Novacoin project purpose and description
What is Novacoin?
Novacoin is a decentralized cryptocurrency and an open-source platform designed to provide multiple investment opportunities for users on a secure platform. The platform was launched by a developer called Balthazar in February 2013.
It also has a native token abbreviated as NVC is based on the Ethereum platform.
Unlike other cryptocurrencies that use either proof of work (PoW) or proof of stake (PoS) consensus algorithms, Novacoin is a hybrid of both consensus models. It was created as an improvement of another coin referred as Peercoin started earlier in August 2012.
Peercoin was among the early cryptocurrencies to use the hybrid model of proof of stake (PoS) and proof of work (PoW) consensus models.
The history of Novacoin price history demonstrates it has suffered extreme swings because of shifting forces of the market. In April 30th, 2013, a short period after release, Novacoin was trading at $4.2 before growing steadily by more than 400% to reach $23.68 in early December of the same year.
Then, the growth took a sharp decline to less than $1 by August 2014 and remained within that range until early 2017.
In the third quarter of 2018, the coin was trading at a range of $2.5 and $5. Its market capitalization had also shrunk from $19.5 million in June 2018 to about $7.7 million within the same period.
What is the problem that Novacoin Solves?
- Limitations and centralization of traditional financial services
Over the years, many people have suffered from the centralized bureaucratic design of the traditional financial services that has threatened to chock the financial industry.
When sending value using a banking platform, your details and those of the recipient have to be verified before the transaction can commence. The process results to serious delays that can at times extend to several days before the transaction is completed.
Other traditional financial services such as credit cards have proven to be highly risky as criminals adopt advanced technologies to steal user information and siphon funds away.
hese problems are making people lose trust in the banking system. Novacoin seeks to change this design by eliminating all the centralized parties and putting users in full control over their accounts and funds.
- Centralized mining
When the blockchain technology was unveiled in 2009, Satoshi Nakamoto demonstrated that it was possible to run decentralized transactions without involving centralized third parties.
However, tech companies started developing Application-specific integrated circuit (ASIC) miners that generate very high mining power to optimize rewards. However, the high cost of ASIC miners implies that only the wealthy can afford to buy, mine and own Novacoins.
- Lack of privacy in the financial sector
One of the main reasons why people are seeking alternatives to conventional financial services is the lack of privacy.
When you save funds in a bank account, send money, or run a transaction via traditional financial services, the details can easily be pulled out by many entities such as the banking administration and courts of law. The Novacoin network is targeting to help users operate in total privacy.
How does Novacoin Solve the problem?
To address the outlined problems, Novacoin was designed to provide users with a seamless investment and trading experience in a completely decentralized manner. The focus is on employing the blockchain technology to transform the financial industry to make blockchain and its resources more affordable. Here are the main features and strategies used at Novacoin platform.
- A hybrid consensus-based algorithm
When Bitcoin was unveiled in 2009, the most notable thing was its proof of stake consensus model. Its design has helped Bitcoin to become one of the most secure platforms for sending value.
However, another consensus model referred as proof of stake was introduced a few years later to ensure that people who confirm transactions own commit to protecting it because their funds are also locked there.
To make Novacoin better, it employed a hybrid model that combines proof of stake consensus with proof of stake. This implies that you can enjoy the benefits of both sides. This application model has made the network more secure and reliable.
- Use of ASIC resistant scrypt hash function
When Bitcoin was launched, blockchain experts concur that Satoshi did not anticipate the sudden explosion of interest in the coin especially by the tech industry that started creating Application-Specific Integrated Circuits (ASIC).
To address the danger of centralized mining, Novacoin opted for the scrypt hash function that is ASIC resistant. This implies that users do not need the expensive ASIC mining equipment to mine Novacoin.
Scrypt is a HashCash proof of work that uses a memory-intensive hash function to lower the effectiveness of logic circuits used in ASICs. This implies that Novacoin users with GPUs and CPUs can participate in the mining the coins and building consensus.
- Advanced encryption of the network
Novacoin founder was concerned that though the blockchain had started to expand, people transactions and personal details were still getting exposed.
Therefore, the development team adopted advanced encryption to guarantee users of greater privacy when sending and staking value on the network.
To operate in the network, you are required to have a supported wallet that generates a private key and public address. When running transactions, miners on the network can only follow the public address to check the balance but cannot get the details of the user. You can also enhance the privacy and security of your transactions and coins by using advanced wallets such as Ledger Nano S and Trezor.
What makes Novacoin better than it’s competitors?
When Novacoin was founded in 2013, the development team wanted to create a network that provided workable solutions to financial issues that faced people by then.
Even as more cryptocurrency networks join the market, Novacoin has demonstrated to be one of the reliable networks. Except for its downward trending coin value, here are key things that make Novacoin better than its competitor.
- Novacoin employs a hybrid of proof of work and proof of stake models
Unlike Bitcoin or Ethereum among other networks that employ either PoS or PoW consensus models, Novacoin combines them so that users can enjoy more benefits.
The hybrid model provides users with a robust, dynamic, secure platform to send value of run other transactions.
- It is ASICs resistant
This is perhaps the most crucial component of Novacoin because it targets to advance the primary goal of decentralization by Satoshi Nakamoto. As a scrypt based platform, it implies that more people even those with standard CPUs and GPUs can mine and own Novacoin. This will be very crucial in keeping the network fully decentralized and more secure.
- The Novacoin community has been growing steadily
Though the value of the Novacoin was not doing very well especially in the first six months of 2018, the community continued to grow. Many Novacoin holders posit that the downward shift was not unique to Novacoin, but it affected almost all the coins. Therefore, they are optimistic that the price will take an upward trend and deliver high ROI.
- Users can operate in a fully decentralized and anonymous manner
As a fully decentralized network, Novacoin platform allows users to operate on a peer2peer basis. Whether you are running a transaction such as sending value or trading the coins, the details are completely decentralized. As long as the sender and recipient are on the Novacoin network, the transactions are private and do not require profit-seeking third parties such as banks.
- It allows users to join, use and own the network
If you save funds in a bank, the attachment is mainly felt when running transactions. People feel passive because of the centralized management that makes decisions in the organization. However, Novacoin network belongs to the people who use and own some stake in its system. You can participate in confirming transactions through mining and voting on major decisions affecting the network.
- Sending value on the network is cheap and easy
The Novacoin network was created to operate as a decentralized network and not as a profit making organization. Unlike banks that adjust the fees for running transactions to meet associated costs and optimize profits, Novacoin platform is cheap and secure. The small fee charged on the network is used to motivate the staff on the network.
- You can mine the network by simply holding Novacoins
While mining is central to the operation of any blockchain network, the process is technical and can often be elusive especially when you are required to generate optimal hashing power. However, use of CoinDayWeight to drive PoS system implies that you can now get rewarded by simply holding the native Novacoins.
- The network is considered more stable after for having been in the market for longer
One of the methods used to gauge the stability of a cryptocurrency network is the length of time taken in the market. Many new networks cannot be considered stable because their features are still under test. However, Novacoin is considered stable because it has been in the market for more than five years.
How can Novacoin be categorized?
Novacoin is a truly decentralized and open source platform aimed at helping to advance the blockchain network. The platform is helping to take the blockchain technology and application to more people by simplifying the acquisition, trading, and use of the native coins in the market. More people are now associating with Novacoin because it is allowing them to mine with standard CPU and GPUs. Indeed, you can earn some rewards by simply holding Novacoins under the proof of stake system.
What’s Novacoin’s vision on Security?
The Novacoin’s vision on security is providing a secure platform where users’ assets, transaction details, and personal information are fully protected from nefarious attackers. The network was created at a time when attacks on the blockchain networks and related establishments such as Mt. Gox had become very common. To keep the network safe, here are some of the main methods used at Novacoin network.
- Use of scrypt hashcash system and hybrid consensus algorithm help to promote even distribution of tokens to avoid 51% attack.
- The network utilizes advanced encryption that makes it extra difficult for attackers to break and steal user information. Indeed, even miners can only follow the public address to confirm if a user has enough funds to send.
- The network has a very aggressive team that evaluates vulnerabilities and closes the gaps promptly to lower the risk of attacks.
Examples of Novacoin’s use cases / applications.
When Novacoin blockchain was created, the founder and the development team wanted to make it one of the most popular networks in the market. Here are the main Nova applications.
- Paying transaction fee on the Novacoin platform. To send funds or run transactions in the Novacoin platform, you will be required to pay a transaction fee using Novacoin. This fee is used to motivate the miners who confirm transactions on the network.
- Pay the transaction fee when trading Novacoin in the markets. If you target trading Novacoin in the exchanges, a transaction fee will be levied based on the traded volume. This fee can be paid in Novacoin.
- Use Novacoin to pay for goods and services from the stores such as Virgin Galactic and Overstock.com that accept the coin. As more traders come to accept and adopt blockchain networks, they are allowing users to pay for goods and service using crypto coins. Note that even when a store only accepts another coin, it is still possible to use Novacoin by first converting to the supported coin.
- Pay taxes with Novacoin. As more countries come to appreciate the special role of cryptocurrencies, some have started opening doors for direct use. In Arizona USA, Bill 1094 passed in April 2018 allows residents to pay transaction fee with cryptocurrencies such as Novacoin.
- Use Novacoin to buy new tokens in the market. Most cryptocurrency enthusiasts are always on the lookout for new investment opportunities such as ICOs (initial coin offering) that promise good returns on investment. The ICOs allow investors to buy tokens on offer before getting released into the market. You can use Novacoin to buy such tokens and wait for them to gain value before selling.