Bitcoin Diamond: Smart Investment Or Risky Gamble?

Bitcoin Diamond (BCD) is a hard fork of the original Bitcoin blockchain, aiming to increase network privacy and reduce transaction costs. It was created in 2017 by anonymous developers who were dissatisfied with Bitcoin's original properties. BCD offers an increased block size of 8 MB, solving the transaction size problems associated with Bitcoin. While BCD has appreciated with the bull market, it has not provided as high of returns as Bitcoin, and its necessity has been questioned due to its similarities with other cryptocurrencies. So, is Bitcoin Diamond a good investment?

Bitcoin Diamond's transaction capacity

Bitcoin Diamond (BCD) is a hard fork of the original Bitcoin blockchain, which occurred on Bitcoin's 495,966th block in November 2017. Forks are a branch from an original blockchain, allowing the technology to use different coding parameters.

Bitcoin Diamond's code increases the block size of each block to 8 megabytes, allowing its blockchain to handle about 100 transactions per second. This is a significant improvement over Bitcoin's 7 transactions per second. The larger block size also means that transaction fees are generally lower, while the transaction capacity increases.

The Bitcoin Diamond blockchain is also more scalable than Bitcoin's, with improved network performance, and reduced fees. The larger block size also means that new block generation is five times faster compared to the original Bitcoin.

The developers of Bitcoin Diamond have also integrated new encryption methods into the system, so confidentiality and security have increased significantly compared to the original Bitcoin blockchain.

Bitcoin Diamond's security and privacy

Bitcoin Diamond (BCD) is a fork of the original Bitcoin blockchain, aiming to improve upon it by increasing block size and transaction speed. It is a hard fork, meaning that it is a permanent divergence from the original blockchain, creating a new branch with its own rules.

Security

Bitcoin Diamond uses a proof-of-work consensus mechanism, and its larger block size allows for faster transaction processing and lower fees. It also includes replay protection, ensuring that transactions on the Bitcoin network are not accidentally broadcast on the Bitcoin Diamond network.

The security of Bitcoin Diamond, like other cryptocurrencies, relies on blockchain technology. Blockchains store information across thousands of computers (nodes), making it extremely difficult for attackers to compromise the network. Additionally, Bitcoin Diamond transactions are processed by miners, who play a vital role in verifying and securing transactions.

Privacy

Bitcoin Diamond has not increased the level of user privacy compared to Bitcoin. Transactions on the Bitcoin network are visible to anyone, making it relatively easy for governments and organizations to trace user identities. The Bitcoin Diamond team initially intended to add more privacy features but decided against it due to anticipated government regulations and business preferences.

While Bitcoin Diamond offers faster transactions and lower fees, it falls short in terms of privacy enhancements. The lack of additional privacy features may disappoint users who value anonymity and could be a consideration when evaluating Bitcoin Diamond as a potential investment.

Bitcoin Diamond's price predictions

Bitcoin Diamond (BCD) is a hard fork of the original Bitcoin blockchain, aiming to increase network privacy and reduce transaction costs. It has a higher block size than Bitcoin, allowing it to handle more transactions per second.

Bitcoin Diamond has been subject to the same volatility as other cryptocurrencies. When it was first listed in November 2017, it traded at around $140 for the first few days, before dropping to find its market price. In 2018, it slid to $9 by June and ended the year at $1. In 2019, it opened the year at $1 and dropped to $0.65 by 7 February. It rose to $1.40 on 3 April, but ended the year at around $0.30.

In 2020, Bitcoin Diamond had a positive start, with its price increasing threefold from $0.30 to $1 by 15 January. It broke through resistance and reached $1.10 on 10 February. However, the pandemic-induced market shock dragged the price down to support at $0.30. It recovered by mid-July and established a trading range of $0.75-$1.00. It ended the year at $0.43.

In 2021, Bitcoin Diamond had a strong start, reaching $1.30 by 10 January. It rose throughout Q1 and then rapidly moved in Q2, reaching $11 before tanking back down and consolidating for the rest of the year.

In May 2022, BCD had an overwhelmingly bearish run, setting a new all-time low at $0.20.

Various sources provide different predictions for the future price of Bitcoin Diamond. TradingBeasts predicts that BCD's price will stabilise above $0.20 for most of 2022, reaching $0.62 as a peak in 2023, and slowly expanding to $0.90 by 2025. WalletInvestor predicts an increase of over 82% in one year, but no further rise until 2026, where their prediction stands at $2.71. DigitalCoinPrice is more bullish, forecasting a price of $0.50 in one year, $0.71 by 2025, and $1.10 by 2028.

Given the volatility and uncertainty of the cryptocurrency market, it is challenging to predict Bitcoin Diamond's long-term behaviour.

Bitcoin Diamond's mining algorithm

To mine Bitcoin Diamond, you will need a mining rig/contract, a wallet to store and manage your funds, and a miner that is compatible with the X13-BCD algorithm. The best way to mine BCD is by using ASIC mining machines, which are currently the most profitable option. If you prefer mining with GPUs, Nvidia is recommended over AMD due to its higher profitability.

The Bitcoin Diamond team's primary objective is to lower the cost of participation thresholds by reducing transaction fees and the cost of participation. They have also stated that Bitcoin Diamond was not created to compete with Bitcoin but rather to increase cryptocurrency adoption and use.

Bitcoin Diamond's wallet options

When selecting a Bitcoin Diamond wallet, it is important to consider factors such as security, ease of use, compatibility with your device, and customer support. It is also recommended to do your own research and read reviews before choosing a wallet.

There are several types of Bitcoin Diamond wallets, including:

• Desktop wallets
• Mobile wallets
• Hardware wallets
• Paper wallets

Some of the most recommended wallets for storing Bitcoin Diamond are:

• Ledger Nano X: This is one of the few hardware wallets that support Bitcoin Diamond. It features a touch screen display and mobile apps for iOS and Android. It is a multicurrency wallet, allowing you to store a variety of cryptocurrencies in a single device.
• Trezor Model T: This is another highly recommended hardware wallet for storing Bitcoin Diamond.
• Ellipal: Ellipal is a multicurrency hardware wallet that supports Bitcoin Diamond, Bitcoin, Ripple, Ethereum, and several other cryptocurrencies. It features a touch screen display and mobile apps.
• Atomic Wallet: A decentralised and secure software wallet that holds a multitude of different cryptocurrencies. The wallet is available on Mac, Windows, iOS, and Android. It also offers interest-bearing accounts for certain cryptocurrencies.
• QT and Electrum: These are multi-platform software wallets that can be used to store Bitcoin Diamond.
• Binance: Binance is a reliable and fast-growing crypto exchange that also offers a software wallet for storing Bitcoin Diamond.

It is worth noting that having multiple Bitcoin Diamond wallets is often recommended to spread out your risk and diversify your holdings.

Frequently asked questions