Bitcoin Diamond (Bitcoin Diamond), operated by the Bitcoin Diamond Foundation, is a fork of the Bitcoin blockchain, with the English abbreviation BCD. The fork will occur at Bitcoin block height 495866, after which a new branch of the Bitcoin family will emerge and generate Bitcoin Diamond. Bitcoin Diamond miners will start creating blocks using a new proof-of-work algorithm and will gradually add features such as enhanced privacy for transactions, leading to a Bitcoin fork.

The original Bitcoin blockchain will remain unchanged, while a new branch chain splits off from the original chain. This new branch has the same transaction history as Bitcoin until the fork, then generates unique blocks from that point forward. This process will give birth to a new cryptocurrency, which we refer to as Bitcoin Diamond.

Project Highlights

First, Privacy Protection:
Bitcoin Diamond enhances the security and privacy of the transaction ecosystem by adding an encrypted amount feature to protect the privacy of participants in transactions.

Second, Increased Transaction Speed:
Bitcoin Diamond increases the block size to 8MB and supports dynamic block sizes, allowing for more flexible handling of all transactions within each block. It continues to use SegWit, improving the utilization of storage space for transactions within each block.

Third, Reduced Transaction Fees and Lower Entry Threshold:
The total supply of Bitcoin Diamond is ten times that of Bitcoin, reducing the unit participation cost and entry barrier for users. The high transaction fees are diluted, enabling users to complete transactions with lower fees, making it easier for more people to participate in Bitcoin Diamond transactions.

Technical Analysis

1. Segregated Witness (SegWit)

In a blockchain, two types of information are recorded in blocks: transaction information, which indicates when someone transferred funds, and witness information, which verifies the reliability of the transaction at a specific node and time.
In the Bitcoin network, both pieces of information are stored within a single block, limiting the amount of data that can be stored. With a block size of 1 MB, this leads to congestion and slow transaction processing.
Segregated Witness addresses this issue by recording only transaction information on the block, allowing for more transactions and avoiding congestion.
Bitcoin Diamond uses SegWit to increase the number of transactions per block and reduce the overall storage requirements for the BCD network.

2. Lightning Network

The Lightning Network is a decentralized system designed to enable real-time, high-volume transactions without trusting either party or a third party. It evolved from micro-payment channels and incorporates two types of transaction contracts: Relative Sequence Maturity Contracts (RSMCs) and Hashed Time Lock Contracts (HTLCs). RSMCs solve the problem of one-way currency flow in channels, while HTLCs address the issue of cross-node currency transfer. These two contract types together form the Lightning Network.

The core idea behind the Lightning Network is to move transactions off-chain to resolve issues such as congestion and slow transaction speeds.
For example, if Bitcoin is likened to cash, the Lightning Network would be like PayPal, and the Bitcoin network would be like a bank – the only bank. Given Bitcoins transaction speed, this bank can handle only seven transactions per second, but there are many people in line, causing congestion and complaints about slow transactions.
The Lightning Network operates similarly to PayPal. You transfer your funds into PayPal and conduct various transactions within the PayPal ecosystem. When you want to settle, you withdraw the funds back to the bank, completing the transaction. The bank branch only needs to record two transactions. This is how the Lightning Network works, addressing problems in the original Bitcoin network.
Bitcoin Diamond leverages the Lightning Network to improve transaction speed, scalability, and user experience.