The text was written by: HassenBlasques
Hello,
I am going to run a project with students of the University of Economics in Prague. I got inspired by this thread: https://nxtforum.org/general-discussion/%28ann%29-nxt-academic-outreach-program/100/, where the NXT Academic Outreach Program (NAOP) was announced. I have already published my plans in the thread.
I am a PhD student and a teacher at University of Economics in Prague. I work at the Department of World Economy. I would like my students to get to know Nxt and cryptos in general and write economic papers about the ways they may be used in a useful way for both individuals and global economy. The head of our department supported the project so that I can work with not only my own students but with hundreds of students on the Faculty of International Relations, potentially.
I want to create a wallet for every student that volunteers for the project and give away 500-1000 Nxt to each participant. Such amount is motivating enough - taking in account the level of income in Prague – but not yet too high to attract someone who would not be interested in Nxt.
I want my students not only to get to know Nxt and learn how to use it in practice. I want them to think about its utilization in global economy too. Students' papers (or even theses) should emerge from the project, bringing interesting new ideas. I also hope that Nxt would start being used at the university as a currency for students' projects, proving it is a vival and liquid tool for community activities. I have prepared several interesting topics; nevertheless, I am going to let the participants to come up with their own topics too, naturally. These are some suggestions:
- Nxt as a reserve currency
- asset exchange - startups, crowdfunding
- currencies built upon Nxt AE
- currencies collateralized by resources
- electronic money for Africa
- save money transfers for migrant workers
- private currencies in form of firms’ IOUs and their aggregation
- contracts within blockchain
- accepting Nxt payments (including a study of benefits)
- marketing, advertisement
- encrypted uncensored communication
- utilization of the net’s hashing power (more of a topic for proof of work cryptos but still)
- hashing power as a flow-type currency
- popularization of Nxt at the university, its usage among the academic community
The participants can work on their own as well as in small teams. My role in the project would be supervising, consultancy and evaluation of the papers. I am going to write a paper concerning the project and its outcomes too. As far as I know, there is only one such project running – at MIT. And the MIT project is concerned with IT specialists. Mine would, on the other hand, involve economists. Knowing this, I suppose my paper could be accepted in an influential scientific journal with impact. I believe that a recognition by a scientific community would significantly help Nxt to retain and strengthen its position among the most important crypto-currencies. I also hope the students of economics can invent some new interesting ways how to use Nxt and its net and community. All their papers will be available for promoting Nxt.
On top of the papers, I will monitor the way the students have used their Nxt coins (to the degree the blockchain allows me to). Some of them may exchange it for fiat immediately, some of them may try to speculate, some may examine its various functions, some may decide to multiply the initial amount e.g. by accepting Nxt in their own businesses. I would like to stimulate them by awarding the 3 participants with the highest number of Nxt on their wallet in the end of the project with an additional Nxt reward.
Last but not least, I would like to repeat the project at a different university next semester, after it would prove itself to be worthy. I am going to be a doctoral exchange student. I am considering applying for University of Nicosia on Cyprus, where they run a Bachelors program concerning crypto-currencies. My own specialization is Alternative monetary solutions. I have already written and published several articles on this topic, including this one about Nxt: https://nxtforum.org/general-discussion/nxt-papers-whitepapers-academic-and-economic/ (Economic Parameters of Nxt).
We could also connect our students to Nxters via videochats, so that we can have some QA discussion sessions or we can stream the student presentations to the world. Potentially, some Nxt developers or promoters could visit the students face to face.
Since I don’t have resources for supporting the project, I am kindly asking the Nxt community to crowdfund the project. If you like the idea, please send a contribution to this address I opened solely for the purpose of crowdfunding of this project: 13727074986936672578 / NXT-7AC4-Z4SS-UNXK-DX42X. The more money I acquire, the more students I can involve. I would like to work with 30 - 100 students.
I am also very open to your suggestions, comments, critique here: https://nxtforum.org/nxt-projects/university-of-economics-in-prague-nxt-project/
Wednesday, July 30, 2014
Saturday, July 26, 2014
NXT is designed to be a lubricant to the financial system (by: jefdiesel)
Bitcoin is MONEY with very few financial tools. Its digital FIAT. You go to work and get paid then you can buy food, shelter, etc. The end. Back to work tomorrow, earn more. The only reason BTC value has increased is demand. Remember BTC is finite and there will eventually be no more (proof of) work to be done. Like a mine town when the mine taps out.
NXT has a different place. Its not to be worked for or spent on consumables. It has a value that people will exchange for goods and services, in limited manners now.
The analogy I use is its like having no money and paying for gas with unvested Facebook shares. If the gas station attendant was smart, he'd pay for you gas himself and keep the stocks. But not all people will be able to afford such actions. They need to buy food and shelter.
NXT is designed to be a lubricant to the financial system. It is a medium through which greater value will pass. The design will allow a much decreased overhead, and instant and secure transactions.
The gas station will not want to accept NXT for gas, instead the gas station will use a system based on NXT to process all payments, handle payroll, rent, banking, and accounts payable. The gas station may never know what NXT is.
As holders of NXT, we are serving to secure and grow this network. The liquidity issue in NXT more concerns distribution, as the security relies upon NXT being in many peoples hands, and less about being available to be simply spent.
The price seems to represent these needs. This reduces the importance of numerous exchanges, as users are not simply moving through NXT into other goods or services.
NXT needs a healthy market, but more importantly it needs a robust market. Exposure on pump and dump exchanges is not doing anything for anyone. When people want to buy NXT, they will go where it is sold. There is a demand for NXT to Fiat of course, but even that is secondary.
MGW offers a decentralized market which is the purest ideal at the moment. Banks and laws are the complete opposite direction. NXT has the planned financial tools to make these regulatory bodies obsolete.
NTX does not need Legal legitimacy, it has secure features that out strip any laws of man.
Source: https://nxtforum.org/introduce-yourself/am-i-doing-good)/msg70966/#msg70966
NXT has a different place. Its not to be worked for or spent on consumables. It has a value that people will exchange for goods and services, in limited manners now.
The analogy I use is its like having no money and paying for gas with unvested Facebook shares. If the gas station attendant was smart, he'd pay for you gas himself and keep the stocks. But not all people will be able to afford such actions. They need to buy food and shelter.
NXT is designed to be a lubricant to the financial system. It is a medium through which greater value will pass. The design will allow a much decreased overhead, and instant and secure transactions.
The gas station will not want to accept NXT for gas, instead the gas station will use a system based on NXT to process all payments, handle payroll, rent, banking, and accounts payable. The gas station may never know what NXT is.
As holders of NXT, we are serving to secure and grow this network. The liquidity issue in NXT more concerns distribution, as the security relies upon NXT being in many peoples hands, and less about being available to be simply spent.
The price seems to represent these needs. This reduces the importance of numerous exchanges, as users are not simply moving through NXT into other goods or services.
NXT needs a healthy market, but more importantly it needs a robust market. Exposure on pump and dump exchanges is not doing anything for anyone. When people want to buy NXT, they will go where it is sold. There is a demand for NXT to Fiat of course, but even that is secondary.
MGW offers a decentralized market which is the purest ideal at the moment. Banks and laws are the complete opposite direction. NXT has the planned financial tools to make these regulatory bodies obsolete.
NTX does not need Legal legitimacy, it has secure features that out strip any laws of man.
Source: https://nxtforum.org/introduce-yourself/am-i-doing-good)/msg70966/#msg70966
Monday, July 14, 2014
Why is Nxt decentralized Multigateway safer than any other centralized gateway? (by: jl777)
Server redundancy
In case of hardware failure, always remaining 2 servers provide ability to release funds.
jl777: Server redundancy is quite a benefit, especially when you consider blockchain forks. For a centralized gateway if their server (for any coin) goes on a fork, well, problems. With MGW, at least on the withdraw side everything comes to a stop. Granted response time isnt good, but I think stopping all withdraws until the fork is resolved is really the only practical solution and MGW design does this automatically. Also, MGW uses the blockchains as its database, thats pretty redundant.
More secure
sile16: Potentially slightly better security. 2 hosts would have to be compromised, but assuming a hacker can compromise 1 host, and all 3 hosts are running the same OS, and MGW software then if he can find an other host whatever method worked on the first one would probably work on the second. As for finding the hosts, it seems like you could just crossreference all the IPs of BTC nodes as well as NXT nodes. However, if MGW was re-implemented 3 times by 3 different programers and secured (os, firewall, etc) 3 unique ways it could achieve significantly higher security.
jl777: Your assumption of "if he can find an other host whatever method worked on the first one would probably work on the second" is flawed. The three MGW hosts will be proving three different sets of operational security, each based on their own proprietary security procedures. Its not like there will be a magic incantation that opens all the pathways to the MGW private keys. Now even it there was, it wont be as simple as doing a sendmoney call as all the funds are in multisig accts. Maybe this is not a big issue, but also, there wont be a single large account, but lots of small accounts. So, this magical hacker needs to crack one server host then while undetected crack another MGW host, then deal with hundreds or thousands of accounts. All without being detected as once detected, everything can be shutdown. Now how exactly the hacker will even contact an MGW server externally is a mystery to me. In any case, MGW doesnt have to run faster than the bear, it just needs to be more secure than a centralized setup. I think a social engineering hack is the weakest link, but whatever the exposure the odds are P*P vs P, where P is the probability of being cracked. Add to that the difficulty of multisig tx, add to that the lack of a centralized account. Whatever those factors are, call it X factor we have MGW being (X / P) more secure. So, if odds of one facility being cracked are .001 and X factor is 5, MGW is 5000 times more secure.
Secure
MGW is thousands of times more secure than centralized gateways. MGW does NOT require trust that it has 100% reserve. MGW has lower target appeal due to no central wallet and multisig. MGW utilizes blockchain redundancy for its state data and is more immune to blockchain forks. MGW is monitored by all independent nodes running the MGW client (which is 95% the same code as MGW server) to obtain realtime verification of all MGW operations, eg. deposits and withdraws.
Now a totally blockchain solution is of course theoretically much more desirable, but I am not smart enough to figure out how to do it. The fundamental problem is "where are the private keys". If you can figure out how to store the private keys on the blockchain without allowing anybody to just empty the accounts, then let me know and I will implement it. To my knowledge, MGW is far and away the most secure gateway solution with the least trust required of any gateway in existence.
Basically, technically it is the best. The bottomline is users have to use either a centralized exchange, a centralized gateway or MGW. Well, OK, I guess people can use NXTsubatomic/NXTatomic and not have to deposit their bitcoins anywhere. Maybe for people like you that seem to want to eliminate all third party risk, that is the way to go. I do understand your point of view. So the best gateway is no gateway at all.
James
Source: https://nxtforum.org/nxtservices-releases/how-to-test-multigateway-with-nxtservices-a-test-user-guide/msg64364/#msg64364
In case of hardware failure, always remaining 2 servers provide ability to release funds.
jl777: Server redundancy is quite a benefit, especially when you consider blockchain forks. For a centralized gateway if their server (for any coin) goes on a fork, well, problems. With MGW, at least on the withdraw side everything comes to a stop. Granted response time isnt good, but I think stopping all withdraws until the fork is resolved is really the only practical solution and MGW design does this automatically. Also, MGW uses the blockchains as its database, thats pretty redundant.
More secure
sile16: Potentially slightly better security. 2 hosts would have to be compromised, but assuming a hacker can compromise 1 host, and all 3 hosts are running the same OS, and MGW software then if he can find an other host whatever method worked on the first one would probably work on the second. As for finding the hosts, it seems like you could just crossreference all the IPs of BTC nodes as well as NXT nodes. However, if MGW was re-implemented 3 times by 3 different programers and secured (os, firewall, etc) 3 unique ways it could achieve significantly higher security.
jl777: Your assumption of "if he can find an other host whatever method worked on the first one would probably work on the second" is flawed. The three MGW hosts will be proving three different sets of operational security, each based on their own proprietary security procedures. Its not like there will be a magic incantation that opens all the pathways to the MGW private keys. Now even it there was, it wont be as simple as doing a sendmoney call as all the funds are in multisig accts. Maybe this is not a big issue, but also, there wont be a single large account, but lots of small accounts. So, this magical hacker needs to crack one server host then while undetected crack another MGW host, then deal with hundreds or thousands of accounts. All without being detected as once detected, everything can be shutdown. Now how exactly the hacker will even contact an MGW server externally is a mystery to me. In any case, MGW doesnt have to run faster than the bear, it just needs to be more secure than a centralized setup. I think a social engineering hack is the weakest link, but whatever the exposure the odds are P*P vs P, where P is the probability of being cracked. Add to that the difficulty of multisig tx, add to that the lack of a centralized account. Whatever those factors are, call it X factor we have MGW being (X / P) more secure. So, if odds of one facility being cracked are .001 and X factor is 5, MGW is 5000 times more secure.
Other benefits
Open
MGW is open. Meaning anybody can do a realtime audit on all the account balances and compare against the outstanding assets. In fact, the MGW client does this when configured with bitcoin-qt. I dont know of any centralized gateway that lets you verify they have 100% backing. Fractional reserve is always a tempting thing, but with MGW it is not possible. This is something that you overlook and I think could be one of the most powerful MGW advantages. You dont have to trust the issuer to not do fractional reserve, it is all there on the blockchain and the MGW clients can monitor this block by block. So in this most important sense, MGW is trustless. Realtime verification of unspent reserves.Secure
MGW is thousands of times more secure than centralized gateways. MGW does NOT require trust that it has 100% reserve. MGW has lower target appeal due to no central wallet and multisig. MGW utilizes blockchain redundancy for its state data and is more immune to blockchain forks. MGW is monitored by all independent nodes running the MGW client (which is 95% the same code as MGW server) to obtain realtime verification of all MGW operations, eg. deposits and withdraws.
Now a totally blockchain solution is of course theoretically much more desirable, but I am not smart enough to figure out how to do it. The fundamental problem is "where are the private keys". If you can figure out how to store the private keys on the blockchain without allowing anybody to just empty the accounts, then let me know and I will implement it. To my knowledge, MGW is far and away the most secure gateway solution with the least trust required of any gateway in existence.
Basically, technically it is the best. The bottomline is users have to use either a centralized exchange, a centralized gateway or MGW. Well, OK, I guess people can use NXTsubatomic/NXTatomic and not have to deposit their bitcoins anywhere. Maybe for people like you that seem to want to eliminate all third party risk, that is the way to go. I do understand your point of view. So the best gateway is no gateway at all.
James
Source: https://nxtforum.org/nxtservices-releases/how-to-test-multigateway-with-nxtservices-a-test-user-guide/msg64364/#msg64364
Wednesday, July 9, 2014
What is Nxt Economic Clustering?
This concept is a development of the idea of Economic Majority introduced by Meni Rosenfeld.
In his notes BCNext states that EC solves the most critical flaw of Proof-of-Stake concept, according to the description this flaw is what others call "Nothing-at-Stake" problem. The 3rd part of the Plan contains such the words:
Mining in Nxt relies on cooperation of people and even forces it
That was said about EC.
The concept of economic clustering is quite simple. Words "economic majority" say enough to explain how it works. From technical point of view it means that if someone decides to rewrite the history of the blockchain he won't be able to include transactions of those who don't take part in the attack, because every transaction contains the id of one of the recent blocks. When Alice sends money to Bob in exchange for something she'll get what she wants only if Bob validates the transaction. And this can happen only if they are both on the same branch.
Forgers can't forge all branches at once, they are faced with a choice, an attempt to forge more than one branch will lead to their exclusion from one of the clusters.
The proposed technical solution will also be used for analysis of transactions to detect forks. This is one of the reasons why I decided to implement part of EC without waiting for complete TF. Another reason is that proposed solution should be peer reviewed. Recent hot debates on BitcoinTalk regarding Nothing-at-Stake show that people are paying a lot of attention to PoS cryptocoins. This is a good opportunity to get a lot of reviews.
Extra consensus rule mentioned in the 1st part of the Plan is a rule that defines choice of an economic cluster a node sticks too. I can't reveal all the details yet, we still need to build infrastructure of nodes and hubs and (this is more important) to form such a cluster...
By: Come-from-Beyond, https://bitcointalk.org/index.php?topic=587007.msg6877338#msg6877338
PS:
Monetary System will allow to create currencies on top of Nxt. In the very beginning only basic operations like money transferring will be available for such subcurrencies. At some point (BCNext wanted this to happen when market capitalization of Nxt == capitalization of Bitcoin with 21'000'000 coins) the community will allow to use subcurrencies for all other things - trading assets on AE, buying goods on DGS, etc. This is supposed to slow down the deflation caused by limited supply of NXT. We don't need Antideflation* right now, but it's better to have it ready earlier than later, coz some non-revealed features of Nxt may lead to explosive growth of the userbase.
In his notes BCNext states that EC solves the most critical flaw of Proof-of-Stake concept, according to the description this flaw is what others call "Nothing-at-Stake" problem. The 3rd part of the Plan contains such the words:
Mining in Nxt relies on cooperation of people and even forces it
That was said about EC.
The concept of economic clustering is quite simple. Words "economic majority" say enough to explain how it works. From technical point of view it means that if someone decides to rewrite the history of the blockchain he won't be able to include transactions of those who don't take part in the attack, because every transaction contains the id of one of the recent blocks. When Alice sends money to Bob in exchange for something she'll get what she wants only if Bob validates the transaction. And this can happen only if they are both on the same branch.
Forgers can't forge all branches at once, they are faced with a choice, an attempt to forge more than one branch will lead to their exclusion from one of the clusters.
The proposed technical solution will also be used for analysis of transactions to detect forks. This is one of the reasons why I decided to implement part of EC without waiting for complete TF. Another reason is that proposed solution should be peer reviewed. Recent hot debates on BitcoinTalk regarding Nothing-at-Stake show that people are paying a lot of attention to PoS cryptocoins. This is a good opportunity to get a lot of reviews.
Extra consensus rule mentioned in the 1st part of the Plan is a rule that defines choice of an economic cluster a node sticks too. I can't reveal all the details yet, we still need to build infrastructure of nodes and hubs and (this is more important) to form such a cluster...
By: Come-from-Beyond, https://bitcointalk.org/index.php?topic=587007.msg6877338#msg6877338
PS:
Monetary System will allow to create currencies on top of Nxt. In the very beginning only basic operations like money transferring will be available for such subcurrencies. At some point (BCNext wanted this to happen when market capitalization of Nxt == capitalization of Bitcoin with 21'000'000 coins) the community will allow to use subcurrencies for all other things - trading assets on AE, buying goods on DGS, etc. This is supposed to slow down the deflation caused by limited supply of NXT. We don't need Antideflation* right now, but it's better to have it ready earlier than later, coz some non-revealed features of Nxt may lead to explosive growth of the userbase.
Decentralized internet and Nxt solutions
People started to realize they have almost no privacy on the internet in last years. More and more web users are looking for free an independent network without any restrictions and spy agencies. John Perry Barlow in his 1996’s manifesto asked for naturally independent internet without any methods of enforcement from the governments. His ideas weren't accepted, so today Google comprises 25 per cent of all North American Internet traffic. You cannot access Facebook in Bangladesh or China. At some escalated days you couldn't use Twitter (and Facebook) also in Egypt, Iran, Syria, South Korea or Tajikistan. These restrictions are quite small if you compare them to the different kind of manipulation: internet controlled by major players: Google, Amazon and Microsoft.
Amazon Web Services decided to pull the WikiLeaks website from its servers in 2010. They said it was a violation of their terms of service, but Amazon was also under a political pressure. This incident raised questions about freedom in independent media. Google removes 1300 sites every year by government requests from 25 countries, including Cyprus, France or Japan. The problem with Google Compute Engine or Microsoft Azure is in a monitoring system which controls its functioning. This regulation needs to be very massive, because users want to view only very limited content on their mobile platforms.
If you look at Apple, they are selling iPhones with iOs or iTunes, but they also decided to launch iPad news publication controlled by Rupert Murdoch's corporation. The readers of this iNewspaper will be able to read only texts approved by one company. Edward Snowden’s leaks brought another reason not to trust centralized cloud systems: Security Agencies were secretly collecting users’ data from data centers owned by Google or Yahoo. The fear of hidden back doors opened debates about need of truly decentralized internet network.
In centralized web all your data, used searches, messages, photos and videos are owned by corporations who know everything about you. There is no online privacy on the internet in 2013. Corporations are trying to create a new internet 2.0, where all information is stored on cloud services. So you will be able to access your files on your mobile phone, tablet and notebook. This way you are going to lose all privacy. Pakistan already implemented a mandatory biometric regime for SIM-card users. All fingerprints used for purchases can now be used for the state fingerprint database. On the other hand in Mexican village Talea de Castro was built an independent mobile network, without any control of state governments or big corporations.
There are some places where decentralized network connects some local areas. Project Guifi started in 2000s by Ramon Roca. This local network has got more than 21.000 wireless nodes, most of them from Catalonia. Its users communicate with each other P2P. This project now hosts web servers, videoconferencing services and internet radio broadcasts. This system is based on radio wireless network, so it would work also if the internet was shot down. Very similar network based in the US is Hyperboria, a virtual meshnet that runs P2P through the existing internet. So it needs internet connection, but its content is unreachable by centralized servers.
Internet is centralized thanks to ISPs' (internet service providers) switches. That's why could be protesters in Egypt unplugged on 28 January 2011. This might be prevented by decentralized systems with enabled internet connection between all computers in the network. Decentralized computing can be used for file sharing, payments and all kinds of online communication. It is based on a peer-to-peer applications running on several local computers, whose connect remotely to each other.
One of the implementation of decentralized internet is a lightweight version of the free Linux operating system invented by Jacob Cook (ArkOS). It has a big advantage of its cheap maintenance: you can run it on Raspberry Pi, a little microcomputer, cheaper and smaller than your mobile phone. It allows hosting for any data that you can access anywhere. This way users don't have to use Dropbox or Amazon, services owned by someone else.
Bitcloud will try to make anonymous internet, with invention of routing traffic in a brand new mesh network (= Proof of Bandwidth). So the internet providers won't be needed. It's already aiming for replacing YouTube, Netflix, Hulu, Soundcloud or Spotify. It is quite similar to MaidSafe, which is a bitcoin for data that aspires to replace Skype, Facebook, Dropbox, Tor or Wuala.
A few years ago was created Diaspora, distributed and decentralized social network. The problem is even this project was backed by specific organization (Free Software Support Network) which means centralization. The FreedomBox brought decentralized system of encrypted voice and text communication. Anyone can anonymously talk to the media or public using FreedomBox, even from countries censored by governments. However FreedomBox foundation is a Delaware nonprofit corporation - so even this project is based on centralized group of people. Their goal was to eventually replace Facebook/Twitter/Flicker, but they didn't complete the application yet. Also using a Kickstarter and payment by Amazon for funding is very centralized way of getting to the system. Almost four years after the Kickstarter funding ($86.724) the backers still didn't obtain an application they paid for.
All these programs had a problem with getting a mass adoption. They were so specific, that they couldn't find a relevant number of users. So Identi.ca and GNU social didn’t replace Facebook, Mega, Parley, Scramble,StartMail, BitMessage, Darkmail, FlowingMail or Pond didn’t gain as many users as Gmail. That's why is important to have one solution that could easily maintain the whole decentralized internet.
Nxt uses an efficient system to maintain the network by using much lower processing power and electricity than is needed for Bitcoin and its clones. It is important to stay decentralized, by forming the Nxt network from thousands of users from all over the world, so this system cannot be censored. You cannot point to any owner of the Nxt system. Ordinary users don't own Nxt coins, they only know the passphrase to a Nxt brainwallet. This means that no legal entity can take Nxt coins from you… There is no creator to blame, no specific user to arrest, and you cannot take the Nxt network down. Nobody can censor P2P networks. Nxt also is not vulnerable to 51% attacks like Bitcoin, so even if someone owns 90% of all Nxt coins, the Nxt network is secured thanks to Transparent Forging algorithms.
Nxt evolved after the second part BCNext's plan was revealed. Nxt coins cannot only be used as currency, they can also be the building blocks to implement any other project on top of the Nxt platform. Different people may have different ideas. Nxt will provide a platform for easy creation of new currencies. Thousands of cryptocurrencies can be built on top of the Nxt network. They are maintained on Nxt blockchain, but they will have their own environment. Also, people can use assets to issue new coins, so they can easily create their own monetary system via the recently implemented asset exchange. All will be secured by Nxt’s green and attack-proof environment. It is up to the creators of those coins, whether their currency will be Proof of Work (Dogecoin), Stake (Peercoin), Bandwidth (Lakshmi, Bitcloud), Burn (Counterparty) or even Learning and Content (UNITAS project). These coins can be used for different purposes– as redeemable "points" and "credits" for businesses and organizations, as redeemable tokens for prepurchases, or local community and even national currencies. Iceland is introducing Auroracoin, when half of all coins will be sent to all of the Iceland inhabitants. Nxt could eventually replace even US Dollars.
Nxt applications similar to Twitter and Viber (messages app) are now available. Soon, the first game built on top of the Nxt network will be published: a decentralized Poker game. It is very simple to create new applications for Nxt. Nxt will be like Lego for cryptocurrencies. Developers can build anything they imagine on top of Nxt.
Nxt Arbitrary Messages lead us to the true decentralized web - torrent files have already been sent via this network. With multiple parallel blockchains running side-by-side, Nxt will be able to provide cloud storage and file sharing apps. The principle behind these applications is using different blockchains for different purposes: one for file storage, one for messages, and so on. Each app will use only a specific blockchain(s) and won't be spammed by the others. Additionally, with blockchain pruning, users will not need to download large blockchains as they do now with Bitcoin and its forks.
Other functions based on Zerocoin and mixing services can provide a completely anonymous infrastructure that was originally built in the Phantom protocol - a decentralized network that focuses on the anonymization of users. Currently, Bitcoin and Nxt are only pseudonymous - transactions from the same account can still be linked to each other. With the Zerocoin feature integrated into the NXT core, it will be mathematically infeasible to link the particular coins used by each user.
Decentralized computing systems built on the Nxt platform could locally solve all kinds of research projects. Thanks to the extremely fast Nxt network, home computers can work on mathematical projects so their owners may receive crypto coins. With built-in decentralized exchanges, such coins can be immediately exchanged for other coins. Currently being tested, the decentralized Asset Exchange allows users to transform these coins into assets for fiat currencies, shares or commodities such as silver and gold. Anyone can use these exchanges without any restrictions of high fees. Asset exchange will replace “kickstarter websites” because with Nxt you can create a kickstarter crowdfunding project without any 3rd party.
Nxt uses small fees, and these fees are always returning to the users who maintain the Nxt network. While fees in VISA or PayPal system go to the centralized corporations, in the Nxt ecosystem, they are distributed fairly between users. While Bitcoin is capable of 7 transactions per second (TPS), Nxt is going to have 100 and then even 1000 TPS, so Nxt payment network might replace VISA eventually.
Nxt will be soon cooperating with DAC (Distributed Autonomous Corporations), such as Bitcloud or ArkOS. Automated Transactions, the Turing-complete scripts, are already being developed. With Bitcloud, nodes on a mesh network can be rewarded financially for routing traffic in a brand new mesh network. This removes the need for Internet Service Providers. The goal is always same: to replace YouTube, Dropbox, Facebook, Spotify, and others with decentralized, open source alternatives.
ArkOS and Nxt systems are very ecofriendly, you can run Nxt on a Raspberri Pi too. Possible merging of these projects may lead to a future of free, decentralized and green internet. Especially if the programs created on top of Nxt network used applications similar to ArkOS.
Currently, United States Federal Grants have been used to invest into installing Fiber Optic Cables. The fiber was installed and then control turned over to Kitsap County Public Utility District. Then, it was forbidden from selling access to this fiber. So instead, they have installed a free mesh network providing access to the communities of Poulsbo, Bainbridge Island, Bremerton, and Port Orchard. NXT Cubietrucks or Odroids connected to federally funded community WIFI mesh connections will connection redundancy to the Nxt network.
Another example of the grassroots deployment of a Commotion Wireless firmware based mesh network is in Brooklyn New York following Hurricane Sandy at the request of the local authorities. This mesh network exists to this day and is served by a donated fiber optic backhaul. The network serves over 500 residents who access it with iPhones, Androids, and other WIFI client devices. The mesh network was deployed by a small group of wireless networking enthusiasts utilizing Ubiquiti Networks Picostations and Nanostations and federally unlicensed wireless spectrum.
These two examples of currently existing community wireless mesh networks are perfect candidates and examples of existing decentralized networking that can be immediately integrated into the operation of the Nxt network. The Commotion Wireless project is active is Seattle and many other major US cities. Wireless mesh networking holds the capability of creating geographic mesh networks that interconnect globally via existing fiber optic backhaul, sidestepping the stranglehold of telecommunications providers worldwide. The day the Nxt network has sufficient backhaul redundancy through mesh networking will be a glorious one indeed, as Nxt data will no longer be required to traverse legacy information channels dominated by government sanctioned communication oligopolies.
The third part of BCNext's plan will be released on April 2014. It will most likely be his idea about building all kinds of decentralized applications on top of Nxt’s green network. Since the Nxt system is democratic and users will be able to vote on all important decisions, people do not have to follow BCNext's plans and can continue with Nxt as a simple currency. This is one of the most important aspects of Nxt: the creator BCNext has no power over Nxt and he cannot control its development. All the power is in the hands of independent developers and code reviewers, with input from the community. He can only suggest new ideas, but he cannot implement them directly in the protocol. Nxt has no benevolent dictator, no sponsoring company or corporation. Instead Nxt is organized around active users and contributors. Some people have already begun to work on new coins and other implementations, so BCNext's plan will likely be fulfilled as well as inspire new ideas.
Nxt is one step ahead of all other decentralized platforms thanks to its kickstart as a cryptocurrency. It is now ready to become a new decentralized internet. Nxt provides a powerful and flexible platform for developers, allowing them to easily develop new applications for Nxt. Thanks to the great community behind it, from the participants of the now almost two thousand pages of discussion in the Nxt Bitcointalk “pub” thread, as well as other forums. Nxt has achieved so much in such little time. Anyone can join this fantastic group of open-minded individuals and make a positive contribution. You can join Nxt at http://mynxt.org / http://nxtcrypto.org / http://bitcointalk.org/index.php?topic=345619.0 to learn more.
Amazon Web Services decided to pull the WikiLeaks website from its servers in 2010. They said it was a violation of their terms of service, but Amazon was also under a political pressure. This incident raised questions about freedom in independent media. Google removes 1300 sites every year by government requests from 25 countries, including Cyprus, France or Japan. The problem with Google Compute Engine or Microsoft Azure is in a monitoring system which controls its functioning. This regulation needs to be very massive, because users want to view only very limited content on their mobile platforms.
If you look at Apple, they are selling iPhones with iOs or iTunes, but they also decided to launch iPad news publication controlled by Rupert Murdoch's corporation. The readers of this iNewspaper will be able to read only texts approved by one company. Edward Snowden’s leaks brought another reason not to trust centralized cloud systems: Security Agencies were secretly collecting users’ data from data centers owned by Google or Yahoo. The fear of hidden back doors opened debates about need of truly decentralized internet network.
In centralized web all your data, used searches, messages, photos and videos are owned by corporations who know everything about you. There is no online privacy on the internet in 2013. Corporations are trying to create a new internet 2.0, where all information is stored on cloud services. So you will be able to access your files on your mobile phone, tablet and notebook. This way you are going to lose all privacy. Pakistan already implemented a mandatory biometric regime for SIM-card users. All fingerprints used for purchases can now be used for the state fingerprint database. On the other hand in Mexican village Talea de Castro was built an independent mobile network, without any control of state governments or big corporations.
There are some places where decentralized network connects some local areas. Project Guifi started in 2000s by Ramon Roca. This local network has got more than 21.000 wireless nodes, most of them from Catalonia. Its users communicate with each other P2P. This project now hosts web servers, videoconferencing services and internet radio broadcasts. This system is based on radio wireless network, so it would work also if the internet was shot down. Very similar network based in the US is Hyperboria, a virtual meshnet that runs P2P through the existing internet. So it needs internet connection, but its content is unreachable by centralized servers.
Internet is centralized thanks to ISPs' (internet service providers) switches. That's why could be protesters in Egypt unplugged on 28 January 2011. This might be prevented by decentralized systems with enabled internet connection between all computers in the network. Decentralized computing can be used for file sharing, payments and all kinds of online communication. It is based on a peer-to-peer applications running on several local computers, whose connect remotely to each other.
One of the implementation of decentralized internet is a lightweight version of the free Linux operating system invented by Jacob Cook (ArkOS). It has a big advantage of its cheap maintenance: you can run it on Raspberry Pi, a little microcomputer, cheaper and smaller than your mobile phone. It allows hosting for any data that you can access anywhere. This way users don't have to use Dropbox or Amazon, services owned by someone else.
Bitcloud will try to make anonymous internet, with invention of routing traffic in a brand new mesh network (= Proof of Bandwidth). So the internet providers won't be needed. It's already aiming for replacing YouTube, Netflix, Hulu, Soundcloud or Spotify. It is quite similar to MaidSafe, which is a bitcoin for data that aspires to replace Skype, Facebook, Dropbox, Tor or Wuala.
A few years ago was created Diaspora, distributed and decentralized social network. The problem is even this project was backed by specific organization (Free Software Support Network) which means centralization. The FreedomBox brought decentralized system of encrypted voice and text communication. Anyone can anonymously talk to the media or public using FreedomBox, even from countries censored by governments. However FreedomBox foundation is a Delaware nonprofit corporation - so even this project is based on centralized group of people. Their goal was to eventually replace Facebook/Twitter/Flicker, but they didn't complete the application yet. Also using a Kickstarter and payment by Amazon for funding is very centralized way of getting to the system. Almost four years after the Kickstarter funding ($86.724) the backers still didn't obtain an application they paid for.
All these programs had a problem with getting a mass adoption. They were so specific, that they couldn't find a relevant number of users. So Identi.ca and GNU social didn’t replace Facebook, Mega, Parley, Scramble,StartMail, BitMessage, Darkmail, FlowingMail or Pond didn’t gain as many users as Gmail. That's why is important to have one solution that could easily maintain the whole decentralized internet.
Nxt solutions
If you want to enter the game as a decentralized application, starting as a currency to obtain a wide distribution is a good place to start. All of the above mentioned projects have had problems with integration and distribution. Nxt started as the first pure Proof of Stake cryptocurrency in November 2013, and since then - in just a few short months - it has gained more than 20.000 users. The first part of BCNext’s plan, the anonymous inventor of Nxt, was spreading the monetary system among as many users as possible to create a network of decentralized P2P computers (nodes). This network is based on a lightweight client running on each connected node, so it can send data directly P2P. Thanks to the new code, it can provide up to 100 transactions per second.Nxt uses an efficient system to maintain the network by using much lower processing power and electricity than is needed for Bitcoin and its clones. It is important to stay decentralized, by forming the Nxt network from thousands of users from all over the world, so this system cannot be censored. You cannot point to any owner of the Nxt system. Ordinary users don't own Nxt coins, they only know the passphrase to a Nxt brainwallet. This means that no legal entity can take Nxt coins from you… There is no creator to blame, no specific user to arrest, and you cannot take the Nxt network down. Nobody can censor P2P networks. Nxt also is not vulnerable to 51% attacks like Bitcoin, so even if someone owns 90% of all Nxt coins, the Nxt network is secured thanks to Transparent Forging algorithms.
Nxt evolved after the second part BCNext's plan was revealed. Nxt coins cannot only be used as currency, they can also be the building blocks to implement any other project on top of the Nxt platform. Different people may have different ideas. Nxt will provide a platform for easy creation of new currencies. Thousands of cryptocurrencies can be built on top of the Nxt network. They are maintained on Nxt blockchain, but they will have their own environment. Also, people can use assets to issue new coins, so they can easily create their own monetary system via the recently implemented asset exchange. All will be secured by Nxt’s green and attack-proof environment. It is up to the creators of those coins, whether their currency will be Proof of Work (Dogecoin), Stake (Peercoin), Bandwidth (Lakshmi, Bitcloud), Burn (Counterparty) or even Learning and Content (UNITAS project). These coins can be used for different purposes– as redeemable "points" and "credits" for businesses and organizations, as redeemable tokens for prepurchases, or local community and even national currencies. Iceland is introducing Auroracoin, when half of all coins will be sent to all of the Iceland inhabitants. Nxt could eventually replace even US Dollars.
Nxt applications similar to Twitter and Viber (messages app) are now available. Soon, the first game built on top of the Nxt network will be published: a decentralized Poker game. It is very simple to create new applications for Nxt. Nxt will be like Lego for cryptocurrencies. Developers can build anything they imagine on top of Nxt.
Nxt Arbitrary Messages lead us to the true decentralized web - torrent files have already been sent via this network. With multiple parallel blockchains running side-by-side, Nxt will be able to provide cloud storage and file sharing apps. The principle behind these applications is using different blockchains for different purposes: one for file storage, one for messages, and so on. Each app will use only a specific blockchain(s) and won't be spammed by the others. Additionally, with blockchain pruning, users will not need to download large blockchains as they do now with Bitcoin and its forks.
Other functions based on Zerocoin and mixing services can provide a completely anonymous infrastructure that was originally built in the Phantom protocol - a decentralized network that focuses on the anonymization of users. Currently, Bitcoin and Nxt are only pseudonymous - transactions from the same account can still be linked to each other. With the Zerocoin feature integrated into the NXT core, it will be mathematically infeasible to link the particular coins used by each user.
Decentralized computing systems built on the Nxt platform could locally solve all kinds of research projects. Thanks to the extremely fast Nxt network, home computers can work on mathematical projects so their owners may receive crypto coins. With built-in decentralized exchanges, such coins can be immediately exchanged for other coins. Currently being tested, the decentralized Asset Exchange allows users to transform these coins into assets for fiat currencies, shares or commodities such as silver and gold. Anyone can use these exchanges without any restrictions of high fees. Asset exchange will replace “kickstarter websites” because with Nxt you can create a kickstarter crowdfunding project without any 3rd party.
Nxt uses small fees, and these fees are always returning to the users who maintain the Nxt network. While fees in VISA or PayPal system go to the centralized corporations, in the Nxt ecosystem, they are distributed fairly between users. While Bitcoin is capable of 7 transactions per second (TPS), Nxt is going to have 100 and then even 1000 TPS, so Nxt payment network might replace VISA eventually.
Nxt will be soon cooperating with DAC (Distributed Autonomous Corporations), such as Bitcloud or ArkOS. Automated Transactions, the Turing-complete scripts, are already being developed. With Bitcloud, nodes on a mesh network can be rewarded financially for routing traffic in a brand new mesh network. This removes the need for Internet Service Providers. The goal is always same: to replace YouTube, Dropbox, Facebook, Spotify, and others with decentralized, open source alternatives.
ArkOS and Nxt systems are very ecofriendly, you can run Nxt on a Raspberri Pi too. Possible merging of these projects may lead to a future of free, decentralized and green internet. Especially if the programs created on top of Nxt network used applications similar to ArkOS.
Currently, United States Federal Grants have been used to invest into installing Fiber Optic Cables. The fiber was installed and then control turned over to Kitsap County Public Utility District. Then, it was forbidden from selling access to this fiber. So instead, they have installed a free mesh network providing access to the communities of Poulsbo, Bainbridge Island, Bremerton, and Port Orchard. NXT Cubietrucks or Odroids connected to federally funded community WIFI mesh connections will connection redundancy to the Nxt network.
Another example of the grassroots deployment of a Commotion Wireless firmware based mesh network is in Brooklyn New York following Hurricane Sandy at the request of the local authorities. This mesh network exists to this day and is served by a donated fiber optic backhaul. The network serves over 500 residents who access it with iPhones, Androids, and other WIFI client devices. The mesh network was deployed by a small group of wireless networking enthusiasts utilizing Ubiquiti Networks Picostations and Nanostations and federally unlicensed wireless spectrum.
These two examples of currently existing community wireless mesh networks are perfect candidates and examples of existing decentralized networking that can be immediately integrated into the operation of the Nxt network. The Commotion Wireless project is active is Seattle and many other major US cities. Wireless mesh networking holds the capability of creating geographic mesh networks that interconnect globally via existing fiber optic backhaul, sidestepping the stranglehold of telecommunications providers worldwide. The day the Nxt network has sufficient backhaul redundancy through mesh networking will be a glorious one indeed, as Nxt data will no longer be required to traverse legacy information channels dominated by government sanctioned communication oligopolies.
The third part of BCNext's plan will be released on April 2014. It will most likely be his idea about building all kinds of decentralized applications on top of Nxt’s green network. Since the Nxt system is democratic and users will be able to vote on all important decisions, people do not have to follow BCNext's plans and can continue with Nxt as a simple currency. This is one of the most important aspects of Nxt: the creator BCNext has no power over Nxt and he cannot control its development. All the power is in the hands of independent developers and code reviewers, with input from the community. He can only suggest new ideas, but he cannot implement them directly in the protocol. Nxt has no benevolent dictator, no sponsoring company or corporation. Instead Nxt is organized around active users and contributors. Some people have already begun to work on new coins and other implementations, so BCNext's plan will likely be fulfilled as well as inspire new ideas.
Nxt is one step ahead of all other decentralized platforms thanks to its kickstart as a cryptocurrency. It is now ready to become a new decentralized internet. Nxt provides a powerful and flexible platform for developers, allowing them to easily develop new applications for Nxt. Thanks to the great community behind it, from the participants of the now almost two thousand pages of discussion in the Nxt Bitcointalk “pub” thread, as well as other forums. Nxt has achieved so much in such little time. Anyone can join this fantastic group of open-minded individuals and make a positive contribution. You can join Nxt at http://mynxt.org / http://nxtcrypto.org / http://bitcointalk.org/index.php?topic=345619.0 to learn more.
Nxt cryptocurrency - introduction and texts for journalists
Dear Mr Journalist,
I would like to inform you about new generation cryptocurrency - Nxt. Nxt is not based on Bitcoin's source code (like all other altcoins). It is faster than Bitcoin (10x) and cheaper (3000x) - you can run Nxt on smartphones and small devices like the Raspberry Pi. (see tech analysis)
Nxt is fully decentralized - there is no organisation above Nxt, no corporations or celebrities, all development and marketing is paid by community donations. Inventor of Nxt only created a source code and left Nxt, like Satoshi left Bitcoin.
Why is Nxt new generation cryptocurrency?Nxt allows building all kinds of decentralized applications on top of Nxt’s green and fast network:
- decentralized internet
- decentralized stock, currency exchange
- decentralized online market
- decentralized file storage
- decentralized Facebook, Twitter, Email, Youtube...
Nxt will be used as a platform for easy building new cryptocurrencies on top of Nxt:
- Casino Tokens
- Airline miles points
- Hotel/Travel Agency Tokens
- Gaming currencies
- Country currencies
- Local currencies
- Companies currencies
Why is it important to be decentralized?Decentralized Facebook cannot be censored by governments (like in China). Decentralized exchanges cannot be hacked (like MtGox in Japan). Anonymity allows decentralized internet and file storage for all freedom fighters. (see "Decentralized internet and Nxt solutions" paper)
Nxt brings the revolution to the free speech and to the democratization of the money.
Why are P2P payments and P2P crowdfunging important?Nxt crowdfunding allows straight micropayments aimed to the hands of everyone, even in Africa. Billions of people cannot have a bank account, but they can be crowdfunded by Nxt kickstarters, without charity providers, without middlemen.
If you have any questions, let us know: nxtsalsacz@gmail.com. We can arrange interviews with Nxt developers... We would be very delighted, if you wanted to write about Nxt. Thank you!
Test new Nxt interface right now here: http://nxtra.org/nxt-
Published articles
- NXT – Proof of Stake and the New Alternative Altcoin
http://bitcoinmagazine.com/9826/nxt-proof-stake-new- alternative-altcoin/ - Whats NXT in the World of Cryptocurrencies?
http://www.cryptocoinsnews.com/2014/01/17/whats-nxt- world-cryptocurrencies/ - Why NXT is Up While Most Other Crypto Coins are Down:
http://www.cryptocoinsnews.com/2014/02/14/nxt-crypto- coins/ - Digital Currencies 2.0: Meet NXT, the ‘Next’ Ripple
http://www.dcmagnates.com/digital-currencies-2-0-meet- nxt-the-next-ripple/ - Open source cryptocurrency Nxt is now finishing testing Asset Exchange
http://cryptosource.org/open-source-cryptocurrency-nxt-is- now-finishing-testing-asset- exchange-and-was-added-on- cryptsy/
- Nxt crypto platform version 1.0 released
http://www.coinssource.com/nxt-crypto-platform-version-1-0-0-released/
- Nxt decentralized Asset exchange now live
http://www.coinssource.com/now-live-nxts-decentralized-asset-exchange/
- Nxt entering mainstream: Payexpo, SMS payments, ATMs, Nxt cafe and new features
http://www.coinssource.com/nxt-entering-mainstream-payexpo-sms-payments-atms-nxtcafe-new-features/
Unpublished texts. You can use or publish any of our texts
- Decentralized internet and Nxt solutions
- Make Nxt Your Blockchain: An Invitation To Universities and Academic Researchers
- NXT Whitepaper: http://wiki.
nxtcrypto.org/wiki/Whitepaper: Nxt - NxtMyths: What should we know about Nxt generation PoS Cryptocurrency
Economic texts:
Tech theses:
- Nxt Network Energy and Cost Efficiency Analysis
- The math of Nxt forging (in progress)
- Nxt Crypto Review of Curve25519.java & Crypto.java
- NXT: A Cybernetics Perspective V 0.1 Proof of X
Infographics:
Videos:
What is Nxt?
Decentralized internet and Nxt solutions:
Download Nxt logos:
Nxt logo:
Nxt brochure
Lists of Nxt websites:
Main Nxt website:
Nxt clients:
http://www.nxtclient.org/ or online wallet: https://wallet.mynxt.
Buy Nxt on:
Yours faithfully, Salsacz, contact: nxtsalsacz@gmail.com
Small unpublished articles
How is Nxtcoin (NXT) Proof of Stake and Transparent Forging better than Proof of Work systems?
https://docs.google.com/file/
Financial decentralization leads to financial freedom!
https://docs.google.com/file/
NXT solution to payment terminal
https://docs.google.com/file/
https://docs.google.com/file/
Financial decentralization leads to financial freedom!
https://docs.google.com/file/
NXT solution to payment terminal
https://docs.google.com/file/
Initial distribution of 100% PoS currencies (by: BCNext and revised by Come-from-Beyond)
Initial distribution of the coins and the forging schedule are more serious problems than they appear at first glance. A 100% proof-of-stake currency needs at least a small part of the coins to be distributed in the beginning because these coins is the only forging instrument. A forging schedule has a lot of influence on initial distribution and must be defined in the first place.
The PoS algorithm used in Nxt has such properties that give a little advantage to an account that holds more coins comparing to an account with a lower amount. If every block subsidizes the forger with extra coins (in addition to the fees) then bigger accounts become even bigger by following the compound interest curve. In a currency with selfish forgers most of the coins would be absorbed by very few accounts that would lead to centralization of the currency. Because of this all the coin in Nxt were distributed at once in the genesis block.
Bootstrapping requires to make a decision how to do the initial distribution. We consider three main schemes, any other scheme can be represented as a combination of them.
The first scheme – all the coins go to a single account controlled by one entity that transfers coins to the others in exchange for work done for development and promotion of the currency. This scheme is completely unacceptable because it’s not “compatible” to decentralized nature of cryptocurrencies.
The second scheme – all the coins are split equally among a group of people. This approach faces some problems. A Sybil attack can be easily conducted by an entity to acquire a significant part of the coins. Such a counterattack as usage of a certification service can’t be used because majority of potential users won’t agree to reveal their true identities. Another possible counterattack, based on proof-of-resources approach, can’t give “fair” distribution because the resources are distributed in “unfair” way. Anyway, even if the Sybil attack could be significantly mitigated, the second scheme is a bad choice because the history of humankind teaches us that an economy driven society where all individuals own equal amount of resources is unsustainable and even utopian. (Note by CfB: It would be interesting to hear opinion of NEM guys on this issue…)
The third scheme – all the coins are distributed in “chaotic” way. This scheme doesn’t have disadvantages of the previous ones, no centralization, no necessity to deanonymize users, no need to counteract Sybil attacks. Economy and sociology sciences state that distribution of the coins will follow the Pareto 80-20 principle. An important note should be made. The fact that (almost?) all the societies conform to this principle assures that the third scheme is the best one. The Pareto principle seems to be a result of universal but yet unknown laws of nature. If the distribution follows the principle then with high probability we can assume that our system will sustain for a long period of time. The previous schemes will transform into “80% of coins belongs to 20% of entities” systems anyway, but the third scheme has such an advantage that it doesn’t need to survive the period of instability.
According to the described above logic Nxt was created by issuing all the coins at once and distributing them by following the last distribution scheme.
Initial distribution has two properties – percentages and number of participants. Common sense says that number of participants should be as large as possible. This seems to be true, but we should take into account that every system has three main stages of the progress – bootstrapping, normal functioning and decaying. We consider only the first two because our goal is to create an ever-functioning system.
We shouldn’t ignore the lessons of history. Societies created by a lot of people are abnormal phenomena. Number of participants in the very beginning should be rather small than large. This is an arguable statement but disputes on the issue lay out of the scope of this paper. The creator of Nxt preferred a small number of “founders” because he had no possibility to do several experiments on finding the best number nor he had time to build a theory that could predict this number. The most stable economic systems were always bootstrapped by a few people (feods, corporations, etc.) so it was safer to follow a similar way.
Now, half a year after the launch of Nxt we see that it didn’t die and keeps growing at fast pace. This lets us guess that the choice of BCNext was a correct one.
Source: https://nxtforum.org/initial-distribution/initial-distribution-of-100-pos-currencies/
The PoS algorithm used in Nxt has such properties that give a little advantage to an account that holds more coins comparing to an account with a lower amount. If every block subsidizes the forger with extra coins (in addition to the fees) then bigger accounts become even bigger by following the compound interest curve. In a currency with selfish forgers most of the coins would be absorbed by very few accounts that would lead to centralization of the currency. Because of this all the coin in Nxt were distributed at once in the genesis block.
Bootstrapping requires to make a decision how to do the initial distribution. We consider three main schemes, any other scheme can be represented as a combination of them.
The first scheme – all the coins go to a single account controlled by one entity that transfers coins to the others in exchange for work done for development and promotion of the currency. This scheme is completely unacceptable because it’s not “compatible” to decentralized nature of cryptocurrencies.
The second scheme – all the coins are split equally among a group of people. This approach faces some problems. A Sybil attack can be easily conducted by an entity to acquire a significant part of the coins. Such a counterattack as usage of a certification service can’t be used because majority of potential users won’t agree to reveal their true identities. Another possible counterattack, based on proof-of-resources approach, can’t give “fair” distribution because the resources are distributed in “unfair” way. Anyway, even if the Sybil attack could be significantly mitigated, the second scheme is a bad choice because the history of humankind teaches us that an economy driven society where all individuals own equal amount of resources is unsustainable and even utopian. (Note by CfB: It would be interesting to hear opinion of NEM guys on this issue…)
The third scheme – all the coins are distributed in “chaotic” way. This scheme doesn’t have disadvantages of the previous ones, no centralization, no necessity to deanonymize users, no need to counteract Sybil attacks. Economy and sociology sciences state that distribution of the coins will follow the Pareto 80-20 principle. An important note should be made. The fact that (almost?) all the societies conform to this principle assures that the third scheme is the best one. The Pareto principle seems to be a result of universal but yet unknown laws of nature. If the distribution follows the principle then with high probability we can assume that our system will sustain for a long period of time. The previous schemes will transform into “80% of coins belongs to 20% of entities” systems anyway, but the third scheme has such an advantage that it doesn’t need to survive the period of instability.
According to the described above logic Nxt was created by issuing all the coins at once and distributing them by following the last distribution scheme.
Initial distribution has two properties – percentages and number of participants. Common sense says that number of participants should be as large as possible. This seems to be true, but we should take into account that every system has three main stages of the progress – bootstrapping, normal functioning and decaying. We consider only the first two because our goal is to create an ever-functioning system.
We shouldn’t ignore the lessons of history. Societies created by a lot of people are abnormal phenomena. Number of participants in the very beginning should be rather small than large. This is an arguable statement but disputes on the issue lay out of the scope of this paper. The creator of Nxt preferred a small number of “founders” because he had no possibility to do several experiments on finding the best number nor he had time to build a theory that could predict this number. The most stable economic systems were always bootstrapped by a few people (feods, corporations, etc.) so it was safer to follow a similar way.
Now, half a year after the launch of Nxt we see that it didn’t die and keeps growing at fast pace. This lets us guess that the choice of BCNext was a correct one.
Source: https://nxtforum.org/initial-distribution/initial-distribution-of-100-pos-currencies/
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