Where did Bitcoin Diamond suddenly come from! Just out of nowhere Bitcoin holders got this new currency credited to their balance sheet on 24 November 2017. Nothing or hardly anything was spoken about this fork in advance and for many it was a surprise when they suddenly saw an amount of Bitcoin Diamond in their wallet. Now this has happened we are very curious, what actually is Bitcoin Diamond and does it have any potential?
How To Buy BCD
So you’re interested in buying Bitcoin Diamond? Currently, there is no way to buy BCD directly with fiat, so the best way to buy BCD is to first purchase Ethereum, transfer it to your chosen trading platform and change it to BCD. We’ll show you how.
2. Once your account has been created and confirmed, log into your Binance account. Once you have logged into the account, go to the menu, click on the funds section and then deposit on the drop down bar.
3. Once you’re on the Deposit section, click the drop down menu labeled “Select Deposit Coin” and look for Ethereum, or type ETH and select.
4. This is your Ethereum Deposit Address, we have chosen Ethereum instead of Bitcoin due to the lower fees and transfer times. Next we’re going to look at buying Ethereum and depositing it into your Binance account.
1. First change the Buy option from BTC to ETH for USD and then choose your amount.
2. When you have chosen the amount of Ethereum you want to purchase (A minimum of 0.05 ETH is required), you will need to register and confirm your CEX account and payment details.
Once that has been confirmed and the ETH has been deposited into your account, we will then need to move it over to Binance.
3. Select the Withdraw option at the top of the site and select Ethereum as your currency. You will then be given a field, where you will add a wallet. This is where you can transfer your money to Binance.
4. Go back to your Binance Account and copy the alpha numeric code under your Ethereum Deposit section and paste it into your Ethereum Withdrawal section on CEX.io. Confirm that this address is correct and press “Withdraw“.
Your Binance account will now be credited with Ethereum.
2. On the trading platform, select the ETH section and use the search function to search for BCD/ETH and confirm.
3. On the BCD/ETH trading section you can now choose how much BCD you want to buy with your Ether. Once you have chosen your amount, press Buy BCD and place your order.
Once your order has been fulfilled, your account will be credited. Congratulations you’re now the proud owner of Bitcoin Diamond.
When did Bitcoin Diamond come into existence?
Bitcoin did a hard fork for the third time. After Bitcoin Cash and Bitcoin Gold we now also have Bitcoin Diamond. The fork took place at block height 495866. Bitcoin reached this block on November 24 10:20 hours UK time.
The arrival of Bitcoin Diamond has created a new chain. The miners will start creating new blocks on this chain with a new Proof-of-Work algorithm. The current Bitcoin blockchain will continue to exist and the new blockchain will operate separately from the old one. Although they share the same transaction history only from block number 495866 onwards they will both build their own transaction history.
Forks are being done to address Bitcoin’s scalability problems. Currently, the currency can only execute 7 transactions per second (7tps). This compared to Visa (56000tps) and Paypal (450tps). In order to eventually be used as a means of payment, it is very important that Bitcoin can scale up.
What does Bitcoin Diamond bring us?
Bitcoin Diamond has not yet been officially launched and there is currently uncertainty about this new currency.
On their website the amount of information is rather scarce.
The following points summarize what can be found on the website:
- The goal of Bitcoin Diamond is to become ‘the better bitcoin’.
- They want to tackle three of Bitcoin’s problems, namely:
- The poor privacy protection -> They make sure your balance and the amount of coins on it are encrypted. This will protect your privacy better.
- The slow transaction confirmations -> Bitcoin Diamond has increased the block size. With the current Bitcoin it is 1MB and Bitcoin
- Diamond has made 8MB of it. This makes it possible to execute transactions faster and cheaper. The blocks are generated 5 times faster.
- The high participation threshold for newcomers -> The total amount of Bitcoin Diamonds is 10 times the Bitcoin offer. So a total of 210 million coins will be released and it is expected that the price will be 1/10th of a Bitcoin. The threshold to buy the coins is therefore lower and the costs also seem to be lower.
- It is possible to minus the coins when the mainnet comes online. This will happen in December. You can minus them with a full node client or minus them within a pool. At the moment there are three pools that will support the minus of BCD. It is possible to minus with your GPU, this can be done with AMD and NVIDIA. On Bitcointalk it says that after 1000 mined blocks they switch to
- Proof-of-Stake. This makes it possible to catch interest/dividend on your BCD’s.
Everyone who had Bitcoin during the split gets his number of BTC x10 paid in Bitcoin Diamonds. Someone with 1 Bitcoin gets 10 Bitcoin Diamonds.
- The coin is not live yet. This will happen when the developers are ready for this.
- It is still unclear who is behind the fork and which members the team consists of.
Differences from other Bitcoin forks
Bitcoin Diamond has taken the specifications of the different Bitcoins and put them together in a new coin. It has most of the similarities with Bitcoin Cash. The only important differences are that Bitcoin Diamond does have a Segwit and privacy is better ensured by the encryption.
What is a Replay Attack?
When using Bitcoin and Bitcoin Diamond, you do not want BCD to be sent when you send BTC. It must be possible to use the two separate currencies separately. When this separation doesn’t work we are talking about a replay attack. Therefore there must be a replay protection.
The split blockchain uses the same rules for doing a transaction as the Bitcoin blockchain. When a transaction is done on the Bitcoin blockchain, the same transaction can be imitated on the separated blockchain. Without replay protection, someone watching your transaction can reproduce it and replay it again on the split-off blockchain. It is therefore necessary to give a unique feature to such a transaction so that they still differ from each other. Think of another watermark. BCD indicates on their website that they have incorporated this unique feature in the transactions so that Bitcoin transactions cannot be imitated on the split-off blockchain.
How do I get Bitcoin Diamond?
When you have BTC on an exchange it depends on the trading platform if you actually get the BCD’s credited. You don’t have the private keys in your hands. They should give you the BCD’s but there is no authority to supervise this. They can therefore choose not to credit anything. Practice shows that at least the largest exchanges do meet their moral obligation.
If you have BTC on a paper wallet or a hardware wallet you can claim your Bitcoin Diamond at any time. BCD will be distributed automatically. You can easily find them on your wallet.
Bitcoin Diamond Futures
It’s already possible to trade futures of Bitcoin Diamond. These are offered on Binance. With the purchase of such a future you are not actually the owner of a Bitcoin Diamond. You buy a fictitious coin that is exchanged for the real coin when Bitcoin Diamond is released. People are already speculating this way on what the coin will be worth.
At the beginning 167 million coins will be released. With the current state of the Bitcoin Diamond Futures of 50 dollars this amounts to 8.35 billion market capitalisation. With this amount, they are between Ripple and Dash to stand. Is this a good estimate or should the BCD price be lower/higher?
It is difficult to determine for the time being. For each Bitcoin there are ten Bitcoin Diamonds. Logically, the price should be 1/10th Bitcoin. If that is the case then the current price of $50 is still nothing!