What is DigiByte? How Does it Work?
When blockchain technology became mainstream with Bitcoin, it revolutionized the financial space with its ability to process transactions without any intermediaries. Soon, Bitcoin was the center of attention for users and hackers alike, which resulted in longer transaction times and attempts to breach the network.
Jared Tate, who has been involved in Bitcoin since 2012, decided to make several improvements to Bitcoin core protocol to make it more scalable, secure, and decentralized, leading to the launch of DigiByte (DGB) in 2014. But, what is DigiByte? What is it made of? Let’s take a look.
Connecting your DigiByte Address to ZenLedger For Your Crypto Tax Forms
- To import your DigiByte transactions into ZenLedger for your crypto tax forms, all we need is your public address.
- Select the proper blockchain or wallet from the dropdown list.
- Paste your address into the address field in ZenLedger.
- Select if the wallet is based in the USA or not.
- Then hit the ADD COIN button.
What is DigiByte?
DigiByte is a peer-to-peer blockchain network and cryptocurrency designed to be scalable and process high numbers of transactions per second. The DGB token is the medium of exchange for smart contracts and decentralized applications (dApps) built on the DigiByte blockchain.
DigiByte was created with a goal of becoming a secure and fast blockchain cryptocurrency. What distinguishes it from the rest is not only its technology but also the vision and principles of Tate. Whoever works for DigiByte doesn’t make a dollar and there is no centralization of digital assets worth billions of dollars. Moreover, whenever the price of the token rises, there’s no “owner” that makes a profit. In this way, DigiByte truly captures the essence of a decentralized blockchain.
What is DigitByte Made Of?
DigiByte is preset to automatically change the amount of computing power required to successfully add a new block to the blockchain. Even the block difficulty changes every time a new block is added. The network comprises three-layer:
- Application Layer: It is the top, user-facing layer of dApps and smart contracts incorporated into the DigiByte platform
- Consensus Layer: On this layer, transactions get recorded on the electronic public ledger created and maintained by DigiByte network
- Network Layer: It is a global network of nodes that report and validate DBG transactions and forge new DGB coins
DigiByte functions on the proof-of-work (PoW) consensus mechanism but this variant of PoW doesn’t require specialized mining rigs, DigiByte mining can be done with consumer-grade hardware, thus reducing the barriers to entry which leads to a more decentralized network. Computers running DigiByte’s software validate transactions secure the network, and earn DGB in return.
DigiByte supports five different mining algorithms: Scrypt, SHA256, Qubit, Skein, and Odocrypt. Multiple mining algorithms make the blockchain more secure and keep it more decentralized as opposed to blockchains that support just one.
Digiassets and Digi-ID
Over the years, the DigiByte team has made several updates to their software. Today, DigiByte allows developers to build custom crypto assets also called Digiassets. These assets represent a wide variety such as traditional financial assets, legal documents, and many more.
Digi-ID is an authentication system for applications that eliminate username and password requirements. It can also share cryptographic data while maintaining complete anonymity and without sharing any personally identifiable information to applications.
DigiByte vs. Bitcoin
While DigiByte is originally based on Bitcoin’s codebase, they have some major differences.
You may be wondering about how DigiByte differs from Bitcoin. While the DigiByte platform is originally based on Bitcoin's code, DigiByte and Bitcoin have some key differences
What is DigiByte’s Mining Process?
As we’ve mentioned previously, DigiByte supports five mining algorithms. Mining rewards are allocated equally on each algorithm — 20 percent distributed to miners.
For this reason, DigiByte can be mined on any computer with CPU/GPU or with specialized ASIC hardware. Once you choose which algorithm you want to use for mining, you need to choose a DigiByte mining pool, download the suitable mining software, Claymore miner for AMD GPUs, CCMiner for Nvidia cards, and AwesomeMiner for CPU mining. After installing the software, configure your pool, set your DigiByte address, and begin mining.
How to Buy DGB Cryptocurrency?
Even though DigiByte can be mined, it is still a time-consuming process and it requires some investment in expensive hardware. Therefore, buying it outright is also a good option. Here is how you do it:
Open an Online Account
Find a crypto exchange such as Binance or Kucoin that supports DigiByte. On these exchanges, create an online account by providing your full legal name, age, address, email ID, and a government-issued ID. While choosing a crypto exchange keep these points in mind:
- How reputable is the exchange?
- Were they hacked before?
- How much do they charge in terms of fees and rates?
Buy a wallet
Leaving your coins on the exchange might not be the safest option as they can get hacked and you can lose your coins. That’s why buying a wallet such as a software wallet or a hardware wallet is the right way to go. Software wallets are free but offer less security, whereas hardware wallets are physical devices and are very secure.
Make your Purchase
After setting up your account and getting a wallet, add funds to your account and buy DGB. After the purchase, shift your tokens to your chosen wallet.
The Future of DGB
In 2020, DigiByte launched the DigiByte Foundation to help with fund-raising within the community. The network is continually developing technical upgrades and applying them to the core protocol. DigiByte is working on developing the next version of the project and increasing the utility of the token.