Do you have questions about Stakenet? Most common questions are covered below. Please contact [email protected] if your question is not answered.
Last updated: 17 January 2019
Frequently asked basic questions regarding blockchain and cryptocurrencies. Find Stakenet specific questions in the section just below.
What is the blockchain and Distributed Ledger Technology (DLT)?
The blockchain is a hash-linked data structure. It is the first type of Distributed Ledger Technology (DLT), which within itself include other different technologies sharing a similar objective. In simple terms, a blockchain is a continuously growing list of records, stored in what are called blocks, which are linked and secured using cryptography. Bitcoin is the first blockchain ever created.
A blockchain allows connected computers in a peer-to-peer network to reach agreement over shared data. While it is technologically decentralized, the implementer may have total control over the network. We can then differentiate between open and closed blockchains, depending if anyone can freely join and participate in the network and its consensus mechanism, or if a central party/ consortium controls it. Bitcoin and Stakenet are open blockchains, while banks and other financial institutions are using closed blockchains (or some other sort of closed distributed ledgers). These differences aren’t necessarily good or bad, they just have different use-cases.
By design, a blockchain is resistant to modification of its data. As said, it is managed by a peer-to-peer network, collectively adhering to a protocol for inter-node communication and validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without alteration of all subsequent blocks, which requires the consensus of the network majority.
Bitcoin was the first (open) blockchain to solve the Double Spend Problem without trusting any third parties - this is why the real innovation and value are in open blockchains. While it doesn't seem like a big deal at first, it is actually one of the biggest revolutions in past decades. It has sparkled a transformation in the financial industry with cryptocurrencies and smart contracts, creating an entirely new world out of it, pretty much like the internet back in the day.
What are cryptocurrencies and altcoins?
A cryptocurrency is a digital or virtual currency designed to work as a medium of exchange - it is money. It uses an open distributed ledger (usually an open blockchain) to secure and verify transactions as well as to control the creation of new units of a particular cryptocurrency.
The term cryptocurrency was determined by bitcoin (BTC) - the first and leading one. Notice one difference, Bitcoin (uppercase B) is the name of the financial network created using a blockchain, bitcoin (lowercase 'b') or BTC is the coin of this network.
By definition, a cryptocurrency is open, permissionless, decentralized, trustless, and censorship-resistant. Anyone can freely participate (transact, store) and independently validate its transactions. If it doesn't fit these rules, it is not a cryptocurrency. Using a blockchain or any other type of DLT doesn't make it a cryptocurrency.
There are some closed, permissioned, and censorable digital coins being created recently, which utilize closed distributed ledgers, and piggyback off being labeled as cryptocurrencies for marketing purposes (e.g. to increase a coin or companies shares value). These are digital coins masquerading around as something they are not, only because they are using Distributed Ledger Technology.
While closed blockchains are great as they cut down costs and improve speed in the legacy financial sector, they don't come anywhere close to the real innovation that open blockchains bring. The value of a blockchain relies upon its intrinsic asset (cryptocurrency) that is the basis for a game theoretical model of security via consensus algorithms that depend on competition (PoW, PoS, et cetera). The open blockchain is used to achieve the decentralization needed (open participation and validation) for this model of security to work, so no single entity has the power to control the network. On top of that, open blockchains can infinitely scale, provide instant settlements, and be essentially free to transact on, while providing a seamless user experience.
Don't be fooled by the marketing efforts of corporations with closed blockchains - they are not creating anything as revolutionary as a cryptocurrency, but rather a faster version of permissioned and censorable money (in most cases backed 1:1 by FIAT), using closed Distributed Ledger Technology. This is how the "blockchain, not Bitcoin" nonsense cliché was born; some people either don't understand, or are interested in taking away the real value of open, permissionless, and censorship-resistant money. You must ask yourself why.
Any cryptocurrency other than bitcoin is called an altcoin.
What is a smart contract?
A Smart Contract is a virtual agreement managed by the blockchain between different parties.
Its main role is for two parties to conduct this agreement that can be digitally self-executed and self-enforced, eliminating the need for a ‘middleman’. This would transfer power away from those who currently manage or verify transactions in our current society, entirely changing the way the world currently operates.
Why are there many cryptocurrencies? What is the difference between a coin and a token?
Each cryptocurrency serves a purpose and has different characteristics, although most of them act mainly as a medium of exchange.
A cryptocurrency coin is a cryptocurrency which operates independently of any other platform, so it has its own dedicated blockchain like Bitcoin (BTC) or Stakenet (XSN).
A token is a cryptocurrency that requires another blockchain, such as Ethereum or Neo, to exist and operate. Golem is a token on the Ethereum blockchain (those are called ERC20 tokens) and Ontology is a token on the Neo blockchain (those are called NEP5 tokens).
What is a wallet?
A cryptocurrency wallet is a digital wallet (an application) used to receive, store, and send cryptocurrencies like bitcoin (BTC) and stakenet (XSN).
It should be noted that a wallet only allows access to the blockchain, where all coins are "stored". So to speak, the wallet is just the medium which stores the private keys, and makes it possible to communicate safely with the blockchain to access certain coins.
Wallets can be of various types such as an Online wallet (web-based), Mobile wallet, Desktop wallet, Paper wallet, or Hardware wallet. A hardware wallet is a special type of wallet which stores the user's private keys in a secure hardware device. For the average user, it is the most secure wallet of all.
Note that if you leave your cryptocurrencies in a Centralized Exchange you don't own them - the exchange does, as they are in posession of the wallets and private keys.
What is the private key, public key, and address?
The private key is the "ticket" that allows someone to spend the Bitcoins (or any other cryptocurrency) associated to it, so it is crucial that these are kept secure. They're automatically generated by each coin's wallet software and can be kept on computer files (usually encrypted within a file called wallet.dat), be printed on paper, or protected within a hardware device (hardware wallet).
A private key can be generated once by a wallet, and it may be able to "unlock" an almost infinite amount of addresses created thereafter within that wallet using that private key - these are called HD wallets. If you lose the private key, the coins it can unlock will be lost forever. In the early days of Bitcoin, a lot of people lost their private keys, and now there are millions of BTC in the Bitcoin blockchain that can never be recovered.
The public key is the unique identifier for your cryptocurrency wallet that is known to the public. The address is another identifier, derived from the public key. The address is the identifier people use to send cryptocurrencies to each other.
Note that if you leave your cryptocurrencies in a Centralized Exchange you don't own them - the exchange does, as they are in posession of the wallets and private keys.
What is a UTXO?
An Unspent Transaction Output (UTXO) is a list of money received that has not yet been spent. In other words, if you were to total up the UTXO of someone, you would get that person's available balance.
Bitcoin, and other cryptocurrencies such as XSN, use UTXO in their blockchain technology to verify that a person has unspent crypto available for spending.
What is the difference between Proof of Stake (PoS) and Proof of Work (PoW)?
Proof of Stake and Proof of Work are both methods used to validate transactions in a blockchain to avoid double spending and fraud.
The Proof of Work consensus is done by what we call "mining", where the miners have to solve complex mathematical puzzles over and over again. The more computational power (measured in Hashrate), the more chances you have of solving this mathematical problem (the solution is called hash) and earning a reward from the blockchain. It is a way of proving the blockchain that you are investing in it with energy/work.
Proof of Work (mining) is not a waste of energy or environmentally destructive, as it not only protect Bitcoin and other blockchains, but also encourages humans to search for the most efficient and cheap source of energy possible. Most of the energy used for Bitcoin mining comes from renewable sources or excess of energy that exist in some areas. As Satoshi Nakatomo stated: "The utility of the exchanges made possible by Bitcoin will far exceed the cost of electricity used. Therefore, not having Bitcoin would be the net waste."
The Proof of Stake consensus is done by minting or forging. In this case, very basic computers can mint or forge (validate transactions) since this is not a very demanding task. Instead of using electricity to prove you are invested in the blockchain, you prove it by owning its coins. Everybody can mint in Proof of Stake systems as it only requires a very cheap computer, online connectivity, and owning some coins of the blockchain you're minting. You don't need to spend huge amounts of money on specialized computers (ASICs) and electricity, like in Proof of Work.
What is staking and minting (or forging)?
Staking is the act of holding PoS coins in a Staking node to mint (or forge) new blocks. Minting (or forging) is the act of creating new blocks in a Proof of Stake blockchain to have a chance to receive a block reward.
A Staking node is a computer that runs the coin's wallet with a positive coin balance. The wallet will automatically stake by using the node's resources to protect the blockchain by verifying the legitimacy of the transactions. For its services, the blockchain will send rewards (coin payments). Rewards are based on the number of coins the wallet owns, the more coins the more chances there are to receive a reward. The node must always be online or it won't be staking and therefore not receiving rewards.
What is a Masternode?
A Masternode is similar to a Staking node, but instead of protecting the network like Staking nodes do, Masternodes provide services to it. They form a huge network of interconnected computers that are used in benefit of the blockchain.
Each Masternode requires a certain collateral (locked coins) balance to work. In Stakenet, exactly 15 000 XSN per Masternode is required. In our case, XSN Masternodes will hold other blockchains and run XSN Dex, among many other things.
We can compare a Masternode to a Merchantnode: while in the TPoS process you would find three entities (Owner, Merchant, and Merchantnode) in the Masternode process there's only two, the Owner and the Masternode. There's no need for an intermediate Merchant, as the Owner is the one directly controlling the Masternode. The Merchant entity was purposely added in TPoS so they (merchants) would be able to trustlessly stake Owners coins.
You can rent an XSN Masternode using our Masternode hosting service in XSN Cloud. It is a trustless solution so you're always in control of your money and there are no associated risks. Since there's no Merchant entity in the Masternode process, as it is in TPoS, you need to deposit some XSN to your Cloud wallet in order for us to take fees for our Masternode hosting service.
Block rewards are new coins (in our case, XSN) created and automatically distributed by the network to users as rewards for its services.
In Stakenet, rewards are distributed to Stakers and Masternodes on each block creation. In Bitcoin, miners get the block rewards.
What is an ICO? Is XSN an ICO?
ICO stands for Initial Coin offering and is a mechanism by which funds are raised for a new cryptocurrency venture. Typically during an ICO, coins are presented/ sold to initial investors at discounted rates.
No, XSN did not hold an ICO.
What is a fork, a hard-fork, and a soft-fork? Did XSN fork off any other chain?
Forking implies any divergence in blockchain - temporary or permanent. Very simply, forking is said to happen when a blockchain splits into two branches. A hard fork is a permanent divergence from the previous version of the blockchain; nodes running previous versions will no longer be accepted by the newest version. Some examples are Ethereum vs Ethereum Classic, and Bitcoin vs Bitcoin Cash.
A soft fork is said to happen when a change to the software protocol keeps it backward compatible. What this means is that the new forked chain will follow the new rules and will also honor the old rules. The original chain will continue to follow the old rules.
Stakenet isn't a fork with other parallel moving blockchains. Stakenet is built on the Bitcoin.core blockchain architecture using a modified Dash and Peercoin codebase.
What is an orphan block?
Orphan blocks are those blocks which are not accepted into the blockchain network due to a time lag in the acceptance of the block in question as compared to the other qualifying block. Orphan blocks are valid and verified blocks but are rejected.
They are also called detached blocks as they exist in isolation from the blockchain. Orphan blocks don't cause any harm at all to the blockchain itself.
Specific and detailed questions regarding Stakenet (XSN)
What are Stakenet and XSN?
Stakenet (XSN) is a decentralized network providing a trustless interchain economy; it is powered by a Proof of Stake blockchain with Lightning Network, Masternodes, and dApps.
Stakenet’s use case is to provide a highly secure cross-chain platform for cryptocurrencies, where individuals can easily operate with any blockchain by using XSN, as it is connected to others through the Lightning Network; while also allowing the ability to build code-agnostic dApps on top of it, such as our Lightning DEX. All of which will be powered by XSN Masternodes, who earn and collect fees for the services they provide.
One of the biggest differences between XSN and most other cryptocurrencies is that we don't want to impose a new norm, but rather adhere to the existing Bitcoin-Lightning Network (BTC/LN) standard, which we believe is the present and future of crypto. The advantage this provides over others is truly massive: we don't have to hope that our solution becomes mainstream, as it always will be alongside Bitcoin and the Lightning Network.
Stakenet allows easy and secure staking of its currency XSN by using its invention Trustless Proof of Stake (TPoS), effectively achieving decentralized cold staking; this provides one of the highest levels of security among any PoS blockchain. TPoS allows users to cold stake their coins via smart contracts, which means you can stake your XSN from your cold wallet, thereby removing any unnecessary security risk. With a combination of TPoS, the Lightning Network, and Cross-Chain Proof of Stake, you will be able to stake XSN from your own hardware wallet (or any other wallet) and receive rewards directly to it in other currencies, like Bitcoin or Litecoin. Currently, XSN is supported on all major hardware wallets, including Ledger, Trezor, and Xeeda.
Stakenet is not only focusing on the software and protocol level, but it is also entering the hardware market with XSN Viper, the debut product from our XSN Hardware division - a Lightning router that allows users to set up Lightning Network hubs for XSN, BTC, LTC, and collect fees. It will also be able to store user's coins safely in cold storage by using a separate microcontroller that holds private keys and remains offline (only sends signatures), powered by our open-source firmware XSN Excalibur, which is based on Trezor's reputable code. Users will be able to operate (receive, store, send, run Masternodes, and trade via Lightning Swaps) with all coins supported in Stakenet Wallet (our non-custodial multi-currency light wallet), while the coins remain safe in our hardware device. Support for multiple LN channels will be added, as well as multiple Masternodes support in later versions. XSN Viper is not only just a useful product but a worthwhile investment too.
XSN Masternodes create a massive decentralized network of computers that generate incredible amounts of computational power. They provide high-end network services and run the dApps that are built upon the blockchain. For example, this Masternode network power XSN Dex (our Lightning DEX) by performing Lightning Swaps (Lightning Network Cross-Chain Atomic Swaps) between different coins, facilitate instant on-chain transactions by using InstantSend, and private transactions with PrivateSend. They will also run other Lightning dApps, host Lightning Channels, and provide liquidity to the Lightning Network with their collateral. XSN Masternodes will be one of the most powerful stations in crypto that earn passive streams of income for the services they provide.
XSN is the first Proof of Stake coin with Masternodes to successfully execute Lightning Network compatibility and is among the first three (next to Bitcoin and Litecoin) to ever perform Lightning Swaps. Stakenet can, therefore, interact with any Lightning Network compatible merchant, application, wallet, or upcoming crypto device. Thanks to XSN cross-chain capabilities you will be able to pay anyone that accepts Bitcoin (or any other Lightning Network compatible coin) seamlessly with your XSN, improving adoption on a massive scale as thousands of merchants already accept Bitcoin payments over LN - and it will only keep growing.
XSN is the currency, the gas, and the foundation of Stakenet. It has one second confirmation times and up to 240 on-chain transactions per second. Over the Lightning Network, where the majority of the transactions will take place, XSN can infinitely scale with instant and practically free transactions.
Stakenet is building dApps -and will allow others to do the same with our dApp framework- to run on its blockchain, such as the aforementioned XSN Dex. This will be the first Lightning DEX ever created. It will work by utilizing off-chain Lightning Swaps, as opposed to on-chain Atomic Swaps which most other DEX do. Lightning Swaps are instant, practically fee-less, and infinitely scalable. One of the biggest issues inhibiting the adoption of current decentralized exchanges is that they simply cannot match the user experience of a centralized exchange. They are both slow and hard to use, because of this, they fail to gain any meaningful market share. XSN Dex completely changes the game by utilizing Lightning Swaps to achieve the user experience of a centralized exchange, while remaining in control of your cryptocurrencies. These dApps will have dedicated websites and be integrated into Stakenet Wallet, which will work in symbiosis with our hardware product XSN Viper.
If you would like to learn more, we strongly suggest reading the whole FAQ, as most questions are covered on it.
What is XSN used for? How is it useful?
XSN is a state of the art cryptocurrency that allows a peer-to-peer method of payment. It is money with unique properties not achievable by any central bank issued currency: open, permissionless, decentralized, trustless, censorship-resistant, immutable, smart (programmable), interoperable, fungible, secure (cannot be counterfeited), and has a fixed emission. It is a medium of exchange used for real-world transactions on a global scale - including the transactional activities happening within the Stakenet financial ecosystem. These characteristics by themselves make XSN valuable, although there is much more to it.
XSN is the first Proof of Stake coin with Masternodes to successfully execute Lightning Network compatibility, and is among the first three (next to Bitcoin and Litecoin) to ever perform Lightning Swaps. Stakenet can therefore interact with any Lightning Network compatible merchant, application, wallet, or upcoming crypto device. Thanks to XSN cross-chain capabilities you will be able to pay anyone that accepts Bitcoin (or any other Lightning Network compatible coin) seamlessly with your XSN, improving adoption on a massive scale as thousands of merchants already accept Bitcoin payments over LN - and it will only keep growing.
One of the biggest differences between XSN and most other cryptocurrencies is that we don't want to impose a new standard, but rather adhere to the existing Bitcoin-Lightning Network (BTC/LN) protocol, which is the present and future of crypto. Because of this, people will always be familiar and ready to use our apps - leading to unparalleled growth and adoption of our tech. With every progress or breakthrough BTC/LN makes, it will in turn benefit XSN. The advantage this provides over others is truly massive: we don't have to hope that our solutions become mainstream, as it will always be alongside both Bitcoin and the Lightning Network.
You can generate a passive income in the form of XSN if you are providing value to the network either by Staking (with TPoS you can stake XSN in your hardware wallet and receive rewards in any other currency, like Bitcoin, directly to it and with no intermediaries or third party risks involved), or running a Masternode. These are incentivized by our economic model to keep running, creating a huge decentralized network of computers with insane computational power.
XSN is the currency, the gas, and the foundation of Stakenet, as everything runs on top of it. The XSN Masternode network runs dApps (Lightning DEX, et cetera...) and services that generate fees which will be paid back to them. These fees will be paid in XSN in one way or another. Users won't even realize they have paid in XSN as it will all be handled by Lightning Swaps in the background. For example, in XSN Dex, if someone were to swap BTC to LTC, the fee will be initially collected in BTC, however, this BTC will then be automatically converted into XSN via a Lightning Swap in the background and paid to XSN Masternodes. This economic model will provide a constant demand for XSN, with fees collected from the dApps and services constantly being converted to XSN and then distributed back to XSN Masternodes.
Stakenet's objective is to make XSN a highly usable coin by:
· Improving its adoption, being able to pay anyone and everyone, even if they only accept BTC.
· Being one of the most secure blockchains, having a robust network and trustless operating environment.
· Being pioneers in new technological advancements, like the Lightning Network, Lightning Decentralized Exchanges, and the crypto hardware industry.
· Building services and dApps on top of the Stakenet blockchain, like XSN Dex (Lightning DEX), and allowing others to do the same with our dApp framework, creating a constant demand for XSN from the fees collected.
· Generating a passive income for both our Masternodes and stakers.
· Giving XSN holders a voice in a decentralized democracy, where casting votes decides and dictates the next moves of Stakenet.
What is Trustless Proof of Stake (TPoS)? How does it work?
You can stake XSN by leaving your wallet unlocked and running 24/7 with a positive balance, or you can stake with Trustless Proof of Stake. TPoS is a technology developed by Stakenet that allows users to trustlessly stake XSN by having a Merchantnode (a server which acts as a Staking node) do the staking for them while not having to share any spendable balance or private keys with it. This is done with a smart contract.
With TPoS, you can safely keep your coins anywhere, like in a hardware wallet, and they will be staking and growing over time, even while you sleep. Not having the coins exposed in the staking server is a huge step forward in terms of privacy and security.
You can run your own Merchantnode to trustlessly stake your own coins, or you can also hire a Merchantnode from a third party to stake your coins for a small fee with no risks associated, as your funds always remain with you. Merchantnodes are provided by independent people called "Merchants" - a whole new market emerged from this technology. You can find them in our social channels, like in our Discord. Keep in mind that a server online 24/7 (Merchantnode) is always needed in order to run TPoS.
Having trustless and decentralized staking nodes with unique IPv4 addresses makes XSN one of the most secure PoS blockchain. Other cold staking solutions can't achieve this level of security, as they don't have as many nodes verifying the blockchain. Trustless Proof of Stake, in combination with Lightning Swaps, will allow users to stake XSN held in a hardware wallet and earn Bitcoin (or any other LN compatible coin) directly to this hardware wallet as rewards.
In a TPoS contract there are three entities: the Owner (wallet that owns the coins to be staked), the Merchant (wallet that creates the smart contract with the Owner and earns a commission), and the Merchantnode (the wallet from the Merchant that will be staking in a server online 24/7).
If you are a Merchant providing services to other Owners, you can use your own local wallet to act as the Merchant wallet where you will earn the commissions from all the TPoS contracts you have created - this Merchant's wallet, as well as the Owner's wallet, can both remain offline. Then you will have servers online 24/7 running the wallets acting as Merchantnodes and staking each Owner's coins.
If you are the Owner and want to TPoS your own coins without hiring third-party Merchants, you can do so and there are only two wallets involved in the process: the wallet with your coins (Owner), which can remain offline, and the wallet running in a server online 24/7 that will act both as Merchant and Merchantnode and will stake your coins. This wallet will earn the commission you set for the contract, as it is acting as a Merchant wallet. Since the minimum commission is 1%, this amount from the staking rewards would go to the Merchant+Merchantnode wallet. Most people decide to transfer this amount to his Owner's wallet once in a while.
Currently it is not possible to use the same wallet to act both as the Owner and Merchant. If this was the case you would effectively eliminate the Merchant entity, and the Owner's wallet would receive 100% of the rewards while the Merchantnode does the staking. It would be similar to the Masternode process.
When the Owner creates the contract with the Merchant, he will receive a TPoS address. This address acts as a cold staking address, where Owner can withdraw and deposit coins to it at will. The coins in it are always staking, risk-free and without further intervention.
What's the difference between Atomic Swaps and Lightning Swaps?
Atomic Swaps are trustless cross-chain trading. They allow people to trade with one another directly from their wallets, without the need and risks of intermediaries. This is revolutionary, as you no longer need to trust any centralized entity in order to buy or sell crypto assets. They work with Hashed Timelock Contracts (HTLCs), a kind of smart contract.
Atomic Swaps (Cross-Chain Atomic Swaps), are done on-chain. This means they are limited by block size (not scalable), confirmation times (slow), and fees (expensive) inherent to the respective blockchains.
Lightning Swaps (Lightning Network Cross-Chain Atomic Swaps) are done off-chain over Lightning Network. Lightning Swaps are infinitely scalable, instant, and have little to no fees at all. So they don't have any of the on-chain Atomic Swaps limitations.
With the issues on-chain Atomic Swaps have, it is clear why Decentralized Exchanges haven't gained enough traction so far, they simply can't match the user experience of Centralized Exchanges. Lightning Swaps solve all of these major problems, so they could very well revolutionize the entire ecosystem.
The possibilities that arise are limitless, and considering the huge progress the developers working on the Bitcoin-Lightning (BTC/LN) protocol are making, it is clear to us that it is the future. That is why Stakenet is leading on Lightning Network innovation, and it is among the first three, next to Bitcoin and Litecoin, to ever perform Lightning Swaps.
In December 2018, the head developers of Stakenet formalized a collaboration with the Litecoin Foundation to work on and further develop the Lightning Network.
How secure is Stakenet? How expensive is to attack the network?
Stakenet is one of the most secure PoS blockchains. In order to perform an attack, you would need to own more than 50% of the current online staking supply. At this moment there are around 25 000 000 XSN staking. This represents 50% of the total stakeable coins (coins not locked in Masternodes), a pretty impressive figure thanks to Trustless Proof of Stake (TPoS). This is multiple magnitudes higher than other PoS blockchains.
Therefore, you would need to own half of those 25 000 000 XSN currently staking, that's around 12 500 000 XSN. On the other hand, if you couldn't buy any of those currently staking coins, you would then need to buy more than 25 000 000 XSN (the current staking amount + 1).
So the attacker would need to own between 12 500 000 XSN and 25 000 000 XSN to successfully attack Stakenet. That's between 17% and 34% of the total circulating supply. If more coins were to be staking, or more supply to be locked in Masternodes -and developers are working towards that happening-, there might not be enough supply available to purchase to perform the attack at all.
This kind of attack would require to invest and lose an insane amount of money, time (many years) and effort, to no benefit at all.
Even in the worst case scenario of someone acquiring the XSN needed to perform this attack, the bad actor will stake, but he won't be able to do much as he can't write every block or fake any transactions. He can't generate two copies of the chain for longer than 20 blocks (our confirmation time), as there's a built-in mechanism (coinage) where coins become immature, thus decreasing the chance of the attacker of minting a new block on each generated block. A double spend won't occur because one block will be dropped in the event of multiple blocks. The most they can do is simply mint empty blocks - and the next blocks will include the transactions anyway, so developers would probably just put a measure in to stop empty blocks from being accepted. For example, wall off coins linked to empty blocks as a new upgrade or fork version.
Something else to keep in mind is that Proof of Stake doesn't allow pre-minting, so they can't generate the next block without generating the previous block. And there is network drift and difficulty as block inputs. They would need to continuously mint 20 blocks on both chains - the chances of that happening with the systems in place are close to none.
Taking into account everything previously stated, we can conclude the chances of such attack happening are essentially zero and Stakenet is among the most secure blockchains in the industry.
How is TPoS protected from a 51% Merchantnode minting attack?
Becoming a TPoS Merchant is purposely made easy. This will ensure competition and enough decentralization amongst TPoS Merchants to prevent a single Merchant from monopolizing the market.
Furthermore, as the setup is fairly easy, a lot of the people just choose to run their own Merchantnode to cold stake their coins and not pay a commission to a third party. This is especially true with people that own large amounts of XSN.
So it is simply not possible to gather the vast amount of XSN needed to perform this attack using Merchantnodes, as most of the coins are being staked by their Owners directly, and you are competing against dozens of other Merchants. After making a lot of marketing efforts and noise, at best you could gather a few hundred thousand XSN by offering Merchant services, nothing in the grand scheme of things where you'd still need to buy between 12.5M and 25M XSN.
The developer team also can work on one-click TPoS setups for Merchant UI’s if need be to even further ensure decentralization and allow average non-techies to enter the market.
What is the block size for XSN?
XSN has 1 MB block weight limit, but with SegWit blocks can reach up to 4 MB.
What is the block time for XSN?
Approximately 60 seconds.
How many transactions per seconds XSN can reach?
On-chain up to 240 TPS with one second confirmation times.
Over Lightning Network, where the majority of the transactions will happen, XSN can reach billions and instant transactions per second.
What do XSN Masternodes do?
XSN Masternodes are aimed to be one of the most powerful stations in crypto. They will earn a passive income based on everything they will do:
· They will host and run XSN Dex. · They will host all blockchains needed to keep XSN Dex decentralized and making sure users can perform swaps without needing to download entire blockchains. · They will handle Lightning Swaps (Lightning Network Cross-Chain Atomic Swaps). · They will facilitate instant and private on-chain transactions. · They will host dApps. · They will host Lightning Channels. · They will use their Masternode collateral to provide Lightning Network (and XSN Dex) liquidity.
While developers are working towards all of this, it is only the first steps of what XSN Masternodes will be capable of.
How much do I need to run an XSN Masternode?
You need exactly 15 000 XSN locked in as collateral per Masternode.
What is the treasury?
The treasury is a cryptographically sealed public address that holds funds allocated to it by the network. In Stakenet, 10% of the block rewards go into it. It is used to fund Stakenet further coin developments, new projects, et cetera.
There is also a long-term development fund distributed between several addresses for larger projects, partnerships, competitions, long-term marketing, key developments. These addresses are:
The treasury is used to cover any expenses before tapping into the long-term development addresses funds. This list will be updated as addresses split and/ or are moved for security reasons.
What is RSB?
RSB, or “Revolving Stake Bonus”, is a reward mechanism designed to dynamically support the Stakenet ecosystem that will support a network of projects (i.e XSN Cloud) whose proceeds are donated to the treasury for further developments or burned via a Proof of Burn mechanism.
The possibilities that arise from this model are limitless, with the very highest ones being prioritized and pursued on a strategic partnership and adoption level in the early stages. This is made possible due to XSN’s unique economic model via our RSB coupled with treasury and API integration, creating a powerful multi-layer of financial protection and growth for its holders.
Stakenet (XSN) will have a dedicated page for everyone to monitor the RSB mechanism for the projects built on top of it.
What is the maximum supply of XSN? is it an inflationary currency?
Since the total block reward will stabilize at 20 XSN per block, supply is theoretically unlimited. This is the case with other coins like Dash and Monero. Being an inflatioary currency is a requirement for our economy to work in the long-term.
However, XSN burns the transaction fees and will introduce RSB, which will serve to offset some or all of the inflationary effect of the block reward. Therefore, it is expected that XSN supply will only increase very slightly with time.
Does inflation mean XSN can't increase in price?
No. The coin price depends on the total circulating supply and the market cap. So the more the market cap XSN has, the more will be the value of every circulating coin, and vice-versa.
It is also important to note that XSN’s inflation is low and its monetary policy is based on hard-coded rules and consensus via XSN Masternodes - any decisions of how inflation is used is left to vote in a decentralized democracy. No group of people, whether elected or otherwise, can unleash a tragedy of the commons.
How are the block rewards distributed?
From each block rewards: 45% Masternodes - 45% Staking - 10% Treasury.
PoS Phase 01: [000 000 – 020 000]
PoS Phase 02: [020 001 – 063 200]
PoS Phase 03: [063 201 – 106 400]
PoS Phase 04: [106 401 – 149 600]
PoS Phase 05: [149 601 – 192 800]
PoS Phase 06: [192 801 – 236 000]
PoS Phase 07: [236 001 – 279 200]
PoS Phase 08: [279 201 – infinity]
PoS Phase 8 started on 21 September 2018.
What is the difference between running a Staking node and a Masternode?
Masternodes provide network services to the Stakenet blockchain, and Staking nodes protect it. As you need a node to be online 24/7 to do both, it is up to every individual to choose. We recommend to always have a Staking node trustlessly staking your coins (we call these nodes Merchantnodes, they are part of TPoS), and if you can afford then also run Masternodes with 50% of your coins.
How profitable is staking? And running a Masternode?
Profitability varies constantly, you will be able to check it soon in our calculator. Currently it is around 18% annually both for Masternodes and Stakers. While staking you can freely move your XSN, but running a Masternode with a locked collateral will have certain benefits. such as earning the fees from the dApps powered by them, like XSN Dex (our Lightning DEX), having voting permissions, et cetera...
XSN Masternodes receive 45% of the block rewards for providing network services. Stakers, whether that be from TPoS or regular PoS, also receive 45% of the block rewards for running their nodes and securing the network. The remaining 10% is sent to the Stakenet treasury.
What is the minimum amount of XSN needed in order to stake?
There is no minimum. However, the rewards are distributed based on the weight on the network of your coins, so if you stake with a low amount of coins you may be waiting a long time to receive a reward. You can stake via TPoS or just by leaving your wallet unlocked and running, they are the same in terms of rewards distribution and minimum amount.
Can I run a Masternode and also stake my XSN?
Yes, but not with the same coins. The XSN being used as collateral to run a Masternode can't stake.
How do I run a TPoS Merchantnode to trustlessly stake my coins?
With this method, you don't need to leave your computer online 24/7 and your coins will stake even if you are holding them in a hardware wallet.
How do I run a Masternode?
You can rent an XSN Masternode using our Masternode hosting service in XSN Cloud. You still need to own 15 000 XSN, but as it is a trustless solution you remain in control of your coins and there aren't associated risks. You need to deposit some XSN to your Cloud wallet in order for us to take fees for our Masternode hosting service.
Keep in mind a Masternode is a computer that needs to be online 24/7. Our Masternode hosting service in XSN Cloud provides, configures and maintain this server for you, so you don't need to leave any of your computers online 24/7 or rent any server.
How do I distribute my XSN between Masternodes, TPoS, and Cloud to get the most out of it?
If you have a few hundred XSN, you can use the Cloud to receive some staking rewards that otherwise can take months for you to earn. Keep in mind there are risks associated with the Cloud as it is a centralized and trustworthy solution.
If you have more than 15 000 XSN, we always recommend staking using TPoS and running a Masternode whenever it is possible. Try to keep the balance between Masternodes and TPoS at 50%. If you have 30 000 XSN, running a Masternode and TPoS the remaining 15 000 XSN is a great idea. If you have 15 000 XSN, you can do either one, as profitability is pretty close.
What is the point of being a Merchant? What does a Merchant get out of TPoS?
It is beneficial to the Owners of the coins because they don't have to leave their computer online 24/7 to stake them and can be stored these in a hardware wallet - as this is a trustless system with no risks involved. It is beneficial for the Merchant to have TPoS since they will be earning a commission for the TPoS contract.
It is worth noting that the Owner can run its own TPoS, so you don't need to hire a third party Merchant to use TPoS. Third party Merchants are only an added benefit of TPoS.
Where do I receive my Staking, TPoS or Masternode rewards? What if I have my coins in a hardware wallet like Ledger Nano?
Staking rewards are paid to the staking wallet. TPoS rewards are paid directly to the Owner's wallet and Merchant's (controller) wallet based on the commission contract details. Masternode rewards are paid to the controller wallet.
In TPoS, you can keep your coins in your Ledger Nano and you will receive your TPoS rewards to it.
What is the staking coinage and why I'm not receiving staking rewards?
The coinage is the amount of time coins have been "maturing" for staking purposes. In order to be eligible to receive a staking reward, coins first need to mature. It is nothing more than a wait time for safety purposes.
In XSN, coins start maturing one hour after 20 transaction confirmations and reach its maximum coinage 24 hours after.
Is Stakenet (XSN) supported on Ledger?
Yes, it is. Stakenet has a lifetime contract with them, so XSN will always be on any Ledger devices.
Can I earn Bitcoin while holding XSN in my Nano Ledger S?
Yes. Due to a combination of TPoS and our Cross-Chain Proof of Stake technology, you will be able to hold and stake XSN in your Ledger or any other cold wallet, and receive the staking rewards in BTC or any other supported currency directly to it - trustlessly and with no intermediaries involved.
Can I run a Masternode while holding my XSN coins in my Ledger Nano?
XSN is working towards that. In the future, you will be able to run Masternodes while holding XSN in your Leger Nano S.
How long does it take to start receiving rewards from my Masternode?
It takes 2.6*(total active MN count) minutes for your Masternode to start getting rewards since activation. With around 1700 Masternodes currently on the network, it will take 73.6 hours.
How do XSN Masternodes run XSN Dex?
XSN Masternodes will hold Decentralized Hashing Tables (DHT’s) which will be the precursor in allowing our network to hold and execute swaps orders as a service via Lightning Swaps (Lightning Network Cross-Chain Atomic Swaps).
All required tech can be done in-house on the XSN chain while accepting XSN as a fee powering these services.
How does TPoS work in technical terms?
Trustless Proof of Stake works with Smart Contracts and the use of a third key -the shared key- apart from the private and public keys. This allows the Owner of XSN to communicate with the Merchant and have their coins stake on the network with a Merchantnode, without anyone but the Owner having access to the funds.
Shared key doesn't mean you and the Merchant owns it. It means everyone on the network can see your agreements but no one other than the Owner can use it for moving funds - the Merchant can only use it to stake those coins.
Are there more use cases for Trustless Staking (TPoS)?
Absolutely. It also has other tangential uses in the crypto space as well. Considering we have likely only scratched the surface of TPoS capability and use, it is very likely that some pretty special ideas will be generated in the near future. Stakenet's developers are already implementing some.
Will other coins begin to use trustless staking (TPoS) as well?
We definitely see other coins using this feature, as it is revolutionary within the crypto community. However, if coins choose to do this they will have to fork off from XSN itself.
Can I run more than one Masternode or TPoS on a computer?
Yes, but with different IPv4. An IP security protocol is implemented, so each Masternode and Merchantnode needs a unique static IPv4 address. This is done to prevent centralization and further strengthen the network.
However, a Masternode and a Merchantnode can share the same IPv4.
As a Merchant, can I use a single Merchant address to create several TPoS contracts?
No. You have to create a different Merchant address for every TPoS contract and link it to a Merchantnode with a unique IPv4. Otherwise, you will get banned.
So a single Merchant wallet can run many TPoS contracts as long as every one of it has a different Merchant address and IPv4 linked to it.
How would I claim my stakes if I have a TPoS contract through my ledger?
There would be nothing to claim. If a Merchant is running a Trustless Proof of Stake contract for funds from an address of yours, your address will receive the rewards as they come in and you would have full access to everything.
Say I leave my computer running, and I hit an orphan block. Does the wallet stop staking because of this?
No, it will continue staking.
I've lost a portion of my total balance, yet I see no outgoing transactions. How do I fix this?
If there is a ? mark that stays in the transactions tab, that means its an orphan block, so it simply didn't get accepted. Just right-click on it and select 'abandon transaction' to free the funds set aside that attempted to stake that block.
No. Myetherwallet.com is only for handling Ethereum ERC-20 tokens. XSN is a coin deployed on its own dedicated blockchain.
Specific questions regarding XSN Cloud app
What is XSN Cloud?
XSN Cloud is a centralized application where we (Stakenet.io website) offer blockchain services, designed to grant a better and easier experience for XSN users, thus helping with adoption.
Please note that XSN Cloud is not Stakenet, and has nothing to do with its decentralized ecosystem and dApps. Simply put, Stakenet.io is an informational website hosting the XSN Cloud app, and Stakenet is the decentralized network built upon the blockchain.
In XSN Cloud it is featured:
· Staking-as-a-Service, wallets that automatically stake. Deposited users' coins are sent to one main address (called pool) that regularly receives many stakes, and are then distributed in real time.
· Masternodes-as-a-Service, a trustless Masternode hosting solution. Set up your Masternode risk-free, as you remain in control of your coins at all times in your wallet.
· Monitoring services for Masternodes and TPoS contracts. Receive e-mail alerts if anything goes wrong.
XSN Cloud collects fees from the users for using these services. Fees are then sent to the Stakenet treasury to cover costs and further developments.
Note that you lose ownership of the coins you deposit to XSN Cloud wallets, as you don't control the private keys. Please do not deposit large amounts of coins to the Cloud wallets, but instead stake on your own with TPoS or common staking solutions, as the profitability will be higher and there will be no risks associated.
XSN Cloud wallets are only suitable for newcomers with no experience and a low XSN balance that otherwise wouldn't earn any staking rewards for months - and we can't recommend everyone enough to move to a cold staking solution like TPoS as soon as possible. The rest of the services, like Masternodes-as-a-Service, are trustless solutions safe to use by everybody as you don't lose ownership of your coins.
What is the difference between staking in XSN Cloud or doing TPoS/ staking in my own wallet?
XSN Cloud staking pools is meant for the people that don't have enough coins to receive regular rewards while staking on their own wallets. On XSN Cloud, the deposited users' coins are sent to one main address (or pool) that regularly receives many stakes, which are then equally distributed in real time. This way, users that otherwise would not receive a reward for months, can receive dozens of (smaller) daily rewards.
The disadvantage is that it is a centralized and trustworthy solution, so it involves huge risks. Those users with enough coins to receive stake rewards regularly must always stake in their own wallet using TPoS as it provides maximum security.
What are the fees for the staking pools services?
For XSN, fees deducted are a percentage equivalent to [2.5 * (amount of coins in the pool / circulating supply)]. E.g. if there's 4 000 000 XSN in the pool and the circulating supply is 80 000 000 XSN, fees will be [2.5 * ( 4 000 000 / 80 000 000)] = 12,5%. The higher the pool percentage represents over the total circulating supply, the higher the fee. This is done as a mean to avoid centralization, and for people that can afford it to use TPoS instead as it is much more secure.
Rest of the coins have a fixed fee of 10%.
Is staking on XSN Cloud more profitable than TPoS or a Masternode?
No, as XSN Cloud charges fees for its staking services it will always be less profitable. The most secure and profitable choice is always to run your own TPoS or Masternode. Alternatively, you can hire a TPoS Merchant to trustlessly stake for you and negotiate his commission. Usually, Masternodes have a higher ROI than staking.
You can also set up a Masternode in XSN Cloud. This is a safe and trustless solution, as you never lose ownership of your coins, but there is a fee added for the Masternode hosting and maintenance.
How does the Masternode hosting service (MNaaS) in XSN Cloud work?
In short, you keep your coins safe in your own wallet and we set up a server to act as your Masternode using your coins as collateral for it. So you don't need to leave your computer online 24/7, and we take care of keeping it updated and running.