Block Lattice (Nano)

A block lattice is the data structure used by Nano, a cryptocurrency formerly known as RaiBlocks, in which every account has its own blockchain rather than all transactions sharing a single chain. Each account's chain records only that account's balance changes, and only its owner can add blocks to it. A transfer between two accounts is split into two parts: a send block on the sender's chain and a matching receive block on the recipient's chain. The combined set of all these account chains is the lattice.

The design aims to make transactions fast and free of fees, since accounts can update their own chains in parallel without waiting for miners to bundle transactions into shared blocks. It is a form of directed acyclic graph structure, related to other DAG-based ledgers such as IOTA's Tangle. Nano, whose ticker is XNO, has a fixed supply that was fully distributed early in its history, so there is no mining or ongoing issuance.

Imagine a village where, instead of one shared ledger kept by a clerk, each household keeps its own notebook of what it has paid and received. Only you can write in your notebook. When you pay a neighbour, you write "sent 5 coins to the baker" in yours, and the baker writes "received 5 coins from you" in theirs. Everyone can read every notebook, so cheating is easy to spot.

Because households do not need to wait for a clerk to update a single big book, payments can be recorded almost instantly and many can happen at once. The challenge is what to do if someone tries to write two contradictory entries in their notebook. In Nano, trusted village representatives vote on which entry is genuine.

Each Nano account is controlled by a private key and has its own chain of blocks. Since a 2019 update, Nano uses a single "state block" type that records the account's new balance, its representative and a link to the related send or receive. A transaction generally works as follows:

1. Send. The sender creates a block on their own chain reducing their balance and naming the recipient.
2. Pending. The amount becomes receivable for the recipient.
3. Receive. The recipient's wallet creates a block on their chain claiming the funds, increasing their balance.

Each block carries a small proof of work, computed by the user's device, which acts as an anti-spam measure instead of a fee. Because blocks are signed with the account's private key, only the owner can extend their own chain.

Since every account writes its own chain, conflicts arise only when an owner signs two different blocks with the same predecessor, a form of double spending. Nano resolves these through open representative voting. Each account chooses a representative, and representatives' voting weight equals the total balance delegated to them. Representatives vote on conflicting blocks, and the one that gathers a supermajority of online voting weight is confirmed. This system is a variant of delegated proof of stake, though representatives receive no reward and cannot spend delegated funds. Confirmations usually take well under a second. Like other stake-weighted systems, its security depends on representatives holding most of the voting weight acting honestly, a property measured by the Nakamoto coefficient.

Nano was created by Colin LeMahieu, who began work on RaiBlocks in 2014 and published a whitepaper in late 2017. Tokens were distributed for free through a faucet that required users to solve captchas, and the supply was capped at about 133 million units. In January 2018 the project rebranded as Nano during the crypto market boom. Shortly afterwards, in February 2018, the Italian exchange BitGrail reported the loss of about 17 million Nano, a hack that led to legal proceedings in Italy and damaged confidence in the project. The ticker changed from NANO to XNO in 2021. Development is coordinated by the Nano Foundation. Nano is traded on a number of cryptocurrency exchanges, and its fee-free design has made it a recurring example in debates about scaling blockchains for everyday payments.

Supporters highlight near-instant settlement, no transaction fees and low energy use, which make Nano attractive for small payments and micropayments. Critics point to several issues. Without fees, the network relies on proof of work and prioritisation to resist spam, and it suffered a prolonged spam attack in 2021 that caused delays until changes were made. Representatives have no direct financial reward, raising questions about long-term incentives. Voting weight has at times been concentrated among a few large representatives, including exchanges. Each account having its own chain also makes features such as complex smart contracts difficult. As with any small-cap coin, the market for XNO is thin and prices are highly volatile.

• Nano Foundation
• Nano documentation