Nimiq is a unique cryptocurrency which is championing the idea of ‘Crypto for Good’ – and announcing an innovative new ‘Pledge 2%’ model which they hope other cryptocurrencies adopt (in much the same way Silicon Valley adopted the Pledge 1% model).
Afdhel Aziz from Forbes caught up with co-creators Philipp von Styp-Rekowsky and Elion Chin to find out more.
Afdhel Aziz: Elion, Philipp, welcome. Please tell us what exactly Nimiq is?
Elion Chin: Nimiq is “Crypto for Humans”, an open-source, censorship-resistant cryptocurrency (NIM) that focuses on ease-of-use, while applying state of the art blockchain research to maximize transaction speed and minimize transaction cost. The decentralized payment network was developed cross-platform for modern desktop or mobile browsers, enabling users to participate with minimal barriers to entry. The fact that Nimiq requires no software installation and continuously looks to maximize simplicity for its interfaces, guarantees an exceptional user experience.
Aziz: How would you articulate the purpose and philosophy of Nimiq? What do you mean by Crypto for Humans?
Philipp von Styp-Rekowsky: The team identified that solving scalability and user-friendliness without taking centralized shortcuts is the main challenge in the true-to-its-spirit crypto space. The fundamental five pillars of crypto are well established (permissionless, borderless, neutral, decentralized, verifiable). Nimiq understands that these fundamental pillars—while key to addressing the problems at the core of a centralized monetary system—are not sufficient for a future-proof, globally adopted cryptocurrency and peer-to-peer payment system. While maintaining those fundamentals, there are key additional human and societal elements that are required for a global and sustainable adoption of a cryptocurrency. It needs to be:
1. Easy to use and practical
2. Fast and scalable
3. Low in transaction cost
4. Ecological and environmentally sustainable
5. Social impact driven, charitable
Everything we do to build the “Crypto for Humans” happens with these additional human and societal requirements in mind.
Aziz: Let’s talk about how it manifests in your innovation with the web browser?
Chin: In 2016, the idea to make cryptocurrency more accessible triggered an attempt to build a browser-based Simple Payment Verification client (or “node”) for Bitcoin. Realizing that this was impossible without additional intermediaries or bridges, we set out to build a browser-centric blockchain protocol from scratch in order to minimize the barriers to entry for everyday people and establish an installation-free, high-performance peer-to-peer blockchain network.
Designing a cryptocurrency that is native to the Internet allows for exceptionally smooth payment related experiences when using desktop or mobile browser interfaces. Kindhumans was the first to integrate our Crypto-Checkout that automatically recognizes your browser-wallet when paying with NIM in their online store. We invented “Cashlinks” that allow sending NIM embedded in a simple web-link via your favorite messaging app or email. With cryptopayment.link we provide freelancers, small businesses or actually just anyone with the easiest-to-use tool to make a simple payment request to earn a portion of their billings in crypto. All of this without installing anything or adding browser extensions.
Aziz: You’re also tackling the sustainability problem of crypto by moving to a staking model – can you please explain how this makes things better?
von Styp-Rekowsky: Today, being sustainable and environmentally friendly is an important success factor for services and products of all kinds. These factors are even more important for Nimiq, as being closely aligned with both environment and society is a vital/fundamental part of our project’s DNA and its Costa Rican roots. Blockchains like Bitcoin that follow the traditional "proof-of-work" principle (a method of achieving consensus in a decentralized network of computers) are known for consuming large amounts of energy, sometimes as much as an entire nation. Nimiq works on a fundamentally different approach to achieve this necessary consensus, while also creating an additional benefit for our users: by introducing it’s own version of the 'proof-of-stake' consensus method, our upcoming blockchain upgrade will no longer require large amounts of energy, while achieving high transaction throughput speed without compromising on decentralization. Thanks to Nimiq 2.0, all users will be able to easily contribute to securing the network with the funds they hold and earn NIM rewards in return.
Aziz: Today you’re announcing the Pledge 2% idea which is an open-source model whereby cryptocurrencies can set aside 2% of their coins for charity – can you please explain how this works?
Chin: Yes indeed, as far as we know this is the first time that such pledge is reported on independently for any crypto project and we hope to lead the way with Nimiq for a new trend. As part of our mission to add social/charitable impact components, Nimiq at creation assigned 2% of its total maximum coin supply to the ImpactX Foundation, a registered 501c3 set up specifically for this purpose. This amounts to 420 million NIM which are bound in a vesting type smart contract which releases portions periodically over the course of 10 years. This encourages taking a longer-term view for the use of these funds in line with growth and reach of the Nimiq project in time. In its early stage, the foundation board decides on which social or ecological impact efforts portions of funds may be allocated to. With maturing of the efforts and value to give away, the plan is to switch to a governance model that will allow voting by the Nimiq community on allocation and projects.
Aziz: And you’ve already made a first donation to charity:water is that correct?
von Styp-Rekowsky: Correct. Even though it is not yet optimal to make use of ImpactX’ NIM funds as we are still building out Nimiq and its value, in June we came across a time sensitive opportunity: charity:water was publishing its “Bitcoin Trust”which would take BTC donations and guarantee holding them until 2025 for a chance to multiply impact manifold. The charity’s 100% Model reputation and this particular crypto donation “hodl” idea resonated with us and made it a marker for the Nimiq charity. To project the ‘cost’ of the donation into the future, ImpactX took out a USD loan to acquire the donated BTC.
Aziz: That’s awesome. What advice do you have for other crypto founders on how to scale their impact?
Chin: When you are in the position to pursue the creation of a useful crypto currency (or token), it just appears profoundly relevant to consider tying into it a verifiable commitment to giving back. We are dealing with growing ecological challenges (water pollution, deforestation, etc) and we live in an increasingly divided world (access to the monetary system, education, health care, etc). Social media provides us with more insights into disparities and increased awareness provides an opportunity for crypto projects to align their purpose and emotional connection with the generation that cares. Notably there are exceptional thought leaders like Sam Bankman-Fried at FTX exchange who determined that “1% of all net fees will be donated to the world’s most effective charities”. Earlier this year he recruited accomplished Gisele Bündchen to take on the role of FTX’s environmental and social-initiatives adviser to oversee the allocation. Now imagine the combined impact the industry could have if every crypto project was to adopt a “Pledge 2%” of its own coin supply! As founders you can add an important and meaningful “why” to the list of reasons you are pursuing success with your project.
Aziz: Where can people go to find out more details?
von Styp-Rekowsky: Nimiq published a blog to provide some ideas and guidelines for crypto projects that are interested in implementing their own version of “Pledge 2%”. Specifically, it describes in more detail how Nimiq went about implementing its commitment all the way back to its Genesis Block.