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Layer 1 (L1) blockchain Nervos Network (CKB) surged over 170% in the third week of February 2024 after developers announced the launch of a protocol that could connect Nervos with the world’s most valuable blockchain – Bitcoin (BTC).
In this article, we explain what Nervos’ RGB++ protocol is all about. We also talk about the Nervos Network, its native CKB token and its founding team in detail, and why in time it may deserve a place on the list of best L1 crypto projects.
Key Takeaways
- RGB++ is an extension of the RGB protocol that maps bitcoin transactions to the Nervos blockchain.
- Nervos’ CKB token is on track to post six straight monthly gains since September 2023.
- CKB token prices buoyed by potential Bitcoin-Nervos compatibility and wider crypto market bull run.
- Nervos was founded in China by four crypto developers, two of whom were ex-Ethereum developers.
Why Has the Nervos CKB Token Been Surging?
Bitcoin’s rise to the $50,000 mark for the first time in two years has renewed investor interest in the crypto sector helping minnows like Nervos’ CKB token rise with the tide. The entire crypto market has been in buoyant mood since the second half of 2023, due in part to the approval of spot bitcoin ETF, upcoming bitcoin halving cycle and excitement over Ethereum 2.0.
But not all of CKB token’s tearing run since September 2023 can be attributed to external factors. Nervos insiders point to the blockchain’s focus on modularity and interoperability as its key value proposition.
In the third week of February, the CKB token rose over 170% after Nervos developers announced the release of RGB++, a protocol expected to increase compatibility between Bitcoin and Nervos.
To understand RGB++, we first need to learn about the RGB protocol. RGB is a Bitcoin-based protocol that brings smart contract capabilities to Bitcoin and Lightning Network.
RGB++ is an extension of the RGB protocol that maps bitcoin transactions to the Nervos blockchain. The RGB++ is expected to bring the Bitcoin and Nervos blockchains closer by making all RGB++ transactions appear simultaneously on Bitcoin and Nervos blockchains.
Client verification was touted as one of the use cases of RGB++, where users can check the correctness of their bitcoin RGB++ transactions on Nervos blockchains. According to the RGB++ light paper, other use cases of the RGB++ protocol were token issuance, NFT issuances, enhanced privacy, airdrops, and AMM support.
Nervos researcher Cipher wrote in the RGB++ light paper:
“If we further utilize the programmability of CKB Cell, then we can correspond multiple CKB transactions to one Bitcoin RGB++ transaction, so that the low-speed and low-throughput Bitcoin chain can be expanded with a high-performance CKB chain.”
Let’s learn more about the promising Nervos blockchain and Nervos Network’s crypto token below.
What Is Nervos Network?
Nervos is a proof-of-work (PoW) blockchain that is designed “from the get-go” to scale through Layer 2 (L2) networks.
The Nervos blockchain is also known as Common Knowledge Base (CKB). It is the lowermost blockchain layer of the Nervos ecosystem, providing L2 chains that exist on top of it with security and trust.
While Nervos’ scaling plans sound similar to that of Ethereum’s rollup-centric roadmap, Nervos is taking a varied approach by prioritizing blockchain modularity. Nervos does this by providing developers with a highly flexible, interoperable and low-level blockchain that supports all programming languages and can run any virtual machine.
For security and decentralization, Nervos takes inspiration from Bitcoin and secures itself using a PoW consensus model. According to Nervos, it chose PoW over proof-of-stake (PoS) consensus model for its zero-compromise approach, anti-monopolization properties, and battle-tested reputation.
What Is the Nervos CKB Token?
The CKByte token, also known as CKB token, is the native token of the Nervos ecosystem.
The CKB token has three primary use cases. They are as follows:
- Cycles payment – Cycles are fees paid to Nervos miners based on the amount of computer resources used to verify a transaction.
- Gas fees – Nervos miners are paid in CKB for facilitating transactions.
- State rent – State rent is storage fees paid to miners for providing storage space.
Cycles and gas fees are paid once to process transactions. State rent is paid continuously to store data on the Nervos blockchain. According to Nervos, owning 1 CKB token entitles holders to 1 byte of data storage on Nervos.
The Nervos Network crypto has infinite supply but follows a fixed inflation schedule with 1.344 billion CKB tokens issued every year.
As of 15 February 2024, CKB’s total supply stood at 44.2 billion tokens, CoinMarketCap data showed. CKB was the 112th largest cryptocurrency with a market cap of $566 million, at the time of writing.
The Nervos crypto token has posted monthly gains for six straight months since September 2023, having gained as much as 480% in the period. Let’s find out why CKB has been surging in the section below.
Early History & Team Behind Nervos Network
According to Hasseb Qureshi of crypto investment firm Dragonfly Capital, Nervos launched in China and was founded by Jan Xie, Daniel Lv, Kevin Wang and Terry Tai.
Two of the four founders had experience developing Ethereum, with Xie having worked as a core Ethereum developer and Lv having co-founded an Ethereum wallet called imToken.
Nervos launched its mainnet in November 2019. The project has partnered with companies such as China Merchants Bank International, Huobi, and Sequoia China in the past.
After DragonFly invested in Nervos in December 2019, Qureshi said:
“There are several innovations that distinguish Nervos from other layer-1 blockchains. For one, Nervos is designed from the ground up to be a multi-tiered network. At its base sits the Nervos blockchain, a high-throughput Proof of Work (PoW) chain that provides high security and decentralization to all upstream layer-2s.”
The Bottom Line
The Nervos CKB token’s massive surge in February 2024 highlights the forward-looking nature of crypto investors. Although the RGB++ protocol has not been battle-tested yet and is only a theoretical paper at the time of writing, it has not stopped crypto investors from making an early bet on the promising Nervos project.
If the RGB++ protocol is successful, the Bitcoin ecosystem will see new upgrades that could help the world’s most popular blockchain get one step closer to mass adoption.
