Obyte (Byteball) is a decentralized system that leverages DAG technology for the storage and transfer of value, enabling tamper-proof storage of any data, including transferrable value data such as currency, property rights, debts, shares, and more. Transactions become faster when the network is more congested. These storage units are linked to each other, with each unit containing the hash values of one or more earlier units, both to confirm the earlier units and to establish their partial order. The links between units form a DAG (Directed Acyclic Graph). There is no single central entity managing or coordinating the entry of new units into the database, allowing anyone to add new units as long as they sign them and pay a fee equal to the size of the added data bytes. Other subsequent users confirm earlier units through the hash values within their own units and collect fees. As new units are added, each earlier unit, including its hash values, receives an increasing number of confirmations directly or indirectly.
Since Obyte uses DAG (Directed Acyclic Graph), a data structure completely devoid of blockchain concepts, consensus mechanisms do not require Proof of Work (PoW) or Proof of Stake (PoS), yet it remains 100% reliable. Obyte features a user-friendly wallet that was the first in the crypto world to adopt a model similar to Apple Store, where independent developers can freely develop various applications on the Obyte platform. It includes an internal exchange, privacy-focused messaging akin to Telegram, mutual insurance, sports betting, and lotteries. Within this system, there is also a highly private digital currency called Blackbytes, which achieves untraceable transactions even at the ledger level for the first time.
Core Features
Obyte has core features that make its platform incredibly powerful:
Atomic Swaps
This eliminates the need for trust in centralized exchanges. Instead, transactions between users occur simultaneously or not at all.
Regulated Assets
Institutions can easily issue assets compliant with "Know Your Customer" and "Anti-Money Laundering" policies.
Multisignature Functionality
To enhance security, users can require approval signatures from multiple devices before transaction processing. Additionally, multisignature functionality creates a process for exchanging assets with multiple owners.
On-Chain Oracles
Oracles are verified data sources connected to real-world events and the database. Users can use oracle-imported data to create customized services for any smart contract. Oracles are essentially trusted third parties who monitor specific real-world events and import their outcomes into Obyte as data feeds.
Immutable Storage
Once data is placed in the Obyte database, it is never altered or deleted.
Finality Settlement
After meeting certain criteria, a new transaction will be finally confirmed. Even powerful attackers cannot modify it. Theres no guessing about how many confirmations a transaction needs to be trustworthy, and there are no 51% attacks.
Distinctive Features
Obyte has several features that provide significant advantages over some of its blockchain competitors:
Multiple Asset Classes
Obyte can be used to store and transfer values of different asset classes, such as currencies, bonds, and commodities.
Privacy
Blackbytes enables users to send payments and messages securely and anonymously.
Free Distribution
Unlike most cryptocurrencies that profit from an initial coin offering (ICO), Obyte decided to distribute the majority of its supply for free.
Conditional Payments
Obyte allows users to make simple, risk-free conditional payments that only complete if specified contract criteria are met. Conditional payments enable users to set a smart contract condition that must be fulfilled for the recipient to receive bound funds. If the recipient does not fulfill their commitment (or external data does not meet the specified contract criteria), you can safely retrieve your funds after a designated waiting period.
Oracle-Based Betting and Hedging
Combining Obytes conditional payment smart contracts with trusted data feeds from oracles enables betting (or hedging) on significant real-world events.
Obyte users can speculate on a variety of events:
Sports Events – Bet on the outcome of any sporting event without pre-commitment.
Weather Events – Hedge against extreme weather events that may affect your business or vacation experience.
Travel Events – Users can purchase flight insurance to receive compensation if flights are delayed or canceled.
Political Events – Gamble on political event outcomes. Users can hedge against the commercial risks of adverse political outcomes.
Price Events – Price bets allow you to short cryptocurrency without owning it. This is achieved by simply formulating a smart contract condition that depends on the selected coin reaching a price threshold.
Transfer Features
1. Confirmation speed is very fast. One confirmation takes approximately 30 seconds, and if you want 3-4 confirmations, its not 30 seconds multiplied by 3; instead, you can obtain multiple confirmations within these 30 seconds due to high concurrency and no TPS limit.
2. There is no block size limit, no miners, and good scalability.
3. Transaction fees are low.
Design
There is no concept of blocks in Obyte, nor are there issues with block capacity. Instead, every new transaction references one or several earlier (parent) transactions by including and signing their hashes. The links in transactions form a DAG (Directed Acyclic Graph):
By including its parent transactions, every new transaction also indirectly includes and confirms all parents of the parent transactions, parents of the parents of the parent transactions, and so on. As more transactions are added, the number of confirmations increases like a snowball, hence the name Obyte (where the snowflake represents data bytes).
Consensus
Obyte uses a DAG without Proof of Work (PoW) or Proof of Stake (PoS) and mining. It establishes a partial order among transactions, plus the main chain added to the DAG:
The main chain (MC) allows defining a full order among transactions: earlier transactions that have been included in the main chain (directly or indirectly) are considered earlier in the full order. When double spending occurs, the transaction that appears earlier in the full order is considered valid, while the others are invalid.
The main chain is determined based on the position of transactions in the graph. According to the white paper details, generally speaking, the main chain attracts transactions authorized by known users, which are never referred to as witnesses. The list of witnesses is defined by users as they include this list in every transaction.
The main chain follows these rules in the DAG:
1. Adjacent transactions on the chain have either the same or different witness lists, but only one case applies.
2. The chain carefully checks the transactions authorized by the majority of witnesses and compares them to alternative chains.
Transaction Fees and Intrinsic Value
The fee paid to store a transaction in the Obyte database equals the size of the stored data. If your transaction is 500 bytes, you pay exactly 500 bytes (Obytes native token) in transaction fees. This means there is intrinsic value in these bytes: they permanently store data of the same size in a decentralized, immutable database. For data representing financial transactions, the value is societal, not just personal, because you need to store all historical records to prove the value and authenticity of every coin owned.
Part of the transaction fee is obtained by users who first reference your transaction as a parent transaction, and another part is obtained by witnesses. The former incentivizes referencing recent transactions as parent transactions, thus ensuring the DAG grows in only one direction. Like a tree trunk, this minimizes network latency. If new transactions are scarce, nodes have enough time to synchronize before new transactions appear, making the DAG look like a chain with occasional forks and quick merges.
Finality
In Obyte, protocol rules dictate that a transaction must contain a previous transaction sent from the same address, meaning there must be a partial order among consecutive transactions from the same address. Violating this rule would result in double spending, and at least one unordered transaction would become invalid. Assuming most witnesses adhere to this rule (which is their purpose), they must only reference as parent transactions the most recent ones and not inherit from much older parent transactions. Therefore, the part of the DAG preceding them does not impact the main chain, and that part of the main chain becomes stable because the overall order becomes stable. See the white paper for a discussion of the precise conditions for achieving stability. Importantly, the conditions are deterministic, and once a transaction becomes a stable part of the main chain, it will never be reorganized, unlike other cryptocurrencies.
This is crucial for financial industry applications and broader uses since most people prefer certainty when talking about recent transactions and asset ownership, making the concept of probability hard to accept.
Related Resources:
Obyte Chinese Website: http://www.byteball.cn/
