Criticisms and Concerns for Nano Cryptocurrency

by RecklessGeek

I figured I could make this post to remind everyone that NANO isn’t perfect, and hopefully spark up some discussion. The main disadvantages I know after being here for a while and investing myself:

1. No smart contracts

Some may argue that this is an advantage, while others consider smart contracts the future of crypto; that’s up to you. It does make sense that NANO isn’t supporting them for technological reasons, and that’s ok. Nano doesn’t have to be the only coin in the planet and can coexist with coins that are specifically made to support smart contracts and thus better at it.

2. Lacking privacy

It’s just as private as BTC, which is already pretty successful. Besides, not sure if it would cause regulation issues, as others have pointed out in different posts. I’d love for privacy in a coin to be an advantage but it doesn’t seem like it in our society.

Anyway, this can be solved to some extent in the second layer.

3. Deflationary currency

There haven’t been any successful deflationary currencies yet AFAIK. The only time that happened was with Japan’s Lost Decade, which wasn’t going to end well according to expert economists. I don’t know enough about the topic to discuss more about it and I still have some reading to do, but my current research isn’t too optimistic. Not because it’s impossible, but due to the fact that it has never happened before, which makes actual Nano adoption harder and another challenge to overcome.

I suggest everyone to learn more about this themselves. It’s a very interesting topic. There’s this small book I haven’t read yet, this great video, and another video, but look for more yourself.

4. Is it really a good enough fiat replacement?

NANO is great, but is it great enough to replace fiat for your average Joe?

• Consider that the average fiat user doesn’t care about decentralization at all. If anything, it’s worse for them: it’s harder to set up, understand, and they have to keep private keys safe.My father is unable to understand how cryptocurrencies work. Thus, he doesn’t plan on using them as he doesn’t trust crypto at all.
• NANO is green, but not that much in comparison to fiat — at least when we’re talking about digital fiat transactions. Would like to see facts and an objective comparison on both physical and digital fiat, though.
• NANO is instant… just like fiat, or at least for day-to-day amounts and between close communities. Nano is a global currency; it shines with larger amounts and between banks from unrelated countries. For example SEPA transfers are limited to Europe and are slow AF, and other methods have fees and are also quite slow. But that’s not really something the average Joe cares about, he just wants to pay for the beer he just had.
• NANO is feeless: that is something nice. But converting to NANO does have fees, which is required to use it (although less important). I don’t think we’ll ever get rid of all middlemen, and we’ll always have to deal with fees, although probably much smaller. Not that big of a deal, but something to take into account.

Here’s an example regarding adoption I’ve experienced myself and consider in the same situation as crypto:

I’m a huge Linux fan and user, and it is objectively better than Windows in many ways: it respects your privacy, is open and transparent, and completely free. It’s usually a bit more performant, and you have full control over it. Yet, not more than 5% of desktop users run this OS, and most are tech-savvy people.

I’d love it if this happened, but the advantages just won’t convince average Windows users to switch, because it’s a somewhat complicated process for the tech illiterate or they just don’t care enough.

Some are also confused about why there are so many distros and which one is best (same as crypto), specially considering that the user of a distro (coin/token) will tell you their own is the best one. Sometimes we are our own enemies. Not to mention that Windows (fiat) is the most used platform, which means there’s less support for Linux (nano) sometimes. That makes it a big reason why people don’t want to switch their OS (currency).

The issues in this section don’t mean that the switch to crypto is impossible. Only that it’s going to take muuuuuch more time than most of their users think, and that it could take many generations IMO. Considering cryptocurrencies are just starting to get attention now, it’s to be expected — you can’t change the world in two days. This also affects all kinds of cryptocurrencies, not just Nano, so at least it’s something we all fight together against.

5. No node incentive

It can only make sense that without fees nor inflation there’s no direct economic incentive to run a node. There’s just no way around it.

To some extent this is what makes Nano more decentralized than other cryptocurrencies, though. We’ve all seen that mining only promotes ASICs — Bitcoin is getting more centralized over time, while Nano progresses towards a more decentralized network.

I can get behind the common counter-argument that companies that use NANO run nodes to secure their own holdings. You can’t programmatically access the Nano network without running a node. You need to run a Nano node to access the functionality that Nano provides. Saying no one will run a Nano node to get access to Nano functionality because no one will pay you to do so is like saying no one will run a SQL server to get access to SQL functionality because no one will pay you to do so.

The question to be asked here is if these reasons be enough to maintain Nano when it becomes a fully global currency with thousands of transactions per second. This so far has been working well, but it’s something to be aware of and that we don’t have much experience with from other cryptocurrencies.

6. Spam attacks

Spam is also a concern: if Nano is instant and feeless, what prevents a Nano hater from spamming the network?

As this post is being written we’re under a spam attack. We’re at ~100 Transations Per Second of tiny amounts of Nano, while we’re usually at ~2TPS, so about a x50 increase. Is Nano any slower? Not that much. The main problem in this case is ledger bloat. These transactions will have to stay there forever, and we won’t be able to remove them even with pruning (which is being worked on).

Nevertheless, only full nodes need the entire history and storage is quite cheap, and will supposedly continue being that way for a while (unless nano’s ledger starts growing exponentially). While this is a relatively small attack and we should work on preventing them, there are many ways to approach spam attacks (DPoW and others: [1] [2]) and it might get better as Nano gets more usage.

7. Devs could do better

Don’t take me wrong. I value the time and effort put into the Nano foundation and all its members for creating this coin, but for instance I think it could be more transparent. I’d love to have a more in-depth analysis of the foundation’s expendings and regarding decisions taken about Nano’s future (most technological decisions are nicely explained in their medium account). The whole Appia thing has already been talked about many times and I don’t want to beat a dead horse. I support it, but I consider it could have been a much more transparent process. I would also like to see a clearer roadmap than a GitHub project.

But considering that cryptocurrencies seek decentralization, and that Nano is proven to be mostly a community project, I’d like the dev team having as little power as possible (to some extent). I don’t think it’s important that e.g. the devs promote Nano. It’s just a different way of doing things, and it makes sense for a decentralized system.

8. Bitgrail

Most posts like this one include the Bitgrail scam as a temporary disadvantage, as some lost a lot of money. It was just a bad experience overall, and some people only know Nano because of this. I don’t consider this a huge disadvantage, but I wanted to include at least a mention.

9. Epoch blocks are centralized

Here’s one I didn’t know about: the epoch blocks are a centralized solution. The upgrade itself was decentralized because all nodes agreed to do so, but it’s only up to the team to add epoch blocks from that moment on. Read more about it here and here and see more discussion here: [1] [2]. To be honest I didn’t know about this one before making the thread so I won’t be commenting any further. Do Your Own Research :)

As a Nano holder, I hope for the best and I look forward to its future, but let’s not get into a bubble with only positive feedback. This is at least something everyone should know about before mindlessly putting their life savings into NANO (I know you guys won’t).