Brief introduction to Nimiq 2.0 and cryptocurrency

Reading Time: 3 minutes ;  Published: 6 months ago on January 22, 2021

What is cryptocurrency?

Cryptocurrency is digital currency that is created on a computer, and it's used as the means of payment for transactions on blockchain.

So that neither coins nor transactions can be forged, those are encrypted, hence the name cryptocurrency.

What is blockchain?

All transactions made in blockchain are placed in a special arrangement of data blocks that resembles a chain.

Tens or even hundreds of transactions made by users of blockchain are placed in blocks, together with the order in which each block is added to the chain, and those are encrypted and added to the blockchain by miners or validators.

What are miners and validators?

Those are computers known as nodes that run a special program responsable for encrypting the blocks that are added to the blockchain.

The program connects to the Internet and search for all pending transactions.

Once it manages to add and encrypt all pending transactions in a block, the owner of the node is rewarded with cryptocurrency that can be used to purchase goods and services, and then the newly created block is added to the blockchain.

What's the difference between miners and validators?

Miners encrypt the blocks using computationally expensive mathematical operations that require a lot of energy.

On the other hand, validators perform a different type of encryption that requires locking their coins as stake in the blockchain to guarantee the validity of the process.

The more computational power, or the bigger the stake, the more likely it is that a block can be mined or validated by a node to receive the corresponding rewards.

Blockchains made only of miner nodes are known as a proof-of-work blockchains, while those known as proof-of-stake blockchains are made only of validator nodes.

But there are also hybrid blockchains made of both types of nodes.

What is Nimiq?

Nimiq, also known as NIM, is the easiest to use cryptocurrency there is, since it doesn't require a specialized program to carry out transactions, and can be used directly from a web browser.

Nimiq started as a proof-of-work blockchain, but with the upgrade to version 2.0, Nimiq will change to proof-of-stake.

The new blockchain will require considerably less energy to work and those who want to participate as validators can enable this functionality from the wallet and won't need to be connected to the Internet at all times to receive rewards.

All coins from the previous version of the Nimiq blockchain will be automatically transferred to the new Nimiq 2.0 blockchain so that users won't have to perform any manual conversion process.

With Nimiq 2.0 the transaction throughput will increase to over one thousand transactions per second and the validation process for each block will be less than a second.

Why should I use Nimiq?

NIMs can be exchanged for other cryptocurrencies, such as Bitcoin or Ethereum, or traditional currencies like the Dollar or Euro.

Unlike other cryptocurrencies, NIMs are much easier to use, since everything is done directly from the web browser, even when using a smartphone to make transactions.

To use your NIM you don't need to have a bank account or move bags of cash, and neither the Nimiq blockchain nor your NIMs depend on the issuance of any bank or government, which makes them more stable against the Dollar and Euro and valuable compared to local currencies in most countries.

Where to find more information about Nimiq?

For more information, please visit https://nimiq.com

At the bottom on the web page you will find the links to the official blog, the forum, and social media with community members willing to collaborate and provide information.