Bytecoin (BCN) Profile

Bytecoin Token Profile (PDF)

Bytecoin is the first digital token to use the CryptoNote protocol, a framework for creating privacy-oriented digital tokens. The CryptoNote whitepaper described the concept of Ring Signatures, which is an obfuscation mechanism that masks the identity of the senders of a transaction by combining signers from past transactions. It also introduced CryptoNight, which is an ASIC-resistant consensus algorithm designed for CPU-mining. Bytecoin used both features in its protocol and evidence suggests that the creators of Bytecoin may have been the authors of the CryptoNote white paper. It is important to note that although the technology underpinning Bytecoin’s privacy-preserving mechanism is truly remarkable, many in the community believe that Bytecoin is an elaborate scam. As much as 82% of the token’s true supply is believed to have been pre-mined. Additionally, embedded in Bytecoin’s source code is an algorithm that makes it appear as though the token was launched in 2012, even though evidence suggests it was in fact launched in 2014. Since Bytecoin’s pre-mine fundamentally made it centralized, a group of developers decided to use the same technology described in the CryptoNote white paper to launch another cryptocurrency under more fair terms. This other cryptocurrency was initially named bitmonero, but later changed to Monero. In addition to the fair launch, Monero differentiated itself from Bytecoin by (1) decreasing transaction confirmation times and (2) decreasing CryptoNote's native inflationary rate by 50%. These differences, along with a fair launch, enabled Monero to quickly capture much of Bytecoin's market share. In addition to Monero, at least 12 other privacy-preserving tokens have been forked from Bytecoin.