...part of a master-crypto series we're doing, examining crypto-currencies-of-intrigue which might merit long-term ownership (see "About Series" at end of article)
Why do we need Nano when there's bitcoin?
note: Raiblocks was rebranded "Nano" on January 31, 2018; whereas, this article was written days before that change. Please use Raiblocks and Nano interchangebly.
Bitcoin has become a real pain in the ass in recent times. This occured bc the increase in price and miner difficulty has caused miners additional cost (electricity, cooling, real estate, etc...) to verify bitcoin transactions on the blockchain. Since miners don't like to lose money they require higher "mining fees" to be motivated to verify transactions. This has caused congestion and/or high mining fees (and to borrow Sir Topham Hatt's phrase "Confusion and Delay") which prevent bitcoin from doing what it was supposed to do: allow cheap, easy transfers of wealth between two different parties. For instance, if you have a small amount in Coinbase, good luck trying to do ANYTHING with it other than have Coinbase fee-you-to-death to the point your bitcoin balance goes rapidly towards zero. For instance, just the Coinbase commission ALONE to buy/sell bitcoin is 4.0%-- INSANE! Compare this to an ATM machine ($2 fee for removing $500 in cash which you can spend anywhere, or 0.2%) or a stock brokerage (0% fees in or out, and as low as 0.1% commissions on trades-- see Interactive Brokers for example). It's awful what's going on in bitcoin, and particularly in bitcoin via "white shoe" means like Coinbase who's trying to act as a legal custodian for your crypto-funds. Could there be a solution to high mining fees, giant transaction backlogs, and walled crypto-gardens like Coinbase who lack any kind of privacy? Well yes, there's actually a TON of cryptocurrencies all trying to accomplish solutions to these problems, even bitcoin itself with add-on functionalities like Lightning Network (LN), and what we think will be the rise of de-centralized exchanges in 2018.
Hint: if you wanna know whether to own any Nano raiblocks, just skip to the end, the conclusion. But we HIGHLY recommend reading this whole article.
Getting money in and out of crypto will likely always be a royal non-private mess; specifically by "in and out", we mean OUT-- exchanging your crypto for dollars, euros, yen, or yuan. Coinbase is a common gateway from fiat (bank account money) to cryptocurrenices, and their leaders have worked very hard to stay inside the law which is why we call them "white shoe". We have not yet fully researched what you can do to improve to improve the crypto-to-fiat problem other than hope more stores and services begin accepting crypto (which might be the entire reason Nano was built, btw), but as for solving simple problems like mining fees, that's become the du jour of every modern crytpo-- especially those who've shunned bitcoin's "proof-of-work" methodology. Proof of Work in bitcoin has a central tenet of increasing difficulty for mining new coins which causes miners to need to spend more money to mine a coin-- both in capital costs (buying a mining rig and using up real estate) and running costs (electricity, space, cooling). This is where Proof-of-Stake coins came into play, starting a long time ago (in crypto-time) with coins like Peercoin and Primecoin. Call those "gen 2" crypto-currencies, which mostly failed to capture the imagination of the now large crypto-armies. Quick aside: Raiblocks (now Nano) were envisioned and created in 2014 by Colin LeMahieu as an "improved bitcoin" aimed at reducing transaction times and energy cost. While PoS solved bitcoin's PoW energy problem, it didn't necessarily solve transaction-time problems bc requesting every single wallet in the crypto-network to "talk" to each other as conflict-resolving nodes (resolving the double-spend attack) causes a lot of traffic and therefor cost. This additional problem with PoS, led to yet even MORE innovation.
"Gen 3" cryptos introduced a slight modification called "delegated proof-of-stake" crypto-coins-- think of it as a Democracy (everyone votes) changing to a Republic (everyone votes for representatives, and THEY vote). A few examples of these are Eos & BitShares (of Dan Larimer / Steem fame), Lisk (101 elected delegates, JavaScript, sidechains), and Ark (51 delegates, "SmartBridges"). If our Democarcy vs Republic visual doesn't do it for you, let's explore DELEGATED Proof-of-Stake more and why is it used vs just Proof-of-Stake (POS)?
Proof of Stake
A pure POS coin would allow anyone with a wallet to earn miner's rewards. Each wallet acts as if they were a bitcoin miner but without having to crack an arbitrary puzzle of increasing difficulty. In Proof of Work (PoW) coins like bitcoin, new cryptocoins are rewarded to a miner; but, in PoS newly minted crypto is issued to ALL wallet owners proportional to how much CRYPTO the wallet owner has. For example, let's say there are 100 people with Primecoin wallets, and 99 of them own ONE primecoin and ONE wallet owns 101 primecoins. In pure POS, the one wallet with 101 primecoins would get 50.5% of the newly printed coins, and his 99 competitors would split 49.5% of the rewards. This assumes ALL the wallets are turned on, or left running, such that they can run the blockchain and help do blockchain transaction verification with the other wallet nodes. If 98 of the primecoin wallets turned their wallets (computers, internet connections) OFF to the network, then the POS system algo would only account for ONE guy with 1 primecoin vs ANOTHER guy with 1 primecoin (the guy with 101 primecoins is on vacation); thus, the guy with just 1 primecoin would get more minted coins than if all wallets were turned on, and in fact he'd get 50% of scheduled newly minted coins for as long as just two wallets remained "ON". In THEORY, if all owners of a crypto-currency keep their wallets "ON", then this creates a wonderful distribution-- a highly de-centralized system of governance and transaction dispute solution. In practice, it gets messy bc more wallet "nodes" running means more network time and effort to verify transactions, and problems arise when wallets are down. It can also be a strain on the poor guy with very little wallet staked coins, yet his wallet would be "working" all the time verifying transactions, costing electricity worth more than the value of his coins. So how do we improve this?
(note: we've simplified PoS here, there are some adjustments to the formula using other factors but not applicable for our discussion)
DPoS
DELEGATED Proof-of-Work (DPoS) cryptocurrencies allow for every wallet to either vote on his/her representative (like a Republic government) to vote his/her stake, OR the whitepaper can allow for a set number of "delegates" to be the ONLY voting members of the cryptocurrency. for instance, Steem has 21 "witnesses" who are allowed to vote on many things regarding Steem, such as the interest rate paid on Steem Dollars or the amount of Steem given to a new account.
Note: Steem and other DPoS currencies have an odd number of witnesses to break voting ties!)
The main benefit of DPoS over pure POS is a smaller amount of nodes ("miners", "witnesses", "delegates") which allows faster communications and decision trees for transaction verification, as well as an incentive system for nodes to keep their wallets running 24 hours a day, 365 days a year, YET still allow for decentralization of power (all power not in one hand or set of conspirators). We would GUESS Dan Larimer created this system bc his focus was on fast transaction speeds, and POS might take too long to attempt to contact millions of wallet-nodes for votes on transaction verification. This is probably why Larimer and his EOS, Steem, Bitshares cryptos all boast very high transaction amounts vs other cryptos like bitcoin and ethereum. There's more than one way to "skin the cat" when it comes to verifying transactions without having to poll millions of wallets, Steem's DPoS Witnesses are just one method. NXT does POS with RANDOMLY selected nodes for instance. PIVX (a coin we really like) splits tasks between Masternodes (much like seats on the stock exchange you have to BUY a Masternode) and wallets which hold PIVX. Then there's...
Hey, isn't this article about Nano (Raiblocks), we're nearly asleep now!
Enter (the genius of) Nano.
Nano's tagline = "Designed from the ground up for INSTANT, FEELESS, scalable transactions"
quick definition: "Scalable"
It means Nano was built to be able to do all the transactions ever needed to do by HUMANS on earth, so 6 billion people transacting a few times per minute. Ever balance your OWN checkbook? Imagine trying to balance all 6 billion people on earth's checkbook! So "scalable" is a measure of a cryptocurrency's speed and efficiency. Bitcoin, for instance, might break the Earth's current electricity-generation network if it keeps getting bigger and harder and more expensive to transact. Raiblocks attempts to solve this problem with a very unique system of "EVERYONE GETS A BLOCKCHAIN".
Remember how cool paper money was?
If you wanted to buy something your mother didn't want you to buy, like candy bars or fireworks, if you had cash in your sock you could make a transaction behind your school and Mom wouldn't have a clue you bought M-80s or the S.I. Swimsuit Issue from evil Eddie Hascal. Not so in most cryptos, somewhere there always seems to be a digital trail, and the closer to "private" cryptos get, sometimes the more complicated the cryptocurrency gets to the detriment of other features like fast transactions, or cheap cost-less transactions. Nano attempts to solve all this, by focusing on being JUST a currency-- not a platform (like Ether, Lisk, Eos, Neo). Nano wishes to be the most efficient, most fair cryptocurrency-- acting much like cash in your wallet. We'll attempt to summarize in one sentence, and then explain later. But here's the littany of features for Nano/Raiblocks...
EVERYBODY HITS!!
EVERYONE GETS THEIR OWN BLOCKCHAIN
Raiblocks allows each person to have their OWN blockchain, thus if two people transact Nano the only people to know about that transaction are those two people-- like cash exchanged in the back alley of a dark city street. The only thing required to make the transaction official, is to broadcast the FINAL TALLY of how much Nano is in each user's account to the main blockchain (which is run by the elected Representatives-- or nodes). Let's do an example:
Biff has 100 raiblocks and wants to buy a Playboy Magazine from Sally who has 1 raiblock in her wallet. Biff sends 50 raiblocks to Sally via NFC phone-to-phone transmission in a back alley-- no use of internet connection is needed and both Biff and Sally have their nodes turned OFF. Let's say there's 1,000 other wallets with raiblocks; NONE of those wallet-nodes are aware of what Biff and Sally are doing. In fact, Biff goes behind another building and then buys a pack of cigarettes from Smokey (who has no raiblocks in his wallet) for 50 raiblocks. After these transactions are complete, later in the day everyone involved connects their phones to the internet an runs their raiblocks wallet. Biff's wallet tells the main Raiblock blockchain he NOW has ZERO raiblocks. Sally's wallet broadcasts to the main blockchain she has 51 raiblocks, and Smokey says he now has 50. Raiblocks doesn't care that Biff did two transactions, it only cares about his final amount, which must checksum with all other raiblocks wallets in the universe. If it checksums perfectly, everyone in raiblocks-land is content, and the blockchain re-records the new wallet amounts as official and everyone is happy. If there's a dispute, Sally hacks her wallet to broadcast she has 1,000 raiblocks, THEN some ELECTED DELEGATE wallets will fix the dispute by reviewing which accounts might be causing the problem. It might then request Sally's wallet send all her tranactions to verify against anyone with whom she's transacted to settle the dispute. Frankly, it's probably SLIGHTLY more technical than our example, but from our example at least you can understand some of the benefits of this system. For one thing, wallets-as-nodes ("miners" "witnesses" etc...) don't need to attempt to verify EVERY TRANSACTION on the blockchain, as it's mainly only interested in total wallet amounts. Thus the amount of information transferred is very small, thus block sizes need only be very small. In fact, instead of many transactions inside a block (like bitcoin), each and every block is a transaction! Each wallet does all the accounting for each person, just like in the cash society! So Biff's wallet might know all the crypto-addresses of people he transacted (If Biff does internet transactions with other private wallets, he obviously won't know names of people, just his wallet will know addresses), but in the end his wallet will only publish ONE NUMBER to the delegate nodes (his elected official node) to assemble the main blockchain, which is of course a ledger of who owns what raiblocks.
NO MINING FEES
One thing we forgot to mention, how will nodes or wallets take fees for these transactions? Biff & Sally didn't pay anyone or anything to transact! That's bc there's no fees, not per the protocol anyway (some exchange will charge you fees, betchurass on that!). This kinda means peer-to-peer transactions are essentially free, WHOA!
INSTANT TRANSACTIONS
Ironically, your OWN raiblocks wallet does a proof of work to authorize the NEXT transaction. so when you do a transaction, your wallet will ALSO do a very quick POW to create it's next block (in YOUR blockchain!) which the wallet will save to use in the NEXT transaction. It's like having your coffee maker make another cup of coffee and keep it hot and ready the moment you take from it a cup of coffee to drink NOW! This system of proofing the NEXT block allows your next transaction to happen instantaneously!
SIMPLICITY for nodes/representatives = speed & cheapness for everyone:
Nodes only really need to update when it recieves incoming information about changes to wallet amounts, thus network "banter" is even further reduced. If 98 wallets aren't transacting, then a rep node only needs to balance 2 wallets if it accounts for 100 wallets total, it doesn't need to sequester all 100 wallets!
The simplicity is that the main node only needs to hold one raiblocks number (how much is in YOUR wallet?) per wallet, so the amount of information is small compared to blockchains which attempt to store every transaction event. This makes this network VERY fast and efficient (as most people aren't sophisticated enough to lie about transactions-- which is a form of hacking).
NANO allows ASYNCHRONOUS transactions
What's also interesting is Raiblocks, like a cash society, allows for ASYNCHRONOUS transactions and account verification. In our example, if Biff Sally and Smokey all decide to not turn their wallets on for a long time after transacting, the main blockchain doesn't care, and simply assumes no transaction took place. Only when wallets are connected do they transmit their own amounts, but this doesn't mean the transaction didn't happen bc Biff could theoretically make other off-line transactions with other off-line wallets and the system would wait until all parties were online to officially recognize the shifts in wallet raiblocks balances. Again, it's a tad more complicated, but you get the picture.
define: "Representative"
This is a wallet-node which acts on your behalf, and accepts your wallet's final raiblocks tally when it questions your wallet. A Representative is picked by you, your wallet, and acts as your gateway onto the raiblocks main blockchain. Really the representative is just asking your wallet for it's final amount/balance, assuming their are no disputes to the checksummed main blockchain. You get to vote for which representative you want, and representatives when deciding disputes vote according to how many votes they each have. If you have 100 raiblocks, then your representative gets to vote your 100 raiblocks on your behalf. The representative also has other votes based on other voter-wallets he's been assigned to represent. In the beginning of raiblocks, they set up 8 "standard" representatives which were approved by the founders to be the main beneficiaries of the first representive votes.
define: "Block Lattice"
This is the fancy term Raiblocks attaches to it's system of making every transaction a block, and ever wallet a node which accounts for it's own transactions only. Thus, the wallets to the work of verifying ONLY the transactions which involve them. So and exchange wallet might have to do tons of work, eating plenty of electricity, but YOUR wallet with 2 raiblocks in it and zero transactions, might only need to send a transaction balance to the blockchain every few months or so bc it's largely inactive-- thus LOW electricity bill.
More ### DETAILS: ### on Nano the currency
Raiblocks has 133.2 million tokens outstanding (source: RaiBlocks.com). They weren't/aren't mined. Initial funds distribution was via a captcha-based faucet distribution ending October 2017. There's an important distinction to understand about Raiblocks number of tokens, it's related to how Bitcoin and "Satoshis" work. It's the same, but can be kinda confusing. Raiblocks version of "satoshis" is named "raw". It takes 1 million "raw" to make a single XRB. The abbreviation of "raw" is lower-case "xrb", whereas the price you're going to see for Raiblocks is actually the upper-case "XRB" which is = 1 million "raw" RaiBlocks. In short, the base RaiBlocks unit, the raw, is "29 zeroes", or .000000000000000000000000000001. They are VERY confusing with this notation, it's illogical. It's version of the "satoshi" is probably this small due to the fact it has so many blockchains operating simultaneously.
Let's talk # SECURITY # which might be the #1 concern of anyone wanting to use Nano/Raiblocks
Security could be an issue, bc "Representatives" or "Nodes" act as the main blockchain ledger, determining who owns what, and they receive their power via wallets which "vote" on them as their always-on nodes. This could lead to "trusted" Nodes having too many votes and thus near dictatorial power. They claim security is kept by the larger Nodes not wishing to upset the applecart or they'd have the most to lose. Hmmm, this MIGHT work, but might also result in too much power. Any wallet can act as a representative "Node", but only the representatives who are ALWAYS online will gain votes. This could also be a slight flaw in the system, bc if YOUR individual wallet has a representative who's down (computer node off), then your transaction might not get verified even if the overall system is running fine. In some secret instances you might want this, but if you're just running around buying and selling coffees you might wish to have your transactions verified immediately by the main blockchain.
What are the (other) "attacks" Raiblocks is susceptible?
Section Five of Whitepaper can be read for full comprehensive (and honest) depiction of all attacks possible via this system. The RaiBlocks website link to the WhitePaper doesn't work, it's a Google Doc which is just a link to a pdf which won't open, not today anyway. But OK, we did a search for it outside of the Raiblocks website, and found a link to Colin LeMahieu's whitepaper here... (Creator of Raiblocks was Colin LeMahieu and his right-hand man is known as "Sergsw/byte16")
https://goo.gl/VQhHZe
51% Attack.
This is ALREADY a concern in Raiblocks, because only 4 "representatives" already has a consensus NOW.
Three of them seem to be associated with the founders. KuCoin exchange seems to have about a 5% vote and BitGrail exchange a 7% vote, but they are irrelevant bc even combined they still easily outvoted by the top 4 reps. Queezy yet?
Look at their list of power-broker nodes, and then add up the ones that say "Official Representative". There are 8 of them, and added up they equal 53% of the vote required to secure transactions. Yucky. Over TIME, this problem MIGHT be alleviated as the core developers sell their RaiBlocks to buy mega-mansions and yachts, but that hasn't happened to sufficient comfort just yet.
OFFLINE attack:
Another type of attack can be done while you sleep, or more accurately, while your "representative node" sleeps. So if a few nodes go "off the air" (disconnecting from the internet), the nodes still ON the network can gain a voting 51% consensus and begin writing bad checks. When we looked at Raiblocks "top 100" list of representatives, we found a LOT of them were red, meaning offline. Then we looked later and the list looked completely different. Maybe the first one with heavily-weighted "Official Reprensentatives" was a historical look? Both pages looked the same to us, but our 2nd look had the representatives MUCH more spread out, with the top Rep being BitGrail at 10% vote, and our 2nd look seemed to have all Top 100 Reps "green" (computers on). The Representative list updates ever 1 hour. This link is to the SECOND viewing of the list...
https://dev.raiblocks.net/page/representatives.php
DOS Attack: "Denial of Service"
Hackers sometimes jam government websites (for example) by overloading them with traffic, thus making it impossible for ACTUAL users of the website to transact. These attacks have become quite common, and can also occur in RaiBlocks if an attacker creates too much traffic for his brother representatives.
Penny-Spend Attack:
This is the same as a DoS attack, and is based on the fact that the smallest Raiblock, the "raw" isn't worth anything bc it's too small. Thus DoS attackers can "spend" these meaningless amounts in the zillions before it equates to any relevant amount of money for them, thus making DoS attacks just as inexpensive inside RaiBlocks protocol as it is in real life, maybe less-so. The Whitepaper SEEMS to provide somewhat of a solution, based on allowing the Representative nodes the ability to change some limits on what it considers "good accounts". This sounds a bit dicey to us, like letting a politician decide what he THINKS is in your best interest.
How is an account penalized for writing a "bad check" (double-spend attack)? (please comment if you know the answer)
Classic "Double-Spend" Attack
Transaction Times: The whitepaper outlined some early performances varied by the computer hardware used, and obtained anywhere from a top speed of 6 transactions per second to a low speed of about 1 transaction every 20 seconds. This is PER ACCOUNT, not for the overall network. Transaction speed will actually depend on YOU. Whichever wallet you are using will utilized the chips and hardware from the device it sits, and that hardware determines your personal blockchain's little "proof of work" algo it will run after each transaction you do. So the second you do one transaction, your wallet will commence it's minuscule proof of work to create the next block for your personal blockchain. Remember, each transaction is a block, in fact TWO blocks (one for you and one for your trading partner's personal blockchain). This tiny proof of work takes some time and electricity, such that it slows you down. Why did Nano creators use a tiny proof of work at all? This is to prevent Denial-of-Service-type attacks, such that it will be more than trivial for a computer to saturate the Nano blockchains with transactions, thus creating a slow-down "DOS attack" on the currency. Think about the benefits this would allow for today's US dollar. So if you were an HFT-style trader and needing to put in limit orders on an asset every microsecond, it really would be difficult. This would almost favor humans, imagine that! We'd love a system where HFTs cannot transact properly, but similar to HFT system RaiBlocks is probably susceptible to HFTs finding out geographical locations of voting Rep-nodes and getting close to them to use their time-advantage on other HUMAN-based accounts (to front-run them). Exchanges could prevent this, but just like in stocks exchanges are reverse-incentized to do this, as they get more traffic by catering to HFTs. RaiBlocks would DELAY HFTs, but not prevent them.
define HFT:
High Frequency Trader. In the stock market, egghead programmers have developed algorythms to "trade ahead" of those with actual opinions and information about a stock. HFTs are very fast servers running an algorythm which are placed right next to the New York Stock Exchange's servers. These HFTs are programmed to detect YOUR stock buy and sell orders, and jump in front of you to profit. This has the effect of stealing money from those of you who actually have an opinion about a stock. The HFT algos rely on a 'wisdom of crowds' type knowledge effect, and basically steal money from you. This practise could EASILY be fixed by slowing down trades (do any of you make 1,000 decisions in a single second? Yeah, didn't think so) but exchanges pander to the money HFTs pay them, and the volume they send, so like crack addicts the exchanges must accept terms from their drug dealers even to the detriment of the echange's REAL customers. It's BS and it's wrong, and people should go to jail, but this practise is older than prostitution so good luck trying to fix it (We see you IEX exchange, nice try! but....). What's important to YOU, is HFTs would HATE Nano, bc it forces them to pay extra money to send (and quickly cancel) so many transactions. This would benefit actual PEOPLE! Wow, a cryptocurrency which benefits living breathing people who aren't computer nerds-- NOVEL!
Both Sender and Reciever of a Transaction must "sign" for the transaction to be complete. So if you think about our example earlier, both Biff and Sally's wallets would need to acknolwedge each other, even if offline.
While the Sender cannot revoke the transaction, the funds exist in the "nether" (to borrow a Minecraft term for the uninhabitable void) until the receiver signs. What happens to the sent Raiblocks if the receiver does NOT sign? The whitepaper is not conclusive here so this remains an open question. For instance, what if the receiver dies before signing for a significant transaction, then his "heirs" cannot receive the funds bc they don't have the private key to sign for it, and yet the sender doesn't get his funds back either? Where are those Raiblocks going in that case, to the founder's account?!?! If you have an answer to this, please leave in the comments. We'll look it up in the meantime.
Wait, it sounds like this Nano has POLITICIANS??
Who are these 8 founders-chosen representive nodes?
See HERE young man... https://www.raiblocks.club/representatives
When you viddy the far right column, think about it in terms of "51% attacks". Who would have to get together to be able to write bad checks (what a 51% attack really is) and allow them to go thru?
Did they REALLY make their currency open for anyone to grab in the Fall of 2017 via this "faucet distribution", or did they set up a "page 13 IPO" where only those "in-the-know" were able to pre-mine the "free" Raiblocks? We fear the worst, as the eight main "Official Representatives" are so large a component of what's now over $1 billion dollars worth of RaiBlocks. So 8 core guys created $800 million of value out of nothing this past Fall, but supposedly this was all up for grabs to anyone with eyes and a heartbeat? Upon looking at this again, the faucet distribution actually lasted TOO long, so "everybody hit". It lasted so long, the currency couldn't appreciate due to all the immediate selling after doing "captchas" puzzles to "mine" Raiblocks. Entire exchanges (Cryptopia) went bezerk dealing with Raiblocks sellers en masse. After long consideration, and only a fraction of total Raiblocks minted, the founders shut down the faucet in 2017 and finally allowed the FINAL NUMBER of Raiblocks to remain steady at 133mm. Good timing, then December-of-Crypto happened and this is why you are reading this and we are writing this bc Raiblocks/Nano entered the crypto vernacular in grand style by rising rising rising...
Soooo... NO MINING:
Cool Protocol regarding tokens outstanding: The 133 million "genesis block" contained all the RaiBlocks there will ever be, no inflation protocol, just one amount to "checksum" betwixt all the wallets in existence. There is no way to increase the number of tokens. This is VERY cool. Raiblocks.net says anyone claiming to mine Raiblocks is a liar!
Exchanges trading Nano: (per raiblocks.net)
Mercatox,
BitGrail, BEWARE THE BitGrail, see comments below this article
BitFlip,
KuCoin,
Bit-Z,
RightBTC and
raiblockstradebot (you can trade on Telegram via XRB/DOGE currency pair)
Binance: Announced in January 2018 they will be listing Nano (and Steem!)
Wallets:
Raiblocks has its own online wallet called RaiWebWallet, which asks for an email address; link here...
https://raiwallet.com.
Their website also provides PC wallets for Windows, Mac and Linex. (what is "node"?)
THIRD PARTY wallets which take Raiblocks are RaiWallet and RaiWalletBot.
Ever-MORE notes on Raiblocks....
the next section has repeated info, bc you've forgotten it already?
Keyword used by Raiblocks website to promote itself: "Block Lattice"
Block Lattice means every account has it's own dedicated blockchain; whereas, in bitcoin there's only one main blockchain which serves as the ledger for everyone.
Unpruned ledger size is 1.7GB. Very small.
RaiBlocks transactions are fast bc the account blockchains can transact asynchronously to the other individual blockchains-- the lattice. RaiBlocks returns money to a "peer to peer" system much like cash dollar transactions-- only TWO accounts (sender and reciever) know about any single transaction. It's infinitely-decentralized.
Block size remains small bc a large one isn't required to process many transactions. Running a node costs very little with POS. Wallets do their "proof of work" immediately after a transaction is completed, so the next block is ready for the next transaction. But what if you do two transactions inside of 10 seconds? Answer: "For ongoing transactions, there may be delays, but this is intentional to prevent transaction spam". This is a major flaw!
Raiblock Nodes only need to lookup all the latest individual blocks, not the entire individual chains, to assemble the overall ledger of who owns what. This reduces lookup time and system resources needed to run a node.
Developers:
Founder = Colin LeMahieu, very impressive sound guy, perhaps another article dedicated to his story?
Wallet developer = Sergsw/byte16
Raiblocks seems to have a following in Russia, Indonesia, Spain and Italy, based on it's community managers.
RaiBlocks tauts FEELESS peer-to-peer transactions, like Paypal back in the "old days".
RaiBlocks is delegated proof-of-stake (dPoS). It is also susceptible to a "51% attack", but an attacker would risk upsetting the whole system, which would directly hurt the value of its own stake, thus a reverse-incentive to cheat the system exists naturally. Plus, if a node got closer to 51%, the currency would probably sell-off as people would get scared and trade into an alternative asset.
Questions we still have: (feel free to answer in the comments if you know the answer, and note that these questions may not be referenced in our write-up and thus aren't "in context" but we encountered them during our research)
What is Linux "node"?
"3rd party" wallets sound too official, who's behind them?
How can RaiWalletBot operate a wallet without giving you the keys?
What is "unpruned" mean? Or "pruned"
What happens to a transaction amount which isn't ever signed by the receiver?
Who invented the following.... Iota? Decred?
ANSWERED QUESTIONS:
Why would anyone want to be a Raiblocks Rep or node? It's just a cost, what's the payoff if there's no transaction fees or mining rewards? This one we found the answer. Raiblocks says people would want to be nodes who own a lot of raiblocks, bc they'd have a vested interest in maintaining the system. Good point, if you had $20 million in raiblocks, it MIGHT be a good idea to help others use it, and to maintain the system, ESPECIALLY if it's a VERY cheap system to maintain. Again, node reps are really just tallying final balances most of the time, it's not "rocket science". This ain't your father's blockchain baby!
note: Who invented DPoS?
A "TheMerkle" article credits Dan Larimer for inventing delegated-Proof-of-Stake, mostly associated with Steem actually! See "witnesses" instead of "node representatives".
CONCLUSION
We may have scared the crap out of you with the "attacks" section of our writeup, but overall we think Raiblocks has LOTS of merit as becoming a neat way to transact. Go read more on the ASYNCHRONOUS nature of raiblocks, and remind yourself that raiblocks is most like cash transactions in that only two parties need be involved. This, along with raiblocks never increasing in number and also not being mined (thus no new ones are created) is a very powerful concept which could help raiblocks gain mainstream acceptance over time, vs other cryptos.
In a diversified portfolio, Joel Greenblatt-style of owning potential gorillas until such time you identify them as NOT gorillas, you should own some Raiblocks until further notice. Why? Bc anything that COULD become the winner of the crypto-currency long-term game, is something to own a few and not worry about the near-term price. At a minimum, we'd own 1% of our assets-under-management (AUM) in Raiblocks, for any crypto-portfolio.
RISK/REWARD: ## What's the upside to Nano, ultimately?
Ultimately, Nano is VERY focused. They aren't trying to be a platform (like Ethereum or Lisk or Eos), they're laser focused on just getting CURRENCY right. While nothing's perfect, they aim to be the BEST currency of exchange, which makes sense when you think about their "cash-like" asynchronous transactions protocol (system). This makes the "reward" part very simple, right NOW with bitcoin remaining flat, bitcoin is worth about $190 billion. Since Nano has 133mm shares, that means you'd be shooting for a Nano price of about $1,400, with Nano currently trading for $18 or $2.4 billion, that'd be a rise of about 80x. So $1,000 would turn into $80,000 if Nano took over for bitcoin. Ironically, this probably merits waiting for a lower price, since there's at LEAST a few dozen cryptos out there wanting to achieve the same task, and that would assume bitcoin itself would falter.
RISK? Simple, zero. Hey, this is crypto, this isn't a McDonald's franchise or a Long Term Storage Locker facility. No one is going to pay you interest bc you own raiblocks, not with US dollars or gold specie anyway.
Anyway, for now, buy those dips and get a little, it might surprise you, as Raiblocks is a pretty nifty crypto.
What are HarpoonInvestor ##### "master-crypto series"? #####
If you had identified 100 cryptocurrencies as "interesting" on January 1, 2016 and invested $1,000 in each one, you'd be VERY rich today with enormous gains. We want to help you identify cryptos which might STILL be able to make outsized gains.
Next-up for a HarpoonInvestor research article:
Wagerr (WGR) & Waves?
No Limit Fantasy Sports?
Scorum?
Iota? They say it's a lot like raiblocks
Steemit? (Steem, SBD)
PIVX?
Please vote in the comments if you have a request.
bibliography / sources:
Steem Witnesses: https://steemit.com/steemit-guides/@pfunk/a-full-steemit-user-s-guide-to-steem-witnesses
About Raiblocks: https://raiblocks.net/page/faq
Proof of Work: https://www.bitcoinmining.com/bitcoin-mining-fees/
Nano not Raiblocks:
https://twitter.com/ColinLeMahieu/status/958743318615216128
- ColinLeMahieu