What is Nxt?

Nxt is not a simple coin. Nxt is a 2nd generation, scalable cryptocurrency offering a novel method of eco-friendly mining. Nxt features are outside the scope of regular altcoins.

In the world where Bitcoin is king, altcoins only change parameters of the original Bitcoin code such as the hashing mechanism, the time between blocks, the starting difficulty, and so on. Nxt brings much more to the table and was designated a second generation cryptocurrency for a number of reasons. Here are five of the most interesting ones:

1. Nxt is not an altcoin such as litecoin, peercoin, and others who have their code based on Bitcoin's source code are. It is brand new from scratch with its own code.

2. Nxt utilizes a 100% proof of stake (PoS) mechanism versus the proof of work (PoW) mechanism other coins are based on. This effectively removes a security risk inherent in other coins, as the issue of a 51% attack and other vulnerabilities inherent to PoW coins become non-issues. Another plus here is how "green" it's protocol is (not a reference to colored coins, that will come later) in power consumption, since 100% PoS mechanisms don’t require massive amounts of hashing power like Bitcoin and altcoins do.

3. Nxt implements a new feature called "Transparent Forging" which will allow Nxt to approach Visa/Mastercard rates of transactions. No other crypto currency can scale this high; this is possible with Nxt because the transparency provided in the protocol will allow each user's client to determine which node will generate the next block. Other nodes can then send their transactions directly to that node. This also allows additional fees to be realized for immediate, priority transactions. An equally important feature of Transparent Forging is a security mechanism to prevent forked chains from being forged by high-stake nodes. This prevents against even a 90% majority owner of all Nxt branching out and forcing a fork.

4. Nxt was announced six weeks in advance, unlike mere hours like altcoins usually are. The 73 original stakeholders are responsible for distributing the 1 billion Nxt coins that were ejected from the genesis block via an injection of their donated Bitcoin, 21 BTC total, into the genesis block. This is a requirement for any 100% PoS system to work and this distribution is now in progress. Nxt is listed on http://coinmarketcap.com/ and people are trading on a 1-on-1 basis in the forums as well as on a temporary (centralized) exchange http://www.dgex.com.

5. It provides built in support for planned extra decentralized features such as a peer-peer exchange, colored coins, messaging/chat, DNS, and options for expedited transactions.

Forkedchain. (January 2, 2014). What is NXT in the world of cryptocurrencies? Nxtcrypto Foundation Forums. Retrieved from http://goo.gl/wHnBUl