Nav Coin: The Everyday Privacy Coin
November 9, 2017
Nav Coin Highlights*
Started: June 6, 2014
Market cap: $49,964,687
Price per coin: $0.80
Reddit subscribers: 4,155
Twitter followers: 20,700
Facebook likes: 3,332
Slack members: 2,129
Circulating supply: 62,002,466
Max supply: N/A
Consensus method: POS
What is Nav Coin?
Nav Coin was created in 2014 as an easy to use financial privacy solution and while that is still a fundamental part of NAV, it is progressing into so much more than that. It's segwit-enabled, extremely fast (30s transaction times), makes use of POS (proof of stake), has developed adjacent product offerings and the team is actively working on major features including NavPay, NavTech 2.0, cold staking, instant, anonymous currency exchange and even decentralized applications** - more on these later.
NAV probably isn't the top privacy coin out there and at this time it may not be the best cryptocurrency in any specific area; however I don't think it needs to be the best in every aspect. NAV has it's foundation in privacy and couples that with tremendous transactional capabilities and ambitious new features. If the Nav Coin team can execute on their roadmap, the project could be one of the best solutions for everyday transactions, both private and public.
How does NAV compare to other privacy coins?
At it's foundation, Nav Coin is a privacy coin so it's important to evaluate it in that regard. Privacy is an area where some critiques tend to surface and part of that is likely due to it's positioning as a privacy optional rather than privacy first coin.
One of the critiques revolve around the anonymization process. NAV makes use of a secondary chain, called the sub chain, in order to anonymize transactions as demonstrated in the whitepaper:****
Instead of sending NAV directly to the receiver, the wallet encrypts the receiver's address and sends the transaction to one of the addresses provided by the randomly selected processing server. When this server receives this transaction, it creates a transaction of arbitrary size on the Subchain which it sends it a randomly selected outgoing server.
This Subchain transaction has the receiver's address and the amount of NAV to send encrypted and attached to it. When the outgoing server receives the Subchain transaction, it decrypts the data, randomizes the transaction amounts and sends the NAV to their intended recipient from a preloaded pool of NAV that is waiting on the outgoing server.
After the outgoing server has sent out the randomized NAV to the intended recipient, the incoming server will join together any NAV which has been processed and on the next transaction cycle send it to the outgoing server to replenish the preloaded pool of NAV for future transactions.
The consequence of this is that we have broken the transactional link between sender and receiver on the Nav Coin blockchain by routing the transaction information through the Subchain. The NAV sent to the recipient are not in any way connected to the NAV that are received.
The Nav Coin team have a great article that goes in depth about how this all works here. At a basic level, the Subchain and the server work to severe the link between sender and receiver by effectively sending a completely new output of NAV and the entire process is encrypted with RSA. On the surface, this makes sense however the server itself is one of the biggest concerns and it is even acknowledged in the whitepaper:*****
The other risk factor is server security of the processing servers themselves. We have done everything in our power to protect the servers from being compromised and will monitor and evaluate our procedures as time passes.
Right now, in order to guarantee anonymity, users would need to set up their own server cluster as NAV relies on their own servers and "trusted third party" servers. This is a fairly significant concern, but it is being addressed. NavTech 2.0, when it is completed, will effectively turn every wallet into a server, creating a fully decentralized network with dummy transactions and multiple receiving addresses.
Whether the privacy optional approach is a concern or not depends on your stance. The reality is that many people don't care about keeping all their transactions private (whether they should or not is a different story) and therefore in terms of mass adoption, the privacy optional route may actually be beneficial. However, if the number of private transactions are relatively few compared to public transactions, these may stand out and therefore draw attention; again NavTech 2.0 development with dummy transactions should help alleviate this.
Another point that privacy advocates make is that Nav Coin has a rich list which fundamentally means it's not private. If privacy in every aspect is paramount, NAV falls short of leaders such as Monero, at least at this point in time. I'm optimistic that NavTech 2.0 will address a lot of these concerns and position NAV as a top privacy coin.
However, the area where NAV really differentiates itself from privacy coins away is in terms of it's transactional capabilities.
What makes NAV so great for transactions?
To start with, let's look at the global standard of transactions right now - fiat. Although there are a lot of issues with the current system (keep an eye out for an article on this), it generally works because:
It is widely accepted;
If not, it can be converted into other accepted forms of payment (different currencies, gift cards, etc.);
It's easy to use, affordable and quick;
Since it is not a limited or scarce resource the value is relatively stable; and
There is incentive to hold it.
Let's briefly look at these one at a time and how existing cryptocurrencies stack up against fiat.
It's widely accepted
As a whole, cryptoccurencies have a long way to go although Bitcoin is becoming more recognized as are other larger ones such as Ethereum.
It can be converted into other accepted forms (different currencies, gift cards, etc.)
Most cryptos can be converted into other forms of payment though it will likely require the use of an intermediary like Changelly or a service like www.livingroomofsatoshi.com.
It's easy to use, affordable and instant
Bitcoin, in it's current form, is slow and expensive to transact with. Bitcoin cash, a fork of bitcoin, is better in this aspect as are other transaction-based cryptocurrencies such as Litecoin and Vertcoin. Ease of use is still a barrier for many.
Since it is not a limited or scarce resource, the value is relatively stable
This is the key point where many POW (proof of work) cryptocurrencies fall short. Since Bitcoin, Litecoin, Vertcoin and so on all have a fixed number of coins, the basic economic factors of supply and demand are going to cause shifts in value. For example, if John bought a used Honda Civic a month ago for 1 bitcoin (around $4000), today that same bitcoin could have got him a much nicer car - John probably isn't too pleased about this. Therefore, POS and hybrid-POW coins which offer fixed inflation rates are more likely to have stable valuations and may be better suited to day-to-day transactions.
There is incentive to hold it
Generally with cryptocurrencies there are three main financial incentives to hold. First, there's store of value - most limited supply cryptos fall into this as the expectation is that demand will drive up price as supply dwindles. Secondly, there's speculation of potential use which is where a number of ICO's and tokens fall. Lastly, there's passive interest which is generally limited to POS cryptos. The first category falls along the line of precious resources such as gold. The second case can be compared to stocks and investments. The last incentive is pretty straightforward - it's basically a savings account.
How does Nav Coin stack up against fiat? Regarding acceptance, it faces the same barriers as most other cryptocurrencies - no advantages here. However, NAV partners with Changelly to provide exchange across 25+ crypto and traditional currencies and with the release of Polymorph, users will be able to instantly and anonymously convert currencies which gives NAV an upper hand in the exchange space. In terms of transaction capabilities, it's way ahead of some of the alternatives mentioned - with a 30 second transaction time and an average transaction fee of only $0.000063 it is 5x faster than Litecoin or Vertcoin and significantly cheaper***.
As mentioned, I believe coins with unlimited supply and low inflation, are the most viable for day-to-day transactions. NAV has a max inflation rate of 5% (in reality is much lower as it would require all coins to be staked to reach that figure). It also fits the third financial incentive to hold - users can stake their NAV in order to receive 5% annual ROI (community vote is currently underway to change this to 4%, with 1% going to a community developer fund). At this time, users have to keep their wallet online in order to receive these rewards but cold staking is on the roadmap meaning as long as the coins are in the wallet they can be staked for rewards - sort of like a traditional savings account.
Adoption aside, Nav Coin boasts a number of features that make fiat work well. What makes it even more impressive is that it maintains those features while also providing private transactions and decentralization, making it a real candidate for the everyday privacy coin.
Other Nav Coin features
NavTech Polymorph, which has been briefly mentioned, will allow users to anonymously exchange cryptocurrencies via Changelly. Not only does this offer instant exchanges between cryptos, but it also means that Nav Coin would actually be able to facilitate private transactions for currencies that aren't capable of transacting anonymously on their own. For example, Eric could send 1 bitcoin to the polymorph server which would then be converted to 1 BTC worth of NAV and routed through the NavTech server. The NavTech server then sends a separate 1 BTC worth of NAV (from the server pool), which is then converted back to bitcoin and sent to the receiver's wallet, without any link to the sender.
The Nav Coin team recently launched the beta of NavPay which claims to be "the world’s first mobile cryptocurrency wallet capable of sending anonymous transactions."****** I've installed the beta and I have to say - it's fast, clean and simple. An awesome mobile wallet.
They've also been building and selling their own NavPi's which are preconfigured with Nav Coin staking software. This has been a great initiative, especially in terms of encouraging consumer adoption. Not everyone knows how to set up a RaspberryPi or have the computing power and understanding to run a node 24/7, but a plug and play solution - that most people can handle. It's been in high demand as well as each batch has quickly sold out.
Lastly, the team is also looking at implementing smart contracts into Nav Coin and the subchain allowing people to build anonymous decentralized apps (DApps) on NAV blockchain. The whitepaper on this is being finalized. It's unclear right now what the capabilities will be but it's an ambitious undertaking for sure.
The Nav Coin Team
NAV is based in Auckland, New Zealand and consists of 14 team members, many from the Auckland University of Technology. The development team has 9 members in total (6 core developers and 3 community developers), and is led by Craig MacGregor, chief engineer. The team also consists of marketing director Kieren Hyland, creative director Laura Harris and digital strategist Josh Drummond. It's great to see some marketing focused members on the team and they are currently working on building out and launching a new digital marketing strategy.*******
What makes Nav Coin great
Affordable, 30 second transactions;
Polymorph (in progress) - integrated, anonymous currency exchange which will not only provide instant access to 25+ currencies, it will enable private transactions for non-privacy coins;
NavTech 2.0 (in progress) will turn every wallet into a server, providing complete decentralization, multiple receiving addresses and dummy transactions;
Optional privacy protection using the subchain to split the link between sender and receiver;
Solid real-life use case;
Huge community relative to market cap;
Community fund (vote underway) will give the team more resources than they've had;
Team has been in the crypto space for a long time and are very responsive, providing weekly updates;
Their github is extremely active;
Dedicated marketing staff;
Staking rewards, with cold staking on the roadmap; and
Potential for DApps in the future.
Concerns about Nav Coin
Most of the features that would make NAV a major player, such as NavTech 2.0 and Polymorph, are still a ways out;
Both the privacy coin and transactional currency spaces are competitive;
Privacy is optional; and
It is heavily reliant on the integrity of NavTech servers until such a point that NavTech 2.0 is completed.
Monero. I don't really see Monero as a direct competitor to NAV, simply because they have different approaches. Monero focuses on privacy first and foremost and the core function is to provide completely anonymous transactions. Nav Coin has privacy technology but also emphasizes ease of use and are working on adjacent offerings like Polymorph and DApps.
PIVX. PIVX is a POS privacy coin with masternodes that make use of the zerocoin protocol for anonymous transactions. It claims near instant transactions, has a strong developer community and as a POS privacy coin it is a significant competitor for Nav Coin. However, NAV has a more ambitious roadmap, which if executed, would set it's feature set apart from many other privacy coins.
Zcash. Zcash is a limited supply, privacy-optional coin that is working on cross-chain atomic swaps thus making it one of the direct competitors of Nav Coin. However, despite the vast difference in market cap, I like NAV here. The Polymorph approach to anonymous exchanges is a bigger play than atomic swaps, transactions are faster and Zcash has their own concerns around centralization. It will be interesting to see how Zcash's user-issued tokens will compare to NAV's DApps in the future.
Vertcoin. VTC is an ASIC-resistant, limited supply POW coin that has really taken off lately. I list it as a competitor because it has a great community, makes use of stealth addresses and is quite fast and cheap to transact with. However, NAV is all of these things as well but with faster, cheaper transactions, better privacy and an unlimited supply all of which make it better suited for day-to-day use, and that's not to mention things like Polymorph.
Ethereum. I hesitate to put Ethereum here as it's unlikely NAV becomes a direct competitor in the smart contract space and it's doubtful it will ever be as big as ETH. However, the reality is that the Nav Coin team are working on DApp functionality and smart contracts while ETH will add zk-SNARKS privacy protection in the future, so both platforms could have private smart contract capabilities.
Is Nav Coin a good investment?
NAV currently sits 88th on coinmarketcap.com with a market cap of only $50M and a price of $0.80 per coin. There are some concerns about Nav Coin that I have highlighted and I don't think it will necessarily become a top coin until NavTech 2.0 and Polymorph are rolled out. But NAV is relatively undervalued compared to other privacy coins, and that's without even considering the transactional capabilities and roadmap features that really make it shinez.
From the list of competitors above, the three that stand out as close comparables are Vertcoin, Zcash and PIVX. ZCash sits 14th overall with a market cap of $587M - that's a pretty lofty target but it does represent what the potential for NAV could be if the team were to successfully implement NavTech 2.0, Polymorph and start expanding into the DApp space.
In the shorter term (6 months) I think NAV could see some positive growth and join those two other competitors, PIVX and Vertcoin, which sit 40th and 41st at respective market caps of $152M and $146M. That would mark a near 3x increase from today's market cap and a 50% jump from NAV's prior high of $95M. If this were to happen, it's likely the price of 1 NAV would go up 2-2.5x, to $2 or a little under.
Considering it stands up to both PIVX and VTC, NAV should be a great shorter term investment. For long term investment potential, there's a big "if" in terms of roadmap execution, but if the Nav Coin team pulls it off, you need not look any further than Zcash to see how big NAV could be.
NAV peaked at a little over 33k satoshi's ($1.55) in September and has now seen a significant retracement, down below the 0.236 fibonacci level. It has generally been trading between 10-12k satoshi's and is currently hovering above the 1 year moving average (dark blue line).
Once the dust settles after the Segwit2x fork I'd expect the NAV/BTC ratio to come back up above the 50 day moving average (light blue) and trend upwards from there. Now is a pretty good time to pick up some NAV - although there is a chance of it falling below the 1 year moving average, RSI (not pictured) and volume suggest it is unlikely. If it were to drop, it could rebound off the historic trendline around 7-8k satoshi's.
NAV is available on Bittrex and Poloniex, or you can purchase it through Changelly (referral link).
Nav Coin could become the perfect blend between consumer need and financial privacy. It's not there yet but with NavTech 2.0, polymorph and cold staking on the roadmap it's in the cross hairs. And that's completely setting aside the fact that the team is actively looking into DApps and smart contracts which opens up an entirely new set of capabilities.
If NAV can deliver on their roadmap, it could be one of the best privacy coins out there for day to day use - in other words, real life use - which means the potential is huge. Even in the short term, given the technology developed, the community following and the team behind it, NAV makes a strong case for being a top 50 cryptocurrency by market cap.
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References and Notes
* Logo, as well as all stats are from coinmarketcap.com with the exception of social following which is taken directly from the social pages
*** Figures taken from this comparison infographic, credit to u/deo1
**** Nav whitepaper, page 6
***** Nav whitepaper, page 24
All other information is either adapted from the whitepaper and other research or is personal opinion.
Crypto Advocate does not have any holdings in Nav at this time (note: a small holding has been acquired a few days after posting.