DigiByte Briefing

DigiByte is now the most bought crypto in the U.S. after bitcoin and XRP.  Our coin guru Obol (pictured) explains why DigiByte should be on your radar.

What do I need to know? Touted for years as a sleeping giant – a faster, more secure version of Bitcoin – DigiByte (DGB) sprang from its slumber in staggering fashion during the height of the disruptive pandemic lockdown, rallying more than 900% to about $USD 0.03 in a six-week period through mid-May.

Okay, tell me more: Since that top-out, DGB hit the snooze button, pulling back by one-third as its founder Jared Tate withdrew from day-to-day activities tied to the original blockchain project that he began but now publicly decries as having been co-opted by corrosive greed, short-term thinking and wrong-minded forces insufficiently concerned with greater decentralization. DGB as of early June appeared to have established a semi-toehold of technical support flirting with the $0.02 mark (or roughly 220 satoshis) while attracting an extremely vociferous champion in blockchain investment banker Rahul Kumar (tweet-touting DGB while trolling Ethereum). This $300-million-in-market-cap, fast-moving Top 35 contender merits closer attention, even if (or precisely because) the big breakout – possibly even up to ten cents – probably is still two years away.

Myriad projects focus on payments, asset issue facilitation/tokenization, or just some pragmatic deployment of distributed ledger technology across business segments, with networks aiming to deliver superior use cases in at least one or some combination of these services; however, boldly enough, DGB seems to be trying to create a DLT ecosystem that can, according to Altcoin Explorer’s Osato Avan-Nomayo, harmonize payment, smart contracts, and broader inter-operability needs. “The stated goal remains to make the DGB payment gateway at par or even superior to mainstream channels like VISA,” Osato Avan-Nomayo said.

The first DGB token was mined in 2014. Supply is finite; if schedule holds, the 21 billionth and final token will turn up in 15 years. In April 2017, DGB became the first altcoin to upgrade to Segregated Witness (SegWit) protocol, even before BTC did. Throughout the pandemic-rocked 2020, DGB helped spearhead a privacy-focused and potentially game-changing contact-tracing project (potentially tying a crypto with some government adoption) while also widening its core competencies from payments to financing and beyond, according to BTCManager. Kumar’s EGW Capital recently announced plans to use DGB to tokenize $100 million in Indian real estate. And in late May, DGB partnered with a peer-to-peer ecosystem ThreeFold to build developer and user projects leveraging new technologies and efficiencies with a rather lofty and ambiguous end-game: a less centralized internet.

What the bulls may have seen:

  1. Speed. In terms of transactions per second (TPS), DGB is nearing 600 (compared to Paypal’s 130) with a goal of 2,000; that, if met, would put it on the level of Visa, something of a grail pursuit from early days. DGB blocks are created every 15 seconds for a transaction throughput time that is 40 times faster than BTC.
  2. “Ethereum killer.” That’s what EGW’s Kumar dubbed BTG, signaling a new dance partner in blockchain finance, citing concerns about congestion in ETH’s network.
  3. Security. DigiByte operates on three layers responsible for different functions within the project’s ecosystem, Avan-Nomayo points out. Comprising five synergistic algorithms, DGB’s open-source mining system is considered to be among the most decentralized on earth. Its own newest mining algorithm, Odocrypt, rewrites itself every ten days. Real-time adjustment mechanism DigiShield was followed by MultiShield, and both are considered, in cybersecurity circles, to be hugely groundbreaking, like when The Beatles followed Revolver with Sgt. Pepper.
  4. Scalability. DGB can support over 48 million transactions a day – that’s 10 times the current transaction capacity of the top 50 blockchains by market cap, said London-based Cassiopeia, which runs DGB’s public relations.
  5. Community-driven credibility. DGB has attracted followers because of its “genuine intention to create a financial system centered on people and social value,” Cassiopeia said. “The community-driven effort and the tremendous faith that all those involved in DGB have in the project are the key factors that make DGB so unique and compelling.”

Risk Factors:

  1. What Cassiopeia does not mention is that an aversion to the mainstream (e.g. refusing to pay to list on big exchanges) in favor of grassroots altruism came at a cost – name recognition – something of a requirement for value storage trustworthiness, resulting in an uphill climb on the payment front. Does a pivot away from a pure-payment use-case toward the jam-packed realm of digital asset issuance signal an admission of defeat for a platform that for all of its cache couldn’t set itself apart in a crowded space? That was a question raised by a Captainaltcoin analyst, Felix Kuester. Although in fairness, DGB’s founder to his credit never wanted the word “coin” in the name, looking to transcend the limitations of such a label; it could be fair to say that pursuit of a breadth of scope has always been part of the plan and that DigiAssets is less of a pivot and more of a natural evolution.
  2. As DGB beckons developers to join its open-source community, how will the founder’s publicized disillusionment with a large segment of the community’s sense of reality (being in it to do good and enrich themselves) come into play – will incentives i.e. bounties and the promise of riches cause tension within the volunteer community and their the tear-down-the-system-and-build-it-anew ethos? Delicate flowers require pollinating bees – able to avoid being bitten in half by locusts. Tate’s departure, which he announced on Twitter on May 15, caused a 20% decline in value on rumors (unfounded) he was totally cashing out.
  3. Extreme volatility: The scariest part of a 930% upswing in less than two months is the inevitable bear trap that comes with it. Such is the territory, though.
  4. With a network like this, who needs enemies? Laying bare the ugly underbelly of an industry he helped build, Tate revealed in his Twitter kiss-off just how many countless people “stabbed [him] in the back and/or tried to use [him] or DigiByte for a quick buck,” a group which even included close friends and confidants. Watch the company but be sure to keep an eye on the company it keeps.
  5. Hype galore. Empowering true economic freedom would seem the right mission for these times and yet almost at the precise nanosecond a new shiny crypto screamed out some Madness-reminiscent instructions (“hey you don’t watch that, watch this”) it indeed went one step beyond i.e. the moonboys piled in – and DGB cratered.

Team and record: One of the most impressive aspects of DGB’s growth is the fact it never did an ICO. In terms of its stewards, not having any real team driving things at the top has been a badge of honor. Even before Tate stepped aside, the project’s community was known for having no single person as its face. It’s gaining recognition for being a truly decentralized project run by the community without any central authority, according to someone considered to be a well-known community member: Rudy Bouwman, vice chairman of the DigiByte Foundation and who led the work on the Covid19 Alert App.

Institutional Adoption: As mentioned, EGW Capital is reportedly set to use DGB for $100 million in real estate debt issues in India. In 2017, DGB was added to the popular payment system, Paytomat. More than 400 companies now accept it is payment. These include I49 Seed Bank, an online cannabis seed bank based in Los Angeles (and which saw a surge of interest during the pandemic lockdown). CoinPayments and Playhub casino are also among the largest companies that accept it. DGB’s seemingly overnight success owes to being associated – over several years – with and integrated into third-party projects like the V-ID and Antum platforms.

Recent Partnerships: The collaboration, announced May 27, with peer-to-peer (p2p) ThreeFold, gets straight As (for ambition, altruism, amorphousness and ambiguity) as it seeks to “decentralize the global internet architecture.” The partnership led CoinNewsSpan’s Edward Nash to note that while this “may not directly impact price, it can enhance DGB services … which can attract more users.”

What May Unlock Value: If governments look to DGB’s password-protection-steeped Covid-19 tracing technology, and if such a weapon for virus combat itself goes viral, then the phrases “win-win” and “game-changer” surely would be warranted. The Dutch arm of the DigiByte Foundation developed an application for tracking the contacts of patients with COVID-19, presented it to the Dutch government and generated major media coverage; stay tuned.

Community Consenus: Reddit, Telegram groups. (It’s beloved. Yet on the outside of the Top 35 looking in. A fuller deeper perusal of some recent threads’ 30+ comments still to come).

Notable endorsements: Despite being introduced five years after BTC, the DGB blockchain grew into the longest in the world, said the Cambridge-based Blockchain Board of Derivatives (BBOD) in a 2019 report calling DGB “opportune” at a medium risk. A report from Wallet Investors (WI) suggests that the current level (0.016) is as good as it gets for 2020. 

Having a goal of decentralizing the Internet’s global architecture should in and of itself sustain momentum, for, as BNT’s Bogdan Vinogradov said in early June, “it seems that DigiByte is able not only to succeed, but also to stand its ground, especially important for the highly volatile crypto market.”

Buy DigiByte here

About Obol
Our coin guru is a veteran journalist who has covered virtually all aspects of finance, from trading pits to algorithmic hedge funds. He has written for publications including Barron’s, Reuters and Institutional Investor. The author of several books, he lives in a forest in the Catskill Mountains. His pen name derives from an ancient form of Greek currency.
Please note that Uphold and its affiliates do not provide investment, tax, or legal advice. This article is for informational purposes only and takes no account of particular personal or market circumstances, and should not be relied upon as investment, tax, or legal advice. For investment, tax, or legal advice and before taking any action you should consult your own advisors.