We are really excited to announce a new video series called, Crypto Bites.
In the first video of the series, Abra founder and CEO, Bill Barhydt, talks to DigiByte founder, Jared Tate, about decentralization, cybersecurity, and the popularity of DigiByte on Abra.
The following is a lightly edited version the conversation:
“We have an absolutely amazing community,” Tate said. “One of the unique things about DigiByte is that it’s never been an ICO or a company, it’s just a completely grassroots movement that’s going on five years old now.”
Tate continued by saying that the growth of DigiByte users has been exponential over the past year as more people are entering the cryptocurrency space. “In January of 2017 or total market cap was roughly $2 million. In January of this year we peaked out at about $1.6 billion,” Tate said.
We’ve been really impressed,” Barhydt responded. “We’ve seen a lot of growth in DigiByte usage, probably disproportionate to the other cryptocurrencies in our app over the last several weeks, and I’m curious to get your perspective on how people are using DigiByte and what the core use cases are that would be driving usage, and even speculation?”
“If you take DigiByte — and this also works with Bitcoin ― and imagine it’s an Oreo,” Tate said. “At the bottom layer you’ve got the core protocol communications. Well what incentives people to run it? That’s where the digital assets come in, and then once you are on top of that, you can start to build a lot of cool use cases. One of those use cases is that you can use our new wallet that’s in the iTunes store for authentication on websites to replace passwords.”
“We’ve seen a myriad of ways of people buying DigiByte on Abra,” Barhydt said. “We recently rolled out Visa and MasterCard support, we’ve had people in international markets using Visa and MasterCard to buy DigiByte, we’ve had people depositing bitcoin and litecoin and then using that to convert into DigiByte. We support 25 cryptocurrencies in the system now.”
“Like I said,” Barhydt continued, “We are seeing a disproportionate interest in DigiByte compared to what might be considered the traditional altcoins ― if that’s not a conflict in terms ― in the system today, and I’m curious why you think DigiByte would be more popular versus some of the other altcoins? “
“I think the simple explanation is that when people download the wallet and send a transaction and just see how fast it is, it kind of sells itself,” Tate said. “The number two thing is that people realize, as far as the traditional altcoins go, I would go out on a limb here and say, DigiByte actually had the fairest launch of any of them. There was never an ICO and it was announced ahead of time, and… it really is a grassroots movement in the space.”
“Talk to me about decentralization,” Barhydt says, “because there are a couple of unique things about DigiByte. First is that the blocks cycle every 15 seconds and that’s related to the fact that you have five different mining algorithms, which each work every minute and 15-ish seconds, if I understand correctly. So explain how that works, why it’s secure, and how it relates to decentralization.”
“The biggest thing,” Tate said, “Are these five unique algorithms. Each one accounts for 20 percent of the blocks mined. And one of the interesting things about DigiByte is that you could literally take all of the Bitcoin mining power in the world, throw it at DigiByte, and you would only get 20 percent of the blocks. And the cool thing about that is that we have DigiShield and MultiShield that allows for real-time difficulty adjustment.”
“For those that may have never heard of difficulty adjustment,” Tate continued, “that’s what makes sure that new blocks are produced every ten minutes on the Bitcoin blockchain and every 15 seconds on the DigiByte blockchain, and there are various variations throughout blockchains, but because of our multi-algo approach, and because of the fact that you can literally take all of the ASIC/Bitcoin mining power in the world and put it on par with people that are still able to mine with GPUS, the hardware arms race is somewhat mitigated.”
“We were talking earlier,” Barhydt said, “and you were saying that because so much Bitcoin mining power is based in China, that if there was a massive, country-wide outage, then we could lose 40- or even 50 percent of the hash power on Bitcoin, which if that was out-of-whack for a few days, with the difficulty adjustments, then it would bring the network to its knees, can you comment on that?”
“The first case that I saw this happening, was with Dogecoin,” Tate says. “Their chain, back in 2014, froze for almost two days between blocks and we worked with them to help fix it and you know the same thing could happen with Bitcoin, absolutely, and if you have this massive centralization with these mining farms in China and there is a natural disaster that knocks out that area around southern China where these miners are, it could be a big problem.”
“Talk to me about DigiShield and MultiShield,” Barhydt said. “What are those products, how do they work, and how are people using them?”
“The DigiByte blockchain started with the news headline ‘Target: 110 million customer data stolen,’” Tate said. “So from day one we felt like DigiByte could fix 95 percent of the security vulnerabilities on the internet today.
“To help people understand that, I use an analogy of DNA and nature. If you look at your own body you have millions of cells of DNA throughout your system. Well, what if all of your DNA was just kept in your fingertip and you had an accident, and you chopped it off while cutting up vegetables? That would be a problem. It’s the same thing with how the internet works today. You have all of these very centralized services where if you have a data breach, obviously it causes a lot of damage, and there are a lot of vulnerabilities because when the internet was first developed, it wasn’t designed to be secure.”
“So I like to explain to people,” Tate continued, “that blockchain technology is kind of rebuilding the internet from the ground up, and mimicking what we have seen in nature for millennia.”
“Make it real for a second,” Barhydt said. “What’s an example of a cybersecurity vulnerability that you are alluding to that the multishield technology addresses directly?”
“MultiShield helps secure the blockchain directly,” Tate said. “One of the more practical applications of what we are talking about is called Digi-ID, which is where you have your wallet and your private keys, but instead of using your private keys to send and receive transactions, you have this decentralized system that you trust (although you don’t have to trust it because it is a trustless system) but you can also use those private keys to authenticate a website, so instead of having to remember 100 different passwords for different systems, you can literally use your wallet and use that to cryptographically sign in and out of website, so you don’t have a centralized system. And once you start building decentralized applications on top of that, MultiShield helps secure things at the protocol level, so if we go back to those three layers, MultiShield fits in at the bottom level and then helps ensure and secure the digital assets.”
“So tell me about the future of DigiByte, what’s next, where do you see it going five years from now?” asked Barhydt.
“If you look back at 2014 or 2015, you will see that there have only been a handful of projects that have continuously been there, and continuously innovated and continually progressed, so if you look back over the last five years at the things that we have continually innovated and pioneered, we are going to keep doing that until 2035 and beyond. So in 2035, the last DigiBytes are minted ― the idea was 21 billion in 25 years ― so we’ve been discussing some algorithm swaps, or changing to a hybrid proof-of-work/proof-of-stake system, but most importantly, what we are focused on is building real-world utility and applications, like one I’m working on with real estate, that people will use and they won’t even really know that it’s on a blockchain or what it is, there will be a little “Powered by DigiByte” logo there, but at the end of the day it will make their life easier and better. It’s like today when you go to a website and you see “http” most people don’t even really know what that is, but the underlying protocol layer allows for a lot of amazing things to happen on the internet.”
“Do you see DigiByte, or maybe you can speak about what you think the DigiByte community’s opinion on this is ― does the DigiByte community see DigiByte as a store of value or as a currency to be used in payments, or both?” Barhydt asked. “You know there is this raging debate in the Bitcoin community, the 2X-ers like myself lost that fight last year, to make it a payment rail. Instead, right now, Bitcoin is focused on being digital gold, and that’s fine, that’s what the community wants. And then Lightning is supposed to help make the transition to the payment rail. What’s the analogous answer for DigiByte?”
“I would say both,” Tate said. “Different people are using it for different things ― I send payments to developers all of the time and I can send a payment in a couple of minutes, and it actually reduces a lot of the volatility, and we are 40-times faster and we have code in there that doubles the blocksize into the future. The idea is that we will scale in the future. On the other hand, we see DigiByte as a digital asset if you go to digibyte.io there is a graphic there sending a transaction and it points out that there is a digital payload that you can append, whether it’s documents, music, videos, and there are alot of different things you can do and transmit. That’s why we didn’t call it digicoin or whatever, it’s a byte of data, so that was kind of the thought — so it’s both.”
“Thanks for the overview on DigiByte, it’s really super interesting and I think people in the broader Abra community who aren’t as familiar with the technology will find it super interesting,” Barhydt says. “I know that we do, here at Abra.”
“We’ve been getting hammered on social media by your community over the last couple of months on a whole bunch of things that they want to see,” Barhydt continues. “The ability to go native, because right now DigiByte is stored as a synthetic asset in our system.”
“I had about 20 people from our community that wanted me to clarify, what that is, exactly?” Tate said.
“We have a roadmap where we look at taking assets native based on usage and adoption, that’s part of why the synthetic currency model is so powerful. We can launch everything and then backtrack and see what we should take native, which means we can support deposits and withdraws, which is obviously the request that you are getting. So that’s something we are taking to heart and really looking at.”
“We have a really complex roadmap at Abra,” Barhydt continued. “I can tell you right now that we are working on native ether and ERC20 and a whole bunch of other stuff. We are launching European deposits and withdrawals soon, so it’s complex, but as we are seeing the DigiByte community be so consistent, it has definitely caused my product team to look at. I’m sure we will figure it out, no doubt, I just can’t say when. My team would probably hit me with a hammer if I committed to a date, but it’s definitely something we want to do. You know we would actually love to get your team or community involved in that ― that’s not something that we’ve been good at, which is opening up the platform so that the community can actually participate in the development. And so that’s something we’ll follow-up on.”
“Maybe I’ll just give a quick update for everyone about what’s going on in the broader Abra world. We had a fantastic first half, our business is probably about 4X bigger now then it was in December. Even in the downturn of the crypto prices coming down, our business continued to grow. We launched first the initial cryptocurrencies then we launched another five in May bringing our total up to 25. In addition to DigiByte, we are seeing really strong uptake in the native Litecoin support that we added a few weeks ago, now that we are seeing litecoin deposits. We are seeing a huge influx of litecoin, which people are using to invest in other cryptocurrencies or to hedge their litecoin in fiat. We are seeing a lot of people do deposits in crypto, both bitcoin and litecoin in order to do short-term hedging in fiat to preserve the value in a down market and then convert the currency back to crypto if they think the market is going back up again. We are seeing a lot of interest in Ripple and Monero, and Doge even (I have to smile, it’s always been near and dear to my heart), of course Bitcoin Core purchases are all super interesting. We rolled out Visa/MasterCard support last week globally, we are already seeing a lot of uptick there. As I mentioned, I guess I should say this off-the-record, we are launching native ether support soon, we don’t have an exact date, but it’s way at the top of my list, which also opens the door for native ERC20, which is what most ICO tokens are based on, so we have a fantastic set of features coming and we have some surprises coming that I’m not going to give away now. But these are things that will cause people to use the Abra app everyday even if they aren’t actively buying and selling crypto. So I’ll leave it at that, other than to say we have a fantastic 60 days ahead in terms of things that we have planned for the community.”
“I’ll stop there, except to say, thank you everyone for watching, and best regards from the Abra team here in Mountain View, California.”