What Is DigiByte?
DigiByte (DGB) is a peer-to-peer cryptocurrency and blockchain platform. DGB tokens are used as payment for decentralized application (dApp) and smart contract transactions on the Digibyte blockchain.
The DigiByte blockchain is designed to be scalable, with the capacity to process a large number of transactions per second. It is among the older cryptocurrency alternatives to Bitcoin and was built using the Litecoin blockchain, but it has implemented several enhancements designed to improve it.
While DigiByte has remained relatively obscure compared to other cryptocurrencies, the blockchain platform's scalability allows it to be used in a wide range of applications.
KEY TAKEAWAYS
DigiByte (DGB) is a blockchain platform and cryptocurrency founded in 2014.
DGB tokens are used to pay for transactions in decentralized apps and smart contracts supported by the DigiByte platform.
DigiByte uses five proof-of-work consensus algorithms to prevent mining centralization.
History of DigiByte
DigiByte was created in 2013 and launched in 2014 with the goal of creating a fast and secure cryptocurrency that could reach a wider and more decentralized community than Bitcoin. The DigiByte platform is open source, meaning that anyone can view and contribute to the project's code.
DigiByte uses a proof-of-work consensus mechanism to generate new DGB tokens and process DGB transactions. The DigiByte blockchain, which is designed to be adaptable, supports multiple mining methods. The five different mining algorithms that DigiByte supports are SHA256, Scrypt, Skein, Qubit, and Odocrypt.
The DigiByte blockchain is programmed to continually change how much computing power (block difficulty) is required to successfully add a new block to the DigiByte blockchain.
The DigiByte blockchain consists of three layers:
A top layer of decentralized applications and smart contracts that are integrated into the DigiByte platform
An electronic public ledger that is created and maintained by the DigiByte blockchain
A global network of DigiByte nodes that relay and validate DGB transactions and mint new DGB currency
DigiByte Special Features
Several features make Digibyte's blockchain unique:
Multi-algorithmic mining process: By supporting five different mining algorithms, DigiByte aims to be more decentralized than a platform that supports just one mining process.
Block difficulty changes: By changing how much computing power is required to mine every block, the DigiByte blockchain minimizes the likelihood of a network takeover by a consolidated group of miners.
No ICO: DigiByte was launched without an ICO and is run entirely by volunteers.
DigiByte vs. Bitcoin
DigiByte was created from a copy of Litecoin's source code. It has been adjusted in several ways, but here are a few of the key differences:
Maximum coin supply: Both DigiByte and Bitcoin have a maximum coin supply, but the maximum number of DGB exceeds the Bitcoin maximum supply by an order of magnitude. The maximum supply of DGB is 21 billion tokens, whereas Bitcoin's coin supply is capped at 21 million.
Mining rewards schedule: DigiByte and Bitcoin both gradually reduce the amount of cryptocurrency paid as rewards to miners, but the two blockchain networks use different reduction schedules. DigiByte's per-block reward decreases by 1% every month, while Bitcoin's reward halves about every four years.
Transaction speed: DigiByte can process transactions faster than Bitcoin because it adds new blocks to its blockchain more frequently. DigiByte blocks are created about every 15 seconds, while the average time for Bitcoin creation is 10 minutes. The unofficial standard for transactions to be immutable on Bitcoin is six block confimations, which take about one hour (6 x 10 minutes). Digibyte's blockchain conducts a six-block confirmation in about 1.5 minutes (6 x 15 seconds).
Concerns About Digibyte
The most concerning issues with Digibyte are its lack of participation and centralization despite its design. For example, at 12 P.M. on Aug. 1, 2024, one address had mined 17.7% of the last 1,000 blocks, another 15.6%, and a third 14.7%. Sixteen other addresses mined 51.2% of the blocks, and the rest of the network mined 0.8%. This means that 99.2% of the latest blocks were mined by 19 addresses, which is very centralized for a blockchain designed to be decentralized.
As of Aug. 1, 2024, there were eight different sub-versions of the blockchain being used around the world—this many versions suggests a lack of security considered the small number of peers on the network. There were only 153, which is very small for a public blockchain.
The apparent centralization, low blockchain participation, and various versions being used make Digibyte much less secure compared to cryptocurrencies with larger networks running fewer software versions.
Is There a Future for Digibyte?
Blockchain and cryptocurrencies are notoriously hard to predict. They are usually projects designed to address an issue or issues many other projects are competing to fix—and demand for services provided by these projects is inconsistent at best.
What Is Digibyte?
The DigiByte platform uses blockchain technology, which is considered generally secure. DigiByte enhances the security of its blockchain by two key measures: supporting several mining mechanisms and frequently adjusting mining difficulty.
Is Digibyte Legit?
Digibyte appears to be a legitimate cryptocurrency and blockchain maintained by a small community of volunteers as of August 2024. However, the network of participants was very small, and at least eight versions of the software were being used. As of the date this article was published, it doesn't seem to be ready for public use.
The Bottom Line
Digibyte is a blockchain and cryptocurrency that uses multiple consensus algorithms in its proof-of-work consensus. It processes transactions faster than Bitcoin and has much lower fees, but remains in the shadow of more popular cryptocurrencies.
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