Bitcoin Diamond 101

“A better Bitcoin for all.”

This course will explore how Bitcoin Diamond aims to fulfill Satoshi Nakamoto’s vision of a truly universal, peer-to-peer and decentralized currency. We will take a look at Bitcoin Diamond’s feature set including:

• The X13 Mining Algorithm
• Anti-Replay Protection
• Segwit Integration
• Lightning Integration
• 8 MB Block Size
• Lower transactions costs and fees

What is Bitcoin Diamond?

The name seems to inspire an investment vehicle tied to precious minerals namely, diamonds. But as it is, Bitcoin Diamond is simply a “fork” of the original Bitcoin code which split from the original Bitcoin blockchain on November 24, 2017 at block 495866.

If you haven’t encountered the term “fork” before, a “fork” is simply a deviation from a source. Because we are talking about Bitcoin and its code, the Bitcoin Diamond “fork” is taken to mean at its most simplified: a split from the original Bitcoin blockchain made possible through an alteration of code. This implies several things that we will see later on from its code base.

What are the implications of a fork?

We have to think of open source software development first and Bitcoin as a combination of software, hardware,  governance and implementation.

In the beginning, Satoshi Nakamoto’s original Bitcoin was created using a peer-to-peer network. Its components were pretty straightforward and simple. Nakamoto used some desktop computers that are networked as the first miners. Eventually he gave or dispensed some Bitcoins to some close associates whereby it spread virally. With more users came more politics. Eventually, corporations, other software developers, mining pools and big business groups played a bigger role as Nakamoto stepped back from development. When a project becomes too big and lucrative, the politics in code development become more contentious.

A fork creates a divergence in almost all aspects while retaining parts or the entirety of the codebase. With a fork, development of an alternate version of a software becomes possible without having to be entangled with the previous system’s trappings. It’s also an opportunity for the code “forkers” to add improvements without the consent of other parties that may have been dominant in the previous source.

An example

If you can imagine Microsoft Windows as an open sourced software (In reality it’s not, most of it is closed source and centrally managed by Microsoft) and a different group wants to design a different version of say, Windows XP. The group that wants to “fork” away could create their own version using the original code base and call it “Doors XP”. They could then put all the improvements and alterations they like without having to ask permission from Microsoft’s management.

Bitcoin Diamond is something akin to that. We cannot discount the fact that there’s a lot of politics and conflict in Bitcoin right now. We have to go back to a little Bitcoin history and note that at the time of its inception (November 24, 2017), Bitcoin was on the rise to eventually meet its all time high of almost $20,000 by the end of the year.  So if you were holding 1 Bitcoin at the time, you would have also received 10 Bitcoin Diamonds, which would have cost about $80-$89.27 (November 26, 2017 Coinmarketcap).

Today, September 27, 2018 or almost a year after its creation, a Bitcoin Diamond costs $1.91. We will explore further before we can make a final conclusion of whether holding Bitcoin Diamonds is profitable.