DigiByte

What is DigiByte (DGB)?

DigiByte is a fully open-source, decentralized UTXO blockchain that was fairly launched in January 2014. Released under the MIT license and completely verifiable by any individual or entity, DigiByte serves not only as a fast digital currency but also as a digital asset and smart contract platform.

One of the older cryptocurrencies in existence, DigiByte uses multiple algorithms to improve security and originally aimed to improve the security, capacity, and speed of Bitcoin. Since then, it has seen considerable technical improvement, allowing it to host an ecosystem of decentralized applications (dApps).

DigiByte has never held an ICO and carried out a 0.5% pre-mine that went to community members to incentivize adoption. It launched using the Litecoin codebase and has undergone several non-contentious soft and hard forks, none of which resulted in a chain split.

With an ethos of “faster, more secure, forward-thinking,” DigiByte is one of the fastest UTXO blockchains, with a block timing of just 15 seconds. It was also the first blockchain to adopt the SegWit protocol, in 2017, well before Bitcoin or Litecoin.

Who are the Founders of DigiByte?

DigiByte is the brainchild of Jared Tate, also known as “DigiMan,” who wanted to create a blockchain that addressed many of Bitcoin’s perceived weaknesses. Tate was an early adopter of blockchain technology and authored the book “Blockchain 2035: The Digital DNA of Internet 3.0.”

At launch, DigiByte was a Scrypt-mined blockchain with 60-second block times. Network upgrades have seen these block times improve further, even though they were considered revolutionary in 2014.

DigiByte also followed Bitcoin by encoding a message in its genesis block hash. Digibyte’s genesis block referenced the USA Today publication on the 10th of January, 2014, which ran the headline “Target: Data stolen from up to 110M customers.”

How Does DigiByte Work?

DigiByte is a blockchain or a public distributed ledger upheld by network nodes called miners. These miners record network transactions into blocks, each containing a hash of the previous block.

This forms a chain, and the moment one transaction is tampered with, the block hash changes, and the chain is broken. For this reason, blockchain transactions are considered immutable.

It is also a UTXO blockchain, similar to Bitcoin. Standing for Unspent Transaction Output, UTXO simplifies the accounting methods of the blockchain by tracking unspent coins.

DigiByte has accepted on-chain scaling as the method of choice for future growth in transaction volume and frequency. Rather than support second-layer methods where transactions often aren’t even presented to the network, DigiByte scales through block-size increases. This happens every two years.

DigiByte has a triple-layer architecture, with its top layer functioning like an app store. Digital assets can be created with the DigiAssets protocol, and smart contracts can be encoded easily onto this application layer.

The middle layer provides security and administration. This is the public ledger and what is generally referred to as the “DigiByte blockchain.” Finally, the bottom layer provides communication and operating procedures. This layer describes the way nodes on the DigiByte global network communicate.

What makes DigiByte Unique?

While most other blockchains use a single mining algorithm to mine new blocks and introduce new assets into circulation, DigiByte takes a markedly different approach. It utilizes five unique and independent algorithms in a “MultiAlgo” solution and has done so since block 145,000 in September 2014.

The Odocrypt mined algorithm rewrites and morphs itself every 10 days to prevent ASIC dominance, focusing instead on utilizing FPGA mining. Underlining the project’s commitment to being forward-thinking, future algorithms may be replaced as necessary on an ongoing basis.

DigiByte is also well known for DigiShield, a real-time difficulty-adjustment mechanism that ensures the stability of block generation timing despite exponential changes in mining hash power. DigiShield is utilized in several other projects, including Dogecoin and ZCash.

When DigiByte changed to MultiAlgo, DigiShield was ported and upgraded to become MultiShield. This allows for regular block timings across multiple mining algorithms, even block mining distribution between algos, and the prevention of mining dominance in the event of sudden changes in hash power.

On top of DigiShield, SegWit implementation, Odocrypt, and MultiAlgo mining, DigiByte is also unique for its use of the Dandelion++ privacy protocol, DigiAssets, and Digi-ID.

How is the DigiByte Network Secured?

As mentioned, DigiByte uses five different algorithms for mining rather than just one. They are SHA256, Scrypt, Odocrypt, Skein, and Qubit. The fact that it is mined means DigiByte is a proof-of-work (PoW) cryptocurrency, with nodes running one of the above algorithms to produce and verify blocks.

DigiByte is also ASIC resistant thanks to Odocrypt, relying instead on GPU/FPGA mining. This makes it more decentralized since the barrier to entry for mining is lower. It is also a permissionless blockchain with no controlling entity, making it decentralized in structure.

What is the Use of DGB?

DGB is the native coin of the DigiByte network and a highly scalable peer-to-peer digital currency that is well-suited to making digital payments.

How Much DGB is In Circulation?

DigiByte has a maximum supply of 21 billion DGB coins, due to hit full circulation via mining in the year 2035. Its block reward reduces by 1% every month, marking a far less drastic supply reduction than cryptocurrencies that employ halving schedules.

Once the entire DGB supply has been mined, network miners will rely on transaction fees for remuneration.

How Do You Buy DGB?

You can buy DGB on many major exchange platforms, which is no surprise, given how long the project has been live. You can buy DGB with various stablecoins, and some exchanges also offer fiat trading pairs with DGB.

How Do You Store DGB?

You can store DGB coins using one of several community-developed wallets. Digibyte Core contains a full copy of the blockchain and features full validation and network support, but it requires a lot of disk space and free memory. DigiByte Mobile may be a far easier alternative for ordinary users, although various other wallets like Edge, Exodus, and Trust Wallet are supported.

For a full list of wallets you can store and use DGB with, check out the DigiByte website’s downloads page.

Is DGB a Good Investment?

DigiByte is a tried and tested cryptocurrency and blockchain network that has functioned without any major attacks, controversies, or even contentious forks for years. It’s well known for innovation, decentralization, and being shepherded by its community.

This notable absence of any centralized entities and private investment may be to blame because DigiByte isn’t valued all that highly by the market. However, its proof-of-work nature may end up being the sword by which it lives or dies.

Proof-of-stake (PoS) networks are the norm currently, with older PoW networks often targeted with “FUD” surrounding their energy consumption and environmental impact. However, many of the older networks that stick with PoW contend that it is the only tried and tested means of attaining consensus.

Thus, DigiByte’s long-term future may lie in the success or failure of PoS, although it would be foolish to bet against the forward-thinking, fast-adapting community driving the project.