What is NEAR Protocol?
Originally created to experiment with program synthesis, the fully automatic generation of software based on mathematical specifications without requiring further human intervention, the NEAR Protocol quickly evolved into one of the most popular and user-friendly platforms for developers to create scalable decentralized applications. Read on for the details of the NEAR Protocol.
NEAR Protocol in a nutshell
In a broader context, the NEAR project has set itself the goal of providing the fundamental infrastructure for the future of the internet with a layer 1 blockchain protocol that is scalable and easy to use. At the same time, the project is a universal and fully decentralized platform for developers and today forms the basis for many successful decentralized applications (DApps).
The NEAR Protocol is based on a proof-of-stake (PoS) called Doomslug, which also helps make the project carbon neutral: in fact, thanks to this consensus algorithm, the NEAR Protocol can claim to generate a carbon footprint. of carbon of 174 tons of CO2 per year, which makes it 200,000 times more efficient in terms of carbon emissions than Bitcoin at the time of writing.
The project also launched Nightshade Sharding in March 2021 to start preparing in time for a massive number of consumers to implement it and to increase the number of transactions, allowing the project to scale linearly with the number of shards.
On its website, NEAR Protocol states that:
We envision a world where people control their money, their data, and the tools to build new ideas.
Let’s take a look at the crypto ID of the NEAR protocol:
Discover NEAR Protocol
NEAR is a community-based, developer- and environment-friendly blockchain that supports smart contracts and can process up to 100,000 transactions per second. This allows the creation of decentralized applications (DApps) to be extremely fast, thus easily enabling a constellation of NFTs, DAOs and other new business models.
Sharding for a new level of scalability
The Bitcoin network notoriously suffers from high transaction fees and slow speeds and has the disadvantage that its script is in a Turing-incomplete language, thus offering only limited functionality. Ethereum is working to improve performance and reduce costs. Due to all this, NEAR Protocol wants to introduce improvements by raising the speed to a new level in the near future by fragmenting the databases, but keeping the transaction costs very low.
The NEAR process is based on a horizontal approach to scalability by dividing the network into chunks to dynamically distribute compute, increasing throughput. In traditional networks, each node in a network has to execute all the code, which creates bottlenecks and slows down processes. NEAR seeks to divide the structures in such a way that a large proportion of the calculations can be executed in parallel and scale capacities depending on the number of nodes in the network.
In addition, NEAR allows nodes so small that they are capable of operating with simple elements hosted in the cloud. Thanks to these features, there are theoretically no limits on network capacity, allowing developers to deploy DApps without having to worry about the future scalability of the infrastructure.
Technology (Simple) Nightshade
The technology behind NEAR’s sharding is called (Simple) Nightshade or Nightshade for short, and aims to massively improve transaction performance and overall blockchain capacity with individual sets of validators . that process transactions in parallel across multiple sharded chains.
Unlike normal sharding, it is not necessary for all participants to download the entire states (state) or logical blocks (logical block). Instead, “chunk producers” only have to maintain the state that corresponds to “their” chunks. The list of all transactions in the block is divided into physical chunks (shards of the next block) and one chunk per chunk, ensuring reasonable hardware requirements and allowing a growing number of users to participate.
Thanks to these structures, NEAR Protocol can achieve up to 100,000 transactions per second, as well as near-instantaneous transaction finality thanks to a one-second block rate while keeping transaction fees around zero.
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The NEAR Collective
The community that supports the NEAR protocol is the NEAR Collective, whose goal is to build a secure and high-performance platform for the management of high-value assets that are useful to everyone, such as those related to money or identity. At the time of this writing, the NEAR Community has more than 83,000 members and is made up of Innovators, Creators, and Contributors who, together, are building a stronger ecosystem. The large NEAR community is made up of smaller groups called guilds. Each guild shares a specific mission and vision that has to do with fostering an open and interconnected world in which consumers can participate.
Rainbow Bridge
The NEAR protocol’s Rainbow Bridge was built by NEAR’s Ethereum-compatible scalability solution Aurora. It allows users to transfer their ERC-20 assets between NEAR, Aurora, and Ethereum using a NEAR wallet and Metamask. While transactions between NEAR and Aurora are instant, Ethereum-related transfers take longer and costs are not always easy to predict as they depend on the Ethereum gas commission price.
Astro DAO
The NEAR project also supports Astro DAO, a platform that allows anyone to start a decentralized autonomous organization (DAO), that is, groups that organize themselves autonomously to achieve a common goal. DAOs on Astro are quick and easy to create, even for crypto newcomers, and their number is continually growing. Astro provides the template for stakeholders to quickly automate what DAOs do, and new enhancements are constantly being added to this project.
The NEAR (NEAR) Token
The NEAR protocol token, named in the same way, NEAR, is used for different purposes, such as, for example, to execute the validator nodes that intervene in the security of the NEAR network through staking and fragmentation. The NEAR token is also used for governance votes on the allocation of network resources and eventually as fees for transaction and storage fees on the blockchain.
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How to start your research
We cannot stress enough: that before investing in any asset, make sure you take the following into account.
Do not invest without researching first. The official website of a project, Near.org in this case, is a good place to start.
Do not forget that investing can carry benefits but also specific risks and make sure you familiarize yourself with the ups and downs of market movements.
Lastly, assess how the asset you want to invest in fits into your personal investment portfolio in terms of diversification.
Where can you start investing in NEAR?
At Bitpanda, you can invest in NEAR and more than 2,000 different assets, including cryptocurrencies, crypto indices, precious metals and much more from just €1, 24 hours a day, and even automate your investments with Bitpanda Savings.
Opening your Bitpanda account is quick, easy, and secure via the Bitpanda web app or the iOS and Android app. Go ahead and verify your account, make your first deposit using your favorite payment method (including SEPA Instant) and start investing right away.
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April 24, 2024
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