
• How Does Nano Crypto Work?
• Pros & Cons of Investing in Nano
• Is Nano Crypto a Good Investment?
• Which is Better, Nano or Bitcoin?
Recommended: Crypto Guide for Beginners
What is Nano Crypto?
Nano cryptocurrency is a coin designed to be a highly energy-efficient, frictionless medium of exchange, with no transaction fees. Nano accomplishes these feats by utilizing a radically different design than traditional blockchains. The goal of Nano is to accelerate mainstream adoption of crypto payments by creating a system that is user-friendly, affordable, and scalable.
History of Nano Crypto
The coin that is known today as Nano was originally called RaiBlocks, or XRB. In 2018, the company decided to rebrand itself as Nano. Instead of XRB, the ticker symbol for Nano is now NANO.
In terms of serving as digital currency, Nano’s goals are very similar to that of Bitcoin. The major differences lie in how Nano aims to achieve those ends.
Nano Currency Distribution
Unlike many coins created during its time, Nano did not hold an initial coin offering (ICO). Instead, the process of Nano’s distribution somewhat resembled a crypto airdrop.
During a period from 2015 to 2017, Nano cryptocurrency was released through a series of online “faucets” that let anyone acquire coins for free by completing a CAPTCHA.
Nano has a maximum supply of 133,248,297. According to the official website, all available NANO have been distributed as of 2021. Because there is no mining activity, there will never be any new NANO issued.
How Does Nano Crypto Work?
Rather than relying on mining like most cryptocurrencies, Nano utilizes Open Representative Voting (ORV) to achieve consensus.
Network transactions are confirmed by votes from representatives (nodes) on the network. Account owners assign each representative a voting weight in direct proportion to how much Nano each account holds. Consensus is reached by representatives as they vote on the validity of each block.
In other words, Nano holders give representatives the authority to vote, and the more Nano a user holds, the more power they give to the representatives.
This method is intended to allow users who hold Nano to choose the representative they want to vote on their behalf without having to relinquish control of their coins or stake them on the network (as a proof-of-stake blockchain, like Ethereum, would require).
The people who hold Nano have the power to decide who creates consensus. The team behind Nano believes this to be a better option than giving mining companies the power. This voting process is also energy-efficient and allows Nano to operate without requiring transaction fees.
To learn more about the specifics of Nano’s unique approach, interested readers can check out the Nano white paper .
The Security and Ease of Block Lattice
The Nano ledger uses a structure called Block Lattice. The Block Lattice provides each account on the network with its own blockchain. In the Block Lattice setup, the only person who can add blocks to their own chain is the individual account holder.
This differs from most blockchains, where there is a single chain on which miners are always in constant competition with each other trying to add the next block to receive the associated rewards.
The team behind Nano argues that Block Lattice provides security and allows for a large number of transactions to happen on the network simultaneously (also referred to as scalability).
Pros & Cons of Investing in Nano
While all of this may sound super technical, it boils down to a few key features that make up Nano’s claim to fame. These include:
• No transaction fees
• Requires less energy than crypto that relies on mining
• Near-instant transaction fees, typically confirming in less than one second
That said, Nano does have some of the crypto attributes some people find bothersome. For example, as with all crypto, Nano is considered extremely volatile. It is also subject to the same cryptocurrency regulations that other coins are.
Is Nano Crypto a Good Investment?
There are a few things investors should know before investing in crypto. Possibly the most important: Altcoins could be risky and volatile. That could be especially true for small market cap coins like Nano.
As of the time of writing, Nano had a market cap of $571.5 million, making it the 103rd largest coin by market cap.
The Nano price has risen more than 53,000% from an all-time low of $0.006, reached in March of 2017. However, the coin has also fallen more than 90% from an all-time high of $37.62, reached in January of 2018.
This shows that coins like Nano cryptocurrency are speculative investments only for the few investors who manage to enter and exit the trade at just the right time. Short-term traders may also profit from the daily and weekly price fluctuations that occur in assets with smaller market caps and higher volatility.
But as always with investing, no outcome is guaranteed. Those looking for a less volatile store of value or more stable long-term investments might want to consider looking elsewhere.
Which Is Better, Nano or Bitcoin?
A good argument can be made that Bitcoin might serve as a better long-term store of value. Likewise, a good argument can be made that Nano might serve as a better short-term medium of exchange.
If we’re talking about which types of crypto serve as a better store of value, Bitcoin might be the better choice, vs. Nano. Bitcoin has a proven track record of 12 years and running, the largest market cap of any crypto, and the largest daily trading volume, and is the hardest money with a fixed supply limit of just 21 million coins. Bitcoin also has the highest hash rate of any coin by far, making it one of the most secure blockchain.
But of the two coins, Nano may be better for small transactions or for short-term speculative gains. Because there are no fees associated with Nano transactions, the coin could be used for moving small amounts of money or making many different transactions of various sizes.
Another thing Nano has going for it is a fixed supply, with no new NANO coming online. The law of supply and demand generally dictates that items with limited supply tend to rise in value if demand rises or stays steady.
But this feature of Nano crypto also creates a lack of incentive for people to run nodes on the network, because doing so doesn’t involve any kind of monetary reward. In theory, this could lead to decreased security for the network or even cause it to fail altogether if at some point there are no nodes operating, and transactions never get processed.
The Takeaway
Nano is a cryptocurrency made specifically for fee-free transactions. The architecture of Nano is unique and involves no mining activity. The creators of Nano hope that the coin can serve as an easy way for the world to make digital payments free of charge and free of excess energy use.
For investors interested in cryptocurrency trading, SoFi Invest® is a great way to get started. You can start right from the app with just $10, and feel confident knowing SoFi will keep your crypto in a secure environment.
SoFi Invest®
The information provided is not meant to provide investment or financial advice. Also, past performance is no guarantee of future results.
Investment decisions should be based on an individual’s specific financial needs, goals, and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC registered investment advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).
2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.
3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.
For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or prequalification for any loan product offered by SoFi Bank, N.A.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
SOIN21020
