How to choose your nano representative

Last week we explained what self custody is and why it’s so important to take self custody of your nano. Here, we cover the natural ‘next step’ towards fully participating with the nano network - choosing your representative. 

The funny thing about choosing your representative is, it’s really quick and easy to do, but understanding why it’s important takes a bit longer. So, if what you’re after is a ‘how to’ guide, just jump to the end or check out this short video:

Why should you choose your representative?

Still here? Alright, let’s get into it! 

Nano is a decentralised payment network. It’s uniquely designed to grow more decentralised over time (unlike, say, Bitcoin, which actually centralises as time goes on). However, for this to continue, every nano user needs to do their bit.

Now you’ve taken self custody of your nano, you have a say in how the nano network is run. Think of it like democracy: participation - by keeping power in the hands of the many - is the very act that keeps it alive. And choosing your representative is the easiest way to participate. Your vote, your voice - so to speak. 

So, to return to the opening question, ‘why should I choose my representative?’ The simple answer is: ‘Because it helps to decentralise the nano network’. But that’s not a great answer, because it doesn’t say why we need to decentralise the nano network. 

That takes a bit longer to explain…

What’s so great about decentralisation?

Decentralisation is one of cryptocurrency’s founding principles because: 

It increases security. With a decentralised financial network (like nano) there is no single point of failure. In a centralised network, if the central server were to go down, or be attacked by bad actors, the entire network is at risk of being compromised. In nano’s decentralised network, any computer (or ‘node’) that is deemed to be compromised can be identified and bypassed by other computers on the network. The more decentralised the network, the less the impact of one or more nodes being compromised simultaneously. 

It increases equality. Nano offers anyone in the world with an internet connection the opportunity to take control of their money. Even if they’ve been marginalised by existing financial systems. Nano is also open source, which means anyone can access the network and have a say in how it is run. There is no single entity that can suddenly decide to devalue the currency by printing or minting more, or act in a way which benefits only a small group of users. 

It increases freedom from censorship. Centralised institutions have the power to reject or withhold transactions, (or even withhold access to funds), for people who are deemed to violate their rules and regulations. If you are able to trust your bank or government, this may never be a concern for you. However, there are many examples of cryptocurrency being a lifeline for people who have legitimately lost faith in financial institutions and the regimes under which they live. 

So, there you have it: choose your representative and decentralise the nano network! 

Sorry, what? You want to know how choosing a representative decentralises the network? Good on you! Okay then, strap in… 

What does ‘choosing a representative’ actually mean? 

The next step towards understanding why choosing your representative is important, is to understand a bit more about how nano works. In particular, how it achieves something called ‘consensus’.

Consensus and Open Representative Voting

For any decentralised payment network to work, it needs a ‘consensus mechanism’. This is the process it uses to achieve agreement, or trust, between the computers across the network. Ultimately, the consensus mechanism is what makes sure only valid transactions get approved. 

Nano’s consensus mechanism is called Open Representative Voting (ORV) and it’s totally unique. It works as the name suggests: representative accounts (or nodes) that are always online, vote on the validity of transactions published to the nano network. When a transaction has enough votes to achieve consensus, it is officially approved by the network.

However, it’s not as simple as one node having one vote. This would leave the network vulnerable to actors who could simply start up lots of nodes to manipulate consensus. To stop this from happening, each representative has a ‘voting weight’, which is determined by the balance of the accounts that have delegated their votes to it. For a transaction to reach consensus it needs to be confirmed by 67% of the total online voting power. 

So, by choosing your representative, you allocate the balance of your nano account to their voting weight. And this is where the ‘open’ part of ‘ORV’ comes in. Anyone can run a node, anyone can be a representative and anyone is free - indeed encouraged - to change their representative whenever they want to. Throughout this process your nano remains in your non-custodial control, ready to spend whenever you want. If your representative goes offline, your account is totally unaffected - it just means your funds are no longer used to secure the network. 

As a nano holder, there is no incentive for you to choose a representative that already has a lot of voting weight. By spreading out the voting weight, you make the network more robust, more secure and make nano an even more attractive proposition. Because there are no monetary rewards for being a representative, there is also no incentive for anyone to want a large share of voting power. Representatives seeking to achieve this would see a stream of nano holders moving their vote elsewhere - to protect the integrity of the system and thereby, the value of their asset.  

So, now you know how choosing your representative contributes to the decentralisation of the nano network and why it’s so important. Your next question might be, ‘Wait - does all this actually work?’ 

‘Wait - does all this actually work?’

The simple answer is, ‘Yes. Really, really well’. 

Since its creation, the nano network has processed over $45bn dollars without a single fee, double spend or chain reorganisation. Due to its unique incentive structure, nano is continuing to decentralise, in contrast to the vast majority of cryptocurrencies, which centralise over time. The number of representatives has steadily increased, demonstrating that without fees, financial incentives and inflation there is still reason to run nodes and contribute to the network. 

If you’d like to check for yourself, you can even track the decentralisation of the network by checking the number of representatives and their voting weight:

Hopefully, by now there’s only one more question left to answer: ‘How do I choose my nano representative?’ 

How to choose your representative

Every good nano wallet will allow you to quickly and simply change your representative. The process should be similar for all:

1. Go to your wallet’s account or app settings (often signified by a ‘gear’ ⚙️ icon).
2. Locate the ‘representative’ or ‘change representative’ option.
3. Select ‘choose from a list’. A good guide rule is to select a representative with high uptime and low voting weight to improve decentralisation. 
4. Sometimes a wallet will ask you to enter your representative address manually. You can find a full list of representatives and their addresses at nanolooker.com 

The infographic below offers a nice summary and walks you through the process for popular wallet, Natrium:

Some multi-currency wallets, such as Exodus, also enable you to choose your representative. You can find their video guide to doing so, here.

Final thoughts

So, there you go! A comprehensive guide to choosing your nano representative: why it’s so important, how it works and lastly, how to do it. 

If you want to explore the technical concepts presented here in even more depth, docs.nano.org is a great place to start, especially if you’re a developer looking to get involved in the protocol. 

For an easy access intro to cryptocurrency in general and how nano came to be, check out The beginner’s guide to cryptocurrency and nano.

Twitter is where you’ll find the latest nano news. Our Reddit community is full of amazing advice and information, and if you want to help advance the world’s most efficient currency, you can even join our community program.

Until next time, happy voting!