Two developers that had left their work at one of the biggest names in IT was employing testers from around the world. They wanted to solve the payment issue they faced using smart contracts, sadly the costs were too high. They developed a chain that aims to combat this and give a stronger alternative to Ethereum.
Background
Near was created by two former Google employees, Alex Skidanov and Illia Polosukhin. They left Google to create their own start up, NEAR AI, which focused on machine learning. They hired people to commit testing and get compensated for it, they had a number shy over 100 testers trying out their different projects. They charged them for each test, some which could take just a minute, and compensating 100 people working from around the globe with different currency was nothing short of madness.
The two developers looked into using Crypto facilitate the payments, but were quickly shut down due to how the fees were set up. They were looking into using smart contracts to automatically compensate the testers but several small payments of under a dollar was feasible. Instead they decided to try and set up their own blockchain to solve this.
Near first saw the first stages of development in 2017, and the launch of the chain was in 2020. The first ICO for NEAR sold out in just under 2 hours, 1 billion NEAR was minted at launch and is slowly making its way onto the market through developer grants and rewards. The chain started by being heavily centralized and managed by the two developers, until they felt it was safe and stable enough to let go of control. It is still proceeding through these phases, just recently getting its PoS system up and running. Today the chain is being managed by more than 40 employees.
Network
Near operates using a proof-of-stake smart contract where validators work together to verify transactions. A smaller amount of nodes performing transactions speeds up the speed of the network, but that is only half of the reason behind NEAR's nightshade protocol performance. The network also operates in different shards that can be added fairly seamlessly and split up the network load. The problem with splitting the network into shards is that network security isn't as strong as the nodes are split amongst the shards and attacking a single shard is easier than a focused network. NEAR solves this with function of hidden validators & Fishermen nodes.
Hidden validators get assigned a shard and perform validations on that shard, which is only known to that validator. Fishermen nodes operate for free and that routinely check verified blocks for faulty blocks or malicious behavior from nodes. Active nodes can have their NEAR supply slashed if they falsely verify a transaction.
Use cases
NEAR functions for payments and smart contracts created in RUST, you can create smart contracts and run them on chain by paying NEAR. Any Dapps or contracts running on-chain can have their data stored on-chain if the creators of the smart contract hold a sufficient amount of NEAR. Users can stake their NEAR to help keep the network secure, interact with Dapps or participate in governance.
Near today
The chain started out very centralized with the developers having full control of the chain as new features was rolling out. The chain has been slowly getting the promised updates to allow it to be self sustaining as there have been more users and nodes using it. The Proof-of-Stake change has been released so that users can participate in on-chain governance and security. This chain is performing very well and is seeing it become more decentralized with time. In fact, this month (as of writing) there are going to be 4 shards launching and splitting up the network load. The network is still looking for its place in the crypto world, I'm curios to see where it lands.
Pros:
- High speed and low fees
- Solid PoS consensus method
Cons:
- Their EIP-1159 solution
- Smart contract structuring can be have problems scaling.