Crypto’s Top 50 (Part Eight): Chainlink (LINK), Paxos Standard Token (PAX), Bitcoin Diamond (BCD), Bytecoin (BCN), and Nano (NANO)

January 16, 2019 / by Steven Lubka

This is the eighth part of a series that will cover all of the top 50 Cryptocurrencies and provide an introduction to what the coin does, why it matters, and any important highlights. The goal of the Top 50 series is to give readers a basic understanding of each coin that simplifies a thorough technical understanding into a few easy to understand points. The ranking of coins changes on a day by day basis and may not always reflect the order in this article.

36 of 50 — Chainlink (LINK)

Chainlink is a unique project that is tackling the Oracle Problem. An Oracle is a service that is able to import data from outside a data structure into the structure. This is particularly applicable in blockchain as smart contracts can only “push” data, they cannot “pull” it. This means a smart contract cannot request data to be sent to it from an external source.

Chainlink attempts to solve this problem by creating a system of oracles and nodes that can function in a decentralized environment. Chainlink currently only works with Ethereum but plans to expand. Chainlink uses an on-chain and off-chain setup, where the off-chain nodes work with external APIs and other information sources. These nodes reference multiple sources to reduce the probability of incorrect data and then push the data on-chain into smart contracts. The nodes are compensated in LINK tokens.

37 of 50 — Paxos Standard Token (PAX)

PAX is a stablecoin developed by Paxos Trust. Paxos Trust has operated a cryptocurrency exchange since 2014 and has recently pivoted to providing a payment settlement platform using the Paxos Standard Token.

PAX is a collateral-backed stablecoin similar to Tether. Each PAX is backed 1:1 by US dollars. PAX is regularly audited on a financial level and has been audited on a security level. PAX is an ERC-20 token on the Ethereum Blockchain.

38 of 50 — Bitcoin Diamond (BCD)

BCD was a fork of the Bitcoin blockchain in November 2017. The main differences between Bitcoin Diamond and Bitcoin is that BCD does not use the SHA-256 hashing algorithm and instead uses X13. X13 is an ASIC-resistant algorithm, and the goal is to promote further mining decentralization. BCD also features an 8MB block size, which is much larger than Bitcoin’s 1MB (2MB with Segwit) block size.

BCD is a minor fork of Bitcoin and has not seen major adoption or use.

39 of 50 — Bytecoin (BCN)

Bytecoin is a privacy coin that allows users to send anonymous transactions similar to Monero(XMR), ZCash (ZCASH), or DASH (DASH). Monero is a fork of Bytecoin along with several other assets. Bytecoin also influenced the development of Electroneum (ETN).

Bytecoin is an early project that lost traction and developer attention but recently has gained traction and attention. It still represents a risky bet against much more established and utilized privacy cryptos.

40 of 50 — Nano (NANO)

NANO is payment cryptocurrency that utilizes a directed acyclic graph framework instead of a blockchain. It provides near instantaneous transactions that do not require a transaction fee. While it offers free transactions, it does not incentivize any miners or validators with a reward. As such, the NANO network relies on the users of the cryptocurrency to maintain nodes which are the same as wallets.

NANO suffered a very high profile hack through the Bitgrail exchange, which damaged trust in the coin as the exchange was the main provider of the NANO cryptocurrency.  NANO uses delegated proof-of-stake for its consensus.