I’m happy to report that my Next client has successfully forged a second block. This one also came with a reward of two NXT, bringing my cumulative mining total up to four NXT. It doesn’t sound like much now but wait until those puppies are worth ten or a hundred dollars apiece and forging becomes a nice little source of passive income. Of course for this to happen, Next has to be more widely adopted and distributed.
When I took a peak at my account on the Next block chain explorer I learned much to my surprise that my client has actually forged four blocks. The two additional blocks were empty blocks, and so their generation did not register as a transaction in my wallet.
I finally understand the built-in incentive to Next holders to do their part to encourage the use of Next as an actual currency. Since Next is a proof of stake cryptocoin, the obvious incentive is for me and every other Next holder to simply hoard it in our wallets. The more Next I have sitting there, the more blocks I get to generate. So why wouldn’t everyone who holds Next simply keep holding it?
The answer lies in the empty blocks. The Next network generates a new block every minute. The blocks are all empty until there is a Next transaction. The transaction fee costs a minimum of one NXT. When the transaction is completed the transaction fee gets locked up into the next available block. Then whoever generates that particular block gets the fee. If there are no transactions sent, then the blocks just sit empty and there is no reward in generating or opening them.
There is also the principle that a growing number of transactions represents a healthy currency associated with a real economy. For example I can sit on all the coin I want but if no one is using it to buy and sell things then it’s not a currency. This principle is true for all forms of currency, but it is especially true when it comes to maintaining the Next network. It doesn’t cost or inconvenience me too much to run my little corner of the network, but if all I generate is empty blocks at some point I might decide to not bother. If too many people do that, then the Next network is over, and with it its viability as a currency.
I enjoy peeking at my open Next wallet client every so often, and one section I now pay much more attention to is the unconfirmed transactions section. This section shows not just my unconfirmed transactions but all the unconfirmed transactions in the network at that particular time. If I watch them long enough, I can see them showing up again as the blocks are generated. Once a transaction clears, it just takes a minute or two for it to show up in the next block. I suspect that when the number of transactions grows there will be more of a lag time, but for now I can watch it as it’s happening.
And I dream of a day when there will be no more empty Next syndrome.