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Next Coin – NXT – The ‘Next’ Cryptocurrency?

Logo for Next Coin
Logo for Next Coin
In the last year, Bitcoin has taken the world by storm. Designed to be a decentralized currency which is not backed by any specific country or dependent on a particular currency. There is a famous story that in 2010, a software programmer called Laszlo Hanyecz bought two pizzas for 10,000 Bitcoins. At the time they were worth about $30. At today's price ($730), those Bitcoins are worth $7.3million. Just in the last month, we have seen the price rise to $1,200 and then drop to around $450. However, there does seem to be some value to Bitcoin as more and more retailers (including overstock.com) are accepting it as payment for physical products. A side product of Bitcoin is that there have been 10s if not 100s of alternative currencies popping up. Generally, they are using the same code or slightly adapted code of Bitcoin and generally the value of these coins is what someone will pay for it. If there is nothing that you can do with it apart from hoard it or speculate with it, then the value is fairly arbitrary. Another currency which is making its mark on the world is Next Coin or NXT. As opposed to using similar code, this has been built by the bottom up and development is generally funded by the founders of this currency. It was initially brought into circulation by 71 founders who donated a total of 21 Bitcoins in exchange for a stake. At today's price of Bitcoin, the original Market Cap of NXT was around $51,000 or an average of $718 per founder. At today's price of NXT, the Market Cap is around $64,000,000 or an average of around $900,000 per founder. In perfect market conditions, each of the founders would become millionaires in the space of a couple of months. Realistically though, in order to sell their stake, there would need to be people to buy the Next Coins. With 4,000 accounts in play, it is hugely unlikely that they would be able to sell anywhere near that worth without crashing the price. So, what makes NXT different from the hundreds of other alternative currencies: 1. The coins have already been premined. What this means is that there are a set number of coins which are already in circulation. Unlike Bitcoin where additional coins are mined every 10 minutes. 2. There are future plans to have an exchange mechanism built into the client itself meaning that you don't need to go through a central exchange. 3. Coins are not mined but forged. When you pay or receive money, there is a fee. This fee is divided between existing owners of coins depending on their share of the pie. So, the more coins that you own, the more likely that you are going to be able to forge further coins. 4. Unlike Bitcoin, transactions are conducted almost instantly so there is no waiting around to see if your payment has been cleared. 5. There are plans to have colored coins which is a way to designate specific coins and tie them to physical property. So, how can NXT coins be bought? There is currently only one exchange at http://dgex.com/ where you can buy coins with Bitcoins. Especially in the last few days the price has been increasing rapidly. Officially the currency only launches on 3rd January, so it is likely that much more action (up or down) will be happening in the next week or so. So, will NXT survive as a coin or is a concept which is based on an imagined value? The survival of any cryptocoin depends on two things: The ability to actually spend that money and the belief that there is a value to it. By the rising value, there seems to be belief in the currency. However without having the ability to spend that money it is likely to fail.