DigiByte is a cryptocurrency that its founder Jared Tate imagined as a more stable, decentralized and faster iteration of Bitcoin back in 2014.
After its introduction, DigiByte has built an infrastructure designed to combat what its developers have seen as the big obstacles facing traditional and better-known cryptos such as Bitcoin. With its DigiByte token (DGB) and a decentralized public blockchain based on speed and stability, DigiByte aims to outperform its rivals by tackling the following issues:
- DigiByte aims to be the faster-than-average network. DigiByte is defined as being the quickest block generation among all public UTXO blockchains (Bitcoin, Litecoin) in service today. In addition, it boasts early adoption of SegWit (Segregated Witness) and a measured restriction of the reach and scale of transactions in order to preserve their quality and processing power.
- Protection is not meant to be the Achilles heel of the crypto universe. The DigiByte team claims that its blockchain technology is capable of plugging any possible security-related vulnerabilities due to its regional decentralization encompassing more than 200,000 machines, phones, nodes and servers. In addition, Digibyte has also deployed its groundbreaking DigiShield and MultiShield technology to handle complexity stability and protect itself from repeated malicious attacks.
- The implementation of Blockchain has to be more forward-looking in its use. At DigiByte, this problem is tackled by keeping an eye on three main developments that have been developed in conjunction with the blockchain: cybersecurity, the Internet of Things (IoT) and Artificial Intelligence (AI). DigiByte aims to extend its security technologies to IoT products and merge its blockchain platform with AI to offer more in the area of data management, information protection and automation.
How Is Digibyte’s Layered Architecture Working?
Over the course of its 4-year growth, DigiByte’s blockchain has become one of the oldest and largest UTXO networks of this kind in operation today. With its community counting some 100,000 nodes from all corners of the globe, DigiByte based its architecture growth on decentralization, scalability, protection of payment and speed. In order to do this, DigiByte uses distinctive architecture that is separated into three layers on top of each other:
- The Core Protocol Layer as the Prime Mover. This is the basic specification for the whole DigiByte network. With its place at the bottom of the layered structure, it manages communication and basic data transfer between the nodes and handles all operations taking place on the blockchain. Despite serving as the “core” layer for those above it, this aspect plays a key role in the DigiByte initiative to ensure decentralization for thousands of users around the globe. All of these nodes use this layer to distribute and process blockchain-based transactions.
- Digital Asset and Public Ledger Layer as the Security and Administrative Hub. This layer is the “treasure vault” of the DigiByte blockchain, where all data on the network is stored. Around the same time, the same layer hosts a security framework that avoids data interference and offers opportunities for DigiByte mines.
It is also home to DigiBytes digital assets that are defined as digital “representations” of larger data, or units that stand for things of value in the blockchain. Since these assets can not be forged, duplicated or destroyed, they are suitable to represent and secure digitized assets such as currencies, confidential data, property ownership documents and others. All transactions with DigiBytes are documented on an eternal public ledger that is also hosted on this network. New DigiBytes are produced by mining and the DigiByte team plans to make them entirely tradable for goods and services provided by traders who follow their solutions. DigiBytes can be securely stored, sent or received with the aid of DigiByte wallets that give users full control of their properties without the need for third party intermediaries.
- Application Layer as the Front of the DigiByte Architecture. The topmost layer of the DigiByte architecture is the one with which users interact in a “visible” way. This is the home of DigiByte’s interface, purchase portal, and APIs, arranged like the software stores most users are familiar with. When completely introduced, all DAPPS (Decentralized Apps) and centralized apps (called Digi-Apps) which will be built on the DigiByte network would also be hosted. Finally, this layer is where one can find all the smart contacts that are to be created and entered on the DigiByte platform.
Can DigiByte Actually Offer Faster and Cheaper Transactions?
With this infrastructure in place, DigiByte aims to potentially counter dominant payment processing companies, such as PayPal and Western Union, which handle about one million transactions on a regular basis. To get at least close to this target in the long term, DigiByte has taken the block generation pace on its network to one block every 15-18 seconds. Around the same time, transactions on the DigiByte website can be checked within 1-3 seconds. Depending on this, the DGB team believes that the blockchain is nearly 40x quicker than Bitcoin at the moment. This is interpreted as providing a DigiByte blockchain network of about 560 transactions per second, taking it closer to its general goal of handling 2000 transactions per second as Visa does, for example. This is ultimately to be achieved by doubling the block generation time every two years after the start of the project.
DigiByte also aims to combat its rivals by developing a price charging strategy to reduce transaction rates for end-users and companies to the lowest possible point (approximately USD$0.0003 per transaction). The transaction mechanism depends on the payment of minimum fees to the miners every time the user sends a single byte as part of the transaction. Each of these transactions may involve varying amounts of bytes (from anywhere between 300 and 1000 bytes), each of which goes to the “mempool” from which the miners may choose to include them in their blocks. Users do not want to pay too high a fee for day-to-day transactions, but setting fees too low puts them at risk of losing their transaction.
To hold prices down, DigiByte needs to make all transactions in the mempool for each node, and this is made possible by the computing power of its blockchain. With DigiByte, the customer charges roughly 80–100 “Satoshis” per byte of data (one Satoshi is 0.00000001 of DigiByte) for each transaction. It is defined by the DigiByte proponents as a very inexpensive fee which, as such, is highly suitable for regular transactions. As a result, DigiByte has also developed DigiCafe as its point-of-sale payment app, which focuses on cell phones and is based on this network for everyday micropayments.
How Does DigiByte Approach Scalability?
The DigiByte team is aware that faster block generation times will cause scalability problems, which means that individual nodes will have trouble verifying transactions if they have to keep track of the whole blockchain history, especially with a growing number of users.
Keeping in mind that DigiByte is used in more than 80 countries and that its blockchain is probably the longest in the world, DigiByte had to introduce other innovations to respond to the challenge of scalability. The first was an update to the SegWit protocol. This provides an efficient isolation of the authentication of transactions and the details on transactions in blocks. The result is a more lightweight ledger and the ability to perform single validation and cross-chain transfers on the blockchain.
DigiByte is also a cryptocurrency running the UTXO that potentially improves parallel transaction processing and facilitates advances in scalability. DigiByte has decided to limit the size and complexity of its transaction in order to make it more resource intensive and to increase its throughput. This is known as the “Rigidity Blockchain.”
Bearing this in mind, the team opted for the production of 21 billion DigiByte coins to be mined in a 21-year period. The creators have wanted to make the use of DGB simpler for those who want to make daily purchases with it. It therefore features a decimal system in which each DigiByte is divisible to 8 decimal places in order to make the prices look more like “40 DGB” than, for example, “0.004 DGB.”
How Does DigiByte Prioritize Security?
The DigiByte team also points to security in the crypto community as something they want their platform to set apart from the competitors. This is to be accomplished mainly through:
- Mining Decentralization
- Security-first strategy
Mining Decentralization is part of DigiByte’s perception that decentralizing transactions and blockchain sharing on its network would likely make it more safe in the long run. At its introduction, DigiByte used a single Proof of Work (PoW) method, followed by a fork that implemented five stable PoW algorithms in all. They are SHA256, SCrypt, Groestl, Skein and Qubit. The choice of algorithm depends on which hardware the user chooses for mining, be it a graphics processing unit (GPU) or an ASIC system. Mining is equally divided between 5 algorithms, each of which contributes 20% of the total capacity.
SHA-256 and Scrypt algorithms are commonly used by ASIC miners, stopping them from being the primary option for any form of home-based mining effort. Qubit allows the combination of hardware types that are best suited for more advanced miners. Eventually, Groestl and Skein are focused on GPU-based mining. The decentralization of the DigiByte has the goal to split the miners’ pool into smaller units of equivalent strength. With the vast number of nodes that DigiByte operates, this strategy is likely to strike a balance with the need to keep the network running and ensuring efficient and “democratic” mining.
MultiShield and DigiShield Technologies
The MultiShield and DigiShield technologies pioneered by DigiByte are closely related to the above. Each of DigiByte’s five mining algorithms has a specific complexity change that is contrasted to the others in order to balance the load they work with. The balancing mechanism itself is called DigiShield, with its advanced version known as MultiShield. Splitting mining between algorithms and applying these technologies will allow the DigiByte network to protect itself against possible malicious attacks.
DigiByte’s UTXO-based model is yet another building block in the security architecture of the network. Individual tokens are assigned with it to the identifier. The tokens received by the wallet are classified as “unspent” unless the sender transfers them to another recipient, after which they are treated as “spent.” At the same time, transactions are checked only after all transaction-related data are contained in the UTXO database.
As far as privacy is concerned, DigiByte aims to make it more difficult to create connections between the accounts on its network by having a party to the transaction use a new address for each transaction obtained.
DigiByte Wants to Go beyond Being a Payment Platform
For all the talk of transfers and purchases, key people behind DigiByte have shared the conviction that cryptocurrencies focusing solely on these facets are expected to die a slow death. To stop this, DigiByte plans to gradually move away from payment in order to expand its native technologies to the following fields:
- Cyber Security
- Artificial Intelligence
- Internet of Things
This change of direction has recently been confirmed by the founder of DigiByte, Jared Tate, who has vowed to combine AI technology with the DigiByte blockchain in order to create a network to be used. According to the developers, DigiByte’s scalability capability is what recommends it for use with IoT gadgets that can number thousands and grow in numbers rapidly.
While these plans are still being made, this is hardly the first time DigiByte has moved into a technology world outside of cryptos. Back in 2017, the DigiByte Gaming company launched an effort to promote digital advertising and consumer participation in games through micropayments and cryptocurrency rewards.
DigiByte History and Token Availability
Jared Tate, the founder of DigiByte, has a background in computer programming, blockchain programming and cyber security. In 2013, he developed DigiByte with the goal of providing a quicker and safer alternative to Bitcoin. The project formally began with the mining of the genesis block in January 2014, without the organisation of an ICO and without any major media attention. Instead, the project was financed by donations to the DigiByte Foundation, which is responsible for supporting the project at global level.
As of November 2018, DigiByte’s market cap stood at about USD 132 million, down from around USD 1 billion at the beginning of 2018. Actually there are around 11 billion DGB in circulation and they can be exchanged and purchased via cryptocurrency exchanges such as Coinbase and HitBTC.