0xBitcoin Ethereum Token: Bitcoin-Like Proof of Work Mining?
0xBitcoin is an autonomous decentralized currency based on the Etheruem blockchain. The protocol is fully supported with Ethereum smart contracts, allowing business logic to be built into the platform.
A reference implementation for these mineable tokens has been launched at the Etheruem address: 0xb6ed7644c69416d67b522e20bc294a9a9b405b31. Thus, the platform combines the scarcity and distribution model of Bitcoin with the speed and utility of Ethereum.
0xBitcoin: Combining Bitcoin And Ethereum
0xBitcoin shares some parallels to both the Bitcoin and Ethereum networks. For example, a total of 21,000,000 tokens can be mined, combined with a diminishing block reward every 10 minutes due to difficulty adjustments. Also, users can use the tokens with any ERC20-based service like Metamask, Parity, 0x, EtherDelta and other Ethereum smart contracts.
As part of its proof of work smart contract function, a number named a nonce has to be passed into its function for new tokens to be dispensed. The nonce fits into a specific ‘puzzle,’ similar to how one solves a Sudoku puzzle.
Proof Of Work
This proof of work algorithm is the same that Bitcoin uses for mining and verifying transactions. Users can download a CPU miner for mining proof of work tokens, or they may join a mining pool to help expedite the process. At present, only a small number of rewards have been mined on the network due to the recent release of the platform.
0xBitcoin’s philosophy is to encourage other platforms to switch to a mining distribution model over ICOs, as coin offerings come with their own legal and financial risks for both founders and investors. Instead of ICOs, 0xBitcoin allows every day users to gain new coins with their home computers, making it easy for new users to join the crypto ecosystem.
The tokens are compatible with some wallets and applications:
- Tradeable on Enclave.io
- Ledger Nano
- Trust Mobile Wallet
Additional integrations between its tokens and other platforms will be released in future.
Introduction Of The Initial Mining Offering
The platform states that 0xBitcoin introduces a new form of token distribution to the market in the form of an Initial Mining Offering (IMO). IMOs take the centralization away from ICOs in that a single entity must handle and control all of the coins and raised ICO money. In an IMO, however, ownership of the token contract no longer solely belongs to the contract deployer and is instead distributed among users and miners of the platform.
Projects incorporating ERC20 and ERC721 tokens can now be decentralized. This means that the development team can be composed of volunteers around the world in a flat structure, with governance similar to an open source project.
Transparent Token Governance
Instead of the tokens assigned to a single entity as with an ICO, the tokens are owned by a smart contract in an IMO. A function named mint() works like a faucet and assigns tokens to anyone who calls the mint() function. The mint() function requires proof of work to mint new tokens to reduce gas fees on the Ethereum network.
The advantage of a smart contract holding the tokens is that every user can see that the distribution is fair and that no advantage has been given to a single entity.
Also, the 0xBitcoin community is conscious of its energy consumption without a function securing its network. In other words, although the mining of tokens does not secure the network, it does help secure its governance and community from corruption as it eliminates the need for ICOs or centralized governance.
Also, an IMO could last as little as a day, week, or even an hour, at which point all available tokens have been mined.
What are your guys thoughts on the 0xBitcoin Ethereum token? Will a fork outside of Bitcoin Cash ever amount to much or provide solutions that the bitcoin blockchain itself won't be able to handle or adapt to? We shall see in the months and years, and likely decades to come.