Burst — Part 1: What is Burstcoin?
An introduction to Burst as a Technology and Potential Investment.
Note: Updated on 5/23/18 to reflect current prices and market changes since December 2017 when this was originally published.
Altcoins are all over the news lately. Tales of 10x, 100x, and 1000x returns in a matter of months have investors, engineers, and enthusiasts everywhere scouring the web to find hints as to what might be their ticket to riches. Amongst the non-stop hype and never-ending influx of new ICOs and message board announcements, it can be hard to get a clear picture as to which coins are worth your attention and which are scams, pump-and-dump schemes, or over-inflated promotion.
In this first post I’ll explain what Burstcoin (Burst) is and why I see potential for this technology. In subsequent posts I’ll go into greater detail about some of the technologies used in Burst (PoC, Dymaxion), do some analysis of the market, and provide tutorials and tools for getting set up with a local wallet and mining on macOS.
What is Burst?
Burstcoin (BURST) is a cryptocurrency and payment system built from a fork of the Nxt (NXT) cryptocurrency, introduced in the summer of 2014. Burst was built to solve several of the lingering problems in cryptocurrencies at the time.
- Wasted energy during mining
- Network control by large miners
- Unfair coin circulation during pre-mine/launch/ICO
- Lack of decentralization
One of the major innovations that enabled these solutions was the introduction of a Proof-of-Capacity (PoC) algorithm that avoided the ASIC arms race that resulted from Bitcoin and other Proof-of-Work (POW) consensus algorithms. I will explain in more detail in a later post, but the result of this change meant that miners did not need large, energy-hungry, specialized mining rigs anymore but could instead do sufficient mining with a home PC and excess storage space on hard drives.
This change not only cut down on network domination by large miners, but it was also tremendously more energy efficient than PoW mining. Burst’s official wiki offers the claim that, on average, Burst is more than 400x more energy efficient when compared to Bitcoin.
Additionally, the lack of ICO or pre-mined coins meant that all Burst in circulation was mined fairly and open to all. While early miners could profit off higher exchange rates, there was no founder’s reserve of coins being held by a small number of parties.
What Makes Burst Appealing?
I see 4 primary factors that make Burst an interesting investment consideration.
1. Green Factor
With the Bitcoin network current using about as much electricity as the country of Denmark and Ethereum using roughly a third of that at ~10TWh, Burst might be seen as a greener alternative. Capacity mining rigs (i.e a bunch of hard drives) use much less energy than their mining equivalent in GPU or ASIC miners.
2. Current Prices
After hitting an all time high of around 743 Satoshi or $0.12 USD earlier this year, Burst is down like the rest of the market and is currently sitting at 256 Satoshi or $0.015. This leaves the floor open to make a relatively large investment in terms of volume of Burst. As we’ve seen in the meteoric rise of some cheaper altcoins in the last year, a relatively small investment at a lower price point opens up a possibility for large returns. See Ripple’s 2017 performance and bearing in mind the total circulating supply of XRP being ~38 billion versus the current current supply of Burst being ~1.8 billion.
3. Miner Accessibility
As mentioned previously, the ability to enter the mining game with a spare desktop and a few TB of disk space means that getting started mining a couple Burst a day is feasible for the motivated enthusiast.
4. The Dymaxion
The Dymaxion marks the beginning of stage 2 of the strategy set forth by the PoC Consortium (POCC), which is a group of skilled developers that have been seen as the thought leaders of the Burst community since 2017. The Dymaxion whitepaper was released in late 2017. Briefly, the Dymaxion is the integration into Burst of a number of protocols and ideas already proven by other cryptocurrencies. This list includes the use of Lightning Networks for payments á la Bitcoin/Litecoin, Tangle technology from IOTA, Anonymity characteristics from Monero and Zcash. The details deserve a post of their own, but POCC hopes they will improve scalability, add anonymity, and add new payment channel features. In the meantime you can read more here or read the whitepaper.
While I’m excited by the technology behind Burst and see great potential for its use, I do have a few concerns.
1. Source of Truth
While the handful of folks I’ve interacted with in the Burst community have been nothing but friendly and enthusiastic, the community has a bit of a checked past with some previous drama before the PoCC unofficially took over the future direction of Burst.
There is a good amount of useful information online, but there seems to be a lack of any “Official” source. This even goes as far as the official name (Burstcoin vs. Burst). While the PoC Consortium appear to be making great strides in uniting and leading the community, there is still a bit of difficulty for those getting started.
2. Leadership and Community
This relates to my first concern. Though the POCC is helping instill confidence on the technical side, success in the crypto markets depends on much more than superior technology. Leadership, roadmaps, partnerships, and promotion are all integral to the success and adoption of altcoins. A good example of this is Lisk. Through their ICO, the Lisk team has been provided with financial support which is allowing them to do great marketing, outreach, talent acquisition, while even providing bounties to their top community contributors.
I would love to see similar outreach and leadership from the Burst community. However without financial incentives to help drive involvement, this task becomes more difficult.
Update: Since this was originally posted the Burst Guerrilla Marketing group has largely taken up the task of bringing the community together and tackling different marketing and promotional challenges. Several members, notably on the US West coast have also started to get small businesses involved and accepting Burst and have attended several conferences representing Burst.
Burst is an altcoin worth watching. Its revolutionary Proof-of-Capacity mining algorithm is just one of the many reasons to consider investing or becoming involved in the project. I see 2018 as being a big year for Burst, due in no small part to the introduction of the Dymaxion and the contributions of the PoC Consortium.
Burst donations are always appreciated: BURST-Q944–2MY3–97ZZ-FBWGB
Thanks to Annie Hunt for editing assistance.
If you liked this make sure you check out the rest of my series on Burst.
Part 1 — What is Burstcoin?
Part 2 — macOS Wallet Setup Tutorial
Part 3 — Proof-of-Capacity
Part 4 — Network Analysis
Part 5 — How to Buy Burst
Part 6 — The Burst Dymaxion Explained
Donations are always appreciated:
Burst *** BURST-Q944–2MY3–97ZZ-FBWGB
BTC *** 1KUMJDvX8fGTpsZ49NXmmL9UpWiUX8g6K7