Nano - Issue #48
In this newsletter, we are profiling Nano [NANO]. In previous newsletters, we have profiled Bitcoin, Cardano, Stablecoins, Uniswap and many others. Access all our newsletters in our archives at madcapx.substack.com.
The Short of It
There are many fast cryptocurrencies today that were made for transactions, but you would be hard-pressed to find one that has the speed, scalability and simplicity of Nano. There are no smart contracts, but there are free transactions. Will Nano receive wider adoption and get back into the top 100 of crypto? Currently sitting at position #119 on CoinMarketCap.
Nano began development as RaiBlocks in 2014 and rebranded in early 2018. It is the invention of Colin LeMahieu, who has worked for AMD, Qualcomm, and Dell. Created to be small and fast, the goal of Nano is to allow users and merchants an almost instant, fee-less, and decentralized network of digital currency.
In the early days, it was seen as one of the only cryptocurrencies that could legitimately overcome the limitations of both traditional financial systems and the then-currency crop of cryptos. Their slogan is “digital money for the modern world.” It still holds true to its goals, but many other modern projects have come along with similar properties, so can Nano compete?
The Nano Foundation is an organization created to drive the development forward and to bolster commercial adoption. Nano is unusual in that its entire supply is already in circulation, and you cannot mine or stake it. This makes Nano highly decentralized, with the majority of accounts holding less than 100 NANO. Initial distribution was done through a CAPTCHA faucet system. There was no ICO, and early adopters benefited greatly, and some see Nano as one of the most fair and organic cryptocurrencies.
Nano has a maximum supply of 133,248,290 coins. Initially, it was much higher, but it was decided to burn all the supply above the current 133 million limit. The system runs on a Directed Acyclic Graph (DAG or block-lattice) rather than a blockchain, which is why it can achieve sub-second finality and can easily handle 1000 transactions per second. On top of this, transactions are completely free, making Nano ideal for microtransactions. Accounts are required to do a minimal bit of Proof-of-Work when sending a transaction, but it is not for block creation but rather as a way to prevent bad actors from spamming the network and creating Sybil attacks.
Consensus is achieved via Open Representative Voting (ORV). This system makes Nano extremely energy efficient, which also makes them one of the most environmentally friendly cryptosystems. NANO holders can delegate voting weight to elect network validators. Unlike almost all other crypto ecosystems with validators, no block rewards or fees occur. Validators are entirely voluntary and provide their services only to enjoy the natural incentive of having a fair, secure, and stable network. A maximum of one thousand validator nodes are allowed at a time.
There are other fee-less cryptocurrencies like Iota and EOS, which can be seen as direct competition in that regard. The Nano ecosystem sounds quite ideal for merchant transactions in many ways, and it seems odd that it has not gained the adoption it deserves. Part of this might be due to their lack of marketing or not ever being seen at the top of the crypto news cycle with new features. Regardless, Nano is a much-respected crypto that deserves everyone’s attention.
NANO/BTC weekly chart going back as far as March 2017 sees it take a crazy spike up over 25,000% in the late 2017 crypto bubble. The highs hit in January 2018 with steep downward movements till August 2018 where a more gradual bear market started.
As we stay on the weekly NANO/BTC chart and zoom into the most recent trendlines, we see that it continues to be bearish on this longer time frame with possible strong support above 700 Satoshi. In the early 2021 crypto bull run, it gained 1100% from the lows in December 2020 to the highs in May 2021. Since it ran well over the top resistance line and quickly returned, shall it also get a moment below the current support line?
On this following chart on the weekly with NANO/USD, let’s look at the all-time highs and lows. January 2017, NANO hit $42.92, and in March 2020, the low was $0.26 for a loss of -99%. Holding onto an asset without any risk management in place can ruin your portfolio. Sure this is an extreme example since most do not buy at the top or sell at the bottom, but it is a reminder to put some thought into your investments.
This YouTube user has an optimistic view of where NANO is going in Q4. It is worth a listen if you hold NANO or are planning to buy some soon.
The Other Trend Lines
So what is up with Bitcoin and the current downward trend we are in? On September 8th we went above $52,800. Since then BTC has been getting lower highs and lower lows. The 128 day moving average is just above $40,000 and could act as good support. Also the previous highs and lows can be a support band that ranges from $37,500-$40,500. Look for a break above the current downward resistance line and the green line (200 day moving average) to start a new trend and maybe a trend change.
ETH/BTC over five months looks to be going sideways, and over the last three months is in a nice upward trend. Will ETH have another 15%+ bounce from here back to the top of the trend lines? So far, over the last 5 to 6 days, the support has been holding.
This portfolio section gives you an idea of what sort of return you can get when investing in crypto assets.
BTC/USD FUND is up 300% since October 1st, 2020. Since this is a long-term holding, it is best kept in cold wallet storage or a safe custody solution. We continue to see a long-term hold position as our best stable alternative. This past week bitcoin has been ranging between $39,600 and $45,200 USD in value.
FUND 3 started on November 16, 2020, with $1000 USD in value and was invested into BTC, LTC, ETH, and ADA. The total amount of BTC value from the four coins has had a gain of 146% since the start. The USD fund value is up 537% since the beginning. We will hold these positions to see how well it does against our BTC-only portfolio. LTC is down -19% against BTC. ETH is up 153% against BTC since the start. ADA has a gain of 711% against BTC and 1977% to USD.
BLWX Fund started on February 22, 2021. They all are assets we have profiled in the last few months, and we are interested in how they will perform in 2021 against BTC. BAT has a gain of 43% against BTC since the start; LINK is down -3%, WAVES is up 168%, XMR is up 32%. Overall, against BTC, the fund is up 60% and 25% against USD.
Overall, Bitcoin should be your first choice as an investment in crypto, though many digital assets can give you amazing gains if you manage your risk. As a long-term investor, we see it as our largest portfolio investment. If you are a day trader, there are many great assets to put on your watch list. Look through our previous newsletters to find some.
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MadCapX research newsletter is written by the Madbyte Team. You can learn more about Madbyte and MadCapX on our websites.
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Disclaimer: Nothing in this newsletter is intended to serve as financial advice. Therefore, do your own research and due diligence before applying any of the techniques highlighted in this post. Any risks or trades based on this newsletter are committed at your own risk.