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Whitepaper - Bytecoin with cover

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BYTECOIN WHITEPAPER


What is <strong>Bytecoin</strong>?<br />

<strong>Bytecoin</strong> is an open decentralized cryptocurrency. Anyone<br />

interested can join <strong>Bytecoin</strong> network and take part in<br />

currency development. As well as the Internet, <strong>Bytecoin</strong> is<br />

international by its nature.<br />

<strong>Bytecoin</strong> allows safe and secure transactions around the<br />

globe and offers the convenience of instant fee-free money<br />

transactions.<br />

In order to distinguish <strong>Bytecoin</strong> network from <strong>Bytecoin</strong><br />

currency, the latter is referred to as BCN. For instance,<br />

current <strong>Bytecoin</strong> emission rate is 65,000 BCN each 120<br />

seconds.<br />

Join <strong>Bytecoin</strong><br />

<strong>Bytecoin</strong> is an open cyptocurrency. Therefore anyone<br />

willing can become a user of the currency and voluntarily<br />

take part in operation of the network. The only thing you<br />

need to do is to download special software that will create<br />

a wallet for you. With help of this software you will be able<br />

to send money to other users and receive payments from<br />

them.<br />

<strong>Bytecoin</strong> algorithms don’t allow other users to know your<br />

wallet balance, to whom you send money and where you<br />

receive your funds from.<br />

You can take part in operation of the network by allocating<br />

computing power of your computer. Due to this<br />

mechanism, transaction processing is decentralized, which<br />

allows a person to be not only a user, but also a participant.<br />

There are two ways to obtain <strong>Bytecoin</strong>s. You can take part<br />

in network maintenance and get a reward for it, or buy<br />

BCN directly on exchanges.


<strong>Bytecoin</strong> Transactions<br />

Fiat money transactions between people are carried out<br />

through an intermediary, a bank or financial institution.<br />

Transaction reliability is guaranteed by an agent who<br />

conducts the transaction.<br />

Transactions between <strong>Bytecoin</strong> users are carried out<br />

through the Internet. Transaction privacy is protected by<br />

secure cryptographic algorithms whereby no one can<br />

identify who sent the money, who the receiver was, and<br />

what amount of money was transferred.<br />

<strong>Bytecoin</strong> transactions processing is done by the whole<br />

network of users. Yet no participant has access to the<br />

transaction details. All transfers are fully anonymous.<br />

The transactions processing requires a considerable<br />

amount of computational resources. Those users who<br />

joined the network may allocate time of their computers<br />

for transaction processing. As a reward they receive BCN.<br />

Such process is called mining.<br />

<strong>Bytecoin</strong> Emission<br />

Emission of fiat currencies is a closed process where an<br />

issuer is engaging its own capabilities. One can’t take part<br />

in the emission process.<br />

<strong>Bytecoin</strong> emission is an open process which employs<br />

computing powers of all network members. Any user can<br />

join the <strong>Bytecoin</strong> network and take part in the emission<br />

process (thus, becoming a miner).<br />

Mining in the network results in creation of new money,<br />

which serves as the reward for users who employ their<br />

computing power in order to process transactions.<br />

All transactions are carried out each 120 seconds. Miners


ensure that the transactions are processed correctly and<br />

provide cryptographic protection of transactions and<br />

personal data. However, miners cannot access users'<br />

financial data since <strong>Bytecoin</strong> protects the identity of the<br />

sender and the receiver, and conceals the sum transferred.<br />

As a reward, miners receive roughly 65,000 BCN each 120<br />

seconds. Such approach allows both new money emission<br />

and zero-fee transactions.<br />

Deflation<br />

<strong>Bytecoin</strong>s are gradually getting more expensive over time,<br />

since the emission is limited to 184.47 billion BCN. The<br />

number of <strong>Bytecoin</strong> emitted each 120 seconds is slightly<br />

decreasing. As a result BCN gains value and exchange rate<br />

increase.<br />

While currencies <strong>with</strong> sharp decrease of reward per block<br />

are exposed to intense declines in network power, <strong>Bytecoin</strong><br />

emission is decreasing slowly, which protects the currency<br />

from economic shocks.<br />

Geographic region<br />

Fiat currencies are assigned to specific territories while<br />

<strong>Bytecoin</strong> is bound to the Internet and therefore is<br />

international by its nature.<br />

<strong>Bytecoin</strong> has formed its own network that consists from<br />

users who use <strong>Bytecoin</strong> for mutual settlements. <strong>Bytecoin</strong><br />

network is open and anyone willing to join is welcome to<br />

become a user of <strong>Bytecoin</strong> currency.<br />

Safety and reliability<br />

The reliability of <strong>Bytecoin</strong> is defined by total computational


power of all the computers that take part in transactions<br />

processing. The greater the processing power, the more<br />

reliable the network.<br />

In so doing all money stored in your wallet is already<br />

protected during the transaction processing and the safety<br />

doesn’t depend on network reliability. Your money is safe<br />

anyway.<br />

How <strong>Bytecoin</strong> works<br />

John has 30 BCN in his wallet. He wants to order pizza<br />

delivery to his place which costs 1 <strong>Bytecoin</strong>, taxes and<br />

delivery included.<br />

John places an order on the website. Right after that he<br />

receives 1 BCN bill that contains the pizzeria <strong>Bytecoin</strong><br />

wallet address. John broadcasts the following instruction to<br />

the <strong>Bytecoin</strong> network: send 1 BCN from John_address to<br />

pizzeria_address.<br />

Once each computer in the network receives this<br />

insutruction it checks whether this BCN John wants to<br />

transfer actually belongs to him. However a computer can’t<br />

find out neither who transferred this BCN to John, nor his<br />

balance. A computer simply checks conformity of sender’s<br />

signature. It has no access to personal data.<br />

Each computer in the network collects the transactions that<br />

need to be processed and packs them up in a block. Each<br />

block should comply <strong>with</strong> specific rules, which is a difficult<br />

task to solve. Hence, each computer in the network works<br />

on calculating suitable transaction block form. This is<br />

required to protect the network from transaction forgery.<br />

At some point one of computers in the network may be<br />

lucky to find the correct block structure. Then this<br />

computer puts the block into its blockchain file, which


epresents the database for all performed transactions.<br />

Then this computer broadcasts the new block to all other<br />

computers in the network so that they could also update<br />

their blockchain files. The transaction is completed and the<br />

owner of the computer that was the first to find the correct<br />

block structure gets a reward.<br />

After the transaction is done, 1 BCN belongs to pizzeria and<br />

no longer to John. The <strong>Bytecoin</strong> blockchain contains all data<br />

required for pizzeria owner to use this 1 BCN for his own<br />

goals.<br />

This whole process takes about than 2 minutes, and the<br />

pizzeria owner will get paid before he even starts to cook<br />

John's pizza. Moreover, in order to get paid <strong>with</strong> <strong>Bytecoin</strong>s<br />

he only needs a computer <strong>with</strong> the Internet access. No fees,<br />

no intermediaries.<br />

You can easily convert <strong>Bytecoin</strong>s into U.S. dollars and vice<br />

versa through the exchanges.<br />

<strong>Bytecoin</strong> specification<br />

Block time: 120 seconds. It takes 120 seconds to check the<br />

authenticity of a transaction and process it. This time is<br />

used to apply cryptographic algorithms, and make the<br />

payments secure.<br />

Total coins: 184.47 billion BCN. <strong>Bytecoin</strong> emission is<br />

limited. Each 120 seconds a new batch of roughly 65,000<br />

BCN is emitted and distributed between miners as reward<br />

which makes zero-fee transactions possible.

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