What is Skycoin (SKY)? | A Beginner’s Guide

What is Skycoin?

Skycoin is an entire ecosystem based on blockchain 3.0. Created by early developers of Bitcoin and Ethereum (LINK), Skycoin has purportedly been developing for nearly 7 years with the first Github commit dating back to 25th Dec 2013.

They have their own consensus algorithm called Obelisk, written and published academically by an early developer of Ethereum, that is completely different to PoW, PoS and their derivatives.

Skycoin emphasizes on developing applications for cryptocurrency to be actually used instead of a pure speculative vehicle. Skywire is Skycoin’s flagship application, it has the ambitious goal of decentralizing the internet at the level of hardware (yes really!) and is about to begin their testnet in April. However, this is just one of the many exciting areas Skycoin has to offer. Skywire will not only provide decentralized bandwidth but also storage and computation, completing the holy trinity of commodity essential for the new internet.   

They also have their own ICO platform called Fiber, their own deterministic programming language CX derived from Golang, private messenger system called Sky-Messenger and a decentralized social media platform called BBS.

Here is another way to think of Skycoin: An open-source, community-owned and peer to peer internet designed from first principles starting at the level of hardware incentivized by blockchain technology.

The amazing thing is that, unlike most ICOs you see these days, they are not asking for money with the promise of developing something in the future. This is a project with a 7 years long development and the testnet is about to begin.

 

Skycoin

Skycoin, a third generation cryptocurrency, is the fuel of the entire ecosystem. It supports 300 TPS, free transactions with less than 2 seconds transaction time, resistant to 51% attack, sustainably maintained without energy-intensive mining, default private transaction with the CoinJoin protocol and pays a form of dividends in a different currency known as Coin Hours (think NEO/GAS INTERNAL LINK). This is all possible due to its innovative consensus algorithm called Obelisk.

 

Skywire

The flagship project, Skywire, will be decentralizing the internet with an incentivized mesh net of nodes and eventually antennas on your roof to completely stop piggybacking off of the existing infrastructure. Skywire is based on the famous open-source networking project cjdns and an open-flow protocol (as known as software-based networking). It is said that the speed of Skywire will be drastically faster than any VPN available on the market and even the current internet itself with the channel bonding capability of Skywire and a new DNS based on public/private keys.

It might sound too good to be true but this has already been demonstrated with the non-blockchain incentivized cjdns protocol (“An encrypted IPv6 network using public-key cryptography for address allocation and a distributed hash table for routing”) developed by the open-source networking protocol community from early 2011.

PIC FOR TESTIMONIALS.

https://www.youtube.com/watch?v=nJVW_DqLntg

By holding 1 Skycoin in the Skycoin wallet, it will produce 1 Coin Hours every hour. Coin Hours will be the currency that users will transact for bandwidth. Users who provide bandwidth get paid in Coin Hours and users who pay in Coin Hours will be prioritized in bandwidth consumption. Keeping true to the open source spirit, it is free for anyone to use without paying Coin Hours, however, paid-traffic will be prioritized.

If you want to use Skywire you will first have to become a node on the network. Nodes that are forwarding traffic will be directing encrypted traffic without knowing where the encrypted packets will ultimately go. They will only know the previous node where the data came from and the next node the data is going to while being completely blinded to the content of the data. Meanwhile, they are getting paid in Coin Hours for their hard work. Only once the file reaches the destination public key then it can be unlocked and viewed with the requester’s private key.

You can think of it as a peer to peer torrent network where the data is encrypted and is only able to be seen by the leecher. Meanwhile, seeders or rather the interconnecting nodes of seeders will all be paid by the bandwidth they are seeding. No longer will we get people who just leech and never seed (admit it, we have all done it). Now everyone is incentivized to be that lone noble seeder who has been seeding the cracked version of Roller Coaster Tycoon on their own for years.

 

Fiber

There is a multitude of reasons why the team decided to design an entire internet first before building up to this new vision of blockchain 3.0. Not only has this removed security flaws seen in other blockchain protocols at the network level; by first incentivizing a decentralized network of hardware with a non-computational intensive consensus protocol, blockchain applications on Skycoin will be able to scale horizontally infinitely.

Fiber is the blockchain architecture behind Skycoin and all the future ICOs (currently 30 in the pipeline) will all be utilizing this open source technology. The team believes that putting the world’s dApps into one single blockchain will never enable the scaling needed for a true mass adoption. Instead, each company will have their own blockchain and they can decide to run it as a private permissioned chain all the way to a public permissionless chain. By giving everyone their own blockchain, this prevents situations where a single dApp like CryptoKitties from clogging the entire Ethereum network. At the same time, no companies will have to worry about their sensitive information from being seen as you currently would be able to on a public permissionless blockchain.

Skycoin solves the pay-off problem between the holy trinity of “Efficiency, Security, and Decentralisation” by allowing every company to decide on the degree of decentralization needed for their specific use cases.

The quick readers must be thinking: “Hang on. If every company has their own blockchain then how are all these individual blockchains decentralized?”

Good question!

This question is answered by the hardware that they have developed – the Skyminer.

INSERT THE NEW INTERNET IS HERE PIC.

 

Skyminer

Strictly speaking, the official Skyminer has minimal proprietary hardware at this point. It was only designed with the most suitable combination of hardware needed for the Skycoin platform with an open-source software developed by the team. In fact, Skycoin foundation encourages people to make their own DIY miners and there is an extremely enthusiastic community of people building their own version of the miner.

Before we begin with the design of the official Skyminer, it is important to note that the consensus algorithm Obelisk does not have mining in order to prevent the centralization of miners we see today in Bitcoin. There are no block rewards for minting a block. “Mining” in the context of Skycoin refers to the contribution of bandwidth, computation, and storage to the network in return for Coin Hours.

The first generation Skyminer hardware list is as follows:

•        Custom PCB boards

•        16-port OpenWRT router

•        16GB RAM (8 x 2GB DDR3)

•        ARM Cortex-A53 CPU

•        8 x 16GB Class-10 A1 Micro SD

•        Hexa-core Mali450 GPU

•        LAN Bandwidth: 8 x 1000Mbps

•        Gigabit Ethernet, 8+1 port switch

•        64-bit Linux (Alpine Linux)

Sounds complicated but it really is just 8 Orange Pis (8 little computers), a router, a bunch of Ethernet cables and a power supply with a total cost of around 600 USD only. The reason behind scaling horizontally with cheap but efficient computers is this prevents situations like the centralization of ASIC miners while providing the hardware needed to decentralize all the blockchains on the ICO platform Fiber.

Each Orange Pi will act as a node for one application on Skywire. This enables each application to be quarantined from each other and thereby removing the systemic risk of an ever-growing massive worldwide blockchain.

Co-founder of Ark and Bitseed, Mike Doty, has already committed to mass manufacture the next generation of Skyminers to meet the demand of the millions of node needed for a growing Fiber ecosystem.

In the final phase of the project, the Skyminer will also connect to a high-frequency antenna placed on your roof that will cover a 10-15km radius and connect with other Skyminer antennas, forming a wireless mesh net and slowly removes the need of the existing internet infrastructure. Furthermore, the Skyminer will be able to add in storage and computation and completes the holy trifecta of decentralized bandwidth, computation, and storage all provided on Skywire.

The Skycoin foundation will be subsidizing running Skyminers for the initial phase of the project until Skyminers are self-sustainable.

Team, advisors and early investors

•       Synth (Founder), an early developer of Bitcoin who sits on the advisory boards of multiple cryptocurrencies.
•       Huowu Chen (Founder), an early developer of Ethereum responsible for the python implementation of Ethereum developed the consensus protocol, Obelisk, for Skycoin.
•       Steve (Founder), with a long history of involvement in cryptocurrency since the very early days of Bitcoin. Steve developed most of the original Skycoin software.
•       Mike Doty, co-founder of Ark and Bitseed.
•       Michael Terpin – Founder of CoinAgenda conference series and head of the ICO committee of the Alphabit Fund.
•       Patrick Dai, founder of Qtum and early involvement with Vechain

Note: this is not an exhaustive list.

Coin supply

There are a total of 100 million Skycoins with just over 7.7 million Skycoin distributed over 3 years. Assuming the same rate of distribution as the past 3 years, Skycoin will reach 25 million coins in 2022. Once the first 25% is distributed, the remaining Skycoins are capped at 5% release a year until the maximum 100 million Skycoins are all released.

Trading history

Reaching an ATH of 49 USD in early January, Skycoin has retraced to a low of 8 USD along with the rest of the cryptocurrency market. With the upcoming Skywire testnet coming up and the first ever ecosystem review conference in Shanghai on the 10th of April, we will likely see a lot more interests particularly from China in the coming days.

PICTURE OF POSTER

Where to buy

Currently, Skycoin is available to buy at Cryptopia, C2CX, and Iquant.

An OTC by-pass function is also being developed where users can directly purchase Skycoin in their Skycoin wallet and it will automatically fill the lowest ask currently across all available exchanges.

Where to store

You can use the official desktop wallet (https://www.skycoin.net/downloads/), web wallet (https://wallet.skycoin.net/) with a soon to be released mobile wallet (https://www.youtube.com/watch?v=dAHal0bVqa4)

 

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