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Skycoin

Skycoin

Skycoin is cryptocurrency designed to implement complete decentralization and distribution across a network of computers.

Skycoin was established in 2011 and has its headquarters at Beijing, China. Skycoin is a blockchain platform. It includes Skywire, a cryptocurrency-based peer-to-peer decentralized Internet service. Skycoin has been in development since 2013, and the Skywire testnet was released in May 2018.

Compared to earlier cryptocurrencies, the Skycoin ecosystem incorporates architectural differences that the creators claim improve its speed, scalability, security, flexibility and decentralization. These differences include dedicated hardware nodes, a new consensus algorithm, and the inclusion of an inflationary parallel currency that functions alongside the primary deflationary currency. The Skycoin platform has been the subject of controversy, with some critics expressing concern that Skycoin is a scam. On the other hand, the Skycoin platform was discussed in a positive light at a United Nations blockchain conference in Geneva.

History

Company

Skycoin is a private company that provides blockchain application platforms, cryptocurrency trading and other related services. Skycoin was founded in 2011, by former Bitcoin developer Brandon 'Synth' Smietana, and the first commits to the Skycoin platform were released in 2013.

Controversies

In February and March 2018, Tristan Greene and Bryan Clark from technology website 'The Next Web' published a series of articles denouncing Skycoin as a scam. In particular, the authors raised concerns that pre-mined cryptocurrencies are a scam, therefore so were all Skycoins, as they were all created in the genesis block. They also believed the Skycoin whitepaper was unduly technical and misleading; the Skyminers were too expensive; and Skycoin's organizational structure lacks transparency.

In June 2018, Skycoin terminated its relationship with its Chinese marketing team, EVOLAB, due to alleged robbery and embezzlement of funds. According to reports, at 9:30 p.m. on June 13, nine individuals led by Skycoin's China-based marketing team forcibly entered the home of Skycoin's founder Synth and his wife, holding the couple hostage. The event was triggered after it had been discovered that EVOLAB had embezzled approximately 100,000 Skycoins over the preceding six months. During the robbery, the group extracted another 18.88 Bitcoin and 6,466 Skycoins under threat of violence.

United Nations conference

In May 2018, Professor Stefan Brunnhuber presented a talk to the United Nations in Geneva, in which he said Skycoin's Skyledger (Sky Fiber) and Obelisk platforms as a potential solution to global financial inequality and a way of easing world hunger.

Binance partnership

In October 2018, cryptocurrency exchange Binance announced an ecosystem integration with the Skycoin platform. Under the arrangement, Binance's native cryptocurrency, BNB, is to be integrated into KittyCash and all future Skycoin games and applications. BNB is to become a circulating currency on the Skywire network, with the Skycoin hardware and software wallets also supporting BNB.

Partnership with John McAfee

In November 2018, cryptocurrency advocate John McAfee announced a partnership with the Skycoin platform.

Architecture

Skycoin

The supply of Skycoin is fixed at 100 million coins, and all coins were created in the genesis block. 75 million coins are timelocked and 25 million are unlocked. The timelocked coins cannot be distributed until the first 25 million have been distributed. After that, for each subsequent year, 5 million coins are unlocked by the developers. Skycoin transactions complete within seconds and require one Coin Hour to make a transaction. There is an anonymity feature with the use of the CoinJoin protocol which enables the platform to mix transactions from multiple wallets so they are indistinguishable from one another. The platform is private so that IP addresses cannot be traced.

Coin Hours

Coin Hours are a parallel currency generated by holding Skycoins in a wallet. One Coin Hour is generated each hour for every Skycoin held. Coin Hours are also earned by running a Skyminer node. Users who run Skyminers are paid in Coin Hours for providing bandwidth, storage and computing power to other users of the network.Coin Hours are accumulated on the blockchain, so a wallet does not need to be open to generate Coin Hours. This is similar to the way in which the NEO (cryptocurrency) generates GAS. Coin Hours are required to make transactions on the network. Each time a transaction is made, 50% of the Coin Hours in the sending wallet are burned, and another 25% are sent to the receiver. This Coin Hour burn fee prevents transaction spam by rate-limiting the number of transactions a single entity can make. Anyone who attempts to spam the network with transactions will quickly run out of Coin Hours and must wait for another Coin Hour to be generated before making another transaction. Since Coin Hours are generated continually, and there is no maximum limit to the number of Coin Hours in existence, this mean Coin Hours are an inflationary currency.

Skyminers

Skyminers are the hardware nodes that form Skycoin's decentralized Internet service. They don't mine coins in the traditional sense. Instead the Skyminer nodes are rewarded with payment in Coin Hours for providing services to other users, rather than for solving complex math puzzles as is the case with Bitcoin and other Proof of Work cryptocurrencies. Services provided by Skyminer nodes includes providing bandwidth, storage and computing power to users of the network. Skyminers may be purchased directly from Skycoin, or they may be built using commonly available components by following one of several online DIY guides. Skycoin chose this approach to avoid the centralization of mining pools that has occurred with Bitcoin, Ethereum and other cryptocurrencies. There were 8560 Skyminer nodes deployed globally as of October 2018.

Skywire

Skywire is a blockchain-based network consisting of Skyminer nodes that can connect to each other in a peer-to-peer manner via wireless, radio, satellite, optical fiber or ISP links. These nodes are used for the forwarding and routing of traffic, creating a decentralized Internet. This Skywire mesh network uses Multi-Protocol Label Switching rather than TCP/IP for transport. MPLS routes are predetermined and each node can only see the previous node and the next hop for the data packet. This is more secure and private than the IPV4 and IPV6 protocols, in which anyone can view the origin and the destination of the data.

Skycoin Fiber

Skycoin Fiber was originally known as Skyledger. Skycoin Fiber is a blockchain platform that enables other projects to launch their own decentralized applications, similar to the way in which Ethereum enables other projects to launch ERC20 tokens and Initial Coin Offerings. The key difference is that Skycoin’s Fiber architecture gives each project its own dedicated blockchain, wallet and coin, rather than sharing a single blockchain. This architecture ensures that congestion on one blockchain does not impact applications on other blockchains, as occurred in 2017 on the Ethereum platform when the CryptoKitties application caused all other Ethereum applications to slow down.Skywire is one of the projects running on Skycoin Fiber. Other Fiber projects include Solar Bankers and KittyCash.

Obelisk

Skycoin’s consensus algorithm is called Obelisk. The Obelisk protocol distributes network influence through a 'web of trust' architecture and does not require any form of coin mining. Each Skyminer node has a list of other nodes that it subscribes to. The density of a node’s network of subscribers determines its influence on the network. This approach removes any incentive for centralization of consensus nodes and eliminates the risk of a 51% attack or majority attack.

Timeline

People

Name
Role
Related Golden topics

amherag

Erich Quist

Evan

iketheadore

johnstuartmill

logrusorgru

meam364

Monty Crypto (Xa No)

nyf

Steve

Synth

Weng Zhiyi

Further reading

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Skycoin White Papers

Skycoin Team

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References