In a Nutshell: Cryptocurrency and its underpinning blockchain technology are hot topics in the finance world these days. But some crypto enthusiasts have identified several problems and limitations in the existing cryptocurrency ecosystem, including relying on blockchain technology and miners. Byteball, a cryptocurrency platform ready for adoption by the existing financial industry, has appealing features including multiple asset classes, conditional payments, and a strong focus on privacy. Rather than operating on the blockchain, Byteball uses Directed Acyclic Graph technology to avoid double payments, eliminate miners, and lower fees. The company is working to broaden adoption by continually refining its platform and offering its currency — called Bytes — for free.
Valerius Coppens is on a mission to let the world know about what he sees as the next evolution in cryptocurrency — Byteball.
Coppens became fascinated with cryptocurrency in 2011 when the nascent industry was well under the mainstream radar, and Bitcoin was valued at only a fraction of what it is today.
By 2014, Coppens was investing in Bitcoin and delving deeper into the crypto world. He became an avid reader and commenter in online forums, debating the ins and outs of Bitcoin, the blockchain, and other crypto collateral. Eventually, he discovered the Byteball white paper, written by Byteball Founder and Lead Developer Tony Churyumoff.
Coppens said the paper changed his whole view on cryptocurrency.
“All the problems I had experienced with Bitcoin were solved by Byteball,” Coppens said. “I thought, ‘This is revolutionary. This guy is a genius.’”
It wasn’t long before Coppens left his job in the world of traditional finance and joined Byteball as the company’s Head of Strategy.
So, what is Byteball? And, why is it so revolutionary?
In short, Byteball is a cryptocurrency platform — but, there’s more to it than that. We spoke to Coppens and Byteball’s Head of Communications Elena Tairova, who took us through the Byteball basics and let us in on how it could change the crypto world as we know it.
Byteball Was Built for the Real World with Multiple Asset Classes, Conditional Payments, and Privacy Options
Coppens said Churyumoff developed Byteball to operate within the existing financial ecosystem using a more moderate ideology compared to that of the first wave of cryptos. Earlier platforms, including Bitcoin and Ethereum, were built from a libertarian ideology that forced those structures to operate completely outside of the existing financial world.
“Byteball builds bridges between the crypto world and the real world from the get-go,” Coppens said. “Tony gave a lot of consideration to things like bank protocols, security tokens, compliance, regulatory issues, and other technical stuff when he built the platform.”
Some of Byteball’s highlights include multiple asset classes, which allows users to transfer value through multiple channels, including currencies or other commodities. Users can also make conditional payments — a risk-free approach in which payments are only completed once a predetermined set of criteria are met.
Then, there is the cryptocurrency itself. Byteball’s primary cryptocurrency is called Bytes, which like Bitcoin, are publicly traded. Its other currency, Blackbytes is not publicly traded and can be used in complete anonymity as it provides users with a secure method to make payments and send messages privately.
Byteball makes it easy to make P2P payments with cryptocurrency as well. Coppens said users can send payments through a chat feature, or via email by simply entering the recipient’s email address rather than a Byteball address. Byteball users can also chat with merchant bots using plain, conversational language.
Coppens said that, while Byteball is poised for more real-world adoption, the platform has already gained the attention of some gambling enthusiasts.
“Betting is one of the most popular use cases for Byteball so far,” he said. “The conditional payments and easy-to-use smart contracts make the platform ideal for these types of activities.”
With DAG Technology, Byteball Solves Numerous Challenges that Exist in the Current Crypto Ecosystem
“I believe a couple of the most brilliant aspects of Byteball are the witness-based consensus mechanism that does away with the blockchain, and how it eliminates the existing fee market,” Coppens said.
Those two components solve some of the biggest problems he ran into with Bitcoin and other cryptocurrencies, he said.
1. No More Blockchain or Miners
On blockchain-based cryptocurrency platforms, miners serve as the gatekeepers, Coppens said. The whole system depends on miners approving transactions in the blocks. But, he said there is nothing requiring miners to be accountable, so if they want to censor transactions they can, with no repercussions.
“It’s a real flaw in the protocol,” he said. “And you can’t discriminate against the miners by saying, ‘You didn’t include my transaction, I want to get rid of you.’”
With Byteball’s Directed Acyclic Graph (DAG)-based technology, the blockchain and crypto miners are completely eliminated from the process. Instead of transactions being documented on a chain of blocks, the transactions are all connected directly to one another. And to solve the problem of double spending, Byteball requires witnesses to verify transactions.
“That’s the consensus mechanism Tony came up with,” Coppens said. “Witnesses are individuals deemed to be trustworthy. Once a transaction is added to the ledger, it must be seen by a majority of witnesses.”
Coppens said another problem with mining is that it requires a lot of real-world energy, which is ultimately bad for the environment.
2. Lower and More Transparent Fees
Cryptocurrency miners are rewarded with small amounts of Bitcoin or other cryptocurrencies for approving transactions on the blockchain, which translates to fees for the end user. Tairova said by getting rid of miners and blocks, Byteball’s DAG-based technology eliminates the current fee market as well.
Coppens added that the fee market is bad for business in general.
“When you have a fee market, you have no way of estimating how much money you need to post transactions because it could be $1 one day, then $20 the next,” he said. “We saw this at the end of 2017. If you wanted to buy a cup of coffee, it might have cost you $45 in transaction fees.”
He said with Byteball, the cost is one Byte of currency for every byte of data stored.
“That makes it very predictable,” Coppens said. “It never changes. So you can know in advance how many Bytes you need for a whole year or for 10 years.”
3. Smart Contracts That Anyone Can Use
“Our smart contracts technology is possibly the most killer feature of Byteball,” Coppens said.
With other cryptocurrency platforms, the ability to write contracts is limited to those who understand coding languages — primarily developers. Coppens said those without a deep coding knowledge can easily make mistakes when writing contracts.
“Anybody can write a smart contract in 10 minutes with Byteball,” he said. “You don’t have to have any coding experience whatsoever.”
Byteball’s smart contracts come into play with its conditional payments and betting features, he said, because users can create the contracts using plain, easy-to-understand language.
Promoting Adoption by Refining the Technology and Distributing Free Bytes
Coppens said that, right now, Byteball’s priority is to push the platform into real-world adoption. He said the company has multiple teams working on refining the user experience, adding payment channels, and generally making Byteball as simple to use as possible.
“Before we get any kind of mass adoption we need a really stellar user experience,” he said. “We have to be on par — or better than — what’s already out there.”
To prepare users for Byteball’s more widespread use, the company is distributing its Bytes for free through a number of methods. A few of the most straightforward ways users can receive Bytes is by verifying their real name, verifying their email address, or verifying their Steem account. They can also pass a quiz, donate computing resources to the World Community Grid, or follow Byteball’s YouTube channel for Byte giveaways.
“It’s going to take a little bit of time before we see the mass adoption that we would like,” Coppens said. “But I am absolutely positive it’s going to happen.”