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===Multi-signature and Phased transactions===
===Multi-signature and Phased transactions===
The latest client (1.5) supports a method (named ''Phasing'' for Nxt) for requiring specific conditions for executing a transaction.<ref name=nxt-phasing-news />, such as approval of multiple accounts or the passage of an interval of time.
The latest client (1.5) supports a method (named ''Phasing'' for Nxt) for requiring specific conditions for executing a transaction.<ref name=nxt-phasing-news />, such as approval of multiple accounts or the passage of an interval of time.

===Monetary System===
Implemented in version 1.4.8,<ref name=nxter-MS-client>{{cite web|title=Nxt Monetary System NRS client 1.4.8|url=http://nxter.org/nxt-monetary-system-nrs-released/|website=nxter.org|accessdate=15 January 2015}}</ref> the Monetary System allows the creation of currencies on the Nxt blockchain.<ref name=ms-testnet>{{cite web|title=Nxt Monetary-System on public testnet|url=http://nxter.org/nxt-monetary-system-on-public-testnet/|website=nxter.org|accessdate=22 December 2014}}</ref><ref name=monetary-system-description>{{cite web|title=description of the Monetary System|url=https://bitbucket.org/JeanLucPicard/nxt/issue/136/monetary-system|website=bitbucket.org|accessdate=22 December 2014}}</ref> These coins are backed by a specified amount of NXT, which can be retrieved if necessary. The possible properties range widely - including different models of inflation, exchange and the use of Proof-of-Work as distribution system.


===SmartContracts===
===SmartContracts===

Revision as of 19:49, 23 September 2015

For other uses, see NXT.
Nxt
Nxt Logo
Unit
PluralThe language(s) of this currency do(es) not have a morphological plural distinction.
SymbolNXT‎
NicknameNxtcoin (also incorrectly referred to as Nextcoin)
Denominations
Subunit
 1NXT[1]
 10−8nxtQuant
(smallest unit)
Demographics
Date of introduction24 November 2013[2]
User(s)Global
Issuance
AdministrationDecentralized
peer-to-peer consensus.[1]
 Websitenxt.org
Valuation
InflationDisinflationary. All coins were distributed after IPO (28 September 2013 - 26 November 2013).

Nxt is an open source cryptocurrency and payment network launched in November 2013 by anonymous software developer BCNext. It uses proof-of-stake to reach consensus for transactions - as such there is a static money supply and no mining as with Bitcoin. Nxt is specifically conceived as flexible platform to build applications and financial services around.[4] It has an integrated asset-exchange (comparable to shares), messaging system and marketplace. Users can also create new currencies within the system. The last major release enabled Multisignature capabilities and a plugin-system for the client.[5]

NXT has been covered extensively in the "Call for Evidence" report by ESMA,[6] which NXT has answered in July 2015.[7]

History

On 28 September 2013 Bitcointalk.org member BCNext created a forum thread announcing Nxt as second generation cryptocurrency, asking for small Bitcoin donations to determine how to distribute the initial stake. On 18 November 2013 fundraising for Nxt was closed, with 21 BTC raised.[8] The genesis block was published on 24 November 2013. It revealed that 1,000,000,000 coins had been distributed to 73 stakeholders in proportion to their level of contribution.[2] The source code was partially released on 3 January. The full source code was released on 1 March 2014 under the MIT License.[3]

Concept

Just as with Bitcoin, the blockchain stands at the core of this currency. But Nxt is completely written from scratch[9] and departed in several ways from existing cryptocurrencies. Most notably, in one of the founding statements BCNext asks the community not to consider the NXT coin as the important part, but rather create currencies on top of it[10] - possibly devaluing the core currency.

  • Nxt is coded in Java.
  • Nxt was the first currency to rely purely on proof-of-stake for consensus. Allowing a block creation rate of roughly one minute.[11]

Developer Accessibility

The core structure and the client features are aimed at facilitating external development.

  • No centralized service is needed for accessing the API, not even a node run by the developer, since named peers of the network can be directly accessed via API calls.[12]

Proof-of-Stake Consensus Mechanism

While Bitcoin uses hashing power as proof for verifying transactions, Nxt works with the stake-size the user owns. Block authors are selected in a practically random manner, with greater amounts of stake increasing the likelihood of adding a block to the chain.[1] While in the former the investment in mining gear serves as incentive not to attack the network, an attacker in the latter would directly hurt the personal coin holdings.
This method effectively removes the security issue of any miner gaining 51% of the hashing power and attacking the network.[13]

Forging

Since Nxt has an unchanging coin supply, no new units are created for block rewards. Instead the transaction fees are passed on. After owning Nxt for about one day (1440 confirmations),[14] the Nxt software will begin to contribute to the block generation process and can earn coins for as long as an account is "unlocked".

At the moment Nxt is open to attacks if any account has 51% of the total coin supply that is forging.[15] As outlined in the founding statements[10] Nxt is aimed at implementing a process of "transparent forging", which allows the software to predict which accounts will forge upcoming blocks. This is basically done by iterating through all active accounts and seeing which one has the highest "hit". Transparent forging rapidly increases transaction processing, since the account that will forge the next block is known. Another benefit of this feature is that accounts that are due to forge, but do not, will be penalized by having their forging power temporarily reduced to zero. This raises the threshold for an attack to 90%.[15]

Features

The core infrastructure of Nxt is complex. This adds risks as compared to the more lean Bitcoin, but makes it easier for external services build on top of the blockchain.[4]

Marketplace

NXT has one of the first completely decentralized marketplaces, since the offers are stored directly in the blockchain. Users are able to buy and sell directly to any other user - the ledger serves as unchangeable proof of the transaction.[16]

Multi-signature and Phased transactions

The latest client (1.5) supports a method (named Phasing for Nxt) for requiring specific conditions for executing a transaction.[5], such as approval of multiple accounts or the passage of an interval of time.

SmartContracts

Using the Nxt's data storage capabilities, SmartContracts.com is a website adding smart contract functionality - with the benefit of external data sources (like market prices or GPS signals). These are executed centrally, but the agreements are unalterably stored in the blockchain.[17]

FreeMarket

Freemarket is using Nxt's arbitrary messages feature to provide a more comprehensive marketplace. Since the offers are stored in the blockchain and not on servers like other cryptocurrency good-markets, it is resistant to any attempt of shutting it down.[18]

Criticism

Nothing at Stake Attacks

It is proposed that one could attack any Proof-of-Stake currency with zero costs.[19] There are several proposed attack avenues. Amongst them to attempt to build blocks in every fork in the network, because doing so costs them almost nothing and ignoring any fork may mean losing out on the block rewards that would be earned if that fork were to become the chain with the largest cumulative difficulty.

It is disputed whether attack scenarios are prevented through the various measures that Proof-of-Stake currencies apply.[20]

Distribution

Since Nxt had no mining phase, all initial units were released to 73 people through a one-time fund raiser via Bitcoins, after the announcement of the NXT project in the bitcointalk-forums by its inventor BCnext.[21]

User-generated passwords

To access an account, the user types a password or a pass phrase from which a private key is calculated, unlike Bitcoin, where private keys are typically stored in a wallet file and not directly visible to the user.[citation needed]

3rd Party use

Local Economies

On the 18th of September, Wall Street investor Brian Kelly announced he would be investing into the Nxt based platform Drachmae, which has as its aim the revitalisation of the local economy of the Greek Island Agistri.[22]

See also

References

  1. ^ a b c "Nxt Whitepaper". Retrieved 2014-03-09.
  2. ^ a b "Genesis-Account". mynxt.info Blockexplorer. Retrieved 21 December 2014.
  3. ^ a b "nxt - source code MIT license". Bitbucket.org. Retrieved 21 December 2014.
  4. ^ a b "Nxt Wants to Be a Digital Infrastructure of Everything". cointelegraph.com. Retrieved 22 December 2014.
  5. ^ a b "NXT Phasing News". Cointelegraph. Retrieved 14 June 2015.
  6. ^ "Call for evidence Investment using virtual currency or distributed ledger technology" (PDF).
  7. ^ LOPEZ PORTO, Marcos José (2015-07-21). http://www.esma.europa.eu/system/files/esma_report._mr_lopez._spain._0.pdf. {{cite web}}: Missing or empty |title= (help)
  8. ^ "NXT Fundraising Over". bitcointalk.org. Retrieved 22 December 2014.
  9. ^ "Cryptocurrency News Round-Up: Mt Gox Fire Sale as Jamaica Bobsled Rides Again". IBTimes. 2014-02-17.
  10. ^ a b "BCNext Founding Statements". nxter.org. Retrieved 22 December 2014.
  11. ^ Chepurnoy, Alexander. "Nxt forging algorithm: simulating approach". scribd.com. Retrieved 22 December 2014.
  12. ^ "Nxtpeers API". nxtpeers.com. Retrieved 15 January 2015.
  13. ^ Eyal, Ittay; Gun Sirer, Emin. "Majority is not Enough: Bitcoin Mining is Vulnerable". Cornell University Library. Cornell University. Retrieved 22 December 2014.
  14. ^ "Nxt-Whitepaper (Blocks)". wiki.nxtcrypto.org. Retrieved 22 December 2014.
  15. ^ a b mthcl (pseudonymous). "The math of Nxt forging" (PDF). pdf on docdroid.net. Retrieved 22 December 2014.
  16. ^ "Nxt Marketplace". nxt.org. Retrieved 22 December 2014.
  17. ^ "New Blockchain Startup Brings Contracts into the Digital Age". coindesk.com. Retrieved 22 December 2014.
  18. ^ "Decentralized Markets Kills E-commerce Stars". bitcoinmagazine. Retrieved 22 December 2014.
  19. ^ Houy, Nicolas. "It Will Cost You Nothing to 'Kill' a Proof-of-Stake Crypto-Currency". papers.ssrn.com. University of Lyon 2. Retrieved 22 December 2014.
  20. ^ Buterin, Vitalik. "Proof of Stake: How I Learned to Love Weak Subjectivity". ethereum.org. Retrieved 22 December 2014.
  21. ^ "[ANN] Nxt :: descendant of Bitcoin". Retrieved 20 May 2014.
  22. ^ Aitken, Roger. "Brian Kelly Capital Investing In First 'Fully Deployable' Digi Currency Ecosystem". Retrieved 2015-09-19.
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