Bytecoin is one of the first post-Bitcoin, privacy-focused cryptocurrencies that implements CryptoNote, also used by other privacy coins like Monero. The Bytecoin team believes Bitcoin's on-chain transactional privacy is insufficient for a widely used, peer-to-peer value transfer network.
Borrowing the CryptoNote white paper, Bytecoin implements one-time ring signatures which enable complete transactional unlinkability between network participants. Unlinkability is one of two primary transaction data privacy goals for Bytecoin, the other being untraceability. Bytecoin believes Bitcoin does not sufficiently, if at all, meet these privacy requirements, and they aim to build a protocol that does.
Ring signatures are the primary feature of CryptoNote that offers transactional privacy. Ring signatures allow any member of a given group of network participants to sign an executed transaction, and the identify of which participant signed is kept anonymous since anyone in a group of nodes could have signed. Transactions are then propagated outside the group of authorized potential signers for confirmation by the rest of the network and addition to the blockchain.
Bytecoin blocks are added every 120 seconds, on average, and mining difficulty adjusts after every block. The network achieves consensus via CryptoNote, a privacy-oriented proof of work (PoW) algorithm. CryptoNote is distinct from Bitcoin's SHA256 PoW algorithm in that CryptoNote offers more feature flexibility, smoother token emission via mining, and aims for a lighter data storage lift by network nodes.