Bytecoin is another privacy coin like Monero, Zcash or Dash and helps in hiding the users’ transaction details and concealing senders’ addresses. It was started in 2012 and uses the Cryptonote algorithm for privacy features, but the major red flag is that it is highly centralized with 82% premined. Let’s discuss in detail what the positives and negatives of this coin are over other privacy coins in the market.
History of Bytecoin
Bytecoin was first started in 2012 as the first privacy coin to implement Cryptonote. Famous Privacy coins in the market like Monero and Dash are forks of BCN. It has a total supply of massive 184.47 billion coins, but its total circulating supply will reduce with time. It is very easy to mine BCN with your normal computer with less CPU power. It has a marketcap of 800 million USD at the time of writing with a price of $0..004287.
Bytecoin is the first privacy coin to implement the cryptographic protocol called the “Cryptonote”. This protocol was first endorsed by Bitcoin developer Greg Maxwell. Monero also uses this protocol since it was actually forked from Bytecoin itself.
Cryptonote technology gives Bytecoin the much-needed anonymity feature by hiding the user transactions details and the public key is accessible only by the sender who controls the private key. Whereas with non-privacy coins like Bitcoin, anyone can access the public keys and the transactions are fully visible on a public ledger. The transactions are not linkable when you use Bytecoin and so the mapping of transactions with the actual sender is impossible to trace.
Development and Adoption
Bytecoin has been increasing in price after major updates in December 2018. Also, the marketing team is pushing for major adoption in the Middle East, Africa, and Asia. Recently, its Android wallet app was released with new features. Many business and big exchanges have also started accepting BCN. Minergate is one of the biggest applications to accept BCN.
Minergate is an application that can be installed to mine your BCN using your computer or smartphone. There are many other businesses and exchanges that accept BCN such as Mining applications like EOBOT, Miner Center and Democats; big exchanges like HitBtc, Poloniex, Changelly, changer,alcurex, Cryptopia etc. Applications like Cryptonator, Coinmill, and Bytecoiner also offer support for BCN. The adoption and ecosystem are increasing exponentially for BCN and the marketing strategies are laid out for bigger adoption in the future.
Controversy with Premine and Centralization
Monero forked from BCN, but avoided to work with the latter’s development team. The main reason for this is that they accused BCN to be highly centralized with 82% of the coins being premined and held by some unknown actors.
Below is the exact quote from the Lead developer of Monero – FluffyPony
“Even if you take the fact that Monero is clearly leading the innovation race, I would think it dangerous to touch a coin where 82% of it is held by unknown actors who were not publicly observed during the period where they supposedly mined the coin. Having a shady history does not set a good precedent.”
Moreover, market watchers and traders became highly suspicious when they noticed the sudden surge of BCN price in May 2017 when it was only $5 million for many years and started to pump to the $350 million in a matter of two months.
Many suspected the sudden price surge in only two months to be because of the founders manipulating the market with pump and dump. Since 82% was premined, founders and developers have a massive control over the price of Bytecoin and the risk of pump and dump is imminent. Anonymous founders can dump BCN in the market at any time to crash its price.
So even if BCN has good adoption and privacy features, it is little risky to hold due to the huge centralization of the coin.