What Is DigiByte? - [A Comprehensive Guide to Understanding DigiByte]

What Is DigiByte? - [A Comprehensive Guide to Understanding DigiByte]

By Mr.CryptoWiki | cryptocurrency | 1 Oct 2019


351665157-4149f0536164734508bdac82ee934cd19a8a414e20839cb15952bf09083386e9.png

image source: https://digibyte.io/

DigiByte is an open-source blockchain platform that was started in 2014. It’s one of the older generations of cryptocurrencies and it claims to be running the longest blockchain in the entire crypto space. At the time, initial coin offering (ICO) and all of its variations were still not a thing. During its early days, DigiByte had to live with just donations from the community. Fast forward to today, DigiByte is ranked 49th in the cryptocurrency rankings by market cap. So, how is this multi-algorithm blockchain project able to steal a spot in top crypto rankings while it did not start with any funding? Let’s find out.

History of DigiByte

351665157-4277028fab42a9bd69a3cbfaaafc04212ad71ccfb7cd8ad86fe6c1b3b380d918.png

image source: https://twitter.com/jaredctate

It all began with one developer. His name is Jared Tate. The guy developed DigiByte in 2013 and finally, the genesis block was started in January 2014. There weren’t many public blockchain platforms at the time. DigiByte was among the first altcoins that gained popularity. DigiByte did not get its funding from any type of initial coin offering (ICO). The core team ‘funded’ their operation along with donations from the project supporters.

It can be safely assumed that most of the token supply is controlled by the core developers. There’s not much information about the team beside Jared Tate himself. It seems Jared wants to protect the privacy of his employees.

According to the ‘About Us’ page on the official website, DigiByte bragged for being a project that has never been funded through an ICO. Also, there was no private company controlling a big amount of DigiByte token supply. Due to these facts, DigiByte can be seen as an ‘example’ of ‘better’ decentralization. 

Not only that, but DigiByte is also a project that has been improved and tested for longer than five years. It means DigiByte’s technology and security have been tried through time. There are many newer blockchain projects with security flaws but DigiByte has proved itself as one of the leading projects with a good level of security.

Purpose of DigiByte

351665157-8ef53f114939dc04a9381103ca4d72d0dff622f9f5eb06134c5be617a81a1b93.png

image source: https://seekingalpha.com/article/4213262-cryptoassets-explained-digibyte

One of the main purposes of DigiByte is to be used as peer-to-peer electronic cash, just like most other cryptocurrencies that were created pre-Ethereum. In 2013-2014, all altcoins’ founders were thinking of how to make a ‘better Bitcoin’ with cheaper transaction fees and faster transaction time. DigiByte was not an exception. Still being built on top of a ‘proof of work’ consensus, DigiByte is often considered as one of the fastest cryptocurrencies among the first-gen blockchains.

If DigiByte can become more popular, it is possible for this coin to get a higher level of liquidity. And, unfortunately, to fulfill its purpose as a cross-border currency, DigiByte needs a better trading volume. At the time of this post writing (October 1st, 2019), DigiByte has slightly over $4 million daily trading volume. That number is far lower than its competitors like XRP, XLM, TRX, Bitcoin, or LTC

Fortunately, DigiByte does not just rely on one single use case. From DigiByte Blockchain FAQ page, it is said that decentralized applications (dApps) can actually be built on top of this blockchain. Leveraging the security of DigiByte, developers can deploy smart contracts. As of today, the number of dApps on DigiByte is still far lower compared to Ethereum or EOS or Tron.

DigiByte’s goal with the dApps capability is to have different kinds of digital assets tied together into one same platform. Money, documents, videos, music, IOT data, and photos all can be defined as ‘DigiAssets’ and issued on DigiByte blockchain. DigiByte core team believes they can compete with other platforms in the ‘digitization’ era because they consider the project to be more decentralized than the likes of Ethereum and others. 

Technological Features

351665157-2f3ae5dc6e54ed7b07a3c8c738029b3b694527f8701b77030994437f29e4ccd8.png

image source: https://digibyte.io/digibyte-blockchain-faq

DigiByte has a unique mining algorithm. Different from other top proof-of-work altcoins, DigiByte combines 5 different mining algorithms. They are Qubit, SHA256, Odocrypt, Skein, and Scrypt. So, each of these 5 algorithms will adjust its own algorithm weighted against other algorithms in the network. The process is called MultiShield. With this mining algorithm, the team and hardcore supporters believe that DigiByte is more decentralized than others. More decentralized than proof of stake coins that often allow a few amounts of people controlling a large number of coins and also more decentralized than traditional proof of work coins with just one single mining algorithm.

Not only about its mining algorithm, but DigiByte’s advantage is also for being fast. Even though DigiByte was launched in 2014, but the project can still compete even with the newer blockchain projects. DigiByte can achieve 1066 transactions per second (TPS) with Segwit. And it also has a 15 seconds block time which is significantly faster than Bitcoin’s block time (10 minutes). Block reward reduction is not adjusted every few years but it’s 1% every month with DigiByte. 

And, another impressive thing. DigiByte blockchain has more than 280,000 full nodes since 2017. The number is way higher than many other cryptocurrency projects with a higher market cap than DigiByte. 

With all these impressive stats, however, DigiByte is not ‘very’ mainstream. The adoption is quite slow and not many casual traders even recognize the name and the technology of this coin. The team has been criticized several times for not being ‘aggressive enough’ with their marketing efforts.

Controversies

351665157-84897e32cc4e393a7c33a1ec209b1850ea1903bb9e1398c7909dd7ec62a65e23.png

image source: https://twitter.com/jaredctate/

There weren’t many controversies surrounding DigiByte coin (DGB) until the recent trouble with Binance. So, on September 20th, 2019, DigiByte founder Jared Tate publicly tweeted that Binance asked for $300,000 and 3% of DGB token supply. In other words, Jared Tate wanted to say that Binance is a “no cash, no listing” exchange. Binance CEO Changpeng Zhao then replied to Jared Tate by saying “not gonna waste any time on these types of guys”.

The community itself was divided. Some chose to defend DigiByte because they believed a truly decentralized currency should never pay just for a crypto exchange listing. Some others chose to defend Binance and they thought DigiByte team just wanted a bit of publicity for themselves by stating the obvious (many people already know that you have to pay to get your coin listed on Binance).

According to one active twitter user @Raceytherunner, DigiByte actually won a community listing poll to be listed on Binance about two years ago. However, because DigiByte team refused to pay the listing fee, Binance chose not to list the coin. The ‘debate’ then stopped until two years later when Jared Tate suddenly publicly called Binance on September 20th as we have mentioned above.

Outside the fight with Binance, there hasn’t been much public discussion about this coin. One minor accusation was more about the founders holding a large amount of coin supply. However, this is entirely normal in the crypto space. Many founders (including Satoshi Nakamoto, the founder of Bitcoin) own a large amount of coin supply. Of course, the founders have to be able to get some rewards somehow.

Partnerships and Adoption

351665157-1bbe55c7da6264f4ffd810dc4ca440d02092896708d64ed5294b6bcf417d1cd7.pngImage source: https://twitter.com/Cryptwerk_com/

In terms of partnerships and adoption, there aren’t many ‘direct’ partners of DigiByte. DigiByte’s adoption usually comes from coinpayments.net where you can pay for different types of services using many different types of altcoins. There are more than 400 firms that accept DigiByte as a form of payment thanks to coinpayments.net. Services such as Snel.com, Gamerall.com, and Anna Freya Voice all accept multi-crypto payments, including DigiByte coin. 

From the crypto exchanges’ perspective, DigiByte is also slightly behind its competitors. DigiByte is available on mid-tier crypto exchanges like CoinEx or Sistemkoin, but mostly they don’t have good enough trading volume. Many community supporters believe DigiByte will benefit a lot from a Binance listing but it seems they will never get listed considering the recent public debate between DigiByte founder and Binance CEO.

In general, DigiByte’s adoption rate is a bit slow. Other altcoins with similar capabilities often have more direct partners and better presence in the crypto exchanges. DigiByte founder, however, believes that decentralization should mean that the project must naturally grow instead of paying here and there just to get listed.

DigiByte Coin (DGB) In The Cryptocurrency Market

351665157-59e421cbe920021b318f8e57ac771f13e84fb8f975d6a64fee7eedfdeaf465e8.png

Image source: https://coinmarketcap.com 

On October 1st, 2019, one DGB coin is worth $0.007715 USD. DigiByte has a $95,113,675 USD market cap and more than $4 million daily trading volume. Most of the volume can be found on Sistemkoin and CoinEx with DGB/TRY and DGB/BCH seem to be everyone’s favorite trading pairs. 

It is not an unpopular opinion that DigiByte will have a hard time to be able to climb up the cryptocurrency rankings due to its lack of marketing funds. Many other altcoins with similar use cases often try to ‘hype’ themselves with different types of partnerships and marketing efforts. However, nobody can truly predict the future. 2020 should be an interesting year for DigiByte project and community.

Competitors

There are different kinds of competitors to DigiByte. When it comes to ‘speed’, DigiByte competes directly with the likes of Litecoin, Dash, XRP, XLM, or NANO. They are often seen as the leaders of fast and cheap cryptocurrencies.

Meanwhile, from the smart contract and dApps perspective, DigiByte is competing against Ethereum, EOS, NEO, or Tron. These platforms have loyal dApp developers and it will take a while before DigiByte can be seen as one of the best alternatives to Ethereum.

Conclusion

DigiByte has strong technological features with a unique mining algorithm. However, the project still needs to prove itself as a multi-purpose blockchain platform in order to get the community’s attention. If DigiByte can increase its adoption rate, it can become a serious challenger to top crypto projects.


Mr.CryptoWiki
Mr.CryptoWiki

In crypto since 2002 ;)


cryptocurrency
cryptocurrency

Crypto Wiki :)

Send a $0.01 microtip in crypto to the author, and earn yourself as you read!

20% to author / 80% to me.
We pay the tips from our rewards pool.