What is Bytecoin?
Though it has recently experienced a resurgence of interest, Bytecoin (BCN) has been largely stuck on the sidelines since its creation in 2012. Nonetheless, it is one of the earliest cryptocurrencies developed and is the first to be based on the Cryptonote protocol—a technology also used by its more successful heir, Monero. A fragmented development team and accusations of unfair early mining slowed the coin down, but by 2017, the project had bounced back. The current team has made development more transparent, in keeping with their vision of creating a fast, private, unregulated currency that is accessible for businesses, customers, and investors.
How does Bytecoin work?
The blockchain that powers the currency is fairly standard: every coin transaction between addresses is sent to be validated by computers that are connected to the network. The computers check to make sure that the transaction values aren’t duplicates or invalid, and once they are finished, all the transactions they have checked are permanently recorded into a new block on the blockchain.
It is faster than Bitcoin, with a new block being created every 120 seconds, and it has no set block size (Bitcoin only allows one megabyte of transaction data per block). Bytecoin has instead implemented a system that grows with the network: the maximum size for a block is set at twice the median size of all previous blocks. Within this limit, miners can adjust their block size preferences, allowing more transactions to be processed simultaneously as more people join the network.
While the speed and scalability are good to have, Bytecoin’s biggest strength is its potential for privacy. The first concealment layer is one-time-use public addresses, which mostly protect the receiver. By cryptographically combining the sender’s address and the receiver’s address, the network makes it possible for you to send two transactions to the same person, both of which arrive at completely different, previously-untouched addresses. The only way to connect these addresses to an account is for the account holder to use their private key.
The second layer of privacy is ring signatures, which protect the sender. These have been made popular by Monero, and they work along the same lines here. In cryptocurrencies like Bitcoin, senders put an identifiable “signature” on their transaction to prove their ownership. BCN, however, puts signatures from several other users on each transaction, making the real owner indistinguishable from the rest. If they ever need to prove that they executed a transaction, they can use their key to show which signatures are theirs.
In February of 2018, Bytecoin released a major update to improve the stability, reliability, and user-friendliness of their network. Their roadmap for 2018 also includes marketing efforts across several different continents and significant technological upgrades.
In July of 2017, the previously anonymous development team revealed their identities in an effort to improve their brand and increase transparency.
How to buy Bytecoin
Bytecoin is mostly bought and sold on HitBTC. Here is a quick guide on how to buy Bytecoin starting with fiat to avoid hefty fees:
1. Buy Bitcoin or Ethereum at an exchange that uses your fiat currency on Coinbase.
2. Transfer your BTC or ETH to an exchange that supports Bytecoin. Currently, HitBTC is the best choice. (Tip: if you bought BTC/ETH on Coinbase, look into using GDAX to avoid transfer fees)
3. Buy Bytecoin by trading your BTC/ETH for their coin, and you’re done!
Several retailers, including the five-star Dukley Hotel and Resort in Montenegro and Bentea, a purveyor of rare Indian teas, currently accept BCN.