Bytecoin (BCN) is a project that has been around since the earliest days of the public blockchain space and yet is not well known for the unique features it brings to the ecosystem.
Bytecoin is based on the CryptoNote hashing algorithm, the cryptographic basis for the protocol was created by Ron Rivest, Adi Shamir and Yael Taumann in 2001, and finalized by E. Fujisaki and K. Suzuki in 2007.
Bytecoin was introduced on July 4th 2012, the anonymous transaction revolution within the blockchain space had begun.
While most associate Monero (XMR) with the capability of ‘'untraceable’' transactions within the digital asset markets, it was the Bytecoin team who pioneered a proof of work solution that relied on an additional layer of security called ring signatures and recently implemented a new secondary layer of chain security in their SendProofs concept.
CryptoNote V2.0 was developed by Nicolas van Saberhagen on October 17th, 2013. Saberhagen starts his introduction to CryptoNote with:
''Unfortunately, Bitcoin suffers from several deficiencies. For example, the system’s distributed nature is inflexible, preventing the implementation of new features until almost all of the network users update their clients. Some critical flaws that cannot be fixed rapidly deter Bitcoin’s widespread propagation. In such inflexible models, it is more efficient to roll-out a new project rather than perpetually fix the original project''
CryptoNote is an ASIC resistant solution that favors access to slow-load baroquhigh capacity memory and latency dependance that makes CPU cluster mining ineffective compared to other coins.
ASIC resistance has surged in popularity in the later half of 2018 as more miners look for alternate assets to solve for with their GPU powered rigs.
Saberhagen in his cryptonote whitepaper continues on to rail against the centralized interests of miners in CPU focused blockchains relying on SHA-256 encryption.
It is clear that Bytecoin was an attempt to solve problems within the blockchain ecosystem by relying on CryptoNote ring singnature abstraction to address the rapidly arising issues of how much information the miners controlled within a PoW system.
Back in 2012, when expanding utility tool-sets in the Bitcoin (BTC) ecosystem allowed for more users to track transaction flows, many entities who were actually providing the liquidity for the BTC markets did in fact want the anonymity which had attracted them to the blockchain space in the first place.
Work began on new solutions like BCN and later Monero to bring back privacy to the transaction space.Bytecoin provides an additional layer of anonymized security with the concept of ring signatures.
This technology increases security by obscuring the private key signature created by an individual or group so that that their transactions on the BCN network may be observed and validated, but the identities of their wallets remain encrypted behind a secondary protocol.
This was expanded recently with the development of the SendProof protocol v1.0 which utilized zero knowledge concepts to ensure that transactions occur without knowing the wallet keys.
Obviously such utility in a rapidly expanding space where privacy is paramount is important to the Bytecoin ecosystem and it has acted as a catalyst for a flurry of recent development.
Why watch BCN?
- A looming hardfork when hashrate reaches 90% on new fork; this will solve some serious wallet misconfigurations from a few years of developer inactivity with exchanges.
- The exchanges currently listing BCN are all regional leaders and BCN transactions are attractive for their quick settlement and low volatility (Poloniex, HitBTC, Binance.
- Wallet ID Anonymity will be a contentious point within the space for some time, Bytecoin has been solving this problem the longest and is committed to developing towards solutions like SendProofs.
Read more on each of these points in the next few weeks here on ICNN!