Blackwave Labs


It has been a busy month for us, we have worked tirelessly improving Cryptodogma.com and preparing Onyx.io for open beta. Over the past month:

Cryptodogma.com surpassed 60 BTC 24H Volume

Cryptodogma.com added NuShares and Shadowcash

A rebuilt sidebar and other major UI improvements were pushed to Cryptodogma.com

The open source Ruby API wrapper and example real-time trading bot were released on Github

Cooperated with NuBits to provide liquidity on our first new NBT centric exchange.

We have many more updates in progress, including an improved withdrawal page with address book, functionality to distribute PeerShares/NuShares dividends and to pay out stake rewards, the addition of wallet status to the reserves page, and implementation of Greg Maxwell's Merkle approach to prove cryptocoin liabilities.

We encourage everyone to have a look at our newly available bots and wrappers, we hope the community comes up with creative ways to use these resources. We added QR codes to our user settings page to make it easier to import API keys with a smart device. Keep in mind that our API allows users to create multiple API keys with varying permissions so you can safely and easily create read-only applications. We will be rewarding creative open source projects using our API as well as improvements to the wrappers and bots with Blackcoin.

We have already begun work on API wrappers and example real-time bots in other programming languages and we are committed to improving and upgrading their functionality.

Onyx.io Logo Contest

This week we also launched a logo contest for our upcoming Onyx.io payment processor and merchant services, with a bounty of 10,000 BLK for the designer of the selected logo.

We are looking for a simple monochrome design that would work well as an icon. (For example, will it look good as a font-awesome icon?) Bonus points for providing code to draw the logo in CSS.

Please send your submissions to submissions@blackwavelabs.com

NuBits Markets, and Why They Are Important

We are proud to announce that we have been working with NuBits developers to add a pegged NuBits (NBT) market to our exchange.

If you have not yet heard of NuBits, it is best described as a cryptocurrency that has a stable value of 1 USD. This value is maintained by a decentralized autonomous corporation built around a clever implementation of the PeerShares project. The NuBits infrastructure is maintained in a decentralized manner by the Nu community, who has built bots to maintain the price of NuBits at 1 USD on all participating exchanges.

A different approach

Our implementation took longer than others because we requested something special, our request required changes to Nu's pegging bots:

Rather than pair NBT to BTC, giving it an awkward ~0.00321 BTC price, we decided to price BTC in NBT. Since NBT is pegged to the dollar, the price of Bitcoin will be familiar to anyone knows the USD price of the Bitcoin price. (Current price at the time of writing this is 328 NBT per BTC.)

We plan to continue adding more NBT markets, trading it against BLK, PPC, and NSR, with more expected in the future.

One of our primary reasons for opening this exchange is perfectly described by the NuBits team:

Specialized exchanges allow trading of various digital currencies, but there are problems.

If traders on these exchanges believe the value of their holdings will go down, they will sell their digital currencies for fiat money such as US dollars. The traders then need to either hold the fiat money on an exchange (which can be a target for theft) or withdraw the funds (which can be slow and inconvenient).

NuBits eliminates this frustration. Traders can purchase NuBits as a stable hedge rather than liquidating their holdings to fiat money. These NuBits can then quickly and easily be transferred off exchanges into private wallets. NuBits makes trading digital currencies easier.

NuBits official page

In practice this allows users to trade against USD while maintaining the technological benefits of cryptocurrency. We believe this is a revolutionary advancement in cryptocurrency trading.

We encourage everyone to read more about NuBits and NuShares to learn more about decentralized autonomous corporations and how the people behind NuBits are using one to maintain a peg in a decentralized way. We will be writing more about Peershares and decentralized autonomous corporations in future announcements.

Status of Litecoin Development

Recently a post was made by Litecoin (LTC) developer Charlie Lee:

LTC does not need development right now. Adding gimmicks does not help a currency succeed. Liquidity, merchants, and user does

Charlie Lee

While we agree that gimmicks are unnecessary, we do not think development on a cryptocurrency is unnecessary. Continued development on cryptocurrency is absolutely necessary because the original codebase they forked is far from perfect.

The Bitcoin developers have not ceased development, and anyone who starts reviewing their commits will quickly discover they are not working on gimmicks.

One of the major reasons people originally invested in LTC was because they believed developers were taking the original Satoshi client in a different direction while continuing to improve upon revolutionary open source project.

If this is no longer the case then we see no reason to continue trading LTC on Cryptodogma.com. Over the next month we will be watching the LTC Github and gauging the level of development. If we see a drop off in activity we will be closing our LTC markets.


Will Cryptodogma.com add a PayCoin Market?

We were recently asked if we would be including Cryptodogma, the new cryptocurrency thought up by the controversial mining company GAW Miners. The most common reason we were given to add XPY is that XPY has been added to the popular payment gateway GoCoin, and because of this and a large market cap their growth would be inevitable.

XPY, for those who are not familiar with it, has had incredibly high volume since its launch. Their market cap and mining power quickly escalated to astronomical proportions on popular market summary websites.

Only truly innovative coins will be traded on Cryptodogma.com, and simply put being accepted by a popular service does not qualify as innovative. We are immediately suspicious of any cryptocurrency that doesn't explicitly offer technical achievements.

Deciding to educate ourselves on XPY, we began our investigation with their official website. We were curious to see if there was anything we may have missed underneath the marketing. Scrolling through the page, we reached a section titled "How can I use PayCoin?" only to find every item within linked to nowhere, a succinct metaphor for the project. Farther down, in the client section, we were presented with a selection of unsigned clients and no link to the source code.

We quickly found the source code on Github and begun our review. We looked over each commit since initialization of the XPY project. The changes we saw in practically every commit were superficial, along the lines of removing, then subsequently adding back, the Peercoin copyrights and adding new checkpoints. These trivial changes indicate to us that there was no actual development occurring.

Upon reviewing their buy first bitcoin section, we discovered that XPY does not list a single technical feature. This indicates to us that they have no interest in developing a cryptocurrency. It started appear to us that there was a high probability the creators of XPY are simply selling an idea, with the hope traders will gamble on a token over which GAW Miners maintains opaque and unregulated control of the majority. Everything they claim to offer, including their addition to GoCoin, has already been accomplished by Bitcoin. Bitcoin is also under active development, being constantly refined and improved, and has the network effect and a massive community. So if XPY offers no technological achievements over its predecessors Bitcoin or Peercoin, its value appears to be dependent on its potential acceptance as a currency. There is no reason to believe that this project will ever surpass Bitcoin when it has yet to achieve anything that Bitcoin has not already achieved and offers no technical advancements. After what we have learned about this project, we would not describe XPY as innovative in either marketing strategy or technical achievements.

We see two likely reasons GoCoin management decided to add XPY to their platform. Either GoCoin's management team is woefully naive and unable to recognize the obvious lack of development in their recently added project or, the more likely scenerio, they have a financial stake in PayCoin and expect to make money on the hype generated from their decision and actions taken by other sites cascading from it.

We have entered a fascinating time in history, where there are a growing number of technological advancements that can be recombined and remixed in countless unique ways, where everyone has good ideas and everyone should have good ideas. However, ideas are not enough. What is truly impressive is not simply a good idea, but the act of following through an idea to completion. We will be staying true to our commitment and continue to focus on spotlighting true innovation and actual development in the cryptocurrency ecosystem.


Blackwave Labs is proud to announce that beta testing for our innovative cryptocurrency platform, Excoin, has come to an end. We are now ready to officially launch our trading platform.

Over the course of our beta, the most prevalant question has been: "How will you determine which coins are traded on your market?" To preface our answer to this question, we would first state that we are advocates for cryptocurrency, altcryptocurrencies, open source software, and decentralization. However, to be very blunt, we are very disappointed with the current state of altcryptocurrency.

Many developers, investors, and enthusiasts appear to be misunderstanding a critical fact: A cryptocurrency is not defined by piece of software known as a wallet, a cryptocurrency is defined by a protocol.

Excoin will not be offering trading against every new fork that pops up, we will not be offering flavor of the week cryptocurrency. If you are looking to chase the next pump and dump coin you will have have to look somewhere else. To make this point absolutely clear, we do not think entering the top ten market cap for a few days qualifies a coin as innovative.

To qualify for trading on Excoin, coins must have made fundamental changes to the existing protocols, they must be open source, and their code must be actively developed. These changes to the protocol must not merely be mentioned on a roadmap but actively in development and peer reviewed.

This not only empowers developers who are actually focusing on cryptocurrency protocols, but also keeps the entire Excoin community safer since we are less prone to install a wallet with security issues.

The State of Altcryptocurrencies

Nearly all new cryptocurrency developers are either naive or are actively misleading their communities by marketing their wallet features as unique to their brand of cryptocurrency and associated blockchain.

These developers are ignoring the fact that their wallets' features could be applied to virtually any cryptocurrency fork because they are not making any changes to the protocol. Very few of these new wallet additions have affected the underlying protocol running the cryptocurrency, or the changes to the protocol could have been better achieved as an abstraction above the protocol.

What we are seeing in the cryptocurrency ecosystem is equivalent to developers forking the TCP/IP protocol every time a new website is created. We do not fork the TCP/IP protocol to make a new website, or fork BitTorrent to create a new client, and we do not need a new fork of the proof-of-stake protocol to make new wallet software.

The result of this behavior is a fracturing of the cryptocurrency community: Features that should have been open source and widely available across all cryptocurrency protocols are being used to create pump and dump coins with short lifespans and myopic goals.

A part of this trend has been the rise and subsequent fall of location based coins, which seem to also be actively dismissing one of the best benefits of cryptocurrency. Cryptocurrency, like the internet, has the opportunity to unite a global community. In recent years we have seen the adverse affects of the internet being made increasingly localized, with content providers locking up content and making our once world wide web into fractured country wide webs. The infamous black screen with the words "This video is not available in your country" and similar messages are now commonplace. Decentralized protocols allow us to circumvent these information blockades and take part in a global community—it would be counter-productive to voluntarily put up these blockades ourselves.

The most recent fad has been to make the claim that you need your own fork of the proof-of-stake protocol to run a decentralized and anonymous marketplace. Cryptocurrency investors are making noise trying to get others to buy into the idea that these coins are more than glorified wallets in order to benefit from a fraction of 1% of the drug trade that currently takes place using cryptocurrency. And despite this, underground marketplaces continue to use Bitcoin.

The result of these trends over the past year has led to stagnation in the underlying protocols that drive cryptocurrencies, while the quality of marketing material for flavor of the week coins, that are nothing more than wallets with unnecessary separate blockchains, has been improving.

Our Definition of an "Innovative" Cryptocurrency

Blackwave Labs has invested in innovation within the cryptocurrency ecosystem and we have been very successful. We have selected coins that we feel exhibit a significant change from the previous protocol. We have been following cryptocurrency since its inception and we have read through the source code of every coin selected, analyzing the differences and discussing the impact that each coin has had on the cryptocurrency ecosystem.


Namecoin was the first major fork of Bitcoin. It was primarily a reaction to the closure of Wikileaks and other acts of censorship. Namecoin attempts to solve a problem that many in the internet community have astutely recognized: centralized DNS. Namecoin, along with GNUnet and many others, is an attempt to resolve this issue—and even if Namecoin only raises awareness of the problem of centralized DNS it makes it a worthwhile endeavor. Unfortunately Namecoin is not actively merging in new features and will not be traded on Excoin.


Litecoin was the second major successful fork of Bitcoin. A clone of the less well-known Tenebrix project, Litecoin shined a spotlight on the scrypt proof-of-work algorithm as an answer to the growing problem of mining consolidation. Scrypt mining at that time was inarguably a revolutionary idea, one that not only hoped to solve the problem of mining consolidation, but also allowed existing miners to continue to use their GPU cards to mine Bitcoin while using their CPU to mine Litecoin. Unfortunately, as the idea became successful there was more financial incentive to find methods to use GPU, and eventually ASIC, miners to mine scrypt. Despite these developments, the popularization of scrypt as a modification to the proof-of-work protocol was a step in the right direction and raised awareness of a major flaw within the existing proof-of-work protocol.


The debate on whether to trade Dogecoin is still being waged in our staff meetings. However, we did all agree on one thing: despite Dogecoin being nearly a direct clone of Litecoin, it did manage to do something special. The Dogecoin community successfully hacked the concept of money. Every cryptocurrency enthusiast has been asked something similar to the question "why is Bitcoin worth anything?" or " what gives cryptocurrency value?" and Dogecoin helped provide an easy answer that that question: Anything can be valuable as long as enough people agree it is valuable. While that may seem obvious in hindsight (or to an economist), the lack of concrete "value" is something that most people still grapple with. Using a funny meme, the Dogecoin community was able to take something that common sense dictates should be worthless and create a currency with a multi-million dollar market cap, forcing everyone to rethink the meaning of value.


Before their rebranding, Darkcoin was the first coin to utilize the X11 proof-of-work algorithm, which would prove to be more energy efficient than scrypt while keeping ASIC miners cost prohibitive. This achievement alone was a major step forward for proof-of-work, but developers continued their work by recognizing that the public ledger as it existed was a threat to privacy and made the first attempts to address this problem. The idea was a major step forward for cryptocurrency and because of this practically every new cryptocurrency markets themselves as anonymous.


Peercoin introduced the concept of the proof-of-stake protocol. They tested the waters by creating a hybrid cryptocurrency that utilizes both proof-of-stake and proof-of-work. Proof-of-stake is a major step forward for cryptocurrency. It solves two major problems that existed in the old paradigm: inefficient energy use and the centralization of mining power. These new benefits come with their own problems, and the debate is still going on whether these new benefits outweigh the new problems.


Blackcoin was the first fully proof-of-stake cryptocurrency built on top of the original Satoshi client, and the first real test of the new proof-of-stake protocol. With the move away from proof-of-work to power the network, it has been able to truly capture Satoshi's original vision of a distributed cryptocurrency network that was powered by the computers running the client, similar to how the Bitcoin network was maintained for a short time after its inception. Furthermore, the developers of Blackcoin have modified the original proof-of-stake protocol to remove coin age calculations and solve security concerns in the original design.

Excoin will continue to add currencies to our exchanges that propel cryptocurrency forward, reinvent protocols, or challenge concepts of currency.

The cryptocurrency is not the wallet, the cryptocurrency is the protocol. Adding features to a wallet is no longer enough. Work on wallets is also important but it alone does not justify a new fork of the existing protocols. To be considered for inclusion on Excoin, cryptocurrencies must be open source so we can vet the source code. This allows us to avoid security risks associated and see the changes being made to the existing protocols.

Why Blackcoin?

Since the launch of Blackcoin, we have seen a dramatic evolution in the cryptocurrency ecosystem—almost every coin since the launch of Blackcoin has been proof-of-stake.

The Blackcoin protocol allows for rapid transactions with practically insignificant energy use compared to that of the previous cryptocurrencies. The specifications make Blackcoin a highly versatile cryptocurrency. Blackcoin features 10 second transaction intervals and as it reaches greater distribution secure confirmation can happen as quickly or quicker than a credit card.

Yet despite the massive influx of proof-of-stake cryptocurrencies, Blackcoin developers appear to be the only ones who have actually worked on the proof-of-stake protocol. The developers of Blackcoin have made fundamental changes to the protocol in an effort to keep it secure and stable, and their commitment to improving proof-of-stake continues as they work towards a solution for another major hurdle: decentralized checkpointing.

Blackhole Economics

Our project originally started as a Blackcoin-centric exchange where every pairing would be against Blackcoin. We have since decided to expand our services to include Bitcoin exchanges, too. With help from the community we seek to create a positive feedback loop that puts constant buying pressure on a limited supply of coins.

We believe the increased volume and profit from the exchanges will provide more benefits to the Blackcoin community in the long run. We have already designed trading bots to liquidate our profits from other currencies and convert them to Blackcoin, the currency we hold our capital and profit in. By doing this we will be creating a positive feedback loop on the value of Blackcoin. The supply of Blackcoin (≈74,500,000) is limited to growth of approximately 1% per year, and the increased buying pressure from Excoin, along with the the incredibly successful BlackcoinMiningPool, will raise the value of Blackcoin as long as our exchange continues to operate.

Our profit from Blackcoin will be used to pay developers, artists, translators, and other staff for development of our in-progress Blackcoin projects.

Looking Forward

Blackwave Labs has two major projects in the works:


Blackcoin Payment Gateway

Onyx is an enterprise-grade online payment gateway for businesses to easily integrate Blackcoin payments into their current platforms. Onyx will provide a powerful API along with open source plugins to easily accept Blackcoins anywhere.

Onyx is nearly finished and we will begin our open beta soon.


Decentralized geolocal Blackcoin wallet

Bits (formerly Project BlackNode) is a custom wallet built on top of the existing Blackcoin protocol. Bits will focus on making Blackcoin simple enough for the technology-impaired to use cryptocurrency. You will be able to safely give cryptocurrency to your grandparents to buy goods in the real world without worrying about it being lost and unrecoverable.

Bits is the project that led to Blackwave Labs, not the other way around. Excoin and and Onyx serve two primary purposes: First, to bring stable, secure, and high quality services to Blackcoin, allowing it to flourish as a currency. Second, to fund the decentralized, open source wallet software that we have been developing.

To lead by example, and to prove the points we made above about wallet software, Bits will be an abstraction layer that sits on top of Blackcoin, or effectively any other cryptocurrency designed from the Bitcoin spec code. Bits will be compatible with the Satoshi wallet or other wallet software—users will be able to send and receive Blackcoins to and from any Blackcoin address.

Bits does not require a fork, it will not require its own blockchain. It will utilize the positive features of the proof-of-stake protocol and reap the very important benefits of receiving security improvements, checkpointing updates, and advances to proof-of-stake from Blackcoin developers while Blackwave Labs expands the features of the wallet.


Decentralized Address Resolution

Bits provides a way to associate a cryptocurrency address to an email address or other identifier stored in a secure decentralized database. Transferring money through Bits will only require you to know the recipient's identifier without needing to have previously contacted them.

Address resolution will work similar to domain names. A user will be able to register an identifier to a public address for a set time period, with the option to revoke the association upon request.

Multi-signature Storage

Bits is built around the concept of multi-signature wallets, which enables users to safely store and recover coins. The wallets are encrypted and backed up across trusted peers, or optionally in decentralized storage. In the event your device is lost or destroyed, select trusted personal contacts will be able to recover the encrypted wallet, and if your password is forgotten, your chosen family members or friends will together be able to decrypt the wallet.

Smart Contracts

Create secure contracts locally or with users around the world. Using Bits users can establish algorithmically self-enforceable contracts between two or more people to safely trade goods or services without the need for centralized services.

Geolocal Storefronts

Bits will make Blackcoin into the world's first decentralized geolocal cryptocurrency. Users are empowered to easily buy and sell goods in their local community using Blackcoin.

Using Bits, merchants will be able to create pop-up storefronts visible to users in their area. Customers can choose to search inventories of stores in their area and pay for goods or services with Blackcoin ahead of time, with or without a smart contract, or walk into a store to browse and shop in person like they could with cash. Blackcoin features 10 second transaction intervals and as it reaches greater distribution secure confirmation can happen as quickly or quicker than a credit card.

Decentralized encrypted geolocal chat will allow customers and merchants to communicate throughout the entire process.

Geolocal Exchange

Bits facilitates the negotiations and is capable of matching trades between cryptocurrency and national currencies. Users can search locally or world wide for trades that can be completed in person or through smart contracts.

In person exchange will allow quick payments facilliated by the incredible transaction speeds offered by Blackcoin. Tips, donation, and purchases will be easy and securely made to anyone in the geolocal area or worldwide.

Quorum Sensing

Bits is capable of detecting other Bits users in a geolocal area based on pre-existing trust relationships and user privacy settings. Upon reaching specific population density thresholds new features are enabled.

When two or more users are within range:
  1. Private encrypted communication will be available.
  2. Form joint accounts with with one or more users.

When three or more users are within range:
  1. Private encrypted group chat will be available.
  2. Users can start a key signing party to create a circle of trust or expand existing webs of trust.
  3. Users can opt to send or receive encrypted one-to-many broadcasts if they are within a circle of trust.

When ten or more users are within range:
  1. Users will have many tools available to facilitate organization of large groups of people:
    • Tools for protestors or other large groups of people to safely and securely organize.
    • Tools to raise funds and manage them transparently.
    • Tools to issue digital tickets confirmable through NFC enabled devices or QR code.
    • Tools to break up a Blackcoin and automatically send it to all participating users within a defined range or circle of trust to be used as ballots in a secure vote.

Mesh Networking

Bits is built on top of mesh networking tools that allow users to participate in trades, discussions, and voting—even in the absence of internet access—given enough users are within range.

Full Featured API

The Bits API will allow users to build plugins that leverage the Bits framework and quorum sensing tools for modular, expanded functionality.


While other cryptocurrency wallets have been following recent trends primarily focused around the idea of creating anonymous decentralized internet markets, Bits will instead empower Blackcoin to be seamlessly and safely usable in everyday life.

We want to work towards a future where the powerful effects of decentralized economics are felt on the street, at your local farmers market or coffee shop, and cryptocurrency can easily and safely be accepted by local businesses without reliance on a centralized service. Together as a community we can decide to value improvements to the underlying protocols that power our cryptocurrency, and stop supporting wallets built around unnecessary forks and redundant blockchains. Together we can support real advancements, open source wallets, and projects that benefit cryptocurrency as a whole.