A recap on the Binance & NavCoin AMA with Alex Vazquez
On December 16, 2020, Alex Vazquez, a core developer of NavCoin, participated in the Binance AMA series. He talked about the release of xNAV, a new token for privacy-enhanced transactions, that will come to exist on NavCoin’s network upon the activation of its protocol upgrade following the release of NavCoin Core 6.0 on January 1, 2021. Alex was also given the chance to elaborate on NavCoin’s consensus model, governance layer as well as to talk about what the future holds for NavCoin in 2021. To start off the AMA, however, Alex was asked to introduce NavCoin to anyone unfamiliar with the project. To do this, he said the following about NavCoin:
NavCoin is an open-sourced digital currency with privacy-enhanced features. Transactions that occur on the blockchain of NavCoin are made in a peer-to-peer fashion with no need for intermediaries. Following the release of NavCoin Core 6.0 (January 1, 2021), one will be able to store and transact coins both publicly (NAV) and privately (xNAV). If one transacts privately, it will not be possible to link a transaction to its sender or receiver, or even view the amount that was sent. This is made possible by NavCoin’s self-developed privacy protocol called Boneh-Lynn-Shacham Confidential Transactions (blsCT).
NavCoin was invented in 2014 and had no pre-mine or ICO. With block times of 30 seconds, one can stake their coins to earn rewards through Proof of Stake Version 3 (PoSv3) for helping to secure the network. NavCoin’s current spendable supply is 66,768,000 NAV with a block reward of 2.5 NAV, hence a decreasing inflation model. From the 2.5 NAV, 2 NAV are redirected to the staker who found the block, and 0.5 NAV are accumulated in a decentralized treasury used to fund community initiatives based on the outcome of DAO votings. NavCoin’s decentralized autonomous organization (DAO) enables the community to be self-funded through its treasury, self-guided through consultations, and self-governed through consensus changes. Anyone who holds coins on the public side (NAV) can participate in the DAO by staking their coins. Each stake is the equivalent of one vote, and there is no minimum amount required to take part.
Following Alex’s introduction to NavCoin, he went on to respond to each of the questions that came up during the interview segment of the AMA, and afterwards the questions asked by people following along the conversation. We think it is well worth the read, so please read on to see the full text for each of his responses.
Q1: Why does NavCoin use Proof of Stake (PoS) instead of Proof of Work (PoW)?
A1: Great question! A core premise for us here at NavCoin is to ensure that our network is correctly secured and at the same time environmentally sustainable. PoS is well known as a more energy friendly consensus model than PoW, and in our case, PoS also provides us with better security than what we could achieve with PoW. However, I am not a PoS maximalist; it all depends on the context. For example, the energy expenses derived from PoW can be considered a valid trade-off for Bitcoin, as their level of security, achieved with PoW, is reasonably high for the needed energy expenses. This, however, is largely due to the majority that Bitcoin miners have over the hashing algorithm. A smaller network, such as ours, would become vulnerable to the possibility of miners diverting tiny portions of their hashing power to perform a 51% attack on the chain. If PoW were to be the only consensus model available, only a handful of coins would survive. With that in mind, I am a firm believer in having a growing ecosystem that allows for many different projects and communities to co-exist, and where each of these have their own piece of financial freedom. PoS enables this. Another example (to which I view PoW as a valid option) is when trying to achieve a fair launch when bootstrapping a new chain. In fact, NavCoin launched its chain using PoW, and was thereby able to achieve a fair initial distribution of the supply without relying on a pre-mine or ICO. Moving to PoS afterwards was necessary to secure our existence (for the reasons outlined above). Aligned with our goal of being environmentally sustainable, the NavCoin network has been certified as carbon neutral thanks to the funding coming from our decentralized treasury.
Q2: You are firm ambassadors of privacy and define yourselves as a privacy-enhanced payments coin. There is a lot of excitement surrounding your new privacy token xNAV (based on blsCT). Can you talk a bit about why privacy is so important and how xNAV actually works?
A2: This is one of my favourite topics! Privacy in general has been a hot topic this year due to COVID, and more and more people are becoming aware of just how important it is to protect one’s privacy. For digital currencies specifically, it is now publicly talked about how central banks aim for the launch of CBDCs (Central Bank Digital Currencies), and it is happening all around the world (China, USA, Europe). Overall, we are seeing an unstoppable trend where electronic commerce continues to increase its market share, and where payments continue its shift towards being mostly digital. The current crisis that we are facing with COVID is facilitating this shift even more, as the establishment initially tried to label paper money as an infectious vector for the virus, and thus encouraged people to make digital payments instead. With digital payments, it is also easier for governments to keep the money printing machine going without the need to impose currency controls. While digital payments are much more convenient than using paper money, it is important to understand, that as a result, our ability to transact somewhat privately will decrease day by day. The reason being that cash is currently the best way to make payments in which some privacy is preserved. No one on the outside of the transaction will come to know what, when and from who we are buying. We, as the creators of the technology used in the payments of the future, holds a responsibility to ensure that the right tools are available to the people, and that those tools must protect the individual’s right to privacy, as a protective layer against those who might misuse the access to our financial data. Now is the time to start looking around for alternative payment methods that care about privacy. Not only NavCoin, but also other projects like Monero, Zcash and Firo, who are all building diverse technologies to protect our privacy, when we transfer value between each other. Go get some cryptocurrencies. Play with them. Learn how to use them, and how they work. They will soon be our only way to pay and get paid while preserving our privacy.
It is a common misconception that one should not care about privacy, if one has nothing to hide. If you believe this to be true, I will ask you to please twink twice. Without privacy, censorship is a lot easier to achieve. Our actions may eventually be watched by actors who do not necessarily have good intentions. Privacy is also an important tool to ensure that we do not carry around perceived limits in our way of thinking. For example, without privacy, experimentation is not possible and creativity is very much reduced. Ask yourself this; would you express yourself in the same way as you do knowing that “something” is watching you? We would not be able to be wrong without potentially (and automatically) be punished by algorithms. That to me is rather frightening! It can sound crazy to some, but it has already started to happen. Even if the process is slow, it will continue to accelerate. From my point of view, it will take 1 or 2 generations, if not less, for this new and censored model to be fully established and socially accepted. That still leaves us with time to start becoming aware of the loss of privacy that we could suffer, and to try to stay away from surveillance technologies, and thus protect our freedom, as much as we can. As our way of helping to protect that freedom, our team has drafted and implemented blsCT, a novel privacy protocol built from the combination of the BLS (Boneh-Lynn-Shacham) signature scheme and the battle-tested Confidential Transactions method. The result of blsCT is a trustless, scalable and untraceable cryptosystem!
The first consequence of implementing blsCT in the NavCoin network will be the creation of a new coin; we have decided to name this coin xNAV. We will provide functionality from within our core wallet to freely swap between NAV and xNAV at a 1 to 1 rate. Users will be able to swap between NAV and xNAV at any time, and back and forth as needed. While NAV will keep being the public coin used for transparent payments, staking and voting, xNAV will make payment details hidden from external observers, unless you authorize someone to see the transaction history. You will still be able to hand off your view key for accountability, for example to your accountant, so that he or she can view all of the details. Another example could be an NGO that starts accepting donations in NAV. In such a case, the NGO would be able to publicly display the view key on its website, and thus make its finances transparent for all of its stakeholders. This is a major improvement and advantage over public blockchains, where everyone can see everything without requiring consent. Apart from being able to transact privately with xNAV, one can also earn xNAV simply by holding them in your wallet, as your coins will then become available for others to mix with, and thus earn you a fee. I believe this to be a great incentive for increasing the use of xNAV and its underlying protocol. I feel like I might have overextended myself a little bit with this answer, but I think the topic deserved it! I am sure that the audience has a lot of questions about xNAV, and I am looking forward to answering all of them! :)
Q3: Continuing along the lines of privacy, can you outline to us the major differences between blsCT (the underlying protocol of xNAV) and other privacy protocols, and what advantages that gives xNAV in comparison to other privacy coins?
A3: Thanks for the question! To start with, I think it is important to say that privacy is not something one can measure in absolute terms, but rather a whole spectrum that depends on many different factors. Thus, one cannot definitively state that one privacy protocol is better than another one. I recommend each person to educate themselves about the features of each protocol and then decide which one fits better for the particular use-case that one has in mind. With that said, I will now touch on blsCT and some of its key differences compared to other privacy protocols. First of all, blsCT is great for scalability (something that other chains with privacy-enhancing features are not very well suited at). The scalability advantage that blsCT offers is a result of it using BLS signatures, allowing all signatures of a transaction to aggregate into a single one. In addition to this, our new privacy token xNAV is compatible with the UTXO model, which allows nodes to function in the pruned mode. This essentially means that a node does not need to store the entire transaction history to keep validating transactions. In terms of long-term scalability, this is great in terms of being able to manage the size of the blockchain, as it continues to grow by its transactions year after year.
Another aspect that is a really important part of achieving good privacy is user experience. It is very common to see privacy leaks that are caused by bad use of the technology tools provided to the user. To address this, we have made sure that making a private transaction with xNAV is no less difficult to the user than making a normal transaction using NAV. By approaching it this way, we have heavily reduced the complexity for the user and thus lowered the possibility of one making a mistake that could make other actors guess the details of the transaction. Most of this is handled by the core wallet itself and in the background without requiring the user to make any decisions that would require a savvy knowledge and understanding of the subtle workings of the system. The same goes for swapping between xNAV and NAV; it can be done with just a few clicks. In the coming months, we will work to bring the features of xNAV to mobile devices as well, so that it is easy for everyone to make use of the privacy-enhanced features offered by xNAV with blsCT as its underlying protocol －even when using a phone. One last major advantage (and perhaps the biggest one!) that xNAV has over other privacy coins is its support for scripting and smart contracts. This is a first for a privacy coin! With xNAV, it will be possible to build second layer applications that can directly benefit from the privacy of xNAV itself. A good example of this could be atomic swaps. I can also imagine bridges or DEX integrations to swap for other coins that lack enough fungibility. For example, swapping Bitcoin for xNAV. This could be a great way to utilize xNAV!
As I have described some of the advantages of blsCT and xNAV, I will now mention some of the (initial) weak points of the protocol. I think it is important for users to be aware of them. When using a privacy coin, there is a parameter called the size of the anonymity set, and it is of great importance. It refers to the total amount of coins that is held by other users that are using the same protocol. The higher the number, the bigger the crowd for you to hide in, and as as a result, it is increasingly more difficult to identify you within that crowd. For a new protocol like blsCT, I expect that at the beginning we will not have an anonymity set size comparable to other coins that have been active for longer. But we will work very hard to increase the use of xNAV to improve the size of our anonymity set, and I am confident that it will improve very quickly. The fact that xNAV holders can earn coins simply by participating in the mixing process will likely act as a great incentive from which the anonymity set size will thus increase. On top of this, we will put a lot of effort into communicating and educating people about the technology, so that one can feel excited about the benefits of using xNAV and choose it as their preferred way of transacting privately.
Q4: What does decentralized governance mean to you and how does NavCoin benefit from it?
A4: Decentralized governance is by definition at the core of decentralized and permissionless blockchain-based technologies. It is the main appeal of what we have come to appreciate, when considering what this technology brings to the world; the ability to make decisions that are mathematically ensured to be based on the consensus of a majority instead of the individual will of a centralized entity that can potentially be corrupted. I think that it is fair to say that every project has some kind of decentralized governance. Even with Bitcoin, miners have a voice on which upgrades will be done on the network. Users and economic nodes can somehow also influence decisions in one direction or another. To me, the differences between the various approaches that exist to governance, is seen in the level of sophistication of the governance layer and how the will from its base layers translates into final decisions.
For NavCoin, we introduced earlier this year the concept of consultations in our DAO. Consultations allows any member of the network to start a non-binding vote about any topic that serves to gauge the sentiment from the network as a whole. This puts an end to the many and eternal debates that we are seeing on social media or within other communities, where each side turns into a maximalist of their own interests without the debate ever coming to a healthy conclusion. An example of a consultation, currently active on the NavCoin network, is one to decide if to adopt a new logo for the project. Apart from non-binding consultations, we have also introduced binding consensus consultations allowing anyone to start a vote to propose new values for most of the fundamental parameters that reign our consensus protocol. If the vote is successful towards one of the proposed values, that value will automatically be updated in the consensus protocol without the need to upgrade the node’s software and without the need for any type of intervention from our team of developers －this is revolutionary.
When considering the governance of a project, there are many other important parts besides the layer of decision-making. A really important one is to enable a project to be self-sustainable through funding of its own, and how to manage those funds. As previously mentioned, with each new block created on the NavCoin network, a fixed amount (that can be changed through a binding consensus consultation) will accumulate in a special vault that we have named the Community Fund. The coins available in this fund increases with each new block and thus every 30 seconds, and everyone is free to create a proposal and describe herein the project one would like to execute and get paid for. Once a proposal has been created, it is up to the network to decide if it is worth supporting (based on the value that the proposed work could add to the project). One of NavCoin’s major advantages in this regard (compared to the approaches that I have seen used in other projects) is that we have 2 rounds of voting for the release of funds. The first round simply locks the requested coins for the duration of the project, so that they cannot be allocated to other initiatives. Following this, the proponent can be certain that the requested amount will stay available as long as one stick to the project that was proposed. This is guarded by the second round of voting, which can happen upon completing certain milestones. The second round of voting enables the network to first evaluate the work that was done, and then to release the funds only upon reaching a consensus that the work was completed according to what was laid out in the proposal to begin with. Such an approach is a great way to protect the system from bad actors who may promise to do a lot of work, but then fails to deliver. So far, our fund has enabled the development work of many individuals, the carbon neutrality of the network, wallet integrations, and more recently the development of blsCT and xNAV. I believe that the governance structure that I have described here, is the best way to guarantee the long term survival of NavCoin. If we had a classic business-like structure, we would be at the expense of the individuals managing this structure. What would we do if they decided and somehow managed to leave with the money? Or what if they happened to mismanage the resources? How would we make sure to stay true to the sentiment of our community and enable everyone’s voice to be heard? Although some areas of our current governance layer can still improve, as with everything in life ;-), I think that having all of the above mechanisms implemented in the base layer puts us in a very advantageous position that will ensure NAV’s existence for many years to come.
Q5: All this sounds amazing and I guess your team will not stop here. What are your plans for the future?
A5: I am honestly really excited about the future. These last few years of being in a bear market has not been easy. As prices plummeted, the available resources reduced as well. Our community came to an agreement quite early on to direct most of our available resources towards writing code and keep building our tech stack. This allowed us to implement major improvements in the form of protocol upgrades over this period of time. Releasing xNAV at the beginning of next year (in roughly 2 weeks) is a major milestone, and with that in place, we can now allow ourselves to focus on growth, as we will have reached the goal of having a very solid technological base. From hereon and forward, we will start seeing a shift in our communication strategy as we try to communicate more and more with the broader crypto-community about what we have achieved here at NavCoin. I think it is really important for us to educate people, not just about the benefits of using NAV and xNAV, but also on why we do what we do, our belief system, what we are driven by and so on. To achieve this, we have recently teamed up with a very talented team of content creators and I am sure that this will increase NavCoin’s user-base exponentially during 2021.
Although we have initiated great efforts to increase our communication and reach, we are still mostly a team of builders at heart; and we won’t stop continuing to improve our tech by each day passing! :) We have some great things on our “wishlist” for 2021 and forward. First, we will start working on an improved version of xNAV, which thanks to the use of aggregated range proofs, can greatly help to reduce the transaction size of more than 70%. This improvement will be great for scalability, and also reduce the time it takes for a wallet to synchronise with the network. Secondly, we want to support xNAV transactions from within our family of light and mobile wallets. This is to ensure that privacy-enhanced transactions become accessible to everyone, even if one is using a low-powered device. A third area that we will dedicate a lot of focus to is the integration of xNAV in Decentralized Exchanges. xNAV is particularly well-suited for this, as one of its major advantages is being the first private token that is directly compatible with atomic swaps! This alone brings a lot of utility as a way to add privacy to coins that does not have such capabilities. Speaking of utility, we aim to increase the utility of NAV and xNAV as money, as we plan to add support for these in BTCPayServer. With that in place, it will be easy for any merchant to get paid by NAV or xNAV. Lastly, we wish to research and subsequently start working on the implementation of enabling staking by using xNAV. This will ultimately lead to anonymous staking and voting on our network, and we are incredibly excited about that and the many other things mentioned in the above!
Q6: Where does the project name come from? What does it mean for you and why did you choose that name for your project?
A6: NavCoin was created in 2014. At the beginning its name was Summercoin, but then a swap was made to a different chain called NavajoCoin. NavajoCoin was a tribute to the Navajo Code Talkers, from the american tribe, as a reference to the privacy features of our project! Then the community decided to short it to NavCoin. This was a great question, thank you!
Q7: What is guarantee NAV wil not scam with investors? There were many project come and scam with investors, so how can NAV gain investors trust?
A7: As I already mentioned, we’ve been running since 2014. Went through many bear and bull markets and we are still here. We are also listed in Binance since almost their launch. I think this is the best assurance that we are a legitimate project and we will keep on working and last for many many years! Every cryptocurrency is a risky investment, but NavCoin stands out as one of the most long-standing in the space 🙂
Q8: What is NavTech? What is NavTech’s role in the NavCoin ecosystem? What are the advantages of NavTech compared to current competitors?
A8: NavTech is the name of the previous protocol we used to enhance privacy of our transactions. We discontinued it some time ago in order to substitute it with the new private token xNAV, which is much more powerful and offers privacy to our users in a decentralized and trustless way. We are releasing xNAV on the 1st of January, we are all very excited about the launch. You should keep an eye on NAV and write this date in your calendar! 🙂
Q9: Does NAV have any plans to integrate in Uniswap?
A9: Yes, absolutely! Once we release xNAV on the 1st of January, our focus will go on building our own ERC20 bridge, so we make it possible to swap both from NAV and xNAV to wNAV (wrapped NavCoin). This will allow to add liquidity and trade wNAV in any of the DEX of the Ethereum network, being Uniswap one of them. We will build our own bridge as we consider really important that the management of the keys stays within the community. Besides Ethereum, we also aim to integrate wrapped NavCoin in as many chains as possible. Binance Smart Chain offers very cheap fees and fast trades — it is also in our wish list!
Q10: What Blockchain projects have similar technology with NavCoin?
A10: I think NavCoin can be fundamentally compared to Decred, PIVX or Tezos. They are all chains with a focus on decentralized governance and with support for private transactions. But when we talk about the technology used to develop those features, we are quite unique. I encourage you to learn more about NavCoin if you already knew any of those projects. I’m sure you will like us too!
Q11: I’m a developer, and I’m interested in contributing to your project alongsides earning, Do you have any Bug Bounty to check for vulnerabilities?
A11: Yes, we do! Not only bug bounties, but also for solving some issues tagged in our Github and make contributions to our website. In addition to those, our decentralized community fund allows everyone to make proposals of projects which would bring value to NAV and get funded for your work. I invite you to check our website or visit our Discord to learn more about it 🙂
Q12: What requirements for delegating NAV Coin? Does any NAV Coin wallet to manage and facilitate this delegation?
A12: We allow stake delegation, so you don’t need to keep your coins online while staking and earning rewards. This is great for security! Almost all of our wallets support this feature, although the easiests are NavCash or NEXT. There are also non custodial staking pools which you can use like NavPool. Overall, I’d recommend you to read this guide if you are interested in starting to stake.
The rewards are currently very juicy, around 7–8% per year!
Q13: I think you guys are doing very well! I just have a question related to the financial situation: Considering the bear market that has now lasted for some time, and might continue to do so for even longer; how is the NavCoin doing in terms of funding to be able to keep up the development of the product and introduce new partnerships for years to come?
A13: Well, I think the bear market is precisely something of the past! But don’t take it as a financial advice 😜 I’d say that if we survived the long bear market years of 2018–2020, we are very well suited for what’s to come in 2021 and next. Our decentralized treasury, combined with the effort of our voluntary community members is our best asset for being able to keep building the best tools for the crypto users. It’s my expectation that with all the recent excitement around NavCoin, the value of our funds available in the community fund will only grow in the coming months, which joined with our recent focus shift into communicating and educating more to grow the NavCoin community, will make us have more financial resources and a bigger human force available to make NAV great again 🙂
Q14: Does NAV have offices in the real world or only work in cyberspace?
A14: We are basically a team of individuals who voluntarily contribute to the project. This is great for decentralization and the long term survival of the project! It’s very hard to take NavCoin down with an structure like this. It also allows us to be quite more free when taking decisions affecting to the project, compared to if we had a business-like structure. Our goal is to provide high quality tools which allow individuals to have enough privacy and financial sovereignity without letting any other factor influence our work.
Q15: Tell me if you cooperate with regulators and what to do to a person who is left without documents because of the war. How can he pass KYC? How in such a situation will you fulfil the desire to bring finances to everyone?
A15: I strongly believe everyone has the right to access to the financial system, no matter of any bureaucratic difficulty the system could create. This is our major motivation to build what we build, and why we will focus to bring NAV to decentralized platforms which make this access possible for every human with access to internet.
