ByteCoin’s most unique features is the use of CryptoNote, a codebase developed in 2012 independently of BitCoin and other Altcoins. CryptoNight, the hash function of CryptoNote, is designed to privilege CPU miners over ASIC miners and GPU miners, and it has been one of the most successful cryptocurrencies at resisting ASIC mining.
CryptoNote also employs several strategies to render transactions anonymous while preserving the integrity of currency. In brief, it employs ring-signatures for verifying transactions, generates transaction-specific keys to de-couple person-keys from transactions, and uses key “images” (one-way functions of the transaction-specific keys) to verify transactions. An explanation of the technical details can be found here.
One final implication of this misdirection is that the network is highly resistant to blockchain analysis. Linking transactions to specific senders and receivers is nearly impossible, meaning network statistics are difficult to gather and interpret. Even exact transaction amounts are hidden. This obscures not only individuals within the network but behavior of the network as a whole.
One final noteworthy feature of ByteCoin is that it was the root of Monero.
ByteCoin uses a proof-of-work (POW) scheme that is highly dependent on memory rather than calculation speed. This, and several other features, privileges CPU mining over ASIC mining, lowering barriers to mining participation. The POW scheme also functions as a voting system for the order of transactions, supply distribution, and new features. Prioritizing CPU mining helps CryptoNote currencies realize Satoshi’s original vision of “one CPU, one vote.”
The target time for creating a block is 120 seconds, and the difficulty retargets each block. The block reward decreases each block according to the following formula: BaseReward = (remaining coin supply)/218, where MSupply = (264 – 1) atomic units and ‘A’ is amount of already generated coins. This results in a smooth emission of coins. The total amount of BCN available for eventual mining is 184.47 billion.
Little is known publicly about the launch of ByteCoin. Developers claim it was launched on July 4, 2012. However, the first reddit post was in May 2014 by a user who joined in 2014, and the first blog post on the website was May 12, 2014. Many other users point out that by the time information surfaced on the internet about ByteCoin, over 150 billion coins had been mined, well over 75% of the total eventual supply. Given anonymity of coin holders, no one knows who mined these in the two years leading up to this ‘public release.’
The ByteCoin developer team is very active, with periodic releases in 2015 and meticulous documentation. The website claims the team boasts advanced degrees from top-ranked universities, though actual identities remain hidden. The author of CryptoNote’s 2013 white paper is Nicolas van Saberhagen, though many suspect it is a psuedonym similar to Satoshi Nakamoto. In July 2015, the website announced Mr. Saberhagan would be speaking at an international workshop in Frankfurt, and while the official website did not list him as a speaker, he is included on the agenda.
There are obscure references to a ByteCoin relaunch in 2013, though it is possible this referred to a different coin, given that ByteCoin was unknown in 2013. This coin is called BTE rather than the BCN used today.
CryptoNote has an official WhitePaper dated October 17, 2013, authored by Nicolas van Saberhagen, and titled “CryptoNote v 2.0.”