What are Bitcoin diamonds? Is Bitcoin Diamond Worth Investing? 2017 was a difficult year for Bitcoin. When the block size war reached its climax in August 2017, Bitcoin cash hard forks triggered a wave of Bitcoin hard forks. Bitcoin has produced more than 20 different derivatives: bitcoin gold, super bitcoin, bitcoin platinum, bitcoin cash plus, bitcoin uranium, bitcoin silver, bitcoin god, and so on. However, most of the hard forks turned out to be scams, and their developers wanted to make money from the name "Bitcoin". Therefore, few of you have survived. One of these survivors is Bitcoin Diamond (BCD).

What are Bitcoin diamonds?

Bitcoin Diamond (BCD) is a hard fork of Bitcoin (BTC) that occurred on November 24, 2017 at the block height of 495866. The price of current Bitcoin diamonds can be checked here. If you want to know the price of Bitcoin, Ethereum or other 2000 Altcoins, take a closer look at our course overview.

In essence, hard branching is a change to the software source code that results in two independent versions of the blockchain after a consensus cannot be reached on the change. Taking Bitcoin diamonds as an example, developers obtain source code from Bitcoin (BTC) and modify it according to their requirements.

Since the two blockchains share the same transaction history, until the block height of 495866, Bitcoin owners can get a certain amount of Bitcoin diamonds for free. Compared with Bitcoin cash or Bitcoin gold, the distribution ratio is not 1:1. Instead, the Bitcoin owner exchanged one Bitcoin for 10 Bitcoin diamonds (1 BTC: 10 BCD). This can be explained by the increase in the total amount of BCD, which we will see soon.

What is the target of Bitcoin Diamond (BCD)?

Bitcoin diamonds were announced by two Bitcoin miners in 2017, named "Ivy Team" and "007 Team" respectively. Not only did he know little or nothing about the two founders (teams). It is speculated that both miners are from Hong Kong/Singapore. In addition, I only know that they are frustrated by the dominance of ASIC and the use of Bitcoin network, so they hope to develop an improved Bitcoin protocol.

The main improvements that Evey and 007 teams hope to make in Bitcoin protocol are as follows: the entry threshold for new users is lower (because Bitcoin has become very expensive, not everyone can afford it). Faster transaction, lower transaction cost, better privacy and data protection: encryption of account holding and transaction itself.

Bitcoin (BTC) vs Bitcoin Diamond (BCD)

However, which of these changes can the Bitcoin diamond project actually achieve, and how does the technology implementation happen? It is worthwhile to compare Bitcoin (BTC) and Bitcoin Diamond (BCD).

Perhaps the most obvious difference is the total amount of BTC to the Basel Convention, which can be the maximum. Although Nakamoto has set the maximum supply to 21 million, the Bitcoin diamond team believes that this amount is too small for everyone. As a result, the total number of Bitcoin diamonds has increased to 210 million, which means that the price of BCD will be significantly lower than before. Therefore, the team has achieved the goal of creating a lower entry threshold for new users.

Directly behind the hard fork, Bitcoin diamonds hit a record high of more than $91. A week later, a Bitcoin diamond was worth only $50. Perhaps also due to the bear market in 2018, the BTD exchange rate fell below $2 in October 2018. However, BCD still ranks in the top 40 by market value (as of October 2018).

The next big difference is the mining algorithm. Although Bitcoin uses SHA-256 in the network and supports ASIC Miner, Bitcoin Diamond has implemented X13 algorithm to exclude ASIC from BCD network. Instead, the algorithm is optimized for GPU, so that everyone can access the mining again, so as to disperse it.

In addition, Bitcoin diamonds have a larger block size. As the Bitcoin cash hard fork shows, the Bitcoin developer community is worried about the 1 MB block size originally defined by Satoshi. The team behind the BCD increased the block size to 8 MB while keeping the block time unchanged. This means that Bitcoin diamonds can contain 8 times more transactions than Bitcoin in a block. Combined with the capitalization of SegWit, this will reduce transaction costs and shorten transaction time.

Criticism of Bitcoin Diamonds

Although Bitcoin diamonds promote four goals, so far it can only achieve three of them. The fourth goal, increasing data protection and privacy, has been postponed indefinitely. In fact, the Bitcoin Diamond team wants to encrypt the account balance and transaction information on the blockchain, such as the sender, receiver and transaction amount (in a previously unknown way).

As mentioned in an article by the team, however, regarding Lightning Network, the team decided not to implement the data protection function. According to the post, the background is that the Japanese and Russian governments may soon pass laws to prevent anonymous user data of cryptocurrency. Developers of Bitcoin diamonds say other governments may follow suit.

This decision was severely criticized by the encryption industry, because it is one of the main characteristics that many people distinguish Bitcoin diamonds from Bitcoin gold or Bitcoin cash.

Is Bitcoin Diamond Worth Investing?

The team launched a "BCD Payment" initiative to promote the use of Bitcoin diamonds in daily life. Looking at the cooperation relationship that Bitcoin Diamonds can achieve so far, these are relatively unknown names.

In our opinion, the lack of data protection function makes people doubt the actual added value of Bitcoin diamonds relative to Bitcoin or Bitcoin cash. Although BCD has fast transaction time and low transaction cost, Bitcoin Cash (BCH) can also do this. In addition, BCH has a much larger constituency. Compared with Bitcoin, the advantages mentioned above still exist. If Lightning Network is launched in 2019, these benefits will be taken care of.

We believe that the very vague road map should also be criticized. The implementation of the lightning network should have started before July 31, 2018. However, at the time of writing this report (October 2018), there was no sign of implementation in Mainnet.

Speaking of this, do you believe that what Bitcoin diamonds are and are worth investing in? I have a certain understanding. In general, Bitcoin diamonds are the hard forks of Bitcoin, another ledger opened in the Bitcoin block, which is equivalent to starting a new career. Except that they have the same history as Bitcoin, they have nothing to do with anything else.