BlockTime #3 – What Is NXT, Ardor, & Proof Of Stake?

Mike Casey: So what are your feelings on proof of stake?

Leon Fu: I think it works well enough for what it was because of proof of stake.

Peercoin is the first one I heard of that uses a hybrid of proof of work and proof of stake model

Mike Casey: Why is hybrid different from the pure proof of stake?

Leon Fu: The first pure proof of stake was the NXT project. It is not perfect, but it seems to work well enough. I mean it hasn’t had anything catastrophic happen yet.

Michael Tidwell: how come you don’t want to use this Next coin?

Leon Fu: As I remembered, it didn’t have any funding. It started out with the only funding it got, which was 21 Bitcoins back in 2012.

Besides, there were problems with distribution. There were some problems with marketing. They’re rebranding themselves to this thing called Ardor, which they hope to address some of those issues.

Michael Tidwell: When is that rebranding going to be done?

Tai Zen: It’s already underway right now. It’s been underway since the last summer of 2016.

To answer your question about why people are not using proof of stake, there just hasn’t been enough proven time.

If you look at any proofs of stake blockchains or cryptocurrencies, the problem with it is it just hasn’t had enough testing. It hasn’t been out in the wild long enough for people to see that it’s safe and secure.

For example, in case of the NXT blockchain, if you look at their cryptocurrency, they only have 60, 70 nodes to process the transaction compared to 5000 nodes of Bitcoin.

Mike Casey: Well, that’s just about the nodes. I think the market cap plays a big role.

Leon Fu: We’re going to see more of that.

As you know, our channel is focused on investing and helping individual investors make a return on their investment. Therefore, we do care about technology, but in the sense of how it affects our investments.

Given that focus at the moment, it’s not entirely clear from an investing perspective on how that will impact whether proof of stake works or how that will impact our investment.

There are more factors relating to the question of whether I should buy this coin or not. Let’s say it’s a proof of state coin, there are other factors that mattered more than whether or not proof of stake works.

Michael Tidwell: what’s the biggest factor for you?

Leon Fu: The biggest factor is…

Tai Zen: Funding

Leon Fu: Funding is definitely a huge factor. It is something we’ve focused on very much.

Besides, we also care about the leadership, the community, the technical roadmap and their execution of that roadmap. All of these things will affect your investment far more than whether or not proof of stake works.

Tai Zen: Now, I also want to add this that I was one of the cofounders of the NXT Foundation.

Mike Casey: Its nice disclosure there. It’s good to point out.

Tai Zen: The audience needs to be aware of that. Even though I’m not active in the NXT foundation anymore, I did it help start that and get that going.

The reason why NXT or the proof of stake isn’t more popular is NXT was the first cryptocurrency. They called it Bitcoin 2.0. It was the second generation cryptocurrency and it was the first cryptocurrency that was not based on the Bitcoin code.

Therefore, the way they raised money to it was very new. They call it premise cryptocurrency, which means the tokens were distributed immediately from the genesis block. All the 1 billion tokens were created instantly and not through mining like Bitcoin was.

As a result, there was a lot of people that felt that it was not fair because they did not get in and they had never seen an ICO before.

Michael Tidwell: Is it inflationary?

Tai Zen: No

Michael Tidwell: So why would I stake my coins in NXT if an I don’t get returned investment.

Tai Zen: You get transaction fees.

Michael Tidwell: So transactions have to be happening in order for me to get paid

Tai Zen: Yeah. The approach NXT came out with was there was really no need to wait for a long time for all the coins to be produced in.

According to my understanding and recollection, it was the first ICO (Initial Coin Offering).

Mike Casey: I don’t know.

Leon Fu: I don’t remember anything

Tai Zen: Nowadays, when when we talk about ICO on our channel, nobody blinks an eye about it because they’re all used to it. However, if you rewind back to the end of 2012 and the beginning,…

Leon Fu: That was called an ICO would have been called a premise.

Tai Zen: Nobody uses that term anymore.

Michael Tidwell: When Next coint rebrands itself, what’s going to happen to the people holding next coint right now?

Tai Zen: They still have it.

Michael Tidwell: Will it just be called something else?

Tai Zen: Well, the problem with cryptocurrencies is whenever companies and businesses want to build their private blockchain, they don’t have a technical team to do it.

When they go and build stuff on top of NXT, it’s very difficult because they just don’t have the technical know-how about blockchains and stuff to build it.

Therefore, they created what’s called the Ardor blockchain and this blockchain has side chains.

If you want to create your own private blockchain like R3CEP did, instead of going out there and building it on your own and hoping that there are enough nodes to secure the blockchain for you, they’re doing it on the Ardor blockchain.

Mike Casey: It’s secured 100% proof of stake. How was 7:29 shares distributed for NXT?

Tai Zen: The founder said he needed to raise 21 Bitcoins. His name was  BCNext on the Bitcoin Talk Forum.

Mike Casey: In 2013, it was $250, right?

Tai Zen: It’s the one that had the biggest growth in its history till this day. Outside the Bitcoin, it is still NXT no matter what anybody says.

Learn more about Michael Tidwell and Mike Casey from BlockTime at:

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