As a self-declared Nano expert and writer of longwinded articles, mostly about Nano, I figure I'm in an excellent position to give an overview of what Nano is, what it aims to do, why it might be going up in price, and why I'm so enthusiastic about it.

Nano's value proposition in short

Nano is the fastest decentralized way to transfer value, and does so feelessly. It's secure, energy efficient, with game theory behind it that leads to it becoming ever more decentralized.

How does Nano accomplish this?

Nano was designed from the ground up to be as efficient as possible, and to avoid centralization at all costs. It's efficient, because no resources are wasted on competitive block solving. Rather, Nano uses Open Representative Voting. In Open Representative Voting, everyone can be a representative (validator), anyone can vote for any representative, change votes at any time, instantly, feelessly, and 1 Nano = 1 Vote.

This is combined with Nano's architecture, being a Directed Acyclic Graph (DAG). Rather than one blockchain, with big blocks where transactions are collected and then verified, Nano works asynchronously. Everyone has their own blockchain, as soon as you add a block to your blockchain it's broadcast to the network. As soon as a representative sees this, they will vote on the transaction, and broadcast it further. Again, no waste, just pure efficiency. This high efficiency also leads to Nano's extremely low energy usage, with the best estimates pegging Nano at roughly 6 million times higher energy efficiency than Bitcoin.

Because of this high efficiency and no artificial delays, Nano transactions are subsecond. Cost to validate is extremely low – meaning representatives can easily be run for $50. This is good, as Nano is feeless and fixed supply, meaning there are no monetary rewards for node operators. This often leads to people thinking there are no incentives to run nodes, which I debunk in this article. In short, exchanges trading Nano, merchants using Nano, and big Nano holders are all incentivized to run nodes to keep the network online, to trustlessly verify that the $10 million deposit to their exchange is confirmed, or to simply have direct access. This isn't just theoretical, Nanocharts provides a nice overview of nodes being run.

Incentivizing decentralization

Without fees and without inflation, there is no centralisation over time. There are no miners reaping rewards which they can reinvest, there are no economies of scale leading to emergent centralization. For validators, there is no reason to want to have a large share of consensus power, because this only decreases the value of Nano and therefore their holdings. They, and anyone holding Nano, wants consensus to be spread out. With everyone holding Nano incentivised to contribute to decentralisation, the incentives are aligned and cooperative.

Nano as a store of value

Because of Nano's instant and feeless value proposition, it's ideal as money. It offers merchants a way to have instant and feeless payments, from anywhere in the world, that they can then keep in Nano or instantly convert into fiat currency with no volatility risk (since it's instant). This focus on payments sometimes causes people to overlook Nano's other strengths. For example, Nano is at the theoretical limit of a perfect store of value. It’s almost limitlessly divisible (up to 30 decimals) and limitlessly transferrable (no fees). Crypto's security comes from decentralisation, and decentralisation is incentivised on a protocol level. Attacking Nano’s consensus is difficult because it’s extremely hard to acquire a large share of supply, and because once you have done so you have every incentive not to attack it.

Nano’s scalability means that the move to a 2nd stage (claims on hard money — central institutions) in Nano might not ever be needed or at least far less necessary, because Nano gives us a form of hard money that improves on gold by being globally transferrable, trustlessly, instantly, feelessly, with no loss of matter and incredible divisibility, in a scalable manner.

Spam resistance

One of the final remaining criticisms of Nano was that it was spammable. While this was first of all theoretically a misunderstanding, as Nano used cost-based prioritization just like in Bitcoin and such, it was practically a fair point as the recent spam attack showed. However, and this is perhaps what is causing the recent price surge, Nano's developers have come up with a new prioritization method which is very innovative and deserves a post of its own, so see the earlier post on it here. In short, in the new system, to even outspam small holders (10 Nano, $100) transacting regularly (twice a day), would require an investment of roughly 42 million Nano ($420 million).

With this spam resistance going live somewhere before the end of this month, some of Nano's last criticisms should be gone. That's not to say there is nothing left to improve – more efficient storage is still being explored, the protocol can be further optimised to increase TPS further, and as Nano scales by hardware better hardware being used by nodes will further increase throughput.

In its current state, Nano genuinely does seem to be the future of money. It's not only a near-perfect store of value, it's hard to think of how to further improve on its characteristics as money given instant and feeless transfers. It's FUD-proof in terms of centralization, it's FUD-proof in terms of energy usage, and because of this has built up a huge base of enthusiastic supporters.

Conclusion

I hope this post helped inform those that didn't yet know about Nano or its characteristics, and I would love to discuss any of the claims I make in this post. Everything I've said can be verified, which I'd of course urge anyone to do.

Thanks for reading!