NCL was created as a Cryptocurrency 4.0 response to Crytocurrency World. NCL adopts features that have proved to work well in Bitcoin,Ethereum,and NXT. addresses aspects that are cause for concern. This appendix addresses issues with the blockchain protocol and network that are mitigated by NCL technology.
The Bitcoin blockchain is the complete sequential collection of generated data blocks containing the electronic ledger book for all Bitcoin transactions occurring since its launch in January 2009. Four years later in January 2013, the size of the Bitcoin blockchain stood at 4 gigabytes (GB) about the amount of data required to store a two hour movie on a DVD disk. Eighteen months later, in July 2014, the size of the Bitcoin blockchain had swelled by almost a factor of five to 19 gigabytes (GB). The Bitcoin blockchain is undergoing exponential growth and modifications to the original Bitcoin protocol will be required to deal with it.
NCL block size is currently capped at 32KB. Since its inception, almost 181,000 blocks have been generated and the blockchain takes up 390MB of space. In the future, NCL will implement a Blockchain Pruning feature (still under discussion) that will reduce blockchain size by selectively removing information on permanent blocks, and by deleting other non-persistent data, such as Arbitrary Messages.
Transactions per Day
In late 2013, the number of transactions being processed on the Bitcoin network was peaking at 70,000 per day, which is about 0.8 transactions per second (tps). The current Bitcoin standard block size of one megabyte, generated every ten minutes (on average) by full node clients, limits the maximum capacity of the current Bitcoin network to a about 7 tps. Compare this with the VISA network’s capacity to handle 10,000 tps and you will see that Bitcoin cannot compete as it exists today. Increasing public use of the Bitcoin system will cause Bitcoin to soon hit its transaction-per-day limit and halt further growth. To forestall this, Bitcoin software developers are working on the creation of thin clients that employ simplified payment verification (SPV). To handle greater throughput in the same 10-minute-average time, SPV thin clients will not perform a full security check on the larger blocks they process. They will instead examine multiple hashed blockchains from competing miners and assume that the blockchain version generated by the majority of miners is correct. In the words of Bitcoins Mike Hearn, Instead of verifying the entire contents, [SPV] just trusts that the majority of miners are honest…. As long as the majority is honest, [SPV] works… [However],the full node does give you better security. If you’re running an online shop for example, it makes sense to run a full node.
In its current state, the NCL network can process up to 367,200 transactions per day more than nine times Bitcoins current peak values. The planned implementation of Transparent Forging will allow for near instant transaction processing, drastically increasing this limit.
The increasing difficulty and combined network hashrate for Bitcoin has created a high barrier to entry for newcomers, and diminished returns for existing mining rigs. The block reward incentive employed by Bitcoin has driven the creation of large, single-owner installations of dedicated mining hardware, as well as the reliance on a small set of large mining pools. This has resulted in a centralization effect, where large amounts of mining power are concentrated in the control of a decreasing number of people. Not only does this create the kind of power structure that Bitcoin was designed to circumvent, but it also presents the real possibility that a single mining operation or pool could amass 51% of the network’s total mining power and execute a 51% attack. Attacks requiring as little as 25% of total network hashing power also exist. In early January, 2014, GHash.io began voluntarily decreasing its own mining power because it was approaching the 51% level. After a few days, the pool’s mining power was reduced to 34% of the total network power, but the rate immediately began to increase again, and once more reached dangerous levels in June 2014.
The incentives provided by NCL Proof of Stake algorithm provide a balance Return on Investment of approximately. NCL by providing an even distribution solution. to prevent 51% attacks
Proof of Work’s Resource Costs
Confirming transactions for existing Bitcoins, and creating new Bitcoins to go into circulation, requires enormous background computing power that must operate continuously. This computing power is provided by so-called mining rigs operated by miners. Bitcoin miners compete among themselves to add the next transaction block to the overall Bitcoin blockchain. This is done by hashing – bundling all Bitcoin transactions occurring over the past ten minutes and trying to encrypt them into a block of data that also coincidentally has a certain number of consecutive zeros in it. Most trial blocks generated by a miner’s hashing effort don’t have this target number of zeros, so they make a slight change and try again. A billion attempts to find this winning block is called a gigahash, with a mining rig being rated by how many gigahashes it can perform in a second, denoted by GH/sec. A winning miner who is first to generate the next needle-in-a-haystack, cryptographically-correct Bitcoin block currently receives a reward of 25 newly-mined Bitcoins – a reward worth, at the time of this writing, around $15,750USD. This competition among miners, with its hefty reward, repeats itself over and over and over every ten minutes or so. By early 2014 over 3500 bitcoins per day are generated, worth around $2.2 million US dollars per day. With so much money at stake, miners have supported a blistering arms race in mining rig technology to better their odds of winning. Originally Bitcoins were mined using the central processing unit (CPU) of a typical desktop computer. Then the specialized graphics processing unit (GPU) chips in high-end video cards were used to increase speeds. Field programmable gate array (FPGA) chips were pressed into service next, followed by mining rigs specialized application specific integrated circuits (ASIC) chips. ASIC technology is the top of the line for Bitcoin miners, but the arms race continues with various generations of ASIC chips now coming into service. The current generation of ASIC chips are the so-called 28nm units, based on the size of their microscopic transistors in nanometers. These are due to be replaced by 20nm ASIC units by late-2014. An example of an upcoming state-of-the-art mining rig would be a Butterfly Labs Monarch 28nm ASIC card, which is to provide 600GH/sec for an electricity consumption of 350 watts and a price of $2200USD. The mining rig infrastructure currently in place to support ongoing Bitcoin operations is astounding. Bitcoin ASICs are like autistic savants – they are able to do only the Bitcoin block calculation and nothing more, but they can do that one calculation at supercomputer speeds. In November 2013, Forbes magazine ran an article entitled, Global Bitcoin Computing Power Now 256 Times Faster Than Top 500 Supercomputers, Combined!. In mid January 2014, statistics maintained at blockchain.info showed that ongoing support of Bitcoin operations required a continuous hash rate of around 18 million GH/sec. During the course of one day, that much hashing power produced 1.5 trillion trial blocks that were generated and rejected by Bitcoin miners looking for one the magic 144 blocks that would net them $2.2 million USD. Almost all Bitcoin computations do not go towards curing cancer by modeling DNA or to searching for radio signals from E.T.; instead, they are totally wasted computations. The power and cost involved in this wasteful background mining support of Bitcoin is enormous. If all Bitcoin mining rigs had Monarch levels of capability as described above – which they will not, until they are upgraded – they would represent a pool of 30,000 machines costing over $63 million USD and consuming over 10 megawatts of continuous power while running up an electricity bill of over $3.5 million USD per day. The real numbers are significantly higher for the current, less efficient mining rig pool of machines actually supporting Bitcoin today. And these numbers are currently headed upward in an exponential growth curve as Bitcoin marches from its current one transaction per second to its current maximum of seven transactions per second.
Analysis of the cost and energy efficiency of the NCL network shows that the entire NCL ecosystem can be maintained for about $60,000USD per year, which is currently almost 2,200 times less expensive than the cost of running the Bitcoin network.
Proof of Work’s Resource Costs
Pertaining to Coinholders In addition to massive electrical costs, there is a hidden fee for simply holding Bitcoins. For each block found, the entity that generates the block receives a stipend. At the time of writing, this stipend is 25 BTC, producing 10% inflation in the total Bitcoin supply this year alone. For each $1000USD worth of Bitcoin someone owns, that person is paying $100USD per Bitcoin this year to pay miners for keeping the network secure.
Coins was created with the genesis block, with Proof of Stake and unlimited supply but this will benefit NCL holders. with an inflation rate that will always be reduced by half every 6 months
NXT all Premined
NXT has mined all of its coins and there are no more prizes for the miners except from transaction fees, messages, token issues, asset issues and others this will make the NXT stakers not get enough profit.
NCL has unlimited supply to give prizes to stakers forever and also an additional masternode consensus to provide more nodes to make the network more decentralized. and inflation difficulties will always increase with the concomitant amount of supply that must be added.