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The Nxt 2.0 token distribution

Details about the Nxt 2.0 token distribution have been announced.

Those who have been following  Nxt 1.0 know that the launch of Nxt 2.0 (Ardor) will be a big and important step forwards, not just for Nxt but for blockchain technology in general. With the amazing and broad set of truly disruptive, stable features already running on the Nxt 1.0 blockchain, the next leap forward will be the solving of the blockchain bloat problem inherent to all existing blockchains.

This can make Ardor the first globally scalable crypto platform, and in addition to this, Ardor will enable any individual, business and community to launch their own fully secured customised private ledgers. In short, a Nxt 2.0 Main Chain token (ARDR) will ‘forge’ (~ stake/~mine) all the childchain transactions and thereby secure them. The first and default Nxt 2.0 childchain (Ignis) to be launched with the genesis block will be a ledger which integrates all the functionality of Nxt 1.0.

Ardor’s prime innovation is to split the blockchain into a main chain that is used for consensus creation only, and multiple child chains that keep separate ledgers of transactions, each child chain using its own coin/token.

In the announcement Jean-Luc writes that:

The Nxt 1.0 branch will continue to run

Nxt 1.9 is going to be the last major release on the Nxt 1.0 branch.

Nxt 2.0 is not a fork of Nxt 1.0. NXT tokens will continue to exist.
Existing 1.0 users will be able to log in to Nxt 2.0 with their existing passphrases.

The Nxt core development team is committed to providing support for Nxt 1.x for at least one year after the Nxt 2.0 launch. Additional GUI functionality may or may not be added to the NRS Client.

The distribution of Nxt 2.0 tokens

The Core Developers recognise the tremendous contributions of the investors and holders of the original Nxt 1.0, without whom Nxt 2.0 would not be possible, and have decided to grant them exclusive rights to the new 2.0 tokens.

Ardor tokens

ALL Nxt 2.0 Main Chain tokens (ARDR) will be distributed among the holders of Nxt 1.0 tokens.

Nxt 1.9 will be announced shortly with a hard fork for the ARDR distribution without API changes.

The only way to get ARDR is by holding NXT in your account during the snapshot phase (which starts when Nxt 1.9 is released and will run for about 3 months).

Jean-Luc writes:

The Nxt Software will start taking periodic snapshots of all users’ NXT balances, at regular intervals (most likely once an hour), for a period of three months.

The NXT balances in each account will be averaged over this full three month period, and at the end all accounts will be automatically credited with a token representing their ARDR holdings, issued as an Asset on the Nxt asset exchange.

This ARDR Asset will be freely tradeable.

The distribution of the real ARDR coins will be based on the ownership of ARDR Assets taken at the point of time when the 2.0 Genesis block is created.

There will be no burning of Nxt 1.0 needed in order to receive either ARDR or [Ignis]  Tokens.

ARDR tokens will be used for forging (i.e. staking / mining) to maintain and secure the full Ardor network and incentivize people to set up nodes. Users of any Ardor childchain will have to pay bundled transaction-fees to ARDR forgers.

Riker explains:

Holding the ARDR token provides the ability to bundle many child chain transactions into a ChildChainBlock transaction on the main chain (i.e. become a bundler) and forge transactions on the main chain.

Ardor Mainnet is scheduled to launch in Q3 2017.

IGNIS; the Nxt childchain tokens

Introducing: Ignis.

As stated above, Nxt 1.x will continue to run; you will get to keep all your current NXT tokens.

The Nxt 1.x equivalent chain which will launch with the Ardor genesis, is a new Nxt ledger. Its transactional token has been dubbed Ignis. The Ignis token will be the only transactional token on the Ardor network when it launches, and until new child chains can be spawned.

Ignis tokens will be distributed ~ 50/50 to NXT holders/Nxt core development team.

The ~ 50% Ignis which are to be distributed to the core development team will be theirs to use for funding the continued development of the Nxt 2.0 platform.

Jean-Luc writes:

[Ignis] will be created in the Genesis block of Nxt 2.0. At the moment NXT holders will get 50% [Ignis] of their NXT balance. The other 50% will be reserved for the devs, for instance to do an ICO with, or something else. As this is still one year in the future, the exact method of this is still being debated.

This means, that in addition to the Main Chain tokens (ARDR), NXT 1.0 holders will be accredited a number of Ignis (Nxt 2.0 transactional tokens) equal to ~ 50% of the NXT they hold in their account when Ardor launched in Q3 2017.

As a warning to traders, Riker states that: “If you keep your NXT on a centralised exchange you’ll need to check with the exchange how they handle the ARDR/Ignis distribution since it will be distributed to the exchange account. The exchange will get the ARDR / Ignis tokens and will decide what to do with it”.

Our best advice would be for you to keep your NXT in your own Nxt account with your own passphrase.

Nxt Developers – feel safe to code with Nxt

Nxt has had issues with breaking backwards compatibility when preparing for the switch to Nxt 2.0 / Ardor.

Nxt 1.10.x API will NOT be changed, so developers working with the Nxt 1.10.x API can feel safe that their code will keep working on the 1.0 branch and that they can easily port their new or existing Nxt projects to the new Nxt 2.0 ledger, if they want to do so after it has been launched. The Nxt core development team is very willing to offer their help in that regard, in case it should be necessary.

One exception to the backwards compatibility-rule is, as announced on release, the Nxt add-ons feature (available for developers from Nxt 1.8.0e), as this will “undergo significant refactoring in 2.0”.

Use it to test, play with it, but like Jean Luc writes: “Keep any custom add-on code simple, and be prepared to have to change it for 2.0 or discard it”.

You can follow the Nxt development in nxtforum.org/, and if you’re in doubt about anything, ask the core developers.

Nxt [CORE]: The PoS coin

NXT_accepted_gold

Nxt is a versatile, open source cryptocurrency platform. In this Nxt CORE article series we will dive into the main 2.0 features of Nxt. This first article is about NXT, the token itself.

NXT, which launched on Nov 24 2013 as a 2.0 crypto coin, was the first 100% pure proof-of-stake currency.

It is built in Java, distinguishing it from most other coins, which simply tweak one or other parameters of the Bitcoin protocol. Rather than being a simple coin, usable only for basic send/receive transactions, Nxt can be thought of as a complete platform for economic activity.

Creation and distribution

As a proof-of-stake currency, NXT was never mineable. Instead, all 1 billion NXT were created at once, in the first block. No new coins can ever be added (though coins can be destroyed by sending them back to the Genesis block, and if users forget their passphrases their coins will remain permanently locked in their accounts and therefore, in effect, removed from active circulation  – as is the case with Bitcoin).

Nxt was created by BCNext, a long-term member of the Bitcointalk forums under a different name who started the BCNext user account for this project so that he could remain anonymous; he has since handed the project over to the community (in the best tradition of Bitcoin creator Satoshi Nakamoto). Towards the end of 2013 he advertised for investors for the new platform, receiving a total of 21 bitcoins from 73 backers. Of these, 8 invested the maximum of 1 BTC; the others gave smaller amounts. The 1 billion NXT were distributed proportionally between these investors, with the largest risk-takers receiving in the region of 50 million NXT each. The market cap of NXT rapidly increased from 21 BTC to over $70 million immediately after launch, later fluctuating between $20 and $100 million. The long-term bear market in BTC has returned it to the $20 million range, though NXT has still appreciated in BTC terms and remains largely linked to Bitcoin’s fortunes at the present time.

The initial distribution has attracted much criticism in the year since Nxt’s launch (Nxt celebrated its first birthday on November 24). Many people claim it is unfair – though, as with other such ventures, those who took the risk and invested in the first place get the biggest reward.

It turns out, however, that the supposedly unfair distribution was, in fact, a deliberate move to create a sustainable system. One key advantage is that there are large amounts of NXT available from generous initial stakeholders for further development – something that explains the dizzying pace of innovation and quality of the devs in the Nxt community. Over the last year the number of accounts has grown from 73 to over 85,000. The Monetary System, which will allow new coins to be created on top of the Nxt blockchain by ‘locking’ existing NXT, will also provide a solution to this ‘problem’ of distribution.

Differences from Bitcoin

Nxt has many differences from Bitcoin. For one, as a PoS currency, it does not require wasteful mining to maintain its security. This solves a huge problem with Bitcoin, since the PoW model is extremely wasteful of energy and if the Bitcoin network ever scales enough to be truly useful then it will have serious environmental implications. A client ‘forges’ (rather than mines) to secure the network. Powerful computers are not needed; even a Rasberry Pi can forge NXT. Forgers are rewarded with transaction fees alone.

nxt_solar_powered_node
Legendary Nxt node setup, by davethetrousers. Cubie + solar cell. Greenpeace should be happy.

Nxt’s blockchain is lightweight compared to Bitcoin’s, and transactions are fast. The ideal is for 1-minute block times, which will be achievable in the future as the network grows and with new releases. Current block times average around 110 seconds, compared to Bitcoin’s 10 minutes.

Another significant difference is that Nxt uses a ‘brainwallet’ system. Users need only their passphrase – a long (30+) string of random characters or around a dozen random words to access their accounts. This maps to the Nxt address. Any transaction requires the passphrase. This is unlike most other currencies, which generally use a wallet.dat system (though there are some Nxt wallets, such as the MOFO wallet, that have been adapted to use a wallet.dat). This approach has advantages and disadvantages, but is built into Nxt. One obvious advantage is that you can sign in from anywhere; all necessary information is stored in the blockchain.

Other features include:

  • A cap of 255 transactions per block.
  • New accounts are automatically secured with a 256-bit public key, which makes it perfect for cold storage.
  • Account Leasing allows a user to lease ‘forging’ power to another account for a fixed period of time, without having to send coins anywhere. This allows for the creation of secure forging pools.
  • No new NXT coins will be created.

Nxt has come a long way in its first year, with many new features already included (not least the Asset Exchange and Digital Marketplace). However, new features are still being added to the core, and there is some way to go before all the planned features have been coded and implemented. According to the core developers, there are two reasons for this:

  1. They want to ensure that the platform grows naturally, by releasing the right features at the right time.
  2. Every big new feature requires a hard fork. Releasing only one major feature at a time allows bugs to be easily located and fixed.

https://wiki.nxtcrypto.org/wiki/Whitepaper:Nxt
Sourcecode: https://bitbucket.org/JeanLucPicard/nxt/src

NXT Myths #2

NxtMyths2

This is the second part of the NxtMyths SERIES
Written by Salsacz, released Jan. 16, 2014. (Nxt acc. 15003961341330858247)

Distribution of NXT

Q: „Do you think the unequal distribution of bitcoin / big gains of early adopters / will be a deterrent in a more widespread adoption of bitcoins?“

A: „No. Early adopters get bigger gains (as they should) because they take on bigger risk. A bitcoin can be divided into 100 million pieces, so I don’t see divisibility or distribution as a problem.“
Cameron Winklevoss
The distribution of Nxt has many phases:
    •        Original IPO (1 NXT = 2 Satoshi)
    •        First week (1 NXT = 100 Satoshi)
    •        Second week (1 NXT = 400-2000 Satoshi) – first exchange
    •        Next month (1 NXT = 3000-6000 Satoshi) – aliases
    •        February (?) – distributed exchanges, stock exchanges (?)
    •        March (?) – transparent forging (?)
    •        April (?) – colored coins (?)

The distribution of NXT is very fair because it still continues. Now it isn’t in hand of one man, but it is a community effort. BCNext gave us a long time to get on the train. 

If all coins are in existence already, doesn’t this make the original holders of Nxt very wealthy?

Potentially. The original stakeholders of Nxt all made an investment of Bitcoin to seed their holdings, however, with no promise of any kind of success or return on investment.[1] In order to get more users they started to sell their stakes in undervalued prices and also they spent tenths of millions on bounties or giveaways. And BTW – who are original stakeholders? These who paid 2 Satoshi? Or 100? Or 400?

Q:  How would you solve problem with scam accusations according to “unfair” distribution Nxt to 73 big stakeholders?
BCNext: “This problem can not be solved.  Even if we had a million stakeholders the rest seven billion people would call this unfair.  A world with the money can not be perfect.”

Why was the launch of Nxt speeded?

Come-from-Beyond: „BCNext explained why he speeded up the launch. He wants the stake holders to make all important decisions“.[1]

BCNext: “I wanted Nxt to be launched by the community, not by a single person.  Success of Nxt is supposed to be achieved by work of a LOT of PEOPLE.”[2]

Let’s think for a while. When did Nxt really launch? Was it really in the day when the Billion NXT was transferred from the Genesis account to the original stakeholders? The IPO had been running for weeks in November 2013. In first days NXT cost 100 Satoshi. In first weeks of the December the price of Nxt was still about 400 Satoshi. Then 1500, 2000, 4000 before Christmas and if we don’t count the first bubble, we came back to the original 4000 in the middle of the January. But still – we have really bad client. Nxt is not yet traded in any of the big exchanges. There are many features – already programmed and tested – but they still weren’t implemented why? Because we are still in a Beta.

The launch wasn’t in November 24, it wasn’t in January 3, it will be in February/April. We all – 15.000 Nxt users – are beta original stakeholders. The distribution of NXT is extremely fair. The IPO still continues. We haven’t launched yet.

We can forget about some 73 stakeholders… Now everyone has an opportunity to jump on the train… and also to drive him! Why Nxt doesn’t use all features now? Because BCNext’s plan is to bring as many as possible users before the real Nxt will be released. Then we will have – more users, more features, all source code, but most important – this launch will be leaded by all Nxt community. This will be made by decisions of stakeholders. The success of Nxt is now supposed to be achieved by Nxt community, not BCNext.

What happened with the 21 Bitcoins?

Bitcoins were required to determine how to split the stake among founders. That’s why BCNext asked for tiny amounts. These bitcoins were used to fund development but they covered only part of expenses. When people talk about Nxt IPO they forget about this important detail.[3] 21 Bitcoins were used as a token amount. They didn’t represent any real world development costs.[4]

 

How is NXT distributed?

nxt-distribution