Cryptocurrency is easily the most revolutionary development in personal finance technology since at least the introduction of credit cards in the 1950s. It is still somewhat of an open secret. Most people have never heard of it; most who have only know about one kind, bitcoin, and have only a vague idea about what it is or does.

The story on the financial news these days regarding bitcoin tends to fall along the lines that bitcoin is not important, and that the “real innovation” is the blockchain. The only issue, the story goes, is working out how to separate blockchain from bitcoin.

While these pundits try to figure out how to work the word blockchain into their next on-air game of buzzword bingo, many bitcoin alternatives (which is to say, other cryptocurrencies) exist today, all utilizing the blockchain concept and some with features and capabilities far beyond what bitcoin does on its own.

Nxt is a second generation cryptocurrency. It incorporates the usual features of a cryptocurrency, like decentralization and transparency, and adds some new features on top to create an entire economy within the currency.

While Nxt was not the first decentralized asset exchange (Counterparty was up and running a month earlier, though in clunky, no-GUI mode), it is arguably the best, and has been the best ever since it started. Nxt has had features running and operational that competitors were still talking about in the abstract. Nxt continues to innovate and offers an entire ecosystem that operates almost independently of the outside crypto world.

Nxt is completely open source and very much leaderless. Anyone can build applications on and around the network, create custom wallet applications or new exchanges, or make suggestions for changes on the forums. Volunteers and enthusiasts for the marketplace and the cryptocurrency have started numerous websites and software services built around the cryptocurrency. This user participation level has made Nxt one of the most robust cryptocurrency systems and communities around.

Nxt seems to be much more popular among European users than among US users, and the answer is partly regulatory. The regulatory hurdle that has the greatest impact on user experience is the ability to exchange fiat money for Nxt. Coinimal makes this easy for European users, as you can link your bank account directly to a service to purchase Nxt and send it directly to your Nxt account.

Asset Exchange

Nxt is a cryptocurrency, similar to bitcoin, but with a few very important differences. The first, and most important, is that Nxt is more tan just a cryptocurrency, it is a decentralized exchange. While the bitcoin network makes it possible for people to store and send bitcoins to each other, the Nxt network does this and allows them to create other crypto-tokens and to buy and sell those tokens among each other.

Essentially, Nxt is a crypto exchange, but unlike most exchanges, it is totally decentralized. There is no company operating the exchange, and no single location where it operates from. Like all cryptocurrency transactions, action on the exchange takes place peer to peer. Nxt has many other features which we will take a look at later.

Proof of Stake

Bitcoin calls it mining; Nxt calls it forging.

Nxt operates on a proof-of-stake protocol, while bitcoin is proof-of-work. Bitcoin requires a solution to a cryptographic problem as proof of work done by the miner. The work is the valuable thing that is rewarded (with fees and block rewards.

Nxt does not require this work and instead relies on a user’s unspent balance as the valuable thing, which is rewarded with fees. Users pay fees to perform actions on the network, and whichever account forges each block in the Nxt blockchain earns the fees in that block. There are no block rewards in Nxt because all tokens of the cryptocurrency were created right at the beginning.

Another big difference between Nxt and bitcoin is speed. Bitcoin transaction blocks occur once every 10 minutes on average; Nxt transaction blocks occur every 60 to 90 seconds. The proof-of-stake foundation of the protocol deserves most of the credit for the faster block time. In any case, it makes a much easier user experience.

Since most of us are familiar with actions on an exchange occurring almost instantaneously, even a delay of a minute may seem long. Bitcoin’s version of a decentralized exchange (the ground-breaking Counterparty platform) abides by bitcoin’s block times since it runs on the bitcoin network. That means it can take even a fast trade half an hour to complete (place order, wait 10 min, order is up, wait 10 min, someone buys it, wait 10 minutes, money is transferred).

Private Messaging

Nxt has other features including encrypted messaging. Nxt harnesses the power of the cryptographic protocol it is based on to provide any user the ability to send encrypted messages that are essentially unbreakable by anyone who may wish to listen in. In a world where you can be more or less certain that your phone and your email are being recorded and perhaps reviewed, the privacy of this simple messaging service is refreshing.

In fact, one of the more interesting services to be built on Nxt is a phone app called Nxtty (available for Android and Apple) that allows users to send encrypted messages over their phones, instead of regular SMS texting, or to make free encrypted voice calls (app to app). Nxtty provides complete privacy through encryption, and when you want to delete something, it is deleted network-wide.


Nxt offer a decentralized digital marketplace for digital goods. Really for any type of goods, but digital makes delivery much easier. This marketplace is peer to peer, as is the whole network, which means listings cannot be censored.

Monetary System

The monetary system allows anyone to create new cryptocurrencies on top of Nxt. This means you can go from idea to operating cryptocurrency in about two minutes.

Please though, take a little more time than that. The MS has quite a few configuration options for your new currency, allowing these currencies to be applied to a range of specific applications from crowdfunding to loyalty rewards.

Currencies created with the Nxt Monetary System are exchangeable with Nxt within the MS, giving currency issuers and holders instant access to an exchange market for their new coin. Optionally coins can also be reserveable, controllable, claimable, mintable and/or shuffleable.

More to Come

Nxt is truly groundbreaking technology that is changing personal finance right now. It is changing investing, fundraising, buying and selling, and has the potential to affect all aspects of business and personal finance. Even more exciting features are in the works.

We’ll examine all of Nxt’s features in further detail in upcoming posts, as each layer exposes capabilities and potential far beyond traditional third-party finance.

Download the latest Nxt wallet from, or choose an online wallet from the list.

Buy Nxt on most large altcoin exchanges including Cryptsy, Poloniex and Bter, as well as Coinomat, an exchange service whose startup was funded through a Nxt asset.