0xBitcoin – Ethereum’s Answer to Bitcoin’s Proof-of-Work
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Kickstarting Ethereum with ERC-20 and ERC-721
Ethereum is arguably one of the most ground-breaking technologies of recent years. It was the first-mover in providing innovative new standards for data-transfer and governance, and like many top-tier blockchains, it has the potential to disrupt almost every industry in the world.
However, the vast range of fungible ERC-20 (all tokens within a contract are equal) and non-fungible ERC-721 (each token is unique) tokens created on Ethereum lack one critical hallmark of the original and most valuable blockchain product: Bitcoin. They function poorly as stores of value and therefore as digital commodities. The same is true of Ethereum’s native asset, ETH. As gas, it’s designed to turn the cogs of the network, providing essential utility. But functioning as a commodity? Not so much…
Aside from its longevity, security, and immutability, it’s Bitcoin’s Proof-of-Work algorithm that gives it real-world value. Bitcoin is a finite, standardised, difficult to produce asset which due to its rarity is often referred to as ‘digital gold’. It’s the difficulty and cost of production, through the technical and energy requirements, that yields value. And it’s this intrinsic value that serves to add a layer of inherent security, providing consensus mechanisms and making it cost-prohibitive for bad actors to attack the network.
ETH, and the tokens residing on Ethereum’s network, are distinct by comparison. Those of any value were predominantly given that value via Initial Coin Offerings (ICOs), which give disproportionate control to single agents. And for the most part, they’re unproven as functioning tokens. This makes them problematic as commodities. In many ways, ETH is no better as a store of value than fiat currency, inflatable or deflatable based on the computational needs of the Ethereum network. And with many teams controlling huge swathes of their respective token supplies, for reasons of staff collateral and platform liquidity, there’s a clear issue of centralisation at play for many tokens in the market.
And it’s this fact which opens up the opportunity for a purely decentralised, Bitcoin-like store of value running on Ethereum.
Enter ERC-918, Ethereum’s Gold Standard
Luckily, the solution already exists in the form of 0xBitcoin (0xBTC). The genesis of 0xBTC happened in February 2018, and the community around the coin has been growing steadily ever since. But how does 0xBTC compare to the host of other ERC-20s and ERC-721s out there?
Just like every other ERC-20, 0xBTC is completely compatible with the ERC-20 token standard. The audited smart-contract code can be viewed on Etherscan.io., which contains the distribution as well as other token metrics. But, that’s about where the similarity ends, because 0xBTC also belongs to a new class of Ethereum token called ERC-918, a class that became canonised the moment it was created.
Because of its Bitcoin-like mining functionality and lack of central ownership, 0xBTC is Ethereum’s first wholly-decentralised Proof-of-Work token. Think Bitcoin, but you can use it as a scalable, rare commodity on the Ethereum network. This is important for a number of reasons, the most notable being it takes the battle-tested value generation and storage model of a pure-mined cryptocurrency and imports it directly into the largest decentralised business network in existence.
Like Bitcoin, there will only ever be 21 million 0xBTC, establishing it as a deflationary asset that derives value from relative scarcity. It is immune from 51% and double-spend attacks, at least as long as Ethereum itself holds that status as a stable and secure network. It’s also much faster than Bitcoin, and will benefit from all the updates to the Ethereum network at large.
And of course, it integrates seamlessly with everything that’s already being built for Ethereum; from its wallets like the ever-popular Metamask, the wider market’s well-funded and highly-marketed Coinbase Wallet, Ledger Nano and Trust Wallet, to its native Lava Wallet – a new project which aims to reduce fees for users and improve scalability for Ethereum.
Furthermore, it has been built to be small miner-pool friendly, allowing for fully-decentralised GPU mining; offering identical block rewards and difficulty retargeting to Bitcoin, which makes it open, fair and censorship-resistant. It achieves this using the SHA3 Proof of Work algorithm, with a difficulty that adjusts roughly every month, targeting 15 minute rewards.
Just like with Bitcoin, the block reward is cut in half every 210,000 blocks. For 0xBTC, the first halvening will occur in approximately 2022, leaving a fair amount of time – and unlike Bitcoin, 0xBTC can be acquired using trustless, decentralised exchanges like IDEX, ETHEX, Enclaves, or Mercatox if you prefer the centralised approach.
So, while this article could go on to sing the praises of creator “Infernal_Toast” who designed and published the token contract, the strength of the community who have built and funded technologies like merge-mining for it to flourish (including, we should say, the funds for this sponsored article), or the fact that 0xBTC represents a true mashup-evolution of Nakamoto and Buterin’s decentralised vision, all you should really be thinking about at this point in time is the future value of this kind of technology.
Sure, there’s a lot to choose from out there. You could put all of your eggs into any of 100 other baskets, and you may well see a decent ROI over the coming months and years. However, consider the true value of the very first, fully-decentralised Proof-of-Work token to exist on Ethereum, versus the 100s of ICOs and centralised companies playing blockchain bingo. Can those pre-mined ICO companies deliver on all of their promises, against all the odds and competition? Should 0xBTC be part of your portfolio in the short, mid and long-term?
If you find the concept interesting and are excited to learn more about how 0xBTC has introduced new functionality to the Ethereum network, then we gladly welcome you into our growing community of developers, miners and Proof-of-Work maximalists for the next stage of Ethereum’s blockchain revolution. See you in the Reddit and Discord!