The Nervos Network is an open-source public blockchain platform and a collection of protocols. The protocol was formed with the intention to do away with the scalability issues faced by some of the older blockchain networks like Bitcoin and Ethereum, to name a few. The Nervos blockchain is a layer-1 protocol, and it makes use of a series of layer 2 scaling solutions so as to allow high volume use cases. The Nervos Network platform utilizes a PoW or Proof-of-Work consensus algorithm. The native token of the Nervos Network is called CKB, which is also known as the CKByte among traders.
Nervos Network: the Background
The Nervos Network has its headquarters in Hangzhou, Zhejiang Province. The protocol is developed by a team of experts from various fields within the cryptocurrency universe. The team behind Nervos Network includes former contributors to core protocol research and development of platforms like Bitcoin and Ethereum.
The development team behind the Nervos Network contains over 80 members, with 60 core developers among them. The co-founders of the platform are Terry Tai – core developer at the Yunbi and Peatio cryptocurrency exchanges, and the co-founder of Teahour.fm, a popular tech podcast in China, Kevin Wang – who has previously worked on enterprise data solutions at the IBM Silicon Valley Lab, and Daniel Lv – the former CTO of imToken (the most famous Ethereum wallet in the world), and also the former CTO of Yunbi.
Further, Nervos has Jan Xie (founder of Cryptape and former core researcher and developer at the Ethereum Foundation), Cipher Wang (former Chief Product Officer at Cryptape), Ian Yang (former CTO at Hooya Game), and more on the Research and Engineering front. There’s also Ben Morris as the Director of Business Development and Growth, Jessie Chan as the Head of People Operations, Shawn Sabeti as the Head of Marketing, and Echo Qi as the Lead Designer.
The Nervos Network Technology Architecture
The Nervos Network is a multi-layer network which contains a basic general computation and consensus layer, and then a series of application layers. This unique layered architecture of the Nervos Network provides developers and enterprises with the opportunity to create and launch new products and services on the Nervos blockchain, and the best part is that they don’t need to compromise security and decentralization in search of higher speed and more scalability.
The base layer of the Nervos Network is the CKB or the Common Knowledge Base, and it acts as the consensus engine for various Nervos-based applications and application layers. The CKB is a general-purpose, public, permissionless blockchain which both anchors the network, and presents a safe foundation to store the crypto assets. The CKB consensus algorithm is based on Proof-of-Work and the Nakamoto consensus. The algorithm is called the NC-Max algorithm, and it can adjust mining difficulty as a response to whatever the network conditions are. NC-Max increases throughput when the nodes on Nervos Network are well-connected, and slows it down as the block orphan rate crosses a specific threshold.
This CKB layer on Nervos Network also presents the native utility token of the network, the CKB or the CKByte. CKB is used for resource management, as well as to incentivize miners, and the coin allows the holder a portion of the state storage space on the CKB blockchain. Participants are also allowed to lock their tokens in the Nervos DAO (decentralized autonomous organization), so they can receive rewards on their deposits.
So basically the Nervos Common Knowledge Base allows crypto assets to be stored with all the security of blockchains like Bitcoin and Ethereum while also enabling smart contract development, as well as layer 2 scaling. Therefore, this crypto-economic model keeps in mind the interests of every involved party – i.e. the users, the developers, and the miners, unlike its predecessor blockchain networks.
With CKB’s support, the decentralized applications running on Nervos Network’s layer 2 can have the maximum scalability through a number of advanced solutions. The Nervos Network token CKB stores the network’s state (as in, the account balance information and application activity) in various cells, while the Nervos Network layer-2 protocols process the transactions made on the chain and generate new states. The benefit of Nervos layer-2 protocols is that they can process transactions quicker and more cost-effectively than the Nervos CKB, in exchange for using the security of the CKB.
The layer-2 protocols can also act as application-specific protocols with customized features for specific use cases, like privacy or security or finance. The Nervos CKB also provides a Turing-complete virtual machine or VM to further support any applications developed using smart contracts. The CKB VM utilizes a cell model very much like Bitcoin’s UTXO accounting model to help store and track any state changes. The cell model also allows the parallel processing of transactions made on the Nervos Network blockchain.
As for governance on the Nervos Network, it’s done using an informal and off-chain method which, again, is sort of like the current models in use for both the Bitcoin and Ethereum blockchains. This is how CKB governance works: the developers submit ideas for protocol upgrades on Nervos’ open-source GitHub repository. Then the core Nervos developers look into and discuss these proposals, and the extended community gets to provide their input too. If a suggestion gets the majority of the votes, the core developers implement the new changes into the base code. The node operators have to upgrade their clients to the newest software so as to avoid any complications that might emerge from the merging.
Nervos Network Competitor Analysis
Being a blockchain platform that allows the development of other projects on top of it, the Nervos Network does have competition from quite a lot of the major players in the crypto space, Ethereum included. Nervos also has competition from DFINITY, Qtum, R3, Goopal, Lisk, the Conflux Foundation, Forge Platform, and ConsenSys, and many more blockchain platforms in the crypto space. However, judging by its performance records so far, the Nervos Network seems to be holding its own against all of its competitors.
The Nervos CKB’s native token is the Nervos Network token CKB, as mentioned before. It stands for Common Knowledge Byte, and is also known as the CKByte. CKB is a pretty unique crypto token; it can be used as a secure store of value like Bitcoin, but it can also power smart contracts like Ethereum. Further, it helps increase the security of the entire Nervos Network, and aligns the interests of all parties involved in the running of the CKB blockchain – the users, the miners, the developers and the node operators. The Nervos Network token is not only a powerful part of the Nervos Network, it’s also incredibly strong as an individual cryptocurrency.
CKB can give a token holder the power to occupy a part of the total state storage space on the CKB blockchain. On CKB, the Nervos Network’s state is stored in a set of ‘cells’. So suppose if a user holds 1000 CKBs, they can create a cell of 1000 bytes, or have multiple cells join in to clear a space of 1000 bytes in capacity.
On the other hand, once a user releases the state storage they were occupying, they will get Nervos Network tokens equivalent in amount to the size of the state in question.
Miners on the CKB blockchain receive CKB tokens as block rewards. When a miner mines a block, they receive the block’s full base issuance reward, plus a part of the secondary issuance rewards. The portion of the reward they get is decided based on the size of state they occupy. Further, the Nervos CKB also includes a smart contract called the NervosDAO. The NervosDAO lets you lock your currently unused Nervos Network tokens, and once you deposit your assets into this DAO, you get a fraction of the network’s secondary issuance.
Fundraising History and Investors Details
Back in 2019, Nervos hosted a token sale through Coinlist to power the community-driven research process and development of the Nervos Network blockchain. In the process, Nervos managed to raise $72 million. The many institutions to participate in said sale included the CMB International or the China Merchants Bank International, Polychain Capital, Blockchain Capital, Hashkey, MultiCoin, and Distributed Global.
Milestone and Future Roadmap
Nervos Network was first launched in 2018, and it hosted a private sale back then. In 2019 Q3, the Nervos White Paper was released. The network also launched its testnet at around the same time. Quarter 4 of 2019 saw the official public sale of the CKB token, as well as the mainnet launch.
In 2020 Q1, the Nervos Network held its $30 million Grants Program intended to accelerate the growth of the protocol. Eight major projects joined in the grants program to start off, which were Obsidian Labs, ABC Wallet, Summa, SECBit Labs, Obsidian Systems, Synapse, Lay 2, and GrowFi. In 2020 Q2, Nervos released the Bitcoin SPV Library for Bitcoin interoperability.
The Nervos Network hit another major milestone in 2020 Q3 with the releases of the Polyjuice, Lumos, and Capsule developer tools. Around that same time, China’s National Blockchain Network BSN also integrated with the Nervos Network. In the fourth quarter of 2020, the Nervos-Ethereum Stablecoin Bridge was created. The bridge permits the creation of the eCKB and the nETH tokens. The eCKB token represents one CKB on the Ethereum blockchain, and similarly, the nETH token stands for one ETH on the CKB blockchain. With these tokens, cryptocurrency holders on one of the platforms can transact in that blockchain ecosystem and take part in its services while also maintaining the equivalence of value with a native token to another blockchain ecosystem.
2020 also witnessed the launch of the sUDTs – the very first user defined assets on the Nervos Network.
You can see the road ahead for the Nervos Network in 2021 in the image below:
8. Price Performance History
CKB entered 2020 with a Nervos Network price of about $0.007. Throughout 2020, the Nervos Network price shifted quite a bit, finally ending the year with a Nervos Network price of about $0.004. In 2021, the Nervos Network price reached the highest so far with about $0.044 on April 1.
The Nervos Network’s unique layered architecture puts it at an advantageous position with both users and developers, since the users are incentivized in multiple ways to use the network and the job of developers is made super easy with the layer 2 applications and tools.
In the few years since Nervos Network launched, it has managed to cross quite a few remarkable milestones, and even has secured partnerships with many many big names in the crypto world, Huobi Global and China’s National Blockchain Network (BSN) to mention only a few. If it keeps to the plans it has for 2021, at this point, it’s only fair to expect Nervos to continue to grow and expand in the coming times, working towards a blockchain both powerful and completely unique in its usability.
Hitesh Malviya is the Founder of ItsBlockchain. He is one of the most early adopters of blockchain & cryptocurrency enthusiast in India. After being into space for a few years, he started IBC in 2016 to help other early adopters learn about the technology.
Before IBC, Hitesh has founded 4 companies in the cyber security & IT space.
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