A Dual Blockchain Solution to Protect Privacy
Bitcoin wasn’t the first cryptocurrency, but it was the first to become a major success because it is decentralized, trustless, and anonymous – a trifecta solution that hadn’t been seen before. It works through the use of a public blockchain, which records every transaction on the network – who sent what to whom. So while it is anonymous, it isn’t private, because everyone can trace bitcoins from sender to receiver, all the way back to the genesis block.
Nav Coin, released back in 2014, was one of the first cryptocurrencies to address Bitcoin’s privacy shortcomings. While the majority of the code works just like Bitcoin, Nav Coin introduced a dual-blockchain structure called NavTech which lets a user break the chain of transactions.
Nav Coin is actually two blockchains, the main Nav Coin blockchain and another called the Subchain. When a user wants to send an anonymous transaction, they send the amount of Nav Coin and the recipient’s address to a NavTech incoming processing server. The NavTech processing server creates a transaction of random size on the Subchain and sends the transaction, and the encrypted address of the recipient, to a randomly selected outgoing server. The outgoing server decrypts the recipient’s address and sends Navcoin, from a pre-filled pool, on to the correct recipient.
The incoming server gathers up Nav Coin sent in anonymous transactions and sends it along the blockchain to the outgoing processing server, thus replenishing the pool, while also breaking the chain from sender to recipient.
The NavTech processing servers require a fee to perform this operation, though each NavTech cluster is free to set its own fee rate. If you use the Nav Coin Team’s NavTech servers, you’ll pay 0.5% of the transaction amount.
Proof of Stake (POS)
Nav Coin’s blockchain is secured by Proof of Stake, meaning that if you own Nav Coin and put it in an online wallet, you’ll be rewarded for just having it. Nav Coin’s rewards are currently 5% annually, and nearly 40% of all Nav Coin is sitting in wallets gathering interest. The reward for staking will decrease in the future to 4% once the Community Fund is implemented.
Currently, NavTech servers require special software to let them process anonymous transactions. Only a small number of Nav Tech servers are online, which is an undesirable amount of centralization for a privacy-focused cryptocurrency. The Nav Coin team is working to integrate NavTech into a single multi-chain wallet that will be run by all users, removing the centralization problem.
To gain interest from the Nav Coin Proof of Stake system, you need to have your coins in an online wallet. This makes your Nav Coin more vulnerable than if you keep them in cold storage or in a paper wallet, completely offline. Nav Coin has begun investigating ways to let you gain interest through Cold Staking, which means you’d gain interest even when your Nav Coins are not in an online wallet.
The Nav Coin community recently approved the creation of a Community Fund, which is a portion of newly created Nav Coin that will be used to fund future community proposals. The amount is set at 0.25 Nav per block, which should equal out to 260-300,000 NAV per year, depending on how fast new blocks are created. Though Nav Coin blocks are normally 30 seconds long, the actual length can vary. At current prices, that would equal just under $1 million per year.
Once implemented, staked coins will be able to vote on community proposals. While the Nav Coin Community Fund is similar to community funds for other cryptocurrencies like Dash or PIVX, the Nav Coin Community Fund works in a two-step process. After a proposal is submitted, funds will only actually be dispersed after work initiated by the proposal is completed and a second vote occurs, indicating that the community is satisfied with the result.
Nav Coin is one of the oldest privacy-focused coins and has proven itself reliable over several years, but its dual-chain architecture has resulted in an undesirable centralization due to the necessity of NavTech processing servers.
How to Buy NAV Coin
Unfortunately, NAV isn’t as easy to purchase as Bitcoin. You can’t buy Nav Coin with a credit card, so you’ll have to use one of the cryptocurrency exchanges to buy NAV using Bitcoin.
Buy Bitcoin at Coinbase
To start, if you haven’t already, head over to Coinbase and sign up. Coinbase will let you use a credit card to buy bitcoin, which is what you’ll be using to purchase Nav Coin.
Sell Bitcoin for NAV Coin at Cryptopia
After you’ve purchased Bitcoin, you’ll need to sign up for a cryptocurrency exchange – we recommend Cryptopia. It’s fairly easy to use, has a large selection of coins, and is responsive to customer issues. After you’ve signed up, you’ll send the Bitcoin from Coinbase to Cryptopia. Head to the Cryptopia deposit page, find BTC in the list and click on the Deposit button to get your deposit address. Put that address into the field on Coinbase that lets you send Bitcoin.
After your deposit arrives on Cryptopia, you’ll be able to head to the Cryptopia NAV/BTC market where you can Buy NAV (the Nav Coin currency symbol) using the Bitcoin you deposited.