Distribution To Verified Users And Referrals

In December, we launched textcoins, which allowed to send Bytes to anyone with an email address, even if the recipient is not in Byteball yet. It was inspired by PayPal, which did the same to encourage growth in its early days.

There are two more lessons to learn from PayPal:

  • they gave a $10 signup bonus to every new user;
  • they paid $10 for every referral.

It is hard to apply these tactics in crypto because the environment is anonymous and open to abuse. But now we have identity. Which allows to use the tested and proven methods without risk of abuse.

Attestation reward

Every new user who successfully verifies himself for the first time will receive $20 in Bytes from the distribution fund. With $8 they have to spend for verification, it is net $12. The amount seems large enough to care about but not too large to bother about instadumping.

Attestation is available only for single-address wallets, and to avoid confusion, starting with version 2.1, the default (‘Small expenses’) wallet of new users is created as single-address (nothing changes for old users). Users can still easily add another wallet and make it multi-address for better privacy. The second wallet is not linked to the user’s verified identity and can be used anonymously.

Referral reward

By referring a new user, the referrer also receives $20 after the referred verifies himself. The referrer must be also verified at this moment.

Referrals are tracked using coin history. All transactions in Bytes are visible on the public DAG and one can easily see that money was moved from address A to address B, then to address C, then maybe to the same address C (e.g. as a change address), then to address D, etc. When the attestation bot receives payment, it will follow the history of the money it received up to 5 steps back. If it finds anybody with attested address, it is the referrer who receives the referral reward. If there are 2 or more candidate referrers, it selects the one who was later in history.

The amount that was sent from the initial referrer doesn’t matter, even if it is $0.01 out of the $8.00, it still counts.

How to grow the network and earn referral rewards

Send textcoins to friends via email and chat. Textcoins made it easy to send money to those who are not in Byteball yet, now the referral rewards add a monetary incentive. It is also a reward for the time and effort required to introduce a new user to Byteball.

Those who have large audiences (such as youtube authors) can do giveaways and be paid when their users get attested.

Those who do mass payments as part of their business, can do the payments from the attested address and be rewarded when the recipients get attested.


This new distribution method allows us to grow the network much faster than before by leveraging the existing social and business links and with very low user acquisition cost. Remember, the total value of a network is proportional to the square of the number of users (Metcalfe’s law) and now those who help the network grow contribute not only to the network as a whole but also have a direct monetary compensation for their efforts.

We are also encouraging users to have real names, not just giving them an option, thus building a network with a large subset of verified users. This is an environment where many more businesses can operate compared with what we had in crypto before.