The NEAR protocol was built in 2018 by Alexander Skidanov and Illia Polosukhin, and NEAR crypto is the native token of the ecosystem. The pair initially held roles in companies such as Google, Microsoft, and MemSQL before joining NEAR Inc. co-founded. They initially embarked on a machine learning project, but slowly turned to blockchain technology.
NEAR is on track to create the decentralized, permissionless “open web”. This means that no company, no government and no person has the ability to shut it down. It relies on code and users instead.
Meta Platforms, Inc. — formerly known as Facebook — as a comparative example, NEAR doesn’t want to create what it sees as a closed, biased ecosystem. Instead, NEAR wants to build a place where users manage their own data.
NEAR’s solution is what makes it the “community cloud,” where users can “store meaningful things like money, identity, and digital assets and transact securely with anyone without anyone else’s consent or platform.”
What is the NEAR protocol?
NEAR is a Layer-1 blockchain solution built for the underlying core network and infrastructure of an ecosystem. Bitcoin and Ethereum are examples of some other Layer-1 blockchains. These blockchains complete and validate transactions and secure the network from malicious behavior by rewarding validators with rewards. In this case, validators are rewarded with NEAR cryptocurrency tokens.
NEAR’s team compares its solution to existing centralized platforms such as Amazon Web Services and Microsoft Azure. However, the distinguishing factor of NEAR is the distributed number of validators that secure the network without a single point of failure. This is intended to prevent sabotage, hacking, deletion and loss of data, as well as negate other inefficiencies associated with a cloud platform operated by a single entity.
The primary goal of NEAR crypto is to help users regain control of three pillars:
How does the NEAR protocol work?
The NEAR protocol optimizes the benefits for users and developers, contributing to wider adoption. Entrepreneurs and developers can create decentralized applications and open source software that can generate cash flow while the user retains ownership of the data.
NEAR also aims to solve two critical problems that predecessors failed to solve: system design and organizational design. These issues have led to usability and scalability issues, the main concern being transaction processing times during high volume periods. NEAR solves this problem through proof-of-stake and its self-calibrated nightshade technology.
Nightshade technology uses a process known as “sharding” to reduce user costs. This means that each node can be broken down into “shards” that manage their own set of data, increasing network throughput. This allows for a much higher transaction volume than some other networks, processing approximately 100,000 transactions per second.
NEAR isn’t just built with the “blockchain savvy” in mind, either. By building an experience that resembles a typical individual’s Web 2.0 experience, NEAR has the potential to bring in a wide variety of users, not just crypto enthusiasts.
For developers, NEAR uses Web Assembly and Rust – two easy-to-use programming languages for running nodes and smart contracts. Developers can program ownership, encryption, and storage with all the tools provided to build the open web. NEAR reports that significant failure rates, estimated between 97% and 99%, occur when developers experience frustration creating and maintaining apps, so it has simplified tasks so anyone can interact with the network.
Performance of NEAR Protocol
NEAR has grown significantly in value and has been on an upward trend since its inception. The token’s price and market cap peaked at around $12 billion in January 2022, but it has become one of the largest cryptocurrencies in the world, ranking in the top 20 cryptocurrencies by market cap.
The average 24-hour trading volume has also risen steadily over the past few months, suggesting that adoption is on the rise. It is also one of the cheapest cryptocurrencies to buy, making it attractive to new crypto investors.
On a negative note, however, NEAR is currently limited by its availability on exchanges. The NEAR token has yet to be listed on Coinbase, but it is available for trading on Binance, so it is important to compare cryptocurrency exchanges before investing.
Good to know
Investing in cryptocurrency assets carries risks due to a number of factors, including limited regulation, unproven technology, and unproven returns. However, the number of developers gives credence to NEAR’s long-term goals of bringing in 1 billion users within the next five years.
Expert Opinions on NEAR Crypto
Andreesen Horowitz, a renowned venture capitalist fund, is backing the project. The fund is associated with several other successful well-known projects and companies such as Coinbase, Alchemy, Keep, Maker, OpenSea, Solana, Celo and Trust. Others in the industry have followed suit by investing in the NEAR protocol, including:
Blockchange Ventures ParaFi Capital MetaWeb Ventures Hashed Republic Capital Group Tiger Global FTX Ventures Dragonfly Capital Management Einsvill Labs 6th Man Ventures
In the most recent funding round led by Tiger Global, $350 million has been raised to support further development, acting as a short-term catalyst for price spikes for NEAR crypto holders.
Is it worth investing in NEAR?
NEAR has quickly risen to the list of top 20 cryptocurrencies, but it is still extremely early in its development. It’s a good idea to monitor progress before making a major investment.
However, the signs are telling so far and NEAR looks set to strengthen its position if it continues to perform. To illustrate: four years ago none of this existed. NEAR transformed from a small team in a San Francisco office to where it is today. Adoption has accelerated at an incredible rate, and the statistics from a recent presentation are encouraging. This includes:
More than 40 million transactions in total More than 1 million accounts on the network More than 1,000 people monthly build on the NEAR protocol More than 200 ongoing projects More than 200 decentralized autonomous organizations
The token has the potential to produce exorbitant returns and become one of the best Web 3.0 cryptocurrencies to buy. The stakes are high and an investment can lose some or all of its value.
Data can be changed.
Our in-house research team and on-site financial experts work together to create content that is accurate, impartial and up-to-date. We fact check every statistic, quote and fact using trusted primary sources to make sure the information we provide is correct. You can learn more about GOBankingRates processes and standards in our editorial policy.
About the author
David is a Qualified Financial Adviser (QFA) in the Republic of Ireland. He has a bachelor’s degree in business and entrepreneurship as well as 5+ years of investment experience.