Nxt is a blockchain platform that promises to build and improve on modern blockchain technology. Find out how it works today in our Nxt review.
What Is Nxt Blockchain?
Nxt is a blockchain that aims to improve the functionality of pioneering blockchains like bitcoin. The goal of Nxt is to revolutionize financial technology, crowdfunding, and governance by introducing a new cryptocurrency called NXT.
In addition to NXT, the company is introducing a modular toolset that can be used to build “in any way Nxt users can imagine.” The developer’s official website, NxtPlatform.org, claims “Nxt gives users complete freedom to create their own applications.”
The platform is catered towards average individuals and businesses. Users of all different needs can use Nxt to create a digital currency, trade currencies, or engage in DAO-style functions like voting and data storage.
Overall, Nxt describes itself as a blockchain 2.0 technology. It was first introduced in November 2013. In the future, Nxt will be linked to Ardor and Ignis.
How Does Nxt Work?
Nxt uses proof-of-stake to reach consensus for transactions – which means there’s a static money supply and, unlike bitcoin, no mining is involved in the blockchain.
The platform is specifically designed to facilitate the building of applications and the offering of financial services. With that goal in mind, Nxt has an integrated asset exchange, messaging system, marketplace, and more. Dozens of features (which we’ll discuss below) have been added to the platform since it was introduced in 2013.
Another unique feature of Nxt is that the code was written completely from scratch. It’s not built off bitcoin’s blockchain or any other blockchain technology. That’s why Nxt exhibits several unique features from other technologies. Nxt is coded in Java.
At launch, Nxt was the first currency that relied purely on proof of stake for consensus. The blockchain initially had a block creation rate of roughly one minute.
Meanwhile, the standard Nxt client originally worked as a brain-wallet. It didn’t keep your keys in a wallet file. Instead, the account was accessible via a secret passphrase, which means it can be accessed from any instance of the Nxt software.
Obviously, Nxt is a wide-ranging platform with a multitude of benefits. Here are some of the top features planned for the platform:
Users can create their own project on Nxt through the Nxt Asset Exchange, which offers secure, direct, peer-to-peer trading. The Nxt asset exchange allows for the trading of shares and crypto assets. All transactions are recorded in the immutable Nxt public ledger. One of the unique things about the Nxt asset exchange is that it provides a trading record for items other than NXT tokens. To do this, Nxt designates – or “colors” – a particular coin. This designation builds a bridge from the virtual cryptocurrency world to the physical world. That means a Nxt-based asset – the colored coin – can represent property, stocks or bonds, commodities, or even concepts and ideas.
Users can launch their own digital currency, then share, trade, and exchange other currencies supported by Nxt.
The Nxt blockchain has a data cloud system that allows for data storage, publication, and verification on the blockchain. Like other data storage systems, it promises to be secure, simple, and effective.
Nxt’s Arbitrary Messages system allows you to send encrypted or plain text. You can also use this system as a basic data storage system, as it allows you to permanently store up to 1,000 bytes of data – or 42kb of data. The Nxt Arbitrary Messages system evolved into a file-sharing service for decentralized applications and higher-level Nxt services (like the data cloud we mentioned above).
Users can create customized polls, verified via the Nxt blockchain. Any holder of NXT tokens or Nxt-based assets can vote in a cryptographically-proven, externally-verifiable way. Votes can be used to make decisions about future developments, or to collect votes from shareholders.
Create multi-signature accounts to manage your NXT cryptocurrency. Nxt promises to make decentralized autonomous organizations easier to run.
Nxt can provide cryptographically secure verification data for NXT accounts, allowing Nxt users to publicly prove that they are in control of a particular Nxt account.
Nxt Plugins enable third-party software developers to add functionality to the Nxt client.
The Nxt Alias System allows one piece of text to be substituted for another, which means keywords and keyphrases can be used to represent other things. The Alias System is designed to be open-ended, which means it can be used to implement a decentralized DNS system, shopping cart applications, and more.
Nxt’s account ledger feature allows clients to see exactly how their Nxt account is doing. All balances and transactions are displayed in an easy to read format – just like you would see on your bank statement or online bank account screen.
Nxt users can permanently tag any Nxt account with a small amount of data. A properties tag can provide meta-information about a specific account – a seller can tag buyer accounts that he has sold to in the past, for example.
How Does The NXT Token Work?
NXT is the digital currency that acts as fuel for the Nxt ecosystem. The token can be used as a transaction fee when transferring NXT from one user to another. It’s also used to create assets that can represent things like bonds or ownership of a project, create a decentralized poll on the blockchain, or store arbitrary data on the blockchain.
NXT, like any digital currency, can also be used as an external currency just like you would use bitcoin to buy goods and services.
Nxt first launched online in November 2013. The project was originally launched by an anonymous software developer named BCNext. On September 28, 2013, BCNext created a forum thread on Bitcointalk.org announcing the proposed launch of NXT, a second generation cryptocurrency. That developer raised 21 BTC through an initial crowdfunding campaign for NXT.
The genesis block for Nxt was published on November 24, 2013. A total of 1 billion coins were distributed to 73 stakeholders based on their level of contribution.
The source code for Nxt wasn’t released until January 3, at which point only a portion was released. The full source code was released on March 1, 2014 under the MIT license.
At launch, Nxt was the first currency that relied purely on proof-of-stake for consensus.
The Future Of Nxt
Nxt will continue receiving updates for the next year or so (possibly longer). However, the core developers are now focused on a project called Ardor with a child chain called Ignis.
Current NXT token holders will still be able to use the tokens. If you hold Nxt, you will get awarded IGNIS for free when the token launches this fall. For every Nxt, you’ll get 0.5 IGNIS while still keeping your Nxt. You can also trade your Nxt for IGNIS and get more of that token in exchange for losing your Nxt.
A similar situation occurred with Ardor last year, when Nxt token holders received Ardor.
Ultimately, the future looks bright for Ardor, and the platform has ambitious plans for the future. However, Ardor and Ignis are outside the scope of our Nxt overview.
Nxt is a blockchain technology originally designed as blockchain 2.0 – a new and improved version of a bitcoin-style blockchain, coded from scratch in Java. Today, it’s not as popular as other blockchain 2.0 technologies – like say, Ethereum – but still brings unique features to the table. Nxt was the first blockchain with a proof of stake consensus algorithm – something that generated controversy at the time.
You can learn more about Nxt and the ongoing Nxt project by visiting Nxt.org. The website also features a downloadable version of the Nxt client as well as an online demo.