Three Mining Channels

Nexus features a unique block creation system where CPU, GPU, and Proof-of-Stake (PoS) miners work concurrently to mine every block. The three consensus mechanisms are known as the Prime Channel, the Hashing Channel, and the Proof of Stake Channel. The consensus is balanced between all three channels, as it is based on collective chain weight, providing higher resistance to 51% attacks compared to single algorithm blockchains

Prime Channel

The Prime Channel is a Proof-of-Work consensus mechanism that uses 308-digit dense prime clusters. This makes the Prime Channel more ASIC resistant than the usual hash mining. The Prime Channel can be mined using CPUs.

Hashing Channel

This is another Proof-of-Work channel, but it uses Hashcash as its mining algorithm. This has miners searching for SHA-3 hashes, which is similar to the Bitcoin SHA-256 hashes, but four times the size of the Bitcoin block hashes. The Hashing Channel can be mined with a GPU.

Proof of Stake Channel

The final channel is a reputation-based staking consensus method where users mint new NXS by holding and staking the coins that they hold. Four attributes determine the rate of return:

Stake Rate – There is an annual interest rate applied to holdings, which begins at 0.5% annually and increases over 12 months with a cap set at 3.0% annualized returns.

Trust Weight – Each node has a trust metric which is initialized at 5.0%, and grows with time as the node continually stakes on the network.

Block Weight – This attribute resets to 0% each time a user wins a stake. It then slowly climbs to 100% over 72-hours. Once this weight reaches 100%, the trust key begins the process of decay, which is at a rate of 3x the time it’s been since the user last staked. This ensures that nodes that consistently contribute to the security of the network are rewarded.

Stake Weight – This is the average of the trust weight and block weight. The higher this value is, the more likely it is to win a stake.

Three Dimensional Chain

As the protocol is further developed, these three forms of consensus will become the three layers of the Three Dimensional Chain (3DC). The team claims that the 3DC will reduce miner centralization, and will be more efficient in on-chain scaling. The 3DC will transform the ledger into a multi-layered processing system, in order to scale securely and maintain a high degree of decentralization. It is a promising candidate for solving the ‘Blockchain Trilemma’, an opinion that only two of the three qualities, Security, Decentralization, and Scalability, are achievable concurrently. It chains together cryptographic primitives into a multi-dimensional immutable object and has three core dimensions: pBFT + reputation channels (X), immutability or authenticity (Y), and time (Z). The upgrades of Amine and Obsidian will add another layer of transaction processing ‘L2’ and ‘L3’, to the base layer ‘L1’.

Signature Chains

Many blockchains have been built using the UTXO transaction-based system. Nexus has moved away from this model and has implemented an architecture named Signature Chains. When a user makes a transaction, it is chained to the users' previous transactions, creating a chain of signatures. Alternatively, when a user transfers an asset to another user, this is again recorded on their Signature Chain. Signature Chains are comparable to a personal blockchain and provide the foundation for features such as Managing Assets, whilst maintaining pseudo-anonymity for privacy.

According to Nexus, this type of architecture offers higher scaling potential, as only one signature needs to be verified per transaction. Comparing a single UTXO transaction could contain 1000’s of inputs, to transact even a small amount of coins.

Signature Chains also provide a decentralized login system. This technology still uses public-key cryptography, but rather than maintaining the keys on disk or the cloud, they are stored in ‘mathematical hyperspace’. Signature Chains support the Nexus Wallet, making it accessible from any computer simply by logging in with your credentials (username, password, and pin). This removes the need for a wallet.dat file to access private keys, the inconvenience of having to make regular wallet backups, loss or theft of hard drives, and the risk of sending funds to unspendable addresses. 

Signature chains are considered a quantum-resistant signature scheme, as they use a one-time signature (OTS) that signs one message per key. By obfuscating keys and sensitive data through hash functions, and by updating the key after every transaction, this signature scheme reduces the window of quantum vulnerability to the period between making a transaction and the inclusion of the transaction in the ledger.

Through their research Nexus found that most projects built on Ethereum do not use the Ethereum Virtual Machine (EVM) for its turing completeness, i.e. its ability to do universal computation. What businesses require from blockchain technology are contracts that function more like real-world actions between people, with the addition of an immutable data layer capable of managing rights and ownership. Therefore, Nexus developed an easily accessible and versatile Software Stack where data can be operated on, its ownership transferred between users, and whereby conditions define the behavior of actions. The design not only provides numerous ready-made contract functionalities, but it is also able to scale with the growing demand for smart contracts.

Software Stack

The Nexus architecture is designed as a seven-layered software stack that includes a 64-bit register-based contract engine. Each layer is designated to carry out a specialized process independently of one another, providing additional functionality to the existing Internet stack, the OSI model.

Register-Based Virtual Machine

A register is the fastest storage medium inside your computer’s CPU (Central Processing Unit), that the processor uses to cache data in-between calculations. The Nexus Contract engine follows this architecture as an improvement to other blockchain-powered virtual machines such as the EVM (Ethereum Virtual Machine) that still use the older stack architecture. The improved efficiency gained through the use of registers makes developing on Nexus not only easier but also much more efficient and scalable.

Conditional Contracts

A basic Nexus contract is comprised of three layers: data (Registers), programmable actions (Operations), and accounts (Signature Chains). Together, these layers verify the information of a system or DApp, following a logic that closely relates to agreements and contracts between people.

Nexus has followed this approach for the primary reason that smart contracts cannot be realized with existing language designs, they require a new architecture. This is in direct contrast to EOS’s use of Web Assembly (WASM), which was designed for web development rather than building secure financial applications.

Conditional Contracts allow a user to set requirements in order for a contract to be fulfilled, such as contract time expiration, the decentralized exchange of an asset, or a non-custodial escrow services.

Low-Level Libraries

The Lower Level Library (LLL) is a high-performance ‘Template Library’ designed to power emerging-web technologies. The LLL is simple, powerful, and lightweight. It contains three main components: Cryptography (LLC), Database (LLD), and Protocol (LLP).

The Lower Level Database (LLD) is Nexus’ modular storage engine, which according to tests done by Nexus, is capable of outperforming most existing embedded database engines, achieving 100,000 writes and reads to disk in 0.33 seconds – rivaling Google’s LevelDB.

The Lower Level Protocol (LLP) is a core component of the Network Layer, a light and fast protocol that allows developers to customize their packet design and message interpretation. It gains scalability through simplicity and is capable of managing a large number of simultaneous connections.

The Lower Level Cryptography (LLC) is a light library that contains many useful cryptographic functions such as Post-Quantum Cryptography, AES, and Argon2.

Quantum Resistance

Another aspect that makes Nexus different from other blockchains is the resistance to quantum computers. Signature Chains enhance the security of existing DSA (Digital Signature Algorithm), by hashing the public key until it is used while changing the key pair with every transaction. Nexus has also integrated the following cryptographic functions: FALCON (a second-round contender for the NIST Post-Quantum cryptography competition), Argon2 (winner of the password hashing competition, and a superior alternative to S-Crypt or B-Crypt), and Keccak (winner of the SHA3 competition). Nexus, in theory, belongs to one of the few cryptocurrencies that are resistant to a hypothetical quantum attack.

LISP Implementation

Nexus has implemented the LISP (Locator Identity Separation Protocol) network architecture, which allows the Nexus blockchain to run over a secure open overlay.  LISP was created by Dino Farinacci, in partnership with several Cisco engineers, and is being developed and standardized by the Internet Engineering Task Force (IETF).

With LISP, the user receives an EID (end-point ID), which is a static identity. The EID becomes the “trust key” for a user’s identity. This EID is like an address that remains assigned to a user and is independent of how and where they connect to the network.

As LISP provides a direct route for information to travel, there is no risk of intercepting data packets in the middle of information transfer, giving privacy for transactions as well. The integration of LISP also gives Nexus a scaling advantage by selecting the shortest paths between locations of nodes, allowing them to be located anywhere on the Internet.

NXS is the currency of the Nexus network. Besides powering the network, NXS is used for staking through the holdings channel. Nexus recommends a stake of at least 1,000 NXS to be worthwhile. Rewards depend on the amount staked and contributed to network activity.

As the Nexus ecosystem develops, the token functionality will extend to power applications deployed on the blockchain.

Unlike Bitcoin and other more conventional blockchains, the transaction fees for NXS are burned and removed from the available supply of NXS, counter-balancing the annual supply inflation.