With all the FUD I’ve seen, I just wanted to give you some info about this project. I’ll try to be as impartial as I can.
Skycoin – An introduction
Currency
First, let us look at Skycoin as a cryptocurrency. Development started around 2012 with the goal to improve Bitcoin. That meant not only to eradicate the early bugs in the code of Bitcoin to ensure secure transactions, but also to create a currency that could process thousands of transactions per second without transaction fees. They wanted Skycoin to be more environmentally friendly than Bitcoin, considering the mining of Bitcoin adds up to 0.2% of the world’s electricity consumption (the exact number is controversial, but you catch my drift). To realize these goals, which included the creation of their own programming language CX, took about 5 years of development. One of the goals that Skycoin has met is creating a currency where the transactions are fast (within 3 seconds) and are feeless.
How can Skycoin be feeless?
To send a Skycoin transaction you pay a “fee” in Coinhours. These CoinHours are a parallel currency, that are awarded for holding Skycoin in your wallet. One Skycoin provides you with one CoinHour per hour, meaning if you hold 10 Skycoin, you can send 10 transactions every hour for free. Right now, CoinHours are only used to pay for transactions, but there are more use cases incoming. They will be used to purchase bandwidth in the Skywire network once it is launched and they could also be used as in-apps currency.
The Skycoin Fiber
The Fiber platform allows anybody to launch a coin using the Skycoin technology. All Fiber coins have the same fast transactions and use the concept of CoinHours. Enabling other coins to use your blockchain tech is not new; Ethereum has done that very successfully in the past, with nearly 20% of coins listed on CMC are ERC-20 tokens. Unlike Ethereum though, every coin on Skycoin Fiber is provided with its own blockchain. This eliminates the problem of a bloated blockchain, which we have seen with Ethereum. Every time there was a successful ICOs or a popular app (think Cryptokitties), the transaction costs for transfers of Ether and Ethereum-based tokens skyrocketed. This will not occur to Skyledger-based coins, as each coin has its own blockchain. There are already a few coins that have been launched on the Fiber platform and more to come.
Skywire
Arguably, the most interesting part of the Skycoin project is Skywire. Skycoin is essentially launching a new internet that aims to solve the problems of the current internet, by being fast, denying centralized censorship and allowing users to visit websites anonymously. In my opinion, there are three core problems with the internet in its current form:
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First of all, you receive access to the internet via an internet service provider (ISP). In order to do that, you need to set up a contract with an ISP, meaning you have to give them personal data about you and arrange payments on a regular basis. Considering that that your ISP can track your online behavior and see every website you visit, the privacy of every internet user is being violated. Skywire allows users to access the internet without setting up a contract with an ISP, and giving them your personal data. Instead, you will pay for bandwidth with CoinHours, which do not reveal your identity. Skywire is also end-to-end encrypted by default, so your website visits cannot be tracked.
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Today’s internet is rife with censorship. Due to the centralization of ISPs, it is fairly easy for governments and other influential actors to censor certain content. Skywire aims to solve this by using decentralizing internet access points. Acting as a decentralized internet service provider, every Skywire node would have to censor specific content to make it unavailable throughout the network, which is nearly impossible with a vast number of nodes.
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The underlying internet protocols have not aged well. They have not been updated to meet current demands. For example, current internet routing protocols lack path control. Data is rarely transmitted by the shortest path available, which would reduce the latency and increase bandwidth. Skywire uses an approach similar to multiprotocol label switching as their networking standard, which should be faster than the current internet, because packets are forwarded based on a predefined path. Concerning the identity of network participants, identification will not be based on an IP address but a Skycoin public hash address, allowing greater privacy.
The Skycoin project certainly is ambitious. They have finished the development of their currency, that is fast, scalable and without transaction fees. With Fiber they became a blockchain-enabler, by giving other coins the possibility to use their tech. On top of that, they are building a new internet, that will be anonymous, fast and without censorship.
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