Bytecoin (BCN) and Bitcoin (BTC): Working algorithms and transaction anonymity
Bytecoin (BCN) vs. Bitcoin (BTC): Working Algorithms and Transaction Anonymity
The main goal of the Bytecoin (BCN) project is to create a better cryptocurrency than BTC. But at the same time, the Bytecoin (BCN) team directly states that they do not want to replace Bitcoin (BTC). On the contrary, the Bytecoin (BCN) developers believe that having different strong currencies will benefit the entire crypto community.
The main differences between the cryptocurrencies Bytecoin (BCN) and Bitcoin (BTC) can be summarized as follows:
- block generation;
- recalculation of complexity;
- working algorithm;
Let’s consider each of them separately.
Each new block is an element of the blockchain chain. It contains a set of records of operations performed on the network, which are fresh from the point of view of the previous chain. To the end of the blockchain, add a new block. It also contains information about the initial state of the chain. Therefore, any further changes in its structure are impossible.
Bytecoin (BCN) block generation occurs on average in 120 seconds, in 2 minutes. Against his background, Bitcoin (BTC) loses a lot as block generation in his system still takes up to 10 minutes.
An issue is a process of placing new assets on the market. Cryptocurrency is issued using mining.
As you know, Bitcoin (BTC) issue limit was laid in the blockchain from the very beginning. BTC emission is limited to 21 million coins, and it’s not movable. It cannot be changed or ignored.
Bytecoin has a limit of over 184 billion BCN, which is nearly 9,000 times that of Bitcoin (BTC).
Unfortunately, Bytecoin (BCN), like Bitcoin (BTC), is no longer as profitable to mine as more than 183 billion BCN is already in circulation.
Recalculation of complexity
Initially, Bitcoin (BTC) could be mined using the CPU. The network was so small that the blocks were easily mined with the CPU. However, it was soon replaced by GPUs and now ASICs. Cryptocurrency is currently being mined mainly through mining pools. It makes it easier and faster to get the block through the collective use of resources.
In the bitcoin network, the halving of the currency is laid down every 210,000 blocks, that is, approximately every four years. Bytecoin (BCN) decreases the block reward with each new block. It allows for a smooth decrease in block rewards instead of the less balanced Bitcoin (BTC) feature.
The difficulty level of mining changes for each new block of Bytecoin (BCN) depending on the increase or decrease in the hash rate. Thanks to it, the rate of block creation remains unchanged, even if the activity in the system suddenly increases or there is a sharp drop in the number of miners. Each Bytecoin (BCN) user can vote on how big the blockchain should be, and each miner can set the size of the block he mines within certain limits. The hard limit on block size is the double median of all previous blocks.
With these variable constraints, the block size can grow as the entire network grows. Transaction volumes are unlimited as long as the user is willing to pay all associated fees. Bytecoin (BCN) provides penalties for exceeding the allowed block sizes to prevent miners from creating too large blocks when blockchain swells excessively.
Bitcoin (BTC) uses an SHA-256 cryptographic hash function that takes random-sized input and produces a fixed size output. SHA-256 is considered the most common algorithm with a high level of reliability and a relatively simple principle of operation.
Despite some positive qualities, the Bitcoin (BTC) hashing algorithm has several weaknesses. The main one is the control by the participants in the BTC mining. After all, most Bitcoin (BTC) is concentrated in the hands of the owners of large mining companies. Let’s take into account that not all the BTC received goes on sale. Such organizations turn into investors and custodians of coins. As a result, the number of coins in circulation decreases. In addition, the accumulation of cryptocurrency allows you to influence decentralization and the exchange rate value of BTC in the trading process.
At the heart of the Bytecoin (BCN) coin is the new CryptoNote technology, which allows completely anonymous cryptocurrencies. CryptoNote has several unique properties:
- ring signature;
- one-time keys (unbound transactions);
- proof of double-spending;
- adaptive constraints;
- gradual emission of coins;
- egalitarian proof of work.
Thus, the main advantage of the CryptoNote protocol is implementing the complete anonymity of the sender and the anonymity of the recipient. Let’s take a closer look at the difference in obscurity between Bytecoin (BCN) and Bitcoin (BTC).
Bitcoin (BTC) transactions are published on an open ledger, so anyone can quickly track transfers between wallets. Suppose you want your marketing to remain anonymous. In that case, the only way to achieve this is to engage a trusted third party with which you can shuffle transactions.
In the Bytecoin network (BCN), based on CryptoNote technology, a one-time public key is used for each transaction. Even if we are talking about several transactions addressed to the same recipient. It completely solves the problem of address reuse and reduces the traceability of transactions.
To make it impossible to identify the participants in the transaction, Bytecoin (BCN) uses one-time ring signatures. The ring signature mechanism is designed to mix your signature with the signatures of other system participants, and it is impossible to determine who its author is. You can set the degree of anonymity of your ring signature yourself. The more sender addresses you include in it, the more difficult it becomes to trace who the author of the transaction is.
Bytecoin (BCN) performs the same functions as Bitcoin (BTC). Its team is working to achieve success in areas where the world’s most popular cryptocurrency is not doing well, with a particular emphasis on transaction privacy. In addition, the developers want to make Bytecoin (BCN) a more scalable and flexible platform, responsive to the ever-changing economic environment.
Government interference in the cryptocurrency market continues to intensify. That’s why the interest in confidential cryptocurrencies such as Bytecoin (BCN) will likely grow.