BlackCoin project purpose and description
What is Blackcoin?
Blackcoin is a blockchain project that uses a complete Proof of Stake model algorithm for mining. It is a decentralized, transparent and peerless cryptocurrency that has built an energy saving ecosystem that is cheap to maintain.
It has improved on the PoS model with enhanced security and improved functionality.
Blackcoin was started at the beginning of 2014 and has very similar features to Bitcoin. However, it has some unique features that set it apart from Bitcoin, the first of course being that Bitcoin uses the Proof of Work algorithm while Blackcoin uses the Proof of Stake algorithm for mining. Here is how the two algorithms compare:
Proof of work
Bitcoin uses a proof of work algorithm to verify transactions. This is like the fuel that keeps the blockchain mining process in motion. When you talk about mining in cryptocurrency you are referring to the process by which cryptocurrencies are generated.
For this to happen, individuals have to give up computing power that is required to solve a complex mathematical problem (in this case verifying of transactions) in the network.
Once a correct answer is established, it is added to a block and once the block is confirmed it is immutably added to the blockchain. The miners are rewarded for contributing their computing power with Bitcoins that have been generated due to the confirmed transactions. The miners are incentivized to do the work of mining so that they can get rewarded.
This process, however, is tedious and energy consuming at the same time.
Proof of Stake
Blackcoin uses a proof of stake algorithm to verify transactions on the blockchain. In this case, individuals have to hold/ stake a certain amount of cryptocurrency to receive a reward. In the Blackcoin space, miners are referred to as falsifiers.
They earn interests for the coins they have staked, so the more coins they stake, the higher the reward. So for Blackcoin, falsifiers have to hold the cryptocurrency and are incentivized to hold as much as they possibly can. For bitcoin, on the other hand, miners don’t even have to hold any bitcoin as they are rewarded for generating the coins themselves.
In the Bitcoin network, a miner can hypothetically control 51 percent of the mining power meaning that they can have undue advantage over the system and manipulate it. This cuts at the core of decentralization which is very fundamental to the blockchain. With a proof of stake model, this is not possible as falsifiers have no incentive to control computing power. Also, in the POS model falsifiers are members of the network by virtue of holding the most coins; this creates security in the system.
Other than the proof of stake algorithm, Blackcoin has several other unique features that make it an attractive investment vehicle.
This is a multi-signature wallet with a colored coins support. The multi-signature feature enhances the security of the wallet.
This is a multi-feature open source platform that supports various platforms for both individuals and companies.
This was the world’s premier fully functional contracting software with a double deposit system. This creates total decentralization and does away with the need for central parties.
This is an open-source BlackCoin blockchain explorer with complete REST and WebSocket APIs. It can handle advanced functions such as writing complex web wallets.
What is the problem that Blackcoin Solves?
Blackcoin is a complete proof of stake coin, with the exception of the phase of initial distribution, where the two algorithms were mixed.
Because miners have “an interest” in the system equivalent to the coins they hold, they have all the reason to safeguard the system. This is unlike the proof of work model.
Also, the computing power required in the proof of stake model is minimal. For Bitcoin, as more transactions are computed, the more complex subsequent transactions get and the more energy that will be required.
Eventually, the work of mining is restricted to a few individuals who can afford costly mining rigs.
Security issues in POS
Other than the aforementioned advantages of the proof of stake over the proof of work algorithm, there are a couple of security issues that need to be addressed in the POS model too.
In the proof of stake model, a node can accumulate over 51% of the coins and then use them to launch an attack on the system, at least hypothetically. They can cause a fork out and then perform a double-spend. To perform a consequent double spend, the node would need to save up again to over 51% and then launch another attack.
This is highly unlikely for two reasons; this action would most likely devalue the network significantly and hence there will be no incentive to control the network.
Secondly, it would take a lot of time and effort to acquire 51% of the coins. As much as this is not likely, it is still a possibility and a potential security threat. With coin age, some nodes can keep their coins offline, choosing not to stake them so that they can get high rewards intermittently. This taking coins away from the network is not advantageous to the network as it would compromise on the security of the network.
Blockchain Pre computation and Long Range Attacks
Secure time stamping is an issue in the distributed ledger ecosystem. The hash function is not obfuscated enough and an attacker is able to calculate the next interval for the future proof-of-stake solutions. This means that the attacker can generate a few blocks in a row and execute a malicious attack that could harm the network.
How does Blackcoin Solve the problem?
Other than adapting the proof of stake algorithm, Blackcoin has worked on certain modifications to make the system even more secure.
Taking Coin Age out of the equation.
Having as many nodes as possible online is the surest way to ensure security in the proof of stake model. With many nodes present, likelihood of a 51% attack by a malicious node are minimized.
Blackcoin has taken this out of the equation by using a different equation from the original one. This makes saving up for coin age not profitable. Therefore nodes are more incentivized to have their coins online at all times and reap staking rewards.
Changing the Stake Modifier
In the previous model, the stake modifier was not obfuscated enough and it was possible to pinpoint the time for the next proof-of-stake. Blackcoin has modified this so that it is not possible to make a pre computation attack on the system.
Block Timestamp Rules
Significant changes have been made to make POS work more efficiently; these include changing time stamp intervals. The proposed changes below outline the modifications to the block timestamp rules.
Past limit: median time of last 11 blocks
Future limit: +2 hours
Granularity: 1 second
Expected block time: 10 minutes
Blackcoin (New rules)
Past limit: time of last block
Future limit: +15 seconds
Granularity: 16 seconds
Expected block time: 64 seconds
The hash function has been changed from the script algorithm back to SHA 256d. Script is far much slower and has no real advantage in the proof of stake model. Since Blackcoin is now fully on the POS, it is more beneficial to revert back to the SHA256 algorithm. the block version has been upgraded to version 7.
What makes Blackcoin better than its competitors?
Bitcoin is a competitor of Blackcoin together with the other digital currencies which seek to offer peerless, decentralized, transparent and secure transactions.
Due to the POS model, Blackcoin has several advantages over Bitcoin. First, the POW is a very expensive network to maintain as compared to the POS model.
Secondly, as explained above the POW model is more prone to malicious attacks than the POS. Blackcoin has gone ahead to further secure its network by making major improvements on the POS 2.0. BlackHalo has created full decentralization on the network and is very user-friendly.
The exco.in exchange is a project on the Blackcoin blockchain that has live, high-frequency trading and with many great features. Another great project on Blackcoin is Legionnaire which gives users the ability to have stealth addresses. Stealth addresses ensure complete privacy where transactions cannot be traced back to their point of origin or destination.
Other traditional currencies are also competitors of Blackcoin. According to the website, Blackcoin has these superior advantages over the competition:
· PROOF OF STAKE 3.0
This is a modified version of the POS model. Users can earn up to 8% rewards per annum for staking their coins in the network.
The proof of stake algorithm is an energy saving model as opposed to the proof of work algorithm. This high efficiency model makes transaction costs in the network remain negligible. When miners have to spend a lot of energy to run the system the cost of transactions increases commensurately.
· TRANSPARENT LEDGER
Unlike the traditional banking system, the blockchain allows transactions in the Blackcoin network to be transparent and verifiable by all nodes in the network.
· OPEN SOURCE SOFTWARE
The software (wallet) is open source, so its safety can be audited.
· FAST TRANSACTIONS
Unlike the traditional banking systems where it may take up to three days to transfer money across borders, on the blockchain transactions are almost instant.
The blockchain allows for peer to peer transactions without the need for trust between transacting parties.
How can Blackcoin be categorized?
Blackcoin is a digital currency and a decentralized exchange. It also has features of a privacy coin through stealth addresses.
Blackcoin and Security?
Blackcoin has made fundamental changes to the POS model that enhances its security, as mentioned above. These include:
- Taking Coinage out of the equation
- changing the stake modifier
- changing the timestamp rules
- changing the hash algorithm from script back to SHA256.
These changes are intended to improve security in BlackCoin’s PoS protocol and to optimize the network. Choosing the POS over the POW algorithm minimizes the chances of malicious attacks on the network as the incentive is not significant enough.
In the POS model, nodes are also stakeholders in the network because they have to hold coins for verification. This also creates security in the network. Multisig features and stealth addresses are other features that enhance security.
Blackcoin has done a lot to create as much security as they can, and they have continued to improve their technology to seal all loopholes and potential security breaches.
Examples of Blackcoin use cases / applications.
Blackcoin is a digital currency that has numerous potential applications. The developers wanted to build a coin that was completely based on the proof of stake algorithm, apart from the initial stage of development. The aim was to make this coin highly efficient and secure. So far, a couple of businesses have adopted Blackcoin as a form of payment on their platforms. These include:
- Mojave Café
This is an online retail store with a wide range of products including: automotive, beddings, health and beauty services, electronic and much more.
This is a popular web hosting platform that offers hosting services to both individuals and businesses. https://www.hostinger.com/
- PiVPS Services
This is a software company that sells Cheap Windows VPS – Linux VPS. They accept many cryptocurrencies as payment, including Blackcoin. https://pivps.com/
This is a US owned vape store that seels numerous vape products ranging from vape kits, vape juices, vape pens and other vaping accessories.
- Finna Tour & Travel
This is a tour company that sells everything from flights to travel gear and travel insurance.
This is a web hosting platform that accepts Blackcoin and other cryptocurrencies as payment. https://flokinet.is/
- TorGuard VPN
Provides network security so users can browse securely.
- Bitcoin Recarga
As more and more people accept cryptocurrencies as a form currency, blackcoin will get more and more uses.