Bytecoin (BCN) is like a long lost cousin who is still greatly significant, but also isn’t getting the love it deserves. As one of the first privacy coins, Bytecoin has laid the foundations that many privacy-based blockchains have been built upon. Many people are not aware, but the popular privacy coin Monero is actually a fork of Bytecoin (BCN).
So what exactly is the purpose of Bytecoin and why is it so special?
It all comes back to the deficiencies that Bitcoin suffers from.
It’s distributed nature is inflexible, all network users have to update their clients to implement the newest features. Bitcoin, being relatively old in comparison to other cryptocurrencies, was designed with an old Proof of Work model that has proven to be problematic with energy use and mining power. Bitcoin also fails when it comes to being untraceable and unlinkable. It is entirely possible to follow a path and figure out the final recipient and origin of any Bitcoin transaction. Bytecoin was created to answer these deficiencies and provide a truly untraceable and unlinkable solution to the blockchain.
Created from CryptoNote technology, Bytecoin works through the use of ring signatures where users transact in groups and only one signature is actually needed to sign off or verify a transaction. This leads to an increase sense of anonymity and privacy. As a privacy coin Bytecoin was the first and original untraceable coin, and its community of 20,000 loyal users proves its worth.
How does it work?
Bytecoin operates on the CryptoNight algorithm. With this process, users are totally anonymous and senders are not required to cooperate with other users or third parties to make transactions. It is a fast-paced EdDSA base signature algorithm. Another concern that Bytecoin seeks to address is the increase domination of ASIC, GPU and FPGA miners that are make it infeasible for CPU miners to compete. Bitcoin’s Proof of Work algorithm suffers from the Pareto Principle problem, where 20% of the network mining through Proof of Work is reaping 80% of the rewards made.
Bytecoin focuses on an egalitarian Proof of Work approach that works to curb the gap between CPU, GPU, FPGA and ASIC miners. The community is designed to allow investments to grow linearly with the network’s power, and works to prevent specially-designed hardware from dominating the network and receiving the majority of rewards from mining.
As a concept, Bytecoin helped pave the way for the more popular Monero that we see and hear about today. Because of its precursor status to Monero, do you think Bytecoin has a future in the privacy coin sector? I certainly think so, as this coin would be fantastic for the privacy-focused cryptocurrency investor and trader.
You can buy Bytecoin here:
Poloniex
Cryptonator (can buy with USD)
HitBTC
Resources for Bytecoin mining:
Minergate
Bytecoin Party
BCN XFREE
Bytecoin Wallets:
Official Bytecoin Web Wallet
Official Android Bytecoin Wallet
Cryptonator Wallet for Android
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Coins mentioned in post: