BitcoinDark and the SuperNET

Welcome to BitcoinDark – a revolutionary new approach in privacy!

In future blogs we’ll be taking a closer look at some of the anonymity tech within BTCD, including Teleport and Telepathy, as well as ramchains: an innovative implementation of the blockchain that enables requests that are orders-of-magnitude faster than regular blockchain queries.

In our first blog post, though, we wanted to explain the unique place that BTCD holds within SuperNET. Lead developer jl777 has given BTCD two specific roles within the SuperNET project that he started, and which has since grown into a thriving community of talented crypto developers, service-providers, entrepreneurs and other specialists. BTCD’s key position also brings particular financial rewards.

Privacy

Firstly, BTCD will provide a core part of SuperNET’s infrastructure by enabling private communication and cryptocurrency transactions. SuperNET brings together a huge array of different projects, from crypto exchanges and marketplaces to advertising, news and commentary, gaming and entertainment. Much of its functionality is built on top of NXT, a versatile 2.0 crypto that lends itself to third party applications. However, privacy is fundamental to the ideology behind SuperNET, and BTCD provides a way for users to interact without fear that their transactions will be traced – either on or off the blockchain. (Just how this is possible will be explored in further blog posts.)

BTCD can be considered the highway that connects all of SuperNET’s many apps and services: a way of transacting and communicating securely. In other words, BTCD isn’t simply a coin that adds specific additional benefits to SuperNET – it is fundamental to its operation.

Reference currency

This key ideological and practical role for BTCD is reflected in the special status it is awarded economically. One of the most important components of SuperNET is InstantDEX: a near-realtime trustless crypto-to-crypto exchange service, built on top of the Multigateway exchange that comes installed with SuperNET.

The aim is to make a wide range of cryptocurrency pairs tradeable on InstantDEX. However, this poses a problem: the more currencies are traded, the more pairs are required. Whilst three currencies would only require three pairs (e.g. BTC-BTCD, BTC-NXT, BTCD-NXT), five currencies would require 10 pairs and 20 currencies 210 pairs. Obviously, including even a modest number of currencies entails maintaining liquidity between a very large number of pairs, and this quickly becomes unfeasible. Large spreads would make trading unattractive to many users.

jl777’s solution is to use BTCD as a reference currency, so that all trades go through BTCD – e.g. NXT – BTCD – BTC. This means maintaining only as many pairs as there are currencies. The NXT-BTCD and BTCD-BTC trades will happen in the background, so all the end user will see is NXT-BTC.

This approach vastly simplifies the process of converting one crypto to another in a fast and cost-effective way. It also brings additional activity to BTCD, benefitting it and its users through extra liquidity: traders will always be able to buy and sell at market price. jl777hodl (JLH) will be used as the reference asset to achieve the same result for asset-to-asset trades.

BTCD revenue

Because BTCD holds these unique roles, it will benefit directly from its inclusion in SuperNET, as well as through good liquidity. Five percent of SuperNET revenues will be paid to BTCD stakers, paid in BTCD – thereby placing constant upward pressure on the currency. Aside from ordinary supply/demand, this dividend provides a source of income and thereby a way to value BTCD, turning it into a cross between a cryptocurrency and a crypto-asset.

BitcoinDark and the SuperNET