White Paper

© Bitz Currency – 2015 -‐ v. 1.0 1

White Paper Road Map Version 1.0 (May 2015)

Author: EBK1000

BITZ digital currency

A currency for your digital future

© Bitz Currency – 2015 -‐ v. 1.0 2

Contents Introduction A note on anonymity and Bitz 1. Technical: 1.1. Technical Development 1.2. Simplification Strategy 1.3. Platform Diversification 1.4. Long-‐term security 2. Branding: 2.1. Branding and logo 2.2. Brand distribution and promotion 2.3. Website design 2.4. Social networking 3. Adoption & Reach: 3.1. Payment Processor Integration 3.2. Bitz end-‐user availability 4. Legal Framework: 4.1. UK regulation 4.2. Problems 5. Finacial: 5.1. Cost 5.2 The Bitz Currency Association

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Introduction The idea of a digital currency in a decentralized system with a trustless consensus provided by strong cryptography is a new proposition in the history of money. Some ideas and experimental protocols existed for some years but it was not until the release of the Bitcoin white paper “Bitcoin: A Peer-‐to-‐Peer Electronic Cash System” in November 2008 by Satoshi Nakamoto that a system was proposed and then implemented. Therefore, the best known so called crypto-‐currency, Bitcoin, launched in 2009 and remained relatively unknown up until 2013 / 2014. (A history of Bitcoin can be found at: http://en.wikipedia.org/wiki/History_of_Bitcoin) The Bitcoin infrastructure and adoption has increased rapidly since 2009 and in particular in the wake of the price peak on 17th November 2013 where Bitcoin reached a price of $1216.73,-‐ Bitcoin uses a so called Proof-‐of-‐Work (PoW) mechanism to achieve the trustless consensus which means that so called ‘miners’ are running computers to verify transactions on the network and to create new Bitcoins or ‘find’ new blocks. It is beyond the scope of this paper to go into detail on how the PoW mechanism work or the intricacies of the block-‐chain. For further explanation of this system please refer to the Bitcoin white paper: https://bitcoin.org/bitcoin.pdf Bitcoin however, still remain the pursuit of the few and tech savvy and does not have any significant public penetration amongst the average non-‐technical computer user at this point in time. Bitcoin is also unfortunately surrounded by controversy and has had an unfortunate link to crime and has seen fraud and conflict. A further problem is that a threshold level of knowledge is required to obtain and use Bitcoins. I have also seen a further problem that has arisen in the last couple of years. This is that Bitcoin has become a corporate entity and is largely ‘controlled’ by large investors and companies as the difficulties in ‘mining’ has increased and mining has moved away from the individual and into vast data centers. This is contrary to the core philosophy of crypto-‐currencies of being decentralised and not owned or controlled by anyone. The large mining companies and the large bitcoin whales effectively controls the market. In the last 2-‐3 years a number of other crypto-‐currencies have also come into existence on the back of Bitcoin, most notably Litecoin, Peercoin, Primecoin and Dogecoin. Additionally there are at the time of writing 559 different crypto-‐currencies listed at http://coinmarketcap.com/ which is a website that tracks their value. Most so called alternative crypto-‐currencies (altcoins) are made by and maintained by a small group of relatively young coders and enthusiasts and most altcoins are not made to offer a real world payment alternative to cash money. Most altcoins are rather, explorations around the block-‐chain technology and experimentation around features and seeks to implement features such as various forms of anonymity. Unfortunately, many altcoins are purely made for so-‐called pump-‐and-‐dump schemes (http://en.wikipedia.org/wiki/Pump_and_dump) in an effort to get a quick cash-‐in and the ‘coin’ is then left for dead. Outright fraud is also rife in the world of altcoins and new ‘coins’ are launched on a daily basis. The vast majority of altcoins are clones of previously created ‘coins’ and are easily created and offered in ICOs (Initial Coin Offerings) for the creators to obtain a few Bitcoins. Bitz is a fresh take on the idea of crypto-‐currency and a small but dedicated team is developing Bitz with a long-‐term vision for the currency and the brand. The main design philosophy of Bitz centers on real world adoption, seamless multi-‐platform integration, security and simplicity of use. I do not believe that a multitude of arcane features, anonymity and complicated technical innovations will assist in wider adoption of crypto-‐currencies among the average non-‐technical user. I believe that the average non-‐technical user will want a crypto-‐currency that is simple and easy to use, secure and that integrates over a range of platforms. Bitz will offer all of this to the average non-‐technical user.

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Bitz employs a so-‐called Proof-‐of-‐Stake (PoS) mechanism to achieve the trustless consensus over the decentralised network. This hands the creation of new Bitz back into the hands of the users and Bitz holders and away from large ‘miners’ and ‘mining’ farms. This ensures that Bitz is fair for all and that everyone using Bitz are rewarded in accordance with their holdings and commitment to run wallets to secure the network. Bitz can in many ways be compared to Bitcoin but it differs in that it employs Proof-‐of-‐Stake as the consensus mechanism instead of Bitcoins Proof-‐of-‐Work mechanism. This makes Bitz vastly more energy efficient than Bitcoin without compromising on security. It requires an immense amount of energy to create a Bitcoin but virtually no energy to create a Bitz. Additionally, Bitz also employs strong cryptography through a set of algorithms known as X11 instead of Bitcoin’s SHA256. This along with other features results in Bitz having significantly faster transaction times, makes it more secure and Bitz will pay interest on balances held which Bitcoin do not. In addition, when the Bitz wallets are fully developed they will be the most secure crypto-‐currency wallets available. Bitz will also be backed by a not-‐for-‐profit organization, The Bitz Currency Association (BCA), which will promote the adoption and use of Bitz and secure and update the Bitz infrastructure without directly controlling the Bitz network. Everyone that will become involved will get rewarded with Bitz for his or her work. This will ensure that anyone that gets involved will have a vested interest in the success of the currency and the brand. EBK1000 has set aside 100,000 Bitz from the initial mining effort to support the BCA. Bitz is not owned by anyone and is a fully open source and decentralized system and the BCA does not seek to control but simply to support and promote the use of Bitz. The Bitz dev team and the BCA will operate in a fully open and transparent manner. Bitz was created to provide a credible alternative to the numerous altcoins launched on a daily basis and to provide a crypto-‐currency backed by a trustworthy and serious dev team. Bitz do not seek to be an instrument for subversion or crime and do not wish to engage in any controversy but at the same time we underline the idea that Bitz is owned by no one and transcends borders and nations and enables anyone to send any amount of Bitz to anyone else at any time. The following document can best be thought of as a non-‐technical white paper outlining the vision for Bitz and a road map setting out the long term plans for Bitz. The plans outlined here is for the first year of life for Bitz and although this is not a date specific road map, the below is what we aim to achieve in the first year. We have decided on implementation in stages that we term ‘development cycles’ and have decided on three such cycles over the next year in order to be able to build and finance the project. The cycles are set as May–August, September–December 2015 & January-‐April 2016. This timeline will be affected to some extent by the community involvement and the available funding but we are prepared to see it through regardless as we believe the end result will be a viable and relevant digital currency. Updates will be posted on Bitcointalk and the Bitz Forum. The Bitz dev team are currently ‘EBK1000’ (project lead) and ‘Redpoint404’ (main programmer). ‘EBK1000’ is known and trusted on https://localbitcoins.com/ but will remain nameless at this time. ‘EBK1000’ will be verified with Coinssource.com in the near future. ‘Redpoint404’ prefers to operate out of sight.

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A Note on Anonymity and Bitz Anonymity online must be understood to be a situation where an outside agent (motivated attacker or State Power) would be unable to obtain the real IP address the user is operating from and hence the user would therefore remain untraceable. Anonymity is hotly debated in a variety of contexts and a number of other crypto-‐currencies, like Dash (previously Darkcoin) or Monero, have proposed to offer anonymity in some way or another. Whether this will hold water in a real world scenario where the currency draws the focused attention of a State Power has yet to be established or documented. Bitz has no specific features aiming to achieve anonymity for its users. The Bitz dev team do not believe that this is a needed or useful feature for wider adoption and use of crypto-‐currencies. Bitz is as anonymous as any other ‘normal’ crypto-‐currency like Bitcoin or Litecoin. There is no feature for 'hiding' transactions or 'hiding' your IP on the network. The Bitz protocol however does NOT record IP addresses and so you will not find any IP addresses stored in the Bitz block-‐chain. No IP addresses are linked to any transaction. Your IP address however, will be visible on the Bitz network as a Bitz node if you are running a wallet but there is no information recorded to link the node IP with any transaction.

Although the Bitz ledger (block-‐chain) is public (block explorer) like say, Bitcoin and Litecoin, nobody watching the block-‐chain transactions will be able to see who is sending Bitz to who and most importantly WHY the Bitz are being sent? So, for example, if an agent of some description saw that you completed a transaction for 10,000 Bitz that were sent to an address, say BDVVLfpVbcjsMzKQacWnQFK37iLcCjGqpU from B5o6HqtftvMiRri67KH6uNYSDNaypi5Fv7, the agent would have no information whatsoever about who actually sent it to who and why it was sent. Under normal circumstances, this information is only available if the two parties making the transaction make it public. Therefore we would suggest that Bitz is ‘anonymous enough’ for the vast majority of real world usage. However, you should always assume that a persistent, knowledgeable and motivated attacker will be able to associate your IP address with your Bitz transactions. This could be done by careful analysis of the block-‐chain and the connected nodes. Sophisticated statistical analysis would also probably be able to resolve transactions on so-‐called anonymous networks.

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We therefore suggest that anonymity is relative in the real world and online. You should therefore assume that if a state power put all their resources into tracing you they would be able to do so, even if you use the anonymity features of some crypto-‐currencies. You may remember that many so called 'dark web' sites on the Tor network were traced recently and that there are numerous examples of very high level hacking and breaking of various encryption protocols probably by a state power. Also, you should assume that a state power will NOT reveal the extent of their available technology and will NOT reveal what they can and can't do. If they are able to break encryption they will NOT tell you. So, the questions you will have to ask yourself with regards to anonymity are; are my activities of such a nature that they will attract the attention of a state power (motivated attacker) and are my activities of such a nature that would prompt a state power (motivated attacker) to invest significant resources to track me down? If the answer to the above is yes, we suggest that you may be involved in something serious or dangerous and it is unlikely that you will be able remain anonymous regardless. We do not aim for Bitz to be a tool for criminality. If you were operating from within the borders of an oppressive regime the same level of caution would apply. If you are involved in 'normal' activities however, don't worry; you will be ‘anonymous enough’. We suggest that anonymity features in other crypto-‐currencies are hyped up as a selling point and the vast majority of people do not need it because they are of no interest to a ‘motivated attacker’ or a well-‐funded state power. The dev team wants Bitz to be above board and open and encourage legitimate use and adoption. We feel that a drive towards anonymity (which is relative in any case) only reinforces the negative view of most legitimate users and potential users that crypto-‐currency is dodgy and that people are using it to hide their shady activities. We further argue that a civil liberties argument in relation to crypto-‐currency anonymity is flawed, as any transaction is 'anonymous enough' for anything that isn't terrorism or serious criminality.

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TECHNICAL

1.1. Technical Development Bitz is based on the X11 algorithm that was introduced with Darkcoin (now known as Dash) and is based around a series of 11 strong cryptographic proofs to verify transactions on the block-‐chain. This makes the transactions extremely secure without having a significant impact on performance and future development. Bitz will continue to employ the X11 algorithm to confirm transactions and provide the cryptographic proof and to create new coins through the process of staking based on coin age. The inner workings of the X11 algorithm is beyond the scope of this paper and further information can be found online. We believe that X11 provides a great balance or security, performance and is future proof. Additionally, the Bitz network employs what is known as checkpoints on the block-‐chain to prevent any reorganization of the block-‐chain beyond a certain point. This is to counter attacks such as a 51% attack. Please refer to the Peercoin paper: http://www.peercoin.net/assets/paper/peercoin-‐paper.pdf for a more detailed discussion on a proof-‐of-‐stake system based on coin age such as Bitz. Although Bitz employs a similar staking mechanism to Peercoin, it differs in that Bitz is totally decentralized, whereas Peercoin employs centrally broadcasted checkpointing from a master node and as such is under some central control of the developers. We are working to develop methods of securing the network further and we are researching other methods of decentralised checkpointing that will counter any attacks. At present the most likely attack on a Proof-‐of-‐Stake network would be a so called 51% attack where a malicious entity has control over more than 51% of all Bitz and seeks to fork the block-‐chain and take control. This scenario is highly unlikely as it would be difficult to obtain 51% of all Bitz. The annual interest is set at 10% in an effort to make Bitz less deflationary than Bitcoin. We believe that a purely deflationary currency will encourage people to horde and not to use. We are fully aware that this is a controversial theme but believe that the PoS earnings will encourage the use of Bitz without compromising much on value if you chose to store Bitz for the future. The interest is accrued on the Bitz that are held in the wallets for staking. At the time of writing it appears that 64% of the total amount of Bitz are available for staking on average.

The 10% is compounded annually, and the interest earned comes from your coin age times the APR. Bitz minimum stake age is 24 hours. The coin age is reset after 30 days.

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The PoS model is set in main.cpp: unsigned int nStakeMinAge = 24 * 60 * 60; // 24 hours unsigned int nStakeMaxAge = 30 * 24 * 60 * 60; // 30 days Reward interest is calculated as: nRewardCoinYear = MAX_MINT_PROOF_OF_STAKE; int64_t nSubsidy = nCoinAge * nRewardCoinYear / 365 / COIN; Where MAX_MINT_PROOF_OF_STAKE is set to 0.10, or 10%.

This effectively means that every Bitz owner will accrue interest on their balance depending on how many coins are staking, the amount of time staking and their total amount of Bitz. Bitz was initially a so-‐called proof-‐of-‐work (PoW) coin and the first block (35 Bitz) was minted on 01/03/2015. This was done so that ‘miners’ could create Bitz using their computers and to ‘kick-‐start’ the network and provide an initial incentive to get people involved. The PoW phase ended at block 100,000 on 03/04/2015 with around 1,900,000 Bitz created in total. Bitz has since converted into a pure Proof-‐of-‐Stake coin from block 100,000 and onwards. At the time of writing there are 1,938,000 Bitz in existence. This makes Bitz a relatively rare ‘coin’ in the crypto world. We are determined to keep the Bitz network stable and we will not change any properties of Bitz staking without proper consultation with the Bitz user base or without good reasons. A detailed overview of the live Bitz network can be found at: https://chainz.cryptoid.info/bitz/ We have no plans of changing the way Bitz and the X11 implementation work but will continue to review the code to root out any issues and insecurities and improve on the checkpointing mechanism.

‘Master Nodes’ As part of the Bitz network, the dev team will make sure that a master seed node is running at any given time in addition to the block explorer that also acts as a node. The Dev wallet will also be running 24/7 as always. This is to ensure that the network is up and running on the correct block-‐chain regardless of how many wallets are active at any given time. The master node will be running on a fast VPS with a high capacity. 1st Development Cycle.

‘Block Explorer’ We will seek to get another block explorer up in the next 3 months to further strengthen the network and to ensure consistent consensus of the block-‐chain. This will also assist anyone seeking to conduct any kind of research or extract statistics. 1st Development Cycle.

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‘Sendalert / Network Broadcast’ Bitz also has the ability to broadcast alerts as RPC commands on the network as was intended in the initial Bitcoin network. This means that the Bitz dev team will have a private key that can be used with the ‘sendalert’ function in the wallet. This means that that the Bitz dev team can immediately update all users on the network of any issues or updates. We also plan to use this feature in regular give-‐aways or reward schemes to encourage users to keep their wallets active and staking. Further details will be discussed and published on the Bitz forum. This was meant to be implemented in version 1.1.0 but the same private key is also used to sign the checkpoints and this needs some more work and will require a hard fork so this feature will not appear in version 1.1.0. We are working on another message system but hope that this will be implemented soon.

‘Two Factor Authentication’ We are currently working on a system to implement an option to use a two-‐factor authentication process on the Bitz wallet. This will make the Bitz wallet ultra-‐secure and eliminate the possibility of a malicious attacker stealing your Bitz balance. Further details on this feature will be published in due time on the Bitz forum. 1st Development Cycle.

‘Compressed block-‐chain download’ A problem for a new and non-‐technical user is that the whole block-‐chain needs to be loaded on starting the wallet for the first time. In future versions of the wallet there will be a feature during first time installation to download a compressed and up to date block-‐chain that will be installed with the wallet. This will significantly reduce the time it takes to start using the wallet after first time installation. 2nd Development Cycle.

‘Wallet Installers’ All the Bitz wallets will be delivered with an installer so that non-‐technical users will have the same experience of installing Bitz as they have with any other commercial software. This will also minimise the risk of user error and a poor experience with the Bitz wallet and brand. 1st Development Cycle. 1st Development Cycle.

‘Automatic Backup’ We will offer the option of registering your wallet (see BitzIdent) and then automatically set your wallet to back up to our web-‐server if you chose. This is a feature under development and there are no further details at this point. 3rd Development Cycle. All the above will aid towards the goal of making the experience of using Bitz worry free. We aim to deliver an experience of a system and software that just works and that needs little or no regular intervention on the part of the user. For all technical and feature discussions visit the Bitz forum: http://forum.bitz.biz/index.php

1.2. Simplification Strategy We do not believe that most average users will have either the knowledge or the interest in how the Bitz network actually functions and the workings of the X11 algorithm. One of our aims therefore is to work towards a simplified front-‐end and GUI for the wallets and to make sending and receiving Bitz easy and fast with the click of the mouse without the need for long address strings. We will release a wallet that has the ability to ‘mode-‐switch’ between a ‘simple’ and an ‘advanced’ mode. This will be implemented in a future version of the wallets. 1st Development Cycle. With the implementation of BitzIdent in version 2.0 your Bitz balance and transactions will propagate between all the wallets signed in with the same BitzIdent so that your desktop wallet will show the same balance as your Android wallet and your web wallet and so on. This negates the need to transfer Bitz between your own wallets and so achieves greater and seamless platform integration. This will simplify the use of Bitz.

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BitzIdent – block-‐chain identification

The user will be able to log into his or hers wallet using their BitzIdent and have access to use or transfer Bitz and the balance will instantly be synchronized over all the wallets logged in with the same BitzIdent. The BitzIdent ‘spider algorithm’ (version 2.0 wallets) will poll identified wallets and in effect, it is the user’s unique BitzIdent that enables the writing and retrieving the private keys necessary to sign transactions. The private keys will be encrypted into the Bitz block-‐chain. If the user chooses to create a BitzIdent then the private keys are securely stored in an encrypted form in the Bitz block-‐chain. The block-‐chain is unalterable and permanent and therefore you will never loose your private keys if you create your BitzIdent. This combined with a two factor authentication at the wallet level will make it impossible to accidentally delete your Bitz files or for hackers to steal your Bitz. An updated ‘check-‐point’ regime is also being developed and all together this will make Bitz ultra secure. This will also enable a ‘family’ account if you will, where several people can share a BitzIdent and use the same account from different wallets. Further details will be published on the Bitz Forum and the website in due time.

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1.3. Platform Diversification Bitz is currently available in version 1.1.0 for MS Windows, Linux (23 & 64 bit) and Mac OSX. In addition to these platforms we aim to make Bitz available on Android (on Google Play Store), IOS (for Apple products), Z10 (for Blackberry) and to develop a secure web wallet. BitzIdent will ensure integration of any combination of Bitz wallets signed with the same ID. We are researching the possibility for integration with older non-‐smart phone technology and the possibility of using SMS and so on for transactions but there are no specific plans yet. We can however see that storing the private keys in the block-‐chain may make it possible to access and use the balance by constructing suitable interfaces between other platforms. We can consider running a server that “translates” between SMS and ‘block-‐chain’ and so be able to use a unique combination / password to transfer Bitz via other more old-‐fashioned means.

1.4. Long term security We aim to develop strategies to counteract any threats to the integrity of the Bitz infrastructure such as the possibility of a 51% attack. It appears that the best strategy to deal with this is diversification of funds and global distribution of Bitz. It is also beneficial for a large number of wallets to be staking. As mentioned above, we are developing regular reward schemes beyond the staking benefit using the broadcast function on the network to encourage users to run their wallets permanently. In lieu of the broadcast we will arrange an alternative extra reward scheme to be announced.

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Branding and Promotion

2.1. Branding & logo The branding of Bitz is based on both the typical crypto-‐currency symbols and currency symbols. We have chosen to use the letter Z with currency ticks. This is to symbolise that Bitz is the last (as in Z in the alphabet) and final currency. The branding, name and the symbol is meant to be understood globally and be a reflection on what it is; which is a digital (bits) currency.

2.2. Brand distribution and promotion We aim to promote Bitz to all parts of the world and we are seeking to employ people that have local knowledge in different parts of the world. This will be updated further.

2.3. Website design The new website made by EBK1000 is meant to be simple and functional and to reflect the branding of Bitz. This will be in development continuously. EBK1000 is not a professional web designer and updates will appear regularly. We are also seeking to employ a web designer to implement further features to support the network. We aim to publish the Bitz web site in the following languages: Chinese, Arabic, Russian, Spanish, Greek, Indonesian, Farsi, Thai & Japanese. We anticipate to have the wen site translations done in the 1st Development Cycle.

2.4. Social networking Bitz is currently active on Twitter and Facebook with regular updates from EBK1000. We want to run a Pinterest account, Tumblr, Taringa! and Weibo account. We are actively seeking people who will run social networking accounts in other languages to mirror the main English Twitter account and the Bitz Forum.

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Adoption & Reach

3.1. Payment Processor Integration We are currently trying to whip up enough interest and get Bitz voted up on GoUrl.io. We are also interested in working with Coinpayments, Gift off, Litepaid and other but at the time of writing we have a liquidity problem as Bitz is only traded at C-‐Cex and minor exchanges. We are working towards getting Bitz listed at bigger exchanges. EBK1000 has been in communication with payment companies and they will agree to integrate Bitz into their systems as soon as Bitz become listed on Bittrex or Cryptsy.

3.2. BITZ end-‐user availability Bitz is currently traded at C-‐Cex, YoBit and CryptoTradeEx. We aim to get Bitz listed on Bittrex or Cryptsy during the 1st Development Cycle. We will keep offering Bitz for sale on our website for anyone that wants to support the development. EBK1000 is in constant communication with other exchanges.

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Legal Framework

4.1. UK regulation EBK1000 who is the project lead is based in London and the main programmer Redpointer404 is based somewhere in the cloud. We do not believe that there are any legal implications at this stage and research is being conducted and we follow the updates on regulations around crypto-‐currencies. At this stage Bitz is solely a decentralized network and we do not believe that there are any legal framework to relate to.

4.2. Challenges We will face and deal with any legal challenges should they arise. Further updates on this may follow as and when appropriate.

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FINANCIAL

5.1 Cost There is a cost associated with running the project. EBK1000 is currently paying to host the master nodes, websites and offers a lot of his time. We are encouraging donations and buying Bitz from us to support running the project up until such a time where the value of Bitz will allow the BCA to use it’s store of Bitz to pay for any running costs.

5.2 Bitz Currency Association We have set up the idea of The Bitz Currency Association (BCA) which will serve as a not-‐for profit association to support the Bitz project and to promote the Bitz project and act as a value protection entity. The BCA has been allocated 100,000 Bitz from the initial mining effort by the dev team and any person that will work will get a proportion of this. The 100,000 Bitz are staking and increasing in value.

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