Byteball allows you to do something that traditional currencies cannot: bind payment to a condition. You set a condition when the payee receives the money, and if the condition is not met, you get your money back. All this happens in a completely peer-to-peer manner, with no need for intermediaries or escrows. Under the hood, this is a smart contract between two parties. But unlike other crypto platforms that support smart contracts, you don?t have to trust the developer that the smart contract will operate as expected, and the contract is easy to read and understand.
Byteball is designed to generalize Bitcoin to become a tamper proof storage mechanism for any data, and to remove some of the most pressing deficiencies that impede its wider adoption. With Byteball, there are deterministic criteria for when a transaction is deemed final. Transactions are their own blocks, and they are linked not as a chain but as a directed acyclic graph (DAG), allowing each transaction to be linked to multiple previous transactions. Byteball does not use Proof-of-Work, but rather a witness-based consensus algorithm (detailed in the whitepaper) that relies on users responsibly setting their lists of trustworthy witnesses. This connects Byteball to the real world in a way that cannot be safely automated without significant risk of exploitation and requires human decision-making. It is suggested, however, that popular wallets can be set up by default to follow a witness list provided by the wallet vendor, to simplify the process for users.
In Byteball, the base currency of Bytes is used to pay for adding data to the database ? 1,000 BytesByteball are paid to add 1KB of data ? and the price of Bytes should thus reflect their utility and value. The total number of Bytes in circulation is 1015 ? the largest round integer that can be represented in JavaScript ? and amounts can only be only integers, with larger units of the currency represented by the standard prefixes (kilobyte, megabyte, etc.). Since transactions in Bytes are as visible as those in Bitcoin, a second currency called BlackBytes, which is sent peer-to-peer and is significantly less traceable, is also provided for private transactions.
Users can also issue other assets and use them as means of payment. Assets in Byteball can be issued, transferred, and exchanged, and behave similarly to Bytes. They can represent anything that has value, such as debt, shares, loyalty points, airtime minutes, commodities, other fiat or crypto currencies, etc. Assets can be issued with any rules to govern their transferability, from no restrictions at all (as in Bitcoin), to requiring every transfer to be cosigned by the issuer (e.g. the bank) or restricted to a limited set of whitelisted users.
Currently, bound payments allow users mainly to P2P exchange Bytes against BlackBytes or any other asset issued on Byteball. However, the plan is to enable users to bind payments to real-world events, with oracles (bots) as connectors trusted by the counterparties to provide true data, and a shared control address that gives them differing rights depending on the data posted by the oracle/s. Features which appear to be implemented include:
- P2P payments in chat ? Chat and pay in the same app.
- Prediction markets ? Use a P2P smart contract for betting on price movements, sports outcomes, etc. Find counterparties in Byteball?s #prediction_markets Slack channel, and after the result is known, chat with the sports oracle to have it post the data about the outcome, then unlock the contract.
- P2P insurance ? Use a P2P smart contract to hedge against a negative event or sell insurance for profit. Find counterparties in Byteball?s #p2p_insurance Slack channel. For example, to insure against a flight delay, create a contract, and if your flight arrives late, chat with the flight delays
oracle to have it post the data about the delay, then unlock the contract.
The project?s Bot store provides a venue for developers to reach users with oracles, merchant chat-bots, etc.
Aiming for mass adoption, Byteball is distributing 98% of all Bytes and BlackBytes for free (except for a possible micropayment) in multiple rounds. Seven rounds have already been completed, and the eighth round is scheduled for the full moon on August 7, 2017. In each round, Bytes and BlackBytes are awarded to participants in amounts based on their proven BTC and existing Byte balances, requiring them to link their Bitcoin and Byteball addresses using the Byteball wallet?s Transition Bot (and it is this step which requires making a micropayment or signing a message). It is unclear, however, what this linkage means or entails otherwise; it would seem that the initial value of Bytes is in a sense derived from BTC, and that BTC holders are being incentivized to join the Byteball network. Note that there is no Byte mining, either.
According to the website, the first distribution round took place on December 25, 2016 when the network launched, wherein over 70,000 BTC were linked and 10% of the total supply of Bytes and BlackBytes was distributed. In subsequent rounds, the total distributed supply reached 36.6% and nearly 1.5 million BTC appear to have been linked overall, although currently it seems that the total linked balance is ~857,272.375 BTC. The website states that on the next distribution date, every 16 BTC will award 1GB (1 gigaByte = 1 billion Bytes), and every 5 GB will award an additional 1 GB. It also states that in future rounds, the rules will likely change in favor of current Byte holders.
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