Blocks and Blockchain
NXT is based on a 100% Proof-of-Stake model. Contrary to other cryptocurrencies that are based on Proof-of-Work (like Bitcoin and the vast majority of its derivatives) where blocks are mined and the coins are obtained as a reward, Proof-of-Stake systems require to have all the coins available from the genesis block. No new coins can be created afterwards, what this implies is that the notion of "mining" on a cryptocurrency like NXT makes no sense. The equivalent of the "mining" process in a Proof-of-Stake system is what in NXT is called "forging": as the coins move around, forgers process these transactions and all the transaction fees associated are given to the account that manages to generate the block. Blocks are generated, on average, every 60 seconds. The lack of high performance hardware and the way they differ shows that the parallelism among mining and forging is very weak, the system employed by NXT is more similar to an "interest" your coins gain. As the number of transactions and the value of NXT grow, the rewards of forging could become substantial, but it is nonetheless a process that rewards in the long term.
More details on the forging process and how it works can be found in the page devoted to forging.
- fields + bytes
2 The Genesis Block
The Genesis Block is the name given to the first block of the blockchain. Given what said about the 100% Proof-of-Stake model, all the 1'000'000'000 NXT were available within the Genesis Block and got distributed to the initial stakeholders.
The problems related to the initial distribution of these coins are a heated topic, where reasonable arguments and accusations are often embedded with misconception. Claims of unfairness thrown at NXT rarely get applied, as they should, to so-called "fair distributions". NXT is young and despite the initial distribution, things have improved considerably in the few months of its existence.
If you want to make up your own mind on the subject, we invite you to read the dedicated section.
The following table shows the information concerning the Genesis Block.
|Genesis block ID||2680262203532249785|
|Genesis block generator||1739068987193023818||The Genesis Account|
|Total amount||1'000'000'000 NXT|
As can be seen on the file
nxt / src / java / nxt / Genesis.java or using any blockchain explorer, the first coins were distributed among 73 initial stakeholders, that paid BTC to get a corresponding portion of the billion NXT. In the end, the initial distribution looked like this:
2.1 Unclaimed Funds
- list of accounts and amount of funds
- how they got used
2.2 The Distribution Problem
3 The Genesis Account
The Genesis Account is a special account. It generated the first block, the Genesis Block, and distributed the 1'000'000'000 NXT. This account can be accessed by anybody, the passphrase is:
It was a bright cold day in April, and the clocks were striking thirteen.
and it unlocks the account number:
The passphrase is the opening line to George Orwell's book '1984'. It is not the only reference (see for example the timestamp of the genesis block), plenty more are part of the "lore" of NXT and its enigmatic creator BCNext.
The uniqueness of the Genesis Account lies on the fact it has negative balance: -1'000'000'000 NXT.
For every NXT in circulation, there exists an AntiNXT counterpart on the Genesis Account.
Any amount of NXT sent to the genesis account combines with the corresponding AntiNXT and gets destroyed (1 NXT + 1 AntiNXT = 0). This process is irreversible, once destroyed your coins can no longer be retrieved. This explains why the Genesis Account currently owns little less than 1'000'000'000 AntiNXT, someone destroyed those coins.
The same does not applie to Assets, there is no counterpart. By transferring Assets to the Genesis Account, however, the same effect is achieved. Even though they will not "disappear", they are nonetheless unavailable: the negative balance does not allow to transfer them back (or elsewhere). Even by sending 100% of the tokens, the asset itself will continue to exist but it will be, clearly, useless.