What is Nxt? | Beginner’s Guide
What is Nxt?
Nxt uses the blockchain to create an entire ecosystem of decentralized features, all of which require the Nxt currency. Instead of modifying the original Bitcoin source code, as many altcoins have done, Nxt developers wrote their own code in Java from scratch. While Nxt is a public blockchain, licenses for private blockchains based on its software are also available for purchase. The developers refer to Nxt as Blockchain 2.0, providing numerous applications beyond simply keeping a public ledger of transactions.
In this guide we’ll be discussing:
- Decentralized features of Nxt
- History of Nxt
- Nxt team & progress
- Coin supply and sustainability
- Trading history
- Where to buy Nxt
- Where to store Nxt
- Additional Resources
Decentralized features of Nxt
Here is a typical view of the Nxt desktop client where you would access their network.
The following are some of the main features built into the Nxt platform.
Assets and Asset Exchange
You can have an asset represent anything (such as bonds, reservations, movie tickets, trademarks etc) on this platform and trade them through the peer-to-peer exchange.
The Monetary System allows you to create your own cryptocurrency and immediately start trading it on the Nxt platform or on any exchange that supports the Nxt Monetary System.
You can safely sell digital goods on the marketplace without the use of typical middlemen. Once a purchase is made, you receive a link to download the digital good. It’s unclear what the ramifications would be for Nxt if people sold illegal material on the marketplace, as the decentralized nature of the platform would prevent the item from being removed.
All transactions can include a message, and the platform encrypts the message by default.
Nxt highlights their voting feature. Through this, you can have an account require the approval of multiple parties in order to make a transaction. This could be useful within organizations such as cooperatives or charities.
Coin Shuffling is meant to anonymise where your coins came from. However, the Nxt blockchain system is not designed for every day shuffling. Traditionally “every transaction can be seen and traced.” However, through the Coin Shuffling feature, you need to create a new account and then have your funds randomly distributed through multiple user accounts before entering the new account.
Rather than keep your data on Google Drive or Dropbox, you can use decentralized storage on the Nxt Data Cloud. The Nxt developers believe there are myriad of documents that users would want to securely upload to their cloud such as certifications, contracts, wills, and licenses.
These decentralized features do come with a price, though, with the majority costing at least 1 Nxt. You can check out the Nxt based fees associated with each transaction here. 255 of these transactions are able to fit into a block, with a new block being generated every minute.
History of Nxt
Nxt was first released in November 2013 by an anonymous software developer, BCNext. The idea was first proposed on bitcointalk.org, raising roughly 21 Bitcoins in funding. A bitcoin was worth about 250 dollars at the time. The developer then released all 1 billion coins to 73 people in proportion to the amount of Bitcoin they contributed.
The coins were later distributed to people through “giveaways, trades, and bounties for ongoing development of the platform.” Eventually, BCNext stepped away from the project and The Nxt Foundation was formed to coordinate further direction. However, due to a lack of resources and pushback against centralization, the Nxt Foundation was unable to effectively guide the project. Jelurida BV now develops the platform.
Nxt team & progress
Jelurida BV took over the originally anonymously developed Nxt and now own the IP rights. Kristina Kalcheva, co-founder and legal expert of Jelurida, focuses on how to “explore the different open source licensing models and their enforceability in practice.” Currently, the main developer is an anonymous Star Trek fan, going by the name Jean-Luc Picard.
The other core developer is Lior Yaffe, often referred to as Riker. Nxt and Jelurida have had many other contributors to the project over the years.
While there is still the active development of Nxt, the parent company Jelurida is also working on a Nxt 2.0, known as Ardor, designed specifically to deal with scalability. Ardor will use the same blockchain technology as Nxt, combined with the idea of ‘child chains.’ According to Travin Keith, Nxt foundation Web and Marketing manager, Ardor allows for a “manageable blockchain size, which solves the problem of scalability by separating transactions and data that do not affect security from those that do, and moving all of those that don’t affect security onto child chains.” Jean-Luc and Lior Yaffe are listed as the lead developers of Ardor as well. Despite the development of Ardor, Jelurida remains committed to the development of Nxt, recently tweeting their business strategy for 2018.
Coin supply and sustainability
Developers distributed one billion Nxt coins in 2013 and new coins will never be created or mined as Nxt uses proof of stake instead of proof of work. Nxt was one of the first coins to rely entirely on proof of stake. You can read more about the advantages and possible disadvantages of proof of stake here.
While development has continued on Nxt, and holders of Nxt received free Ignis coins from the latest Ardor ICO, it’s worth noting that there are possible scalability issues with the project. One issue is that even if you implement your own tokens or currency on the platform, the transaction fee would still require Nxt tokens.
The New Economy Movement, known as NEM was inspired by Nxt and contains many similarities in its applications. However, due to the initial centralized distribution of Nxt coins, NEM chose not to perform a hard fork and started with a fresh codebase. Clearly, there is a demand for the idea of decentralized platforms as, at the time of this article, NEM ranks 7th in the total market cap.
Here is a look at the Nxt trading history over the last four years.
As with all coins, there have been large spikes and dips over the years. The recent spike is most likely due to the release of Ardor and their IGNIS ICO which raised over 15 million dollars. Nxt would like to use their platform to produce even more ICOs in the future. Nxt is also providing a new Blockchain Creation kit. 10% of all tokens created on the new blockchains are automatically distributed to people holding Nxt, further incentivizing the purchase of the token.
Where to buy Nxt
If you would like to buy Nxt in order to participate in the upcoming ICOs, you can use Bitcoin to trade on popular exchanges such as Bittrex and Poloniex. You can also trade Ethereum for Nxt on the HitBTC exchange.
Where to store Nxt
The Nxt Client stores all of your coins and transactions. You can download it here. You’ll need to make an account and passphrase which is the key to accessing the information you end up storing on the blockchain. There is a detailed walkthrough of logging in and setting up the client here.
Nxt is an innovative and ambitious project that explores the full potential of the blockchain. It’s fitting that their lead developer calls himself Jean-Luc Picard, as this team is attempting to “to boldly go where no one has gone before!” With the exciting development of NXT 2.0/Ardor, the new Ignis ICO, future ICOs, and the existing decentralized applications, NXT is certainly a coin to keep an eye on in 2018.
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ABOUT THE AUTHOR
ABOUT THE AUTHOR
Paul is a crypto-enthusiast, strategy game world champion, mathematician, and educator based in Taiwan. When he’s not drinking coffee to fuel these interests, you can find him on the way to a coffee shop.