When the crypto community thinks of altcoin, cryptocurrencies like Litecoin, Dogecoin, and Peercoin are usually first on their mind. We have seen a growing number of altcoin since Bitcoin’s introduction in 2009, simply because of the rapid adoption of cryptocurrencies all over the world. But is it possible to have an alternative altcoin? The new and innovative altcoin NXT and its developers have made it possible.
Less than a month ago, NXT launched their brand new digital currency, and soon after signed BTER as an exchange partner. With no mining on the network, NXT is the most energy efficient cryptocurrency, because the “forging” process requires little processing power. Forging NXT can even be done from a mobile device.
The new Alt-Altcoin?
The way NXT works is completely different from that of Bitcoin as it uses completely different algorithms for mining. In fact, the developers created NXT completely from scratch, in order to create the new alt-altcoin. The different algorithms used allow NXT users to mine with exponentially less computing power. NXT uses Proof of Stake (PoS), a concept initially pioneered by Peercoin, rather than Proof of Work, used by Bitcoin and other coins.
NXT and Proof of Stake
As the first 100 Proof of Stake digital currency written from the ground-up, NXT is creating a new path on which altcoins can be built from. Unlike Proof of Work currencies like Bitcoin, the currency is secured by owners of already existing coins that receive a portion of transaction fees for forging a NXT block. A user is chosen to solve a block depending on their stake in the market, which allows everyone on the network to have the same reward potential.
The idea behind NXT and Proof of Stake is to generate coins without using vast amounts of energy as the Bitcoin network does. This is done through the network, by calculating the amount of coins each user has and randomly selecting who will forge the next block. Everyone knows who will be mining the next block in the blockchain, making it impossible for a user to convince the network that a transaction didn’t occur.
Additionally, the network can detect which accounts do not participate in PoS and also recognize users forging a fraudulent block. A process called Transparent Forging enables the network to decrease the attacker’s mining power to zero and keep the NXT network secure.
Reducing Double Spending and 51 Attacks
NXT eliminates the possibility of double spending and 51 attacks, because each user knows who is responsible for forging the next block of transactions. A fork in the blockchain simply does not exist with the newest alt-altcoin. What Transparent Forging and PoS provides to NXT is something new for cryptocurrencies. Transactions continue to remain anonymous and secure, but unlike Bitcoin, each transaction requires less user confirmation, making digital transactions even more efficient.
NXT is the first cryptocurrency that has been completely rewritten and is 100 Proof of Stake. Other altcoins like Peercoin, only uses PoS for a portion of its coins and uses Proof of Work for the rest. Digital currencies, most namely Bitcoin, along with other altcoins like Peercoin use mining to create new coins, working together to solve each block. This is the main point of difference with NXT – instead of mining new coins, NXT has already produced them. This enables the NXT network to focus on solving blocks and increase transaction efficiency, while decreasing power consumption for users.
What’s Next for NXT?
As with any alternative coin, NXT is very new to the cryptocurrency community. The entire market consists of 1 billion coins, all created by the NXT developers, and are currently worth just under $74,000,000USD. NXT also provides an alias system, arbitrary messaging at Block 40,000, asset exchange and a decentralized domain name system. There is no question that NXT warrants its own category, as the world’s first alt-altcoin entirely based on Proof of Stake. With the growing popularity of cryptocurrency, the future looks very bright for NXT.
Adam is a writer and musician on a mission. With a strong background in marketing and sales, Adam covers topics aimed directly at spreading knowledge of and supporting the growth of Bitcoin and cryptocurrencies. Adam resides in one of the best tech hubs in the US - Atlanta. @adamhhofman