Nervos Network Hashrate has gone parabolic
(and why that isn’t expect to stop)
** I am making a headline revision after purported scam site offering TODDMiners for Nervos mining. There are always sights trying to impersonate real mining equipment made by Todek so always be careful looking at mining equipment sights through google search
Nervos Network uses a unique and novel hash function and variation of proof of work nakamoto consensus called Eaglesong. “proof-of-work function that could not have been the subject of premature optimization because it is new.” as specified by Alan Szepieniec, cryptography researcher at Nervos.
Nervos Broke out of its 4 month static period post-mainnet launch of hashrate, where we see it range from 175 to 280 Terahashes per second. around March 7th that all changed in an unprecedented time in the broader cryptocurrency market. How unprecedented was this massive infrastructure boost in contextual terms?
Well for starters, this parabolic inflection point (March 7) is remarkably on the same exact day the cryptocurrency market took an absolute nosedive, and capitulated harder than we’ve seen in months.
In the same time period of time, we saw the Bitcoin mining difficulty capitulate the hardest it has since 2011. The Bitcoin Halving 2020 is almost a singular month away, and less cost efficient miners are exiting in anticipation of decreased returns. What this shows is heavy interest and commitment to the Nervos growth track and that it is unwavering to macroeconomic trends in the space; signaling a healthy, thriving, quiet-giant like internal economy.
So what gives? Why is this project suddenly outpacing the mining competition at breakneck speeds? Well, there are truthful answers all ranging from timing, to design philosophy, to ASICs. Let's observe the qualities of Nervos to see why it is revitalizing the mining economy.
1. recent release mining rigs (SOLD OUT) (TODD Miner C1 + Antminerk5)
So first we’ll observe the most obvious and deterministic cause which was the obvious demand for occupying Nervos infrastructure. It’s hard to imagine how asynchronistic the hype in mining markets is in translation to the social hype around a project. You will see orders of magnitude more social engagement for projects with very frail mining ecosystems, while a project like nervos can quietly leapfrog to the top 10 in Proof of work mining with a brand new hash function. Hashpower is undeniably the holy grail in network infrastructure, as even the most mature networks still struggle to stimulate a robust mining economy.
Noteworthy: Bitmain Released a Nervos Eaglesong ASIC miner on their Chinese website ( https://shop.bitmain.com.cn), and all 2,700 units sold out in 5 minutes according to a very enthusiastic and vulgar Ebay mining salesman:
https://www.ebay.com/itm/Antminer-K5-Eaglesong-BITMAIN-ASIC-Over-1TH-s-CKB-No-Tariffs-Ships-From-USA-/174207755288
Fun Fact: “In the blockchain mining area, Bitmain has shipped billions of ASICs, accounting for 75% of the global market” https://www.bitmain.com/about
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Store of value design philosophy: There are many resources available about store of value and proof of work mining, and learning about Nervos will turn you into a seasoned expert on both. Only a project with a proof-of-work layer one public blockchain, designed for layer 2 computation, and economically balanced to grow in security->rewards->value as the value on top of the network grows. This is anticipated to be a high value asset, and its mining issuance is sustainable without debasing the holdings of long term value-parkers, or storage users.
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100 million reasons from institutions and investors: Nervos Network secured $28 million in investments from a number of blockchain-related enterprises in a private round of fundraising in July 2019, during the peak of the 2019 summer bull-run, in order to build their blockchain. Nervos then acquired $72 million, $5 million more than anticipated, from its public offering. Needless to say, Nervos is on the back-end of a 2 year bear market, and its treasury has to be absolutely flush with cash and now has all the momentum in the world. It has a massive leg up over 95% of the market which took on the full brute of the bear market, and was where most of the liquidity was exhausted.
Noteworthy: Major state-owned bank CMBI intends to use Nervos to create fintech applications for retail and institutional clients.
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Proof of work philosophy, willy woo on (utility is a red herring/store of value): As on-chain analytics guru, Willy Woo explains here: https://woobull.com/the-importance-of-store-of-value-properties/, Store of value properties are the real crown jewel in public blockchain valuation. A store of value network cannot suffer from a tragedy of the commons, luckily Nervos network had a designed State-based rent mechanism so users who occupy state incur an inherent cost that benefits the miners to secure that state (secure that value). Proof of Work remains to this day to be the standard for settlement layer 1 blockchains. Proof of Work is perfect for store of value blockchains
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One of the largest private blockchains in China ties
If you thought there weren't enough bread crumbs to go around for crypto twitter, this one is the juiciest, fattest and most palatable in my opinion. Co-founder of Nervos and former Ethereum Dev, Jan Xie, is also the CEO of Cryptape. Cryptape is an open source, private blockchain solution platform. Built way back in 2016, it proved to be a highly valuable solutions provider across the enterprise industry. Because some of the brains behind Nervos had experience with highly scalable private blockchain throughput, they have unique insight on the state explosion, or post scalability problem in public blockchains. Its advisors include the likes of IC3 Co-director, Elaine Shi, and Ethereum founder, Vitalik Buterin. It is also part of the Linux Foundation and the RISC-V foundation.
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Miner Design Balance:
Finally, at the crown, we have the pro-miner design. As mentioned in section 2, Nervos CKB has miners interests economically and philosophically in deep consideration. As described in its Nervos docs, “Nervos CKB adopts an improved Nakamoto Consensus algorithm called NC-Max. This algorithm uses the blockchain's orphan block rate as an on-chain network bandwidth status indicator and dynamically adjusts block interval to maximize network bandwidth usage and also makes selfish mining unprofitable”. The Cell model allows for User Defined Tokens value to be captured directly by the native CKB token in State Storage so the miners are always appropriately compensated for securing the total network value. Nervos has a regular finite emission, similar to Bitcoin, but it also has a tail emission to ensure that Miners incentives are always aligned, and miners can expect long term compensation. It is clear that Nervos has considered the long term participation of mining nodes in a public blockchain economy and assuring that their resources aren’t being abused or inefficiently allocated.
Conclusion: Nervos has been a promising coin from the start and its future only looks brighter. It is the first public proof of work settlement blockchain with an economically sound state storage solution that is globally and socially scalable for preserving common knowledge. This magnitude leap in mining capacity is only the beginning to a mining infrastructural behemoth. By the looks of my blog, it is pretty obvious I am bullish on Nervos. I found it as a missing link somewhere between the Philosophies of Bitcoin and Ethereum. I see a near future where Nervos has a robust community, good social engagement, and crypto twitter shills and crypto youtube shills will pick up on it soon enough (they are usually slow in the head so please be patient). I believe this as a self fulfilling process, now that the project and ecosystem is appropriately bootstrapped, it is only now beginning a potentially eternal positive feedback loop as it trends into a positive economic state.
For more understanding of Nervos please view some the following perspectives:
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https://github.com/nervosnetwork/rfcs/blob/master/rfcs/0002-ckb/0002-ckb.md
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https://medium.com/nervosnetwork/blockchain-and-common-knowledge-c07957374d9a
