DigiByte (DGB) – cryptocurrency review
DigiByte is a cryptocurrency that focuses on security, decentralization and speed. This digital asset can safely be included in the number of early crypto projects: it was founded back in 2014. However, despite its age and stable development over the past four years, this project is still not very popular.
Fans of the project claim that DigiByte is a sleeping giant in the world of cryptocurrencies. According to them, DigiByte is at the forefront of cryptotechnologies, with a faster, more scalable and more secure network than most cryptocurrencies today, which will allow DigiByte to overtake giants like Bitcoin, Litecoin, etc. The project managed to win a devoted circle of fans with 100,000 nodes all over the globe.
On the other hand, during these four years DigiByte has not achieved much distribution. This coin is still in the shadow relative to its competitors. The DigiByte site is replete with a lot of cliched and noisy statements, but it provides little technical information on how the network actually works. It’s hard to understand which DigiByte achievements are already behind, and which so far are only in the plans for the future.
In this article we will try to study this platform more deeply: its history, technological features and achievements. In the end, it’s up to you to decide if you can count on the potential of DigiByte.
Technical Features Digibyte
Like Bitcoin, DigiByte is a cryptocurrency based on the UTXO model. This means that every new transaction does not use the ‘balance’ of your wallet. Instead, each coin has its own identifier. When a coin hits your wallet, it is considered ‘unused’. When you send this coin to someone else, that coin becomes ‘used.’ Thus, the system solves the problem of double spending and other issues related to blockchain security.
Blocks, mining and hash algorithms
DigiByte launched its genesis block (the first block on the blockchain) on January 10, 2014. At the time of launch, DigiByte used the proof of work algorithm. However, the project soon made a hard fork, introducing a total of 5 proof of work algorithms, including SHA256 (the Bitcoin algorithm) and Scrypt (used by Litecoin and Dogecoin). Separation of mining between algorithms promotes decentralization and increases network security.
A new block is created approximately every 15-18 seconds. Each of the five mining algorithms generates one block with an interval of one and a half minutes. The transaction volume within the block is limited. DigiByte was the first to introduce Segregated Witness technology to help keep the blockchain small and scalable. Fast block creation time and 4 years of project existence make DigiByte the longest (even longer than Bitcoin) block chain in the crypto world.
The final number of DigiByte tokens will be 21 billion DGB. Its mining will last 21 years. Currently, more than 11 billion DGB tokens are in circulation.
DigiByte software infrastructure consists of three layers working on top of each other:
- Basic communications and global network. This layer combines all the nodes in the network. It supports the most basic data exchange between nodes and is the foundation for other layers.
- Public registry and digital assets. All network data is stored here and the necessary security measures are applied for their storage. This layer stimulates the work and replenishment of miners.
- Applications This is the outer layer of the blockchain, addressed to users. It includes an interface, transfers, APIs and, in fact, all applications built on the DigiByte network.
Fast block generation and high throughput
The fast creation time of the DigiByte block means that processing and confirmation of a transaction on this network is much faster. DigiByte block generation time is 15 seconds, which is about 40 times faster than Bitcoin. Of course, at such a speed, the problem of scaling is inevitable, since in order to confirm a new transaction, each node in the network must save the entire blockchain history. DigiByte is already the longest blockchain in the world.
To cope with this problem, DigiByte introduced an implemented protocol update – Segregated Witness (SegWit). SegWit separates the transaction confirmation from the transaction information in the block. This makes the registry more compact. In addition, SegWit provides the ability to leverage other innovations such as inter-chain transactions or single-confirmation transactions. These features give the DigiByte blockchain great potential for development.
DGB also limits the size and boundaries of transactions. There is very little documentation on how this works, however, according to the team, these restrictions make the blockchain more efficient. In addition, limiting transaction volumes theoretically improves network security.
The fast block generation time and the small transaction size give a throughput of 280 transactions per second. This is a pretty quick indicator when compared with the same Bitcoin with its 8 transactions per second. However, the figure no longer seems so high when compared with the throughput of payment processors like Visa with its 2000 transactions per second. And although the DigiByte team announces its plans to break through this indicator, so far its plans are rather vague, and the roadmap does not offer any specific solutions in this regard.
The DigiByte team also claims a high level of security for its crypto. Giving priority to platform security, its creators strive to make it as decentralized as possible. This is partly why the team working on the project still has no more than 10 people. The DigiByte team, as befits a true decentralized project, has entrusted the promotion and development of its platform to its community. Of course, with this comes the problem of coordination within the network. Although many network members contributed to the platform’s code base, all these processes were rather arbitrary, without any clear direction from the DigiByte foundation.
One way or another, DigiByte successfully coped with the task of decentralizing its mining, mainly through honest promotion and the use of five algorithms at once. Algorithms divided miners and their combined mining power into five equal groups, which provided the foundation for healthy competition with a block generation time of only one and a half minutes for each algorithm. Currently, the blockchain has 100,000 nodes located on six continents.
DigiByte equalizes the workload of all five algorithms, changing their complexity so that none of them begin to dominate. This rebalancing technology, called MultiShield, is one of DigiByte’s own technical advances. An early MultiShield prototype called DigiShield made it possible to flexibly configure mining complexity to protect small blockchains from miner manipulation with huge processing power. Asymmetric complexity DigiShield gained fame and began to be used in many other blockchains.
Ahead of development
DigiByte has earned a reputation as an advanced project in the world of cryptotechnologies. The DigiShield technology developed by the team was widely used as an effective solution to one of the mining problems. In addition, DigiByte was the first blockchain to use SegWit. Ahead is the innovative mining technology MultiAlgo, in which this blockchain will also become a pioneer.
Since DigiByte has the longest block chain in the history of blockchains, they have already encountered scaling problems that other blockchains will still have to face. At the moment, the length of the DigiByte blockchain is about 5 million blocks. Given all this, DigiByte as the only one of its kind project on the advanced blockchain technology has the right to make a mistake. In the meantime, this cryptocurrency is not as common as other more successful digital assets, so it’s difficult for us to judge whether DigiByte technology is actually as reliable as it seems to us.
According to information from the official website, the platform will also support AI (artificial intelligence) and IoT-applications (Internet of things), created on the DigiByte blockchain.
As of the end of 2018, many of these updates remain under development. This year, the development was mainly aimed at distributing DigiByte to the mass user by adding coins to new exchanges, wallets and retail outlets.
History and Digibyte Team
Jared Tate developed DigiByte in 2013 and launched the Genesis block in January 2014. At that time, there were very few public blockchain projects. The project started without any ICO and loud bravado.
After the launch, Tate was fully committed to developing DigiByte. The main financing of the project is through donations to the DigiByte fund. It is also important to note that Tate and other project participants are holdings of significant quantities of their DGB coin due to mining and initial transactions. Their condition will grow with the DGB coin.
Speaking of other team members, it is difficult to find any information about them. The official site does not contain any data on its composition. Only a small investigation on LinkedIn revealed to us that the team working on the project has less than ten members, including Tate himself.
DGB, being a UTXO cryptocurrency, competes with many other cryptocurrencies, including the almighty Bitcoin and Litecoin. Given that DigitByte boasts some of the fastest and cheapest cryptocurrencies, it competes with the notorious Dash. Another UTXO-based project is roughly on par with DigitByte – Dogecoin.
DigiByte is very slowly, but surely moving towards its goals. For its four-year history, the company could definitely achieve more. 100,000 nodes is a decent network for an alternative currency, however DigiByte is a rather old currency by the standards of crypto and it has more than once had the opportunity to gain massive support with the right message and public contact.
DigiByte is currently gaining momentum in the gaming industry. A branch of a project called DigiByte Gaming offers gamers DGB coins in exchange for time spent in some games.
Executive Director Jared Tate has promised to focus on closer contact with the audience and the DigiByte Foundation. At the moment, the distribution of the project in wider circles is the main problem of the entire project. In the meantime, the future of DigiByte is vague. The project has every chance to become a leader in speed, scalability and security, however, along with this, there is a chance that DigiByte will sink into oblivion without ever securing user support.
However, so far, Digibyte still manages to slowly attract new loyal users.
Where to buy DGB
You can buy DGB on many large exchanges, including Bittrex, Huobi or Poloniex (the only exception is Binance). You can also buy DigiByte cryptocurrency on the well-known Russian-language exchange Yobit.
You can easily mine DGB, as the variety of DigiByte algorithms supports both ASIC and GPU mining.
Where to store DGB
On the Digibyte website, in the Wallets menu, you can download a hot wallet for storing DGB to any operating system. DGBs can also be stored in hardware wallets like Trezor or Ledger Nano S.
With a fairly supportive community, strong decentralization, and diversity in use (besides payments), DigiByte can have an enviable future. At the moment, due to the prolonged market decline in 2018 and the rather slow development of the project, DigiByte is still fighting for more massive user support. On the other hand, a bear market can play a useful role by removing all weak and useless tokens and clearing the way for projects with real potential. If DigiByte will continue to focus on mass distribution, while fulfilling its long-term plans such as the introduction of smart contracts, the project has a good future.