Finance

What is Nexus (NXS)? | Beginner’s Guide

Submitted by Seth Goldfarb on Fri, 03/02/2018 - 10:45
03/02/2018
What is Nexus (NXS)? | Beginner’s Guide

This article was originally published on CoinCentral

What is Nexus?

Nexus is a peer-to-peer network that improves on the speed, scalability, security, and accessibility of current blockchain protocols. The project mainly accomplishes this through the use of a quantum-resistant 3D blockchain in combination with communication satellites in space. With this, Nexus founder Colin Cantrell is aiming to “decentralize the decentralization”, by taking it out of reach of any government control or mining pool monopolies.

Hold on to your hats, folks. This is one of the more ambitious projects out there, so let’s get right into it.

In this Nexus guide, we’re going to go over:

Three Dimensional Chain (3DC)

Nexus uses, not one, not two, but three consensus mechanisms to form a three-dimensional blockchain. The team argues that having three different mechanisms in place reduces miner centralization and enables more efficient on-chain scaling.

Prime Channel

The Prime Channel is a Proof-of-Work channel. In this channel, miners search for 308-digit dense prime clusters through trial-and-error. Dense prime cluster mining is more ASIC-resistant than traditional hash mining. Therefore, even if you have just a CPU, you can mine on this channel.

Outside of cryptocurrency, the mining on the Prime Channel produces data that can be further used in prime number research for quantum physics.

Hashing Channel

The Hashing Channel is also Proof-of-Work but uses Hashcash instead of dense prime clusters. This is similar to Bitcoin’s mining algorithm except that miners search for SHA-3 (with Skein) hashes while Bitcoin miners find SHA-256 ones. The Nexus block hashes are 4x the size of Bitcoin block hashes.

You should use a GPU when mining on this channel.

Proof-of-Holdings

The third and final channel uses Proof-of-Holdings to secure the network. This is essentially the same as the Proof-of-Stake consensus method used by coins like NEO. You earn newly minted Nexus coins (NXS) just by holding the ones you already have.

Four attributes determine what your return will be when you stake your coins:

  • Interest Rate – An annual percentage of your balance, this is the rate at which you receive new coins. This starts at 0.5% annually and increases to a 3.0% annual maximum after 12 months.
  • Trust Weight – This is an indicator of your node’s trust. It starts at 5% but quickly reaches its 100% maximum after just one month.
  • Block Weight – This attribute resets to 0% each time you receive a staking transaction. It then slowly climbs to 100% over 24-hours. If your block weight ever reaches 100%, your Trust Key expires and all your attributes reset. The reset trigger ensures that you’re continually working to maintain the network.
  • Stake Weight – The value of this is roughly determined by the average of your trust weight and block weight. The higher this is, the more likely you are to receive a transaction.

Nexus Hardware

Nexus has a three-pronged distributed telecommunications system to further decentralize the network.

Mesh Networks

Because the network provides three distinct mining opportunities, almost anyone around the world can run a node and participate in network security. All nodes in a mesh network work together to solve a block rather than compete against each other. This serves to distribute network data more so than other systems.

To take things further, Nexus may produce specialized antennas for you to purchase to operate locally based networks as well.

Cube Satellites

Nexus has partnered with Vector Space Systems (Vector) to create a Low Earth Orbit (LEO) Satellite Network of nodes. The satellites, in combination with the ground mesh network, will host the Nexus network as well as any decentralized apps (dapps) built on top of it. Even more outstanding, the satellite network will provide a worldwide decentralized Internet giving service to those previously unable to access their own.

Ground Stations

The Nexus ground stations connect the mesh networks on the ground to the satellite network in space. They run the uplink/downlink operations including address endpoint route defining and ground-based caching. They also run their own instance of Daemon, the software component of the Nexus system.

Nexus Coin (NXS)

The Nexus coin (NXS) is the currency of the network. There’s no cap on the amount of NXS that will be minted. Instead, the coin has a 10-year distribution period in which 78 million NXS will be distributed until September 23rd, 2024. After this time, the supply will inflate each year by a maximum of 3% through the holding channel and 1% through the prime and hashing channels.

Nodes create blocks, on average, every 50 seconds, and an NXS transaction requires 6 confirmations. Currently, most transactions cost 0.01 NXS. However, once the 3DC is built and 10-year distribution is complete, transaction fees will disappear. Instead, the system will absorb the fees through inflation.

Nexus didn’t hold an ICO. Instead, the project has a Developer Fund that takes a small commission from mining rewards. This commission starts at 1.5% and increases to 2.5% over 10 years. Additionally, 20% of the block rewards are slotted for marketing as well as the production and launch of the Nexus satellite network.

Nexus Team & Progress

Colin Cantrell, also known as Videlicet, is the founder and lead developer of Nexus. He first named the project Coinshield (CSD) when starting in September 2014. The original code only contained the prime channel; the team added the hash channel in October 2014. In April 2015, the team rebranded to Nexus, and they added Proof-of-Holdings in July 2015.

Besides partnering with Vector on the satellite network, Nexus has also joined forces with SingularityNET to provide their 3DC architecture to the project’s decentralized AI network.

Moving forward, Nexus is releasing major updates following their TAO (Tritium, Amine, Obsidian) roadmap strategy. The releases include the 3DC, mobile wallets, quantum resistance, and the satellite network, among many other things.

Nexus is one the most ambitious, if not the most ambitious, projects in the cryptocurrency space. First and foremost, the project is attempting to dethrone Bitcoin as the top peer-to-peer currency. With the decentralized internet produced from its space mesh network of satellites, Nexus is also competing with Substratum.

Trading

Like most of the crypto market, Nexus was relatively quiet until 2017. During that year, the price rose from $0.026 (~0.000027 BTC) to $3.34 (~0.00087 BTC) by September. Shortly after, the price fell back down to about $1 before skyrocketing up to an all-time high of $13.33 (~0.0008 BTC) in January 2018.

This significant rise in price can most likely be attributed to the Vector partnership announcement in combination with the success of the entire market at that time. Since then, the price has drastically fallen, sitting at $1.75 (~0.00018 BTC) at the time of this writing. News of the SingularityNET partnership seems to have had no effect on the price.

The team hasn’t published a roadmap with exact dates, so it’s hard to make any price predictions for the immediate future. As with most cryptocurrency projects, though, important development releases should have a positive impact on the price. With the scope of this project, you should probably consider it a long-term hold.

Where to Buy NXS

You can purchase NXS on either Bittrex or Upbit with BTC. If you don’t currently own any BTC, check out our guide on how to buy some.

As mentioned early, you can also earn NXS through mining. Check out the Nexus mining page to download the miner that fits best with your strategy. As a reminder, you should mine with the Prime Channel if you’re using a normal CPU, and you should check out the Hashing Channel if you plan to use a dedicated mining rig like an ASIC.

Once you hold at least 1,000 NXS, you can stake to earn additional coins.   

Where to Store NXS

Nexus has an official wallet for Windows, Mac, and Linux desktops. Although you can keep your NXS on an exchange it’s highly recommended that you move them to a wallet. You’re only able to stake your coins if they’re in a Nexus wallet.

Conclusion

Nexus is building a new type of blockchain with three separate mechanisms for securing the network. On top of that, the team is sending node satellites into space to create a decentralized Internet and network outside the control of any one entity. The overall mission is to create an improved Bitcoin with faster transactions, lower fees, and less miner centralization.

Nexus is one of the few projects truly addressing quantum resistance and other potential future issues. If these problems become as large as the team believes they will, and they can accomplish their lofty mission, Nexus may just be one of the few projects still in action 20 years down the road.

Additional Nexus Resources

Twitter

Slack

Telegram

Reddit

Discord

Github

Keywords

Placeholder for the "Title" field
Placeholder for the "Review Link" field

DeHedge: Hedging Products for Cryptocurrency Investments

Submitted by Seth Goldfarb on Wed, 02/07/2018 - 04:16
02/07/2018
DeHedge: Hedging Products for Cryptocurrency Investments

As demonstrated by the recent market correction in both cryptocurrency and stock markets, hedging your bets should be considered a critical part in the development of a sturdy portfolio. DeHedge wants to make hedging investments in digital assets easier with a platform offering tools that allow users to hedge against various events ranging from dips in the spot price to hacked or cancelled ICO’s. Investors will be able to purchase hedging coverage using the DeHedge token, which will also be used to raise the funds to serve as collateral for the products offered by DeHedge.

    DeHedge uses their own scoring model incorporating data analytics to determine the amount of tokens required to purchase hedging coverage. The ICO hedging platform has been under development with release planned for March, 2018. Hedging products available to investors will include ICO cancellation, fluctuations in the spot price of tokens, wallet or ICO hacks, and volatility affecting mining and mining farms. Cofounded by CEO Mikhail Chernov, CCO Bogdan Leonov, and COO Dmitry Ansimov, the DeHedge, advisors to the project include wealth fund manager Jack Hunter, Senior Editor of Irish Tech News FinTech Specialist Simon Cocking, and Taras Yakovenko, a Risk and Business Management professional with over fifteen years of experience. 

The DeHedge ICO has been scheduled for March, 2018 but a specific date has not been set. Eighty percent of the tokens will be reserved as collateral for hedging products with fifteen percent going to the team and, two percent each for the bounty program and advisors and one percent for marketing. Of the amount allocated to the hedging reserve, eighty percent will be reinvested in cryptocurrency assets while the remaining twenty percent will be held for unplanned payouts. 
    Reinvesting eighty percent of the assets allocated to the hedging reserve in cryptocurrencies could expose DeHedge to a significant degree of risk but the availability of financial instruments like hedging products also helps decrease the volatility of digital asset markets. A number of projects in the cryptocurrency space aim to offer derivatives or other financial instruments of interest to traders but hedging products represent a relatively unexplored niche. No matter what the markets do for the rest of the year, demand for these products that allow investors to hedge will not be likely to go away. To learn more about DeHedge please visit their website at https://dehedge.com/

Keywords

Placeholder for the "Title" field
Placeholder for the "Review Link" field

A Whole New World: Income Tax Considerations of the Bitcoin Economy

Abstract
In recent years, the use of virtual economies has skyrocketed. These virtual economies include their own virtual currencies, the most well-known of which is the “bitcoin.” There are an estimated 11 million bitcoins in use today, valued at up to $237 per bitcoin in 2013. Because these bitcoins can, in some circumstances, be used to purchase goods or services with a monetary value or where they can be converted to legal tender, the proper income tax treatment of bitcoin transactions presents both compliance and substantive questions for the IRS. To date, there remains little legal or academic guidance on the use of bitcoins, or the taxation of bitcoin transactions. This article explores the current state of the law as it relates to bitcoins as well as proposed methods for applying existing federal income tax laws to the virtual economy. Based upon the current state of the law and the information available on the various systems through which bitcoins may flow, the article sets forth a series of recommendations as to the proper federal income tax treatment of bitcoin transactions and suggests methods for addressing the compliance issues related to these transactions.

The Unreasonable Fundamental Incertitudes Behind Bitcoin Mining

Abstract
Bitcoin is a ""crypto currency"", a decentralized electronic payment scheme based on cryptography which has recently gained excessive popularity. Scientific research on bitcoin is less abundant. A paper at Financial Cryptography 2012 conference explains that it is a system which ""uses no fancy cryptography"", and is ""by no means perfect"". It depends on a well-known cryptographic standard SHA-256. In this paper we revisit the cryptographic process which allows one to make money by producing bitcoins. We reformulate this problem as a Constrained Input Small Output (CISO) hashing problem and reduce the problem to a pure block cipher problem. We estimate the speed of this process and we show that the cost of this process is less than it seems and it depends on a certain cryptographic constant which we estimated to be at most 1.86. These optimizations enable bitcoin miners to save tens of millions of dollars per year in electricity bills. Miners who set up mining operations face many economic incertitudes such as high volatility. In this paper we point out that there are fundamental incertitudes which depend very strongly on the bitcoin specification. The energy efficiency of bitcoin miners have already been improved by a factor of about 10,000, and we claim that further improvements are inevitable. Better technology is bound to be invented, would it be quantum miners. More importantly, the specification is likely to change. A major change have been proposed in May 2013 at Bitcoin conference in San Diego by Dan Kaminsky. However, any sort of change could be flatly rejected by the community which have heavily invested in mining with the current technology. Another question is the reward halving scheme in bitcoin. The current bitcoin specification mandates a strong 4-year cyclic property. We find this property totally unreasonable and harmful and explain why and how it needs to be changed.

The False Premises and Promises of Bitcoin

Abstract
Designed to compete with fiat currencies, bitcoin proposes it is a crypto-currency alternative. Bitcoin makes a number of false claims, including: bitcoin can be a reserve currency for banking; hoarding equals saving, and that we should believe bitcoin can expand by deflation to become a global transactional currency supply. Bitcoin's developers combine technical implementation proficiency with ignorance of currency and banking fundamentals. This has resulted in a failed attempt to change finance. A set of recommendations to change finance are provided in the Afterword: Investment/venture banking for the masses; Venture banking to bring back what investment banks once were; Open-outcry exchange for all CDS contracts; Attempting to develop CDS type contracts on investments in startup and existing enterprises; and Improving the connection between startup tech/ideas, business organization and investment.

On Subversive Miner Strategies and Block Withholding Attack in Bitcoin Digital Currency

Abstract
Bitcoin is a ""crypto currency"", a decentralized electronic payment scheme based on cryptography. Bitcoin economy grows at an incredibly fast rate and is now worth some 10 billions of dollars. Bitcoin mining is an activity which consists of creating (minting) the new coins which are later put into circulation. Miners spend electricity on solving cryptographic puzzles and they are also gatekeepers which validate bitcoin transactions of other people. Miners are expected to be honest and have some incentives to behave well. However. In this paper we look at the miner strategies with particular attention paid to subversive and dishonest strategies or those which could put bitcoin and its reputation in danger. We study in details several recent attacks in which dishonest miners obtain a higher reward than their relative contribution to the network. In particular we revisit the concept of block withholding attacks and propose a new concrete and practical block withholding attack which we show to maximize the advantage gained by rogue miners. RECENT EVENTS: it seems that the attack was recently executed, see Section XI-A.

A Bitcoin system with no mining and no history transactions: Build a compact Bitcoin system

Abstract
We give an explicit definition of decentralization and show you that decentralization is almost impossible for the current stage and Bitcoin is the first truly noncentralized currency in the currency history. We propose a new framework of noncentralized cryptocurrency system with an assumption of the existence of a weak adversary for a bank alliance. It abandons the mining process and blockchain, and removes history transactions from data synchronization. We propose a consensus algorithm named Converged Consensus for a noncentralized cryptocurrency system.

On The Longest Chain Rule and Programmed Self-Destruction of Crypto Currencies

Abstract
In this paper we revisit some major orthodoxies which lie at the heart of the bitcoin crypto currency and its numerous clones. In particular we look at The Longest Chain Rule, the monetary supply policies and the exact mechanisms which implement them. We claim that these built-in properties are not as brilliant as they are sometimes claimed. A closer examination reveals that they are closer to being... engineering mistakes which other crypto currencies have copied rather blindly. More precisely we show that the capacity of current crypto currencies to resist double spending attacks is poor and most current crypto currencies are highly vulnerable. Satoshi did not implement a timestamp for bitcoin transactions and the bitcoin software does not attempt to monitor double spending events. As a result major attacks involving hundreds of millions of dollars can occur and would not even be recorded. Hundreds of millions have been invested to pay for ASIC hashing infrastructure yet insufficient attention was paid to network neutrality and to insure that the protection layer it promises is effective and cannot be abused. In this paper we develop a theory of Programmed Self-Destruction of crypto currencies. We observe that most crypto currencies have mandated abrupt and sudden transitions. These affect their hash rate and therefore their protection against double spending attacks which we do not limit the to the notion of 51% attacks which is highly misleading. In addition we show that smaller bitcoin competitors are substantially more vulnerable. In addition to small hash rate, many bitcoin competitors mandate incredibly important adjustments in miner reward. We exhibit examples of 'alt-coins' which validate our theory and for which the process of programmed decline and rapid self-destruction has clearly already started.