Nav’s New White Paper: The Cheat Sheet

Originally by Sophia Lockhart

On the 26th of September Nav Coin released the Navtech Whitepaper for the re-release of their anonymous network. The 23-page document was written in impressive detail and explained the design, technology, and math, behind the simple tick-box anonymous send system. The groundbreaking design uses double blockchain technology and coin sending methods together to form an advanced anonymous sending system not before seen in the Cryptocurrency world.

Want to know the scoop and don’t have time?

Here’s my cheat sheet for the busy crypto cereal muncher…

For ease I’ve divided the white paper into 5 parts:

The white paper consists of five parts. The first being an introduction describing the core values and perspectives of the development team behind the anonymous sending system. Part two provides us with a high-level overview of anonymity within the realm of cryptocurrencies. Discussed are current methods used for anonymous transactions and their associated problems. Part Three gives us an overview of Nav Coins solution to these problems. In Part Four we get down to the real technical stuff. Broken down into 11 subsections are details of every aspect of Nav Coin’s system right down to error handling. Part Five outlines the key benefits of the system and gives us valuable insight into the future growth and uses cases of the anonymous system. This section concludes with a summary.

5 minute summary of parts

1. Introduction:

The Nav Coin team firmly believe that financial privacy is a democratic right, and aim to provide a way for everyone to have this economic freedom. They cite the example of journalists working in an oppressive country who can be persecuted for publishing dissenting views.

2. The problem: Trust vs Anonymity

In this section, the paper talks about the need to create truly anonymous transactions whilst retaining the decentralised values that cryptocurrencies are built on. This is no easy task. Blockchain technology is by nature a public ledger. This poses a problem for those who want financial privacy, and that should be all of us. The blockchain is a piece of autonomous financial technology. Furthermore, it’s a peer-reviewed publicly available transaction record.

‘All transactions on the Nav Coin network are recorded on the public blockchain so the network can validate them as being correct.’

The white paper goes on to examine current anonymising solutions. These include Tor, which Nav Coin offers as an added layer of security. Coin mixing and coin joining solutions are also discussed alongside other more complicated methods of obfuscating the sender’s details. The white paper describes how methods are vulnerable to attack and do not completely solves the problem of anonymous cryptocurrency transactions

‘The main issue with most of these methods is that they are either eventually traceable through the public blockchain (if you have enough computing power), or they rely on insecure and unreliable means (like a database) to keep track of who is supposed to end up with the coins, or both!’ – Nav Coin white paper

Highlighted are the two main dangers associated with a central database. I’ve put them under 1 & 2.

1. ‘When a database is introduced to the system, it means that someone can fake transactions and extract money by simply adding a row to the database table which keeps track of who to send money out to.’

1. ‘Secondly the system becomes vulnerable to data loss. If the database were somehow corrupted, destroyed or otherwise disabled, the whole system has to roll back to the last backup point which can mean thousands of dollars of missing transactions.’  

A centralised database is of course at odds with the decentralised nature of the blockchain.

3. The high-level solution: Navtech

This section of the white paper involves some pretty complicated theoretical concepts. I’ll try to break them down into chunks. The Nav Coin anonymous send system or ‘Navtech’ as it’s dubbed in the whitepaper uses a unique technique to disconnect the sender and receiver. The essence of Nav’s anonymous system is the use of a secondary blockchain or ‘Subchain’. In simple terms, your Nav Coins are sent to the Subchain rather than straight to the receiver. You could think of this like exchanging currencies. You hand coins of one currency over to a teller and receive completely random new coins of a different currency from a large pool. It is through this process that the link between the sent and received coins is broken.

Here are the three most important paragraphs from the white paper if you want to understand how Navtech processes anonymous transactions

‘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 to 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.’

Any questions before we keeping going?

What’s encryption?

Encryption is a way of encoding data so that only the intended recipient can use it. Navtech uses RSA encryption which is extremely secure and is a favored method for making sure data is secure.

What are these random servers?

The Nav Coin team offer multiple incoming and outgoing servers which are picked at random to make the trail even harder to follow. Once the system is decentralized, other people will be able to set up their own processing groups to increase choice and higher levels of redundancy.

Why does it create a transaction of arbitrary size?

This is to prevent an outsider watching the blockchain. Drawing circumstantial evidence by matching sent and received amounts.

So there’s two random servers?

Yes the random incoming server is selected when your wallet creates the transaction. The random outgoing server is selected when the incoming server processes the transactions.

The traveling coins carry a secret bag of info?

Yup, that’s how the right amount of Nav eventually ends up in the right address. Encryption information attached the transaction that the subchain let’s the Nav pool know about. Even with the most powerful supercomputer in the world cannot crack this encryption.

So the Nav they receive isn’t the same Nav I send?

Correct! The receiver of the anonymous transaction will be paid out of a large pool of coins on the Subchain before that pool even receives the sender’s Nav coins. This means speed and security.

Are multiple transactions lumped together and sent at the same time?

Yes. Again this prevents circumstantial inference. All transactions sent within one transaction cycle will be lumped together and travel across the Subchain as one sum to replenish the Nav pool.

What’s a transaction cycle and how’s it relevant?

A transaction cycle is simply how often the servers check for and process the waiting transactions. Currently, the transactions are processed every 2 minutes on each server, giving the whole system a round trip time of approximately 5 minutes.

So what happens at the end?

Harry potter wins. Sorry for the spoiler.

4. The techie stuff

Don’t worry if you get overwhelmed here. Some parts are just troubleshooting. The Nav Coin Developers have a very thorough process of safeguarding their work. They start with the high-level problems then work their way down to ‘what if ant crawls into a server?’ etc. This section is definitely for the kids that want to do further reading. I’ve given a brief description and clarified a few terms. I’d highly recommend checking out the diagrams if nothing else as it gives clarifying visuals of the system outlined above. Let’s look at the main points from the Solution Details section below.

Technologies used

For the coders among us. This section lists the languages, frameworks and platforms used to create Navtech.

System Overview &  Navtech set up

These two sections are largely relevant for people wishing to be part of this awesome technology and set up a Navtech processing server group.

Note: The d in ‘navcoind’ and ‘subchaind’. Navcoind is the command line version of the Nav Coin wallet, it is what the processing scripts give instructions to when reading and sending transactions.

Wallet Config

From this section, it is important to note that users wanting to send Nav Coins anonymously must set up the addresses of the anonymous servers they want to use. This choice will be a selection from the pool of Navtech servers offered by the Nav Coin team. Navtech API

The important thing to note here is that each server runs its own API, so there is no single Navtech API and hence no single point of failure.

Step by step through the transaction process

We will group with following sections together. Creating the Wallet Transaction; Receiving and Processing the NAV on the Incoming Server; Sending the SUB to the Outgoing Server; Receiving and Processing the SUB on the Outgoing Server; Sending the NAV to the Receiver; Returning the SUB and Replenishing the NAV Pool; Error Handling.

These sections explain with great depth and detail the entire transaction processing system. As mentioned above the diagrams are of immense value to help understand how the transaction system works. I’ve pulled out the last diagram in the series of five. Although the arrows are illustrating the replenishing of the Nav Coin pool, you can see a layout of the whole subchain system, the sender, and receiver.

Figure 1.5 Returning the SUB and Replenishing the NAV Pool

The SUB are returned to the incoming server they originated from and the NAV are sent from the to the Outgoing Server which requires refilling.

5. Technical benefits, business benefits and future growth

The technical benefits sections talks about the advantages of using this new cutting edge technology vs the old or ‘legacy’ technology. The genius of the blockchain, which Nav Coin itself is built on as are all cryptocurrencies is elegant indeed for many reasons. But mainly the reasons we’ve always loved it. It’s trustless and reliable. Notice the term ‘trustless’ is used in the context of the blockchain; this does not mean cannot be trusted but in fact that you do not need to trust it because it verifiably works.

‘there is no need to trust a third party because the rules are impossible to break’

As for the business benefits and growth:

‘All of the technical benefits add up to a system which is fast, redundant (as in easily restorable), resilient, trustless and completely anonymous. This will lead to higher user confidence and wider adoption.’

There are a few interesting things to note here.  One being that Navtech servers contributing to the anonymous system will gain a small payment from each transaction fee. This could add up to significant volumes if a lot of transactions are processed. Secondly, that Navtech can be adapted to be used by other cryptocurrencies.

What does this mean? (Investors skip to the end)

The real summary

Nav coin will release a new world class uncrackable anonymous system within the next few weeks. The anonymous sending feature will be compatible with decentralisation, meaning there is no central server (single point of failure). Nav Coin having rebuilt their anonymous send service with this development in mind will likely decentralise it in the weeks following its release.

It will be the first cryptocurrency in the world to create a decentralised fully anonymous sending system running purely on blockchains. The white paper shows as that Navtech is utterly real and actionable. Also, other developers have the opportunity for peer review. From a technology point of view, it is exciting. From an investment point of view it portends an increase in value.