Bytecoin is yet another “private” cryptocurrency built independently to Bitcoin and other systems in June 2012.
The most important thing to consider with this is the way in which it’s been developed.
There are a large number of members of its community, with that number growing despite this being one of the older coins in the space. The good news is that if you’re looking at this from a user’s perspective, it’s one of the most effective crypto systems for privacy… the bad news is that its feature-set is scattered, it doesn’t have much adoption and its price is heavily linked to the likes of BTC.
The system itself has the following features:
- Unlimited instant international payments: the Bytecoin network works as fast as the Internet. Payments take a little time to process, as confirmation is required for payment. Bytecoin claims that transactions are processed in about 2 minutes.
- Security: Bytecoin “protects the user’s money with secure and modern crypto algorithms” which “can not be hacked.” The creators of Bytecoin argue that breaking a cryptocurrency “will require a lot of expensive electricity and the computing power of supercomputers.”
- Secure personal data: Bytecoin states that “it is absolutely impossible to obtain information about your financial transactions and the balance of your wallet” if you do not want to disclose your data one day. Only the user can manage data that partners and third parties can see.
Why does it exist?
To quote the Bytecoin Whitepaper:
“Bitcoin” has been a successful implementation of the concept of p2p electronic cash. Both professionals and the general public have come to appreciate the convenient combination of public transactions and proof-of-work as a trust model. Today, the user base of electronic cash is growing at a steady pace; customers are attracted to low fees and the anonymity provided by electronic cash and merchants value its predicted and decentralized emission. Bitcoin has effectively proved that electronic cash can be as simple as paper money and as convenient as credit cards.
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.
In this paper, we study and propose solutions to the main deficiencies of Bitcoin. We believe that a system taking into account the solutions we propose will lead to a healthy competition among different electronic cash systems. We also propose our own electronic cash, “CryptoNote”, a name emphasizing the next breakthrough in electronic cash.
Ultimately, all it’s trying to is privatize the way in which transactions are stored in a blockchain type setup.
Although the system has been live since June 2012, its price has tracked that of BTC quite closely, suggesting – like most currencies in the crypto space – it’s operating on spillover from the main one (Bitcoin).
What makes this system different is the use of the unique CryptoNote technology, which basically sits at the core of many of the private crypto systems in the world.
The reason this is important is that – from a technical perspective – the cryptocurrency world is essentially dominated by Bitcoin, with all the other coins falling far behind the leader. Whilst this isn’t a problem, it means that if you’re looking at these systems from an investment perspective, they’ll never ever touch the price of Bitcoin and will be susceptible to the market swings of the BTC system.
As ever, we’ve found the best investments to make in the crypto space are for the platforms. These not only allow you to actually quantify the use value of the system, but many of them (such as Ripple) actually have a real business (with employees, balance sheet etc) to back it up.
Most currency systems in the crypto space are so amateur that it’s not even worth bothering with to look into them. This – unfortunately – is one of those. It’s ridden the coat-tails of Bitcoin and is highly susceptible to the swings that Bitcoin experiences.