What is Nxt (NXT)? | A Guide to the Decentralized Ecosystem
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
- History of Nxt
- Team & Progress
- Coin Supply and Sustainability
- Trading History
- Where to Buy Nxt
- Where to Store Nxt
- Additional Resources
Here is a typical view of the desktop client where you would access the network.
Let’s look at some of the main features.
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 platform or on any exchange that supports the Nxt Monetary System.
You can safely sell digital goods on the marketplace without the use of middlemen. Once a purchase is made, you receive a link to download the digital good. It’s unclear what the ramifications would be for the project 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 its 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 anonymize where your coins came from. However, the Nxt blockchain system is not designed for everyday 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 developers believe there are myriad of documents that users would want to securely upload to its 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 fees associated with each transaction here. 255 of these transactions 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 the 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 Foundation was unable to effectively guide the project. Jelurida BV now develops the platform.
— Jelurida (@Jelurida) October 7, 2018
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.”
The senior developer in Jelurida is Lior Yaffe. Nxt and Jelurida have had many other contributors to the project over the years.
While there is still the active development of the platform, the parent company Jelurida has also launched a Nxt 2.0, known as Ardor, designed specifically to deal with scalability.
Ardor initially used the same blockchain technology as Nxt, combined with the idea of ‘child chains.’ However, now Ardor is based on its own blockchain and is no longer an Nxt asset.
Despite the development of Ardor, Jelurida stated it remains committed to the development of Nxt. However, there have been very few updates regarding the project over the course of 2018.
There is a dedicated website where you can follow all updates on all of the Jelurida projects.
Coin Supply and Sustainability
Developers distributed one billion 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. Proof of stake offers various advantages although it also has some disadvantages too.
While development has continued, and token holders received free Ignis coins from the Ardor ICO, it’s worth noting that the project may face scalability issues. 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 16th in the total market cap.
As with all coins, there have been large spikes and dips. Although all coins spiked in January 2018, in the case of Nxt it could also have experienced a peak at that time due to the release of Ardor and its IGNIS ICO which raised over $15 million.
Where to Buy Nxt
Where to Store Nxt
The Nxt Client stores all of your coins and transactions. You can download it here. It’s currently available on Linux, Windows, Mac, and Android operating systems.
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.
This project showed a lot of initial promise of being an innovative and ambitious project that explores the full potential of the blockchain. With future ICOs and the existing decentralized applications, NXT could still prove to be one of the more successful blockchain projects. However, the team at Jelurida have appeared to take a more proactive approach to develop Ardor over the course of 2018. It remains to be seen if this will change in future.
Editor’s Note: This article was updated by Sarah Rothrie on December 18, 2018, to reflect the recent changes to the project.
This week’s cryptocurrency market was a mixed bag. Big boy Bitcoin is up 5.2%, Ethereum up 2.91%, XRP down 6.17%, and Litecoin is up 11.94%. As a result of the…
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.