Byteball is a new type of consensus algorithm that isn’t based on the typical blockchain already implemented in all the major cryptocurrencies. There is no mining or block chains and it isn’t based on either POS or POW. The system uses something called DAG (Directed Acyclic Graph) which references one or more earlier transactions at the time that new transactions are occurring.
I like to see things as simple as possible, and when I learned how Bitcoin and other cryptocurrencies are designed, I wondered do we need two separate entities — transactions and blocks, maybe we can get rid of blocks and build a simpler system? – Anton Churyumov, Byteball Lead Developer
The native currency of Byteball is called Bytes; in fact the technology allows users to create their own tokens within it. Moreover, Byteball assets can be regulatory compliant to serve the mainstream financial sector.
Users can issue any other tokens (assets), e.g. to represent debt. The debt can be expressed e.g. in fiat currencies or in natural units (barrels, ounces, kWh, etc). The issuers of the debt can reveal their real-world identities and/or be voluntarily attested (i.e. their real-word identities be verified by a well known third party such as CA). This enables the use of the existing legal system to secure against fraud.
The issued assets can be used as means of payment, along with bytes. Assets can be exchanged against bytes and other assets by both parties signing a single unit that executes both legs of the exchange, thus the two transactions either happen simultaneously or don’t happen at all. This kind of signing is called multilateral signing. No centralized exchange is needed, hence no trust is necessary and no exchange fees (apart from the usual fees for the size of the data). – Anton Churyumov, Byteball Lead Developer
Byteball assets can be either public or private. All transactions in public assets are visible to everyone on the public ledger, just like it happens with Bitcoin. The native currency Bytes is a public asset. Private assets instead add an extra layer of privacy, making payments untraceable, a killer feature that is behind the great success of cryptocurrencies like Dash and Monero.
Payments in private assets are not published to the public database. Instead, only the hash of the transaction is stored to the database, while the plaintext of the transaction is sent directly from the payer to the payee. To protect against double-spends, a spend proof is also published to the Byteball database. – Anton Churyumov, Byteball Lead Developer
There will be no airdrop, crowdsale, ICO or any other method typically used to distribute cyrptocoins, yet the vast majority of coins (98% of them) will be given out for free at launch.
I believe the success of a currency depends on the number of people who own it, in fact Peter R’s research suggests that historical marketcap of Bitcoin follows Metcalfe’s law, it is proportional to the square of the number of active users. We have this great technology that has the potential to become a common payments platform for almost everyone, but that is not enough. The platform only becomes live, and acquires its own value, when there are people who use it, many people, That’s why I want Byteball to be in the hands of as many people as possible. – Anton Churyumov, Byteball Lead Developer
The coin distribution is broken down as followed:
– 98% distributed based on how much Bitcoin you hold
– 1% will be reserved for the dev team
– 1% will be given to the first 100 million people who install the Byteball wallet.
You might be wondering how many Bytes will be created for distribution. The answer is 10 to the 15th power or 1,000,000,000,000,000 coins. Yes, the number is very high. In fact, the 15 zeros after the 1 means there is going to be one quadrillion Bytes in existence. However, you have to remember that the entire distribution is going to be based on who holds the current Bitcoin money supply (right now at 15,924,000-ish coins). In short, If you hold a substantial amount of Bitcoins, you will also hold a substantial amount of Bytes as long as you follow a few steps required to verify the ownership.
I know that you will probably have quite a few questions about what Byteball is and why this might be an improvement over cryptocurrencies. For those who want to go deep into the details of the technology, everything is well detailed in the Byteball White Paper. However Byteball testnet is already online, so you can simply download a wallet and experiment with it on the field. The launch is planned for Christmas. Currently the first test flight is in progress and you can follow the status of the project on the official thread.
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