I recently started the Equal-Weight Privacy Coin Index, focused on privacy tech innovation, and it was suggested that NavCoin be included as a component.
There was some question on Twitter as to how @NavCoin was innovating privacy tech, though, and what the project’s goals are for the future. I took the debate as a sign: NavCoin needed some clarification and communication. It’s certainly an interesting project, but is Navcoin truly a privacy coin?
I spoke with Navcoin Founder Craig MacGregor to find out. Enjoy!
An Interview With NavCoin Founder Craig MacGregor
Explain NavCoin to me as though I’m completely new to cryptocurrencies. Who is NavCoin? What does NavCoin do? Why does NavCoin exist?
NavCoin was started in 2014 by a small collective of people from the crypto community on bitcointalk.org. It was started to champion fast blocks, proof of stake and privacy. As a community initiative we never ran an ICO or pre-mine and anyone can contribute to the protocol, promotion and applications. I’m the only founder who is still active, the core team now consists entirely of community members and sponsored developers. There are also at least 3 other developer groups building wallets, block explorers and mining hardware for use with the NavCoin protocol.
NavCoin bases its community structure on Bitcoin’s model and advocates for anarcho-syndicalism, autonomy and self-action. Beyond the protocol, the core developers have a strong focus on usability and NavCoin’s motto is “Simplifying Cryptocurrency”.
Beyond being a currency, once NavCoin realizes it’s current vision, what will be the use-cases? Or do you see NavCoin purely as a currency?
“NavCoin itself is designed to be a cheap, fast, lightweight digital currency. Our thinking is that instead of adding complexity to the NavCoin protocol it’s better to abstract them away into purpose built software or blockchains.”
The NavCoin Core developers have proposed the Valence Platform to manage smart contract capabilities for NavCoin (and other coins) as well as the Kauri Wallet to provide a multi-currency interface for NavCoin and Valence Apps.
In the world of cryptocurrencies/ blockchain, who are NavCoin’s primary competitors? Who are NavCoin’s allies?
I would say NavCoin’s primary competitors from a feature set point of view would be other privacy oriented coins like Pivx, Monero, Dash and Zcash.
However our attitude towards other open-source publicly mined projects is collaborative and inclusive. I like to think of us as all in the same boat rowing the same direction. In that spirit we’ve recently been a part of starting the Proof of Stake Alliance with Blackcoin, Pivx, Peercoin and more PoS projects. It’s already proving to be a fount of knowledge and ideas and i look forward to seeing where it heads once we start to work together to improve the Proof of Stake protocol.
Tell me more about where NavCoin comes from… Is it a fork from, or clone of, another project, and if so, which and why?
NavCoin was a Bitcoin clone in the beginning which is one of the best and simplest ways to start a cryptocurrency. Many of the really hard problems have already been well tested in Bitcoin’s source code and there’s no point re-inventing the wheel.
“I programmed NavCoin’s privacy method from scratch. It’s called NavTech and it operates like a blockchain powered coin mixer. We run a second blockchain which directs encrypted transactions and decouples senders from receivers.”
This second blockchain is what evolved into the Valence Platform as we began planning more projects which add other advanced features to NavCoin using this second programmable chain.
I see that NavCoin offers staking, but not masternodes. Why is that? Speaking of, what’s the current yield on staking?
Proof of Stake and Masternodes are two entirely separate technologies and there is no dependency between the two. Proof of Stake is about validating transactions and securing the blockchain. Masternodes are usually required to perform additional privacy functions like coin mixing for Dash, but NavTech doesn’t use masternodes.
NavCoin’s PoS rewards are 4% per year based on your coin balance. So if you have 1000 NAV staking you should receive 40 coins per year on average for helping to validate blocks. The network also generates 0.25 NAV per block and contributes it to a dual consensus decentralized community fund to sponsor NavCoin projects.
How is NavCoin positioning itself in the fight for privacy rights? Is there a focus on privacy in general, privacy in financial transactions, privacy as an option, privacy by design, privacy first?
NavCoin is currently privacy optional. My personal stance is that privacy is a human right and should be vigorously defended.
“In a monetized society where income is closely correlated to quality of life, financial privacy becomes closely correlated with freedom of expression of the individual.”
NavTech isn’t perfect, but we haven’t had a lot of capacity to focus on improving it over the last year or two, our focus has been on other areas and we’re only a small team. We are wanting to improve the protocol and provide even better privacy solutions for NavCoin in the future. My preference would be to implement robust privacy by design.
How will regulation impact privacy coins in general and NavCoin specifically? What does the privacy coin market look like in 5 years?
Regulation seems like it’s actually falling on the side of privacy coins surprisingly.
I’m not a lawyer, but my understanding is that the recent GDPR regulations regarding privacy could potentially be met by privacy coins and failed by other blockchains. Mastercard recently came out in favour of privacy coins stating that cryptocurrency should be fungible. I would argue that privacy coins will become more and more popular into the future as these privacy regulations roll out globally.
I think when it comes to privacy it’s always wise to have options. That’s why we designed and programmed our own solution from scratch rather than cloning Monero or Dash. There’s nothing worse than having all your eggs in one basket then realising the basket has a hole in it. It’s better to spread your eggs out with something as important as privacy until there is a clear best solution.
I understand that NavCoin is privacy-focused, but how is NavCoin innovating or improving privacy tech?
I think our NavTech solution was innovative at the time, but as I mentioned we’ve been focused on other features since we completed version 1.2 and a lot of other privacy options have emerged since it was first designed.
Privacy is something which is woven into the moral fibre of the NavCoin community and it’s an area which we want to focus our attention on again in the near future.
How is NavCoin improving and innovating blockchain technology? How is NavCoin realizing and/or furthering Satoshi Nakomoto’s work and vision?
We’re definitely admirers of Satoshi Nakamoto’s work and vision. The NavCoin Core team have published our own manifesto which outlines how we operate and why.
“We are big proponents of decentralisation, inclusiveness, collaboration, autonomy, freedom and privacy… not just in the way the code works, but also how people can use or contribute to NavCoin.”
We’re all about empowering the individual to participate and take ownership. Our latest contribution to this end is the NavCoin Community Fund. We’ve designed a decentralised governance platform for NavCoin which uses a dual consensus mechanism to protect the funds. Anyone can make a proposal to claim funds and the network votes on which ones are approved.
The innovations we’ve made is that funds are never held by a central wallet and once approved they aren’t immediately released but are escrowed then released by subsequent network votes when milestones are achieved. We believe this system will help to further decentralise the development of NavCoin projects while protecting funds from bad actors.
What makes NavCoin special, different, unique? Complete this sentence: NavCoin is the future of ________. Explain why and how.
NavCoin is the future of digital payments. At a glance, that sounds generic, but it’s actually quite a bold statement given the competition. Our focus with NavCoin is on simplicity and usability. Cryptocurrency is complex and we’re trying to make NavCoin as simple to use as possible while still being technologically advanced behind the scenes.
Some of our roadmapped projects show how we plan to get there. Especially our next generation of wallets called “Kauri” – named after a native New Zealand tree known as “the king of the forest”. Kauri is an open source multi-currency, multi-platform and multi-purpose wallet which we think will be a big step towards mass adoption.
One of the features “Kauri Delta” is slated to be a merchant gateway and wallet feature that allows users to send or receive any cryptocurrency supported by the multi-currency wallet. So it won’t matter if you have NAV and a merchant accepts LTC, you will be able to seamlessly send them whatever currency they require with the conversion taking place automatically.
What does NavCoin look like in 5 years?
With features like Kauri Delta outlined above, we are hoping that in 5 years time NavCoin will be the ubiquitous cryptocurrency that can straddle the entire cryptocurrency ecosystem as a payment method.
What is NavCoin’s plan for adoption? What sorts of demographics best fit the NavCoin philosophy, mission, and vision?
As NavCoin Core our main strategy is to build the infrastructure and tools which makes it easy for people to get involved and contribute to the project. We believe that having a healthy decentralised group of developers and promoters is the key to long term success.
NavCoin Core is a relatively small group of self funded contributors. But we have at least 3 other independent groups of developers working on wallets and websites for NavCoin and anyone can participate. NavCoin Core’s vision is a combination of simplicity and advanced technology. We try to create high tech advanced features like private payments and deploy it in a way that is easy to use to bring these important benefits to everyday people.
How is NavCoin taking advantage of current market conditions?
For the most part we ignore the market conditions and just concentrate on building the features and protocol improvements on the NavCoin Core roadmap. There’s a bit of a joke within our community that we always announce our releases during the worst times in relation to the market. The reality is we just release features when they are ready and aren’t interested in participating in market speculation. We firmly believe that slow and steady wins the race in the end of the day.
Tell me about the NavCoin dev team… how are they compensated? Do they work on other projects?
NavCoin never ran an ICO, premine or did any type of fundraising, it was released in 2014 with the spirit of Bitcoin, as a community initiative that anyone could mine. Like with Bitcoin, the NavCoin Core developers are entirely self funded through sponsorships and donations. The core developers and content creators which I sponsor in Auckland through my company Encrypt S are focused full time on NavCoin and our other related software and blockchain projects.
With the introduction of the Community Fund soon, we are hoping it will be used to sponsor other developer groups to build NavCoin software and contribute to the protocol. We would rather more individuals or autonomous groups participate as opposed to growing a large centralised team.
From the Manifesto, I see that NavCoin is organized as a decentralized organization. What is NavCoin’s plan to mitigate the RISKS that come with a decentralized business strategy?
Apart from protocol development, NavCoin Core’s other stated mission is building tools and infrastructure which makes decentralised collaboration easy. We’ve released our manifestos, brand guidelines, resource packs and the likes which allow anyone to create brand-cohesive websites, infographics, videos and merch. We’re also in the process of putting together a collaborative space for Community Fund teams to swarm on projects they get network funding for.
Essentially, as the number of contributors grow, we see NavCoin Core’s major role moving toward tending the soil so any project can grow rather than trying to build every project ourselves which is what decentralisation is all about really.
How is NavCoin focused on fair distribution and decentralized coin supply? What % of NavCoin is owned by the top 10% of wallets? Top 25% of wallets?
NavCoin is proof of stake and everyone who has NAV can participate. Everyone is rewarded equally in proportion to the amount of NAV they use to secure the network (at 4% per annum). We are interested in devising a fairer distribution schema because even though we believe proof of stake to be fairer than proof of work in terms of distribution it still unfairly favours early adopters over new participants.
We haven’t seen any serious candidates to improve on the proof of stake model that is production ready, but we would always be open to improving the NavCoin protocol to make it fairer and more decentralised.
Currently the top 10 wallets hold 38% of the circulating NAV but don’t forget that around most of those are exchange wallets so it’s not a very accurate representation of how NAV is distributed. There are 23,808 unique NavCoin addresses which have a balance on our blockchain right now.
Governance is a MAJOR issue for blockchain startups, and will be a key differentiator in the next couple years. How is NavCoin focused on and developing good governance?
Our view is that protocols evolve and we shouldn’t try to introduce too many restrictions or try to solve problems which we are only guessing might be an issue in the future. We would rather design something which is reasonably free form but safe and see if it works and course correct if it doesn’t. The good thing about proof of stake governance is that the people making the proposal decisions have a vested interest in the network. We have to trust that the network will predominantly act in it’s own best interest.
“Our Community Fund is currently on the testnet and we have posted a 20,000 NAV bug bounty for anyone who is able to extract unauthorised funds.”
Here’s a question from Crypto Twitter: “Ask them how they see tokenization is evolving and how the global economy will be shaped by it and the role, if any, they think they’ll play in that evolution!”
Tokenisation has been an interesting step for blockchain technology. Currently it falls broadly into 3 areas; asset tokenisation, utility tokens and security tokens.
Asset tokenisation is a great use case of blockchain and can give people access to investment exposure they would not usually be able to achieve – owning a fraction of an ounce of gold for example. While blockchain provides transparency on the digital side, the tricky thing is ensuring the token issuer is regularly audited and holds the assets which they are giving people exposure to. Utility tokens operate more like vouchers for a particular digital ecosystem and are rapidly evolving to allow for decentralised digital services like cloud storage or graphical computing to operate autonomously and transparently. Security tokens are something which we’re just at the beginning of and operate more like a company stock. I think security tokens will play a major role in startup fundraising and replace ICO’s as we see continue to see the regulators attempt to protect investors from scams and fraud.
The NavCoin Core devs aren’t planning on turning NavCoin into a tokenisation platform, there are already a lot of great platforms for that. Our vision is to keep NavCoin focused on being the best digital currency possible.
“We are working on a blockchain application platform called Valence, our own unique approach to creating data driven smart contracts on the blockchain, which we will use to power advanced features across NavCoin and other blockchains.”