What is Bitcoin Diamond?
Bitcoin Diamond is one of several competing versions of bitcoin that have emerged in recent weeks. Just like similar proposals Bitcoin Silver and Super Bitcoin, Bitcoin Diamond promises to improve bitcoin in a number of different ways.
Many people predicted that we’d see a surge in the number of bitcoin hard forks after the successful August 1 launch of Bitcoin Cash (BCH). Based on the appearance of currencieslike Bitcoin Diamond, that prediction has certainly come true.
Is Bitcoin Diamond just another pointless hard fork? Or does this proposal actually have some merit? Let’s take a closer look at how Bitcoin Diamond works.
How Does Bitcoin Diamond Work?
Bitcoin Diamond, or BCD, is a fork of the bitcoin blockchain. The fork will occur at block 495866. Once that block occurs, a new BCD chain will be generated. At this point, BCD miners will begin creating new blocks with a new proof of work algorithm.
There’s a total supply of 210 million Bitcoin Diamonds. The price will be set at a rate of 1 BTC = 10 BCD. That’s a 10 times higher total supply than the original bitcoin blockchain. Even hard forks like Bitcoin Cash all have a fixed limit of 21 million units – after all, there’s only 21 million bitcoins in existence.
What’s the point of Bitcoin Diamond? Which problems does the currency seek to solve? The website identifies three main areas of concern:
Lack of privacy protection
Slow transaction confirmations
High thresholds for new members
In terms of the total supply, it seems that 170 million BCD will be available on the market, while the remaining 40 million will be reserved for a “community rewards pool as tributes and mining”.
Ultimately, the creators of Bitcoin Diamond emphasize that their currency is not a competitor to bitcoin. They describe it as a fork with upgraded technology that preserves the original features.
The new privacy protection comes in the form of additional encryption during the transfer. Meanwhile, the slow transaction confirmation problem is solved by raising the blocksize to 8MB – which is what Bitcoin Cash did to create fast transaction times.
Why does Bitcoin Diamond emphasize additional encryption on transactions? The company claims additional encryption is needed “in some application scenarios, especially in many business scenarios”. Some people like privacy.
What about a wallet? Bitcoin Diamond doesn’t have any official wallets. However, if you hold your bitcoin keys, then you can transfer those keys into Bitcoin Diamond when a wallet is officially launched.
Bitcoin Diamond also aims to lower thresholds to new members by releasing 10 times as many units as bitcoin (210 million Bitcoin Diamonds instead of 21 million bitcoin).
Who’s Behind Bitcoin Diamond?
Bitcoin Diamond’s development team isn’t named. The pseudonyms for two developers are listed, while the third founder goes unnamed. The two named developers include Every and 007. The company appears to have organized under the name The Bitcoin Diamond Foundation. They list their location as Singapore.
In a press release, the dev teams are listed as Team Evey and Team 007 – so it appears this is a collaboration between teams of developers as opposed to individuals.
Bitcoin Diamond Features
Max Supply: 210 million
Distribution: Mining and claiming
Mining Algorithm: SHA256
Block Time: 10 minutes
Max Blocksize: 8MB
Difficulty Adjustments: Every two weeks
Max Transactions Per Day: 4.8 million
Relay Protection: Yes
Ultimately, based on these features, Bitcoin Diamond seems to have more in common with Bitcoin Cash than the original Bitcoin.
Bitcoin Diamond is a fork of the original Bitcoin blockchain. The fork aims to improve bitcoin in two major ways: it plans to add additional encryption to each transaction, and it plans to increase the default blocksize limit to 8MB. Ultimately, Bitcoin Diamond seems to have more in common with Bitcoin Cash (BCH) than legacy Bitcoin (BTC). It’s also not totally clear who’s behind the project, how the blockchain fork works, or what type of additional encryption is being used. There’s no Bitcoin Diamond whitepaper, for example.
There are also 210 million Bitcoin Diamonds, which is 10 times more than any other version of bitcoin. Again, it’s not totally clear how this works – whether they’ve actually created more bitcoins, or if they’re just using a smaller denomination.
Anyways, stay tuned for the launch of Bitcoin Diamond at block 495866.