What is DigiByte and how does it work?
DigiByte is a cryptocurrency with an active development team and a busy community. Unlike most development teams, they haven’t released a whitepaper or technical documentation, but in the words of its developers, they aim to “under promise and over deliver.”
Where to buy DigiByte in Australia
How does DigiByte work and what does it do?
DigiByte appears to primarily consider itself a payment method. It uses a multi-layer blockchain system consisting of the following:
- The applications layer. This is the user interface which connects users and their devices to the layers below.
- The digital asset and public ledger layer. This is the distributed ledger system of the blockchain, across which transactions are carried.
- The core global communications layer. This layer consists of the mining nodes that support the above layers.
These layers aim to allow people to use DigiByte as an accepted payment method while still retaining blockchain security features.
It uses five separate mining algorithms,and users can choose which of the five they want to use for the best returns on their system. The available algorithms are SHA256, Scrypt, Skein, Qubit and Groestl.
This is intended to improve the security of the DigiByte network, while simultaneously encouraging more users to mine the devices on whichever devices they have at hand.
Although there is no solid roadmap, the DigiByte website has listed the following as possibilities in the future, although it has not made any formal commitment or timeframe for them.
- Corporate collaborations
- Lightning network trials
- Re-launching a previous DigiByte gaming venture
- Hosting conferences or events
- Creating a DigiByte-backed Internet browser
- More wallet support
- Creating smart-contract functionality, launching artificial intelligence products and investigating quantum computer proofing
The total DigiByte supply is set to cap at 21 billion, which will be mined by 2035. It also has a 15-second blocktime, allowing for much quicker transactions than many other cryptocurrencies.
What to consider when buying DigiByte
You may want to consider how useful DigiByte’s distinctive features are, and how they might directly influence the currency’s value.
For example, having five separate mining algorithms could be helpful for DigiByte miners and might offer some extra security against outside attacks for a growing currency, but you will need to decide whether this feature translates into an increased coin value.
Similarly, a properly constructed cryptocurrency can be demonstrably secure even without multiple mining algorithms. A cryptocurrency might have distinctive features, but traders need to decide on how this impacts a coin’s usefulness.
Traders should also consider whether the tendency of many users to regard cryptocurrency as an asset to be held in the long run, rather than a currency to be spent, will get in the way of DigiByte’s goals of becoming a payment method.
DigiByte’s intended purpose also lands it in a competitive area. Its most prominent competitors might be the following cryptocurrencies:
- Nano (formerly RaiBlocks). A payment cryptocurrency with even faster transfers and zero transfer fees.
- Bitcoin. A highly valued payment cryptocurrency with exceptionally slow transfers and high fees.