Bitcoin at one time was the most popular digital currency. But it, like any other, showed its shortcomings. Transactions with it take a very long time and become very expensive. It is due to the limited size of Bitcoin blocks (up to 1 MB), which means that only about 3 operations per second can be performed. Users unwittingly begin to think about switching to another cryptocurrency. Therefore, a hard fork of Bitcoin is inevitable – a necessary fork in the Blockchain network in case of delays in updating nodes and checking blocks. In other words, there is a usual change in the electronic currency protocol, due to which those operations or blocks in the system that were previously considered unacceptable become acceptable. A hard fork is essentially a branch of a new digital currency. In our article, we will tell you about the next Bitcoin fork – Bitcoin Diamond.
What is Bitcoin Diamond
Bitcoin Diamond is a Bitcoin fork designed to improve network privacy and reduce transaction costs. In this digital currency, block sizes have been replaced as well as the development algorithm. Bitcoin Diamond hard fork became possible due to the efforts of 2 teams, 007 and EVEY. They were dissatisfied with the properties of electronic gold. Its purpose is the same as that of BTC. It is a means of payment, very convenient for online settlements, serving as an excellent substitute for fiat money. BCD differs from the basic version of Bitcoin in that it fixes some very important issues. At the very beginning of its existence, Bitcoin Diamond did not have its page on GitHub. Nevertheless, the developers promised that very soon, the code will be posted there. Until that time, futures for new electronic money were not added to any of the crypto exchanges.
Distinctive features of Bitcoin Diamond
The creators of the new digital coin proposed using a special improved mining algorithm. It is denoted by the symbol X13, designed for mining cryptocurrency using the GPU. Bitcoin Diamond was able to add support for SegWit. This e-currency uses a combined PoS / PoW consensus mechanism.
The Bitcoin Diamond cryptocurrency is characterized by the following distinctive features:
- created to correct the deficiencies found in Bitcoin;
- increased volume of tokens, which reaches 210 million coins;
- Bitcoin Diamond was not planned to be used for trading;
- characterized by the increased size of one block – 8 Megabytes;
- the number of BCD crypto coins is ten times the amount of BTC;
- the size of the blockchain is about 140 Gigabytes;
- characterized by increased confidentiality;
- has an optimized algorithm;
- mining difficulty is recalculated every two weeks;
- Bitcoin Diamond uses a new encryption algorithm for crypto wallets and the names of their holders.
How BCD works
BIP44 is the standard that makes the deterministic wallet an extremely important tool, and Bitcoin Diamond adheres to it. In the case of applying this standard, the wallet owner must save his/her private key and also use a secret phrase to generate a large number of associated addresses. They will also be tied to the wallet. But if the user cannot remember the secret phrase, there is a loss of access to all available funds. It is worth noting that it is not recommended to store the secret phrase in electronic form, since in this case, it is easy prey for hackers.
The information block of the Bitcoin blockchain combines information about signatures and the transactions performed. It follows that very few transactions are placed in one block. With the transition to Segwit, it becomes possible to improve the structure of operations and blocks. At the same time, signatures from transactions are forced out into an independent structure. In other words, in Bitcoin Diamond, block sizes are increased just to increase the network bandwidth.
Bitcoin Diamond’s advantages and disadvantages
This relatively young fork has both advantages and disadvantages. In part, we have already familiarized ourselves with them in the previous sections. We can say that the advantages of this digital currency are consonant with the tasks that it is designed to solve. So, let’s list them in order:
- there was an increase in the volume of one digital block to 8 megabytes;
- low transaction fees have become a reality;
- because additional encryption of the transaction amount is applied, as well as the existing balance of the user’s account, the confidentiality within the network has increased;
- the speed of transactions has increased markedly.
- Thanks to the listed advantages, the crypto coin has every chance of becoming, over time, a very popular crypto asset.
Disadvantages of Bitcoin Diamond:
Today, it is extremely difficult to talk about them since the creators of BCD tried to get rid of the shortcomings of the predecessor cryptocurrency – Bitcoin. They aimed to develop a truly innovative digital payment instrument. However, it may well be that after a while, the new network will also have weak points.
A kind of disadvantage of Bitcoin Diamond is that the crypto community does not receive any unusual technological solutions and creative ideas from this site. This cryptocurrency offers users functionality similar to Bitcoin, in which only some of the disadvantages characteristic of BTC are eliminated. Also, any similar digital crypto asset can be a payment instrument. In this regard, some experts believe that the electronic currency BCD has normal functionality.
