Skycoin Fiber

Skycoin Fiber
SKYCOIN FIBER
08.04.2018
BLOCKCHAIN PLATFORM FOR APPLICATIONS
CHRISTIAN OTT
AUTHOR
Introduction
The total number of cryptocurrencies has grown rapidly over the past few years. While CoinMarketCap listed only 66 cryptocurrencies at the end of 2013, we can find close to 1600 cryptocurrencies listed on the site today.1 If we consider the early stage of crypto and the possible influx that will come with commodity-backed and asset-backed cryptocurrencies, that number is only about to grow. While most of these tokens have their own purpose and use cases, the majority certainly does not want to spend most of their resources on the development of their own blockchain platform. Instead, they want to focus on developing and marketing their product and use an existing blockchain platform, which best suits their needs. With Skycoin Fiber, the Skycoin project offers such a blockchain platform2 and in this article, we will take a closer look at how it works.

Fundamentals
Starting off this article, we have to clear some fundamentals. When we talk about a blockchain, we talk about a database. So, if a project is offering a blockchain platform, it means that they are offering a database, that can be used by a set of applications, without these applications having to develop a blockchain database on their own. However, the types of applications that can run on a blockchain are yet to be determined. As of right now, the vast majority of applications that run on a blockchain are cryptocurrencies. That focus on cryptocurrencies among blockchain projects is the reason, why we often talk about ICO platforms rather than blockchain platforms. Certainly, ICO platforms provide users with a customizable cryptocurrency template in addition to a blockchain and can therefore offer a bit more than a pure blockchain platform.

Development Time Matters
There are a few of these ICO platforms out there. To analyze, which is the best one among them, people compare them by different values. Most comparisons focus on transactions per second, the number of partnerships and the ICOs that were already launched on that platform. However, nobody seems to value the time, that this platform has been already in development. Why is that important? Well, from the point of view of a developer, it is very optimistic (frankly: unrealistic) to develop a complex blockchain platform from scratch in 1-2 years, as most new blockchain platform ICOs suggest. If you want to build the best possible foundation, that can be used by other applications, you probably won’t come up with the best solution at your first try. In my opinion, you need several iterations, until you have a working product, and the testing of that product takes a vast amount of time as well. That might sound boring, but a blockchain platform will greatly benefit from a huge amount of time spent on the development of this platform. A thorougly planned implementation, that is tested, validated and secure is much more likely to be extendable and scalable, than a beta version, that has been thrown to the market and is improved after that.

Skycoin Fiber Starter Kit
With that being said, Skycoin is in development since 2012. It was rewritten multiple times from scratch,3 until the team had developed an extendable, future-proof foundation for Skycoin.4 This foundation includes readable and non-bloated code,5,6 as well as a high security standard,7,8 which both evolved from years of testing and refinement. Fortunately, this technology is not limited to exclusive use by Skycoin. With Skycoin Fiber, it is possible for other applications to use this technology as well.

So, how does a starter kit for Fiber based applications look like? Besides benefitting from the technology developed by Skycoin over the past six years, which is working, well-tested, secure and extendable, there are three major points, how applications benefit from using Skycoin Fiber. First of all, every application on Fiber is provided with its own blockchain.9 This eradicates the problem of a bloated blockchain, which we have seen with Ethereum in the past. Every time there were one or more successful ICOs at once or a very popular app like Cryptokitties,10 the transaction costs for transfers of Ether and Ethereum-based tokens increased heavily,11 because all Ethereum-based tokens are placed on one blockchain. Second, since all applications are provided with their own blockchain, the developers can fully customize the technology2 and are not bound to the limited possibilities of customization provided by, for example, smart contracts.12 Customization is even further facilitated by the use of the very well readable programming language Golang in Skycoin.13 Third, blockchains on Skycoin Fiber are fast. They are capable to perform a transaction throughput of at least 300 transactions per second,14 which enables these blockchains to serve as a foundation for highly used applications.
STARTER KITSKYCOIN FIBER300+ TPSOWN BLOCKCHAINCUSTOM
BASICSSKYCOIN FIBERYEARSSECURECLEAN
Tokens on Fiber
In addition to launching applications on Fiber, there are even more benefits, if you are launching a cryptocurrency on top of it. Every coin or token on Fiber can be set up based on Skycoin.15 Therefore, you are not only provided with a working and secure cryptocurrency from the start, it also contains major features of Skycoin. With the implementation of the Token Hour mechanism, transactions will be free and users will be awarded with a parallel currency.16 Furthermore, the token can receive an intuitive wallet and a stand-alone blockchain explorer.17,18 The Skycoin project even plans to set up a multicoin hardware wallet, to make the storage of the tokens as safe as possible.19 Moreover, tokens on Fiber will benefit from the possible integration of future features of Skycoin, meaning Fiber tokens will be able to obtain the privacy protocol CoinJoin20 as well as the implementation of Obelisk as a new consensus algorithm.21
FEATURESTOKENS ON FIBERWALLETTOKEN HOURSFEES
Future Benefits of Fiber
These were only the features, that Fiber can offer for applications and tokens right now. In addition to these, there are three major upcoming features, that will be realized in the near future. The first one is scalability. With each blockchain added to Fiber, the scalability of Fiber projects will increase. With the use of parallel blockchains laid side-by-side, the capacity of the number of transactions per second can theoretically increase up to over a million.22 To make this scalability possible, the blockchains on Fiber need to run on dedicated hardware, which the Skycoin Project aims to develop by itself. They have already started with the release of the first version of the Skyminer in January 2018, which was shipped to 300 customers around the world. While this first Skyminer already has eight CPU boards, the Skycoin Project wants to release even more powerful hardware with 64 CPU boards or even 256 CPU boards in the future. Once these Skyminers are in mass production, it will be the hardware platform for the Skycoin Project’s blockchain applications, which displays the second major upcoming feature on Fiber.23 While scalability and hardware will be available for all applications launched on Fiber, the third major upcoming feature will be exclusive to tokens. To solve the problem of most tokens not getting listed on major exchanges, the Skycoin Project is working on the implementation of a Skycoin-based exchange, where every token on Fiber will be tradable against Skycoin and other major cryptocurrencies right after its launch. In addition to that, a feature called ‘Spend the Bitcoin’ is also in development, which will enable you to pay people in Bitcoin, even though you send them another cryptocurrency.24
FUTUREFIBER IN THESCALABLEEXCHANGEHARDWARE
Fiber’s Early Adopters
The name ‘Fiber’ is actually a rebrand of Skycoin’s blockchain platform and was called ‘Skyledger’ before.25 To my understanding, the rebrand was made to differentiate tokens that were launched in cooperation with the Skycoin Project from other tokens, who more or less just cloned the code.26 It appears a company Shellpay is continuing to use the Skyledger brand to market tokens, that they have set up based on Skycoin’s technology.27 However, Shellpay acts separately from the Skycoin Project.28,29

Two tokens are mentioned in Skycoin’s business whitepaper as early adopters of Fiber.30 The first one is SPO, who also has a partnership with Skycoin. SPO is developing a decentralized storage service and a set of applications running on top of Skywire.31,32 Among these applications is a site-building service,33 an own teller service34 as well as a new browser, which provides users with a customized browsing experience.35 The second token on Fiber is MyDailyLife Talent Hub, which is developing a talent marketplace on top of a global trustchain.36 MDL’s platform offers the possibility for talents and bookers to connect to each other, as well as a marketplace, where talents can trade or rent their gear, equipment, or memorabilia, all under the use of a fully transparent reputation system.37
ADOPTERSSKYCOIN FIBERTALENTMARKETPLACESKYWIREAPPLICATIONS
Wrap-up
During the last six years, the Skycoin Project developed a foundation for their currency Skycoin, that can be used by other tokens as well. With Skycoin Fiber, it offers each incoming project an own private blockchain, that is fully customizable and can process a minimum of 300 transactions per second. Moreover, if you want to set up a token on Fiber, you will receive a customizable cryptocurrency based on Skycoin, which offers major features, such as free transactions, a parallel currency and an intuitive wallet. Furthermore, tokens on Fiber will be able to integrate upcoming developments on Skycoin, such as enhanced privacy or a new consensus algorithm. In addition to these existing features, Fiber will offer even more in the future. With more projects coming to the platform and dedicated hardware being shipped to users all over the world, each blockchain will be able to scale up to thousands of transactions per second, with the use of parallel blockchains. An exchange for Fiber based tokens combined with major trading pairs is in the works as well. Although offering Fiber as a blockchain platform to other tokens by the Skycoin Project is relatively new, there are already two early adopters using Fiber with SPO and MDL and there might be many more joining in the upcoming years.



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Infographics
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Sources – Introduction
1
66 cryptocurrencies were listed on the 29th of December in 2013 on CoinMarketCap, while 1548 were listed on first of April in 2018.
Christian Ott; see the historical snapshots of 29.12.2013 and 01.04.2018 on CoinMarketCap for more information; 04.04.2018
2
“Skycoin Fiber offers customers a “Plug and Play” blockchain that is quick and easy to implement and fully customizable.”
Skycoin; Medium; Skycoin Fiber Platform; 03.04.2018
Sources – Skycoin
3
“What started as an audit into Bitcoin’s volatility, grew into six years of writing (and rewriting and rewriting) to resolve issues such as duplicate Coinbase outputs, signature immutability, transaction immutability, and the most critical: Bitcoin’s consensus algorithm (Proof-of-Work, or PoW).”
Skycoin; Business Whitepaper v1.0; Project History; 02.04.2018
4
“Cryptosystems for Geographic Time Scales: Future Proofing Skycoin … Future Proofing Skycoin: Salted Hashes at Network Level … Future Proofing Skycoin: Rolling State Hashes at Blockchain level … Future Proofing Skycoin: Cryptography For Geographic Timescales … Future Proofing Skycoin: Attacks on the Address Generation”
Skycoin; Skycoin Blog; Development Update #43; 09.12.2014
5
“Fiber achieves this high level of performance due to its elegance. Fiber is less than 5000 lines of code, compared to Bitcoin’s 100,000+ lines of code. Large and convoluted codebases introduce bugs, thus requiring band-aid patches of code, whereas Fiber is elegant and brilliant in its simplicity.”
Skycoin; Medium; Skycoin Fiber Platform; 03.04.2018
6
“… so Skycoin’s main blockchain is only two thousand lines of code. There is no scripting language and nobody even thirty years from now could come in and say, “We need to add a feature to this and try to take over.” There is nothing to add. This is done. We have not changed it in four years and it is not going to change for the next one hundred and fifty years.”
Synth; YouTube; Coin Interview with Skycoin 02; 11.12.2017
7
“Fiber, Skycoin’s underlying blockchain technology was designed for infinite lateral scalability and a high level of security.”
Skycoinproject; Twitter; 09.03.2018
8
“We are using golang so there are no buffer overflow attacks or way that remote party can take over the client and steal your wallet. The worse than can do is crash the client, but cannot loot the wallet remotely. Bitcoin is using C++ and OpenSSL and was affected by the HeartBleed bug. It was possible to buffer overflow Bitcoin through the OpenSSL library and possibly steal wallets through the merchant protocol. Skycoin was implemented with almost no dependencies. There are no 3rd party libraries in Skycoin that can be exploited. The only 3rd party library we are using is for encryption and we fuzzed the library for days and put in strict constraints on the data allowed to pass into the library. The program is designed to crash, rather than accept the invalid input that could lead to leaking the private keys. Even if attacked, we do not know of any way that the client can be used to exfiltrate the wallet or private keys over the network.”
Skycoin; Skycoin Blog; Ask the developers #5; 10.04.2014
Sources – Fiber Starter Kit
9
“Each company and project hosted on Fiber gets its own fully customizable, private blockchain capable of Visa-like speeds.”
Skycoin; Medium; Skycoin Fiber Platform; 03.04.2018
10
“Due to congestion on the network, we are increasing the birthing fee from 0.002 ETH –> 0.015 ETH. We hope this will allow more kittens to be born on time as there have been significant delays.”
Twitter; CryptoKitties; 04.12.2017
11
The sum of daily transaction fees in the Ethereum network increased by around 400 Ether per day from 03.12.2017 to 07.12.2017, starting at a sum of 407 Ether on 03.12.2017, to 1183 Ether on 05.12.2017 to 2239 Ether on 07.12.2017, while the number of transactions per day stayed at around 700 thousand for this period.
Christian Ott; see the Ethereum network transaction fees and the Ethereum transaction chart from 3rd to 7th of December in 2017 on Etherscan; 07.04.2018
12
NEO for example offers only 10 commands to modify the status of a smart contract. However, with costs of 100 to 1000 GAS to create a new smart contract (which is currently 1500 to 15000 dollar), there might not be a lot of people using it anyways.
Christian Ott; see the NEO API reference and system fees on NEO Docs; 07.04.2018
13
“Software engineering guided the design of Go. More than most general-purpose programming languages, Go was designed to address a set of software engineering issues that we had been exposed to in the construction of large server software. Offhand, that might make Go sound rather dull and industrial, but in fact the focus on clarity, simplicity and composability throughout the design instead resulted in a productive, fun language that many programmers find expressive and powerful. The properties that led to that include: Clear dependencies; Clear syntax; Clear semantics; Composition over inheritance; Simplicity provided by the programming model (garbage collection, concurrency); Easy tooling (the go tool, gofmt, godoc, gofix)”
Rob Pike; talks.golang.org; Go at Google: Language Design in the Service of Software Engineering; 2012
14
“One blockchain of Skycoin is 10 times faster than Ethereum, 300 transactions per second minimal.”
Synth; YouTube; Chris Coney & Skycoin ☁️ Lead Developer Synth; 29.03.2018
Sources – Tokens on Fiber
15
“Through Fiber, customers have a private chain that is fully customizable to their needs and equipped with all the benefits of Skycoin technology”
Skycoin; Business Whitepaper v1.0; Application ecosystem; 02.04.2018
16
“We don’t only have Skycoin. We have 30 ICOs. We have a thing that was called Skyledger, now it is called Fiber. We have a platform just like ERC-20, where people can launch their own coins, but in our platform, there is no transaction fees and there is no gas.”
Synth; YouTube; Chris Coney & Skycoin ☁️ Lead Developer Synth; 29.03.2018
17
“This is on top of the convenience already provided by Skycoin mobile and desktop wallets.”
Skycoin; Business Whitepaper v1.0; Hardware Wallets; 02.04.2018
18
Skycoin Explorer
https://explorer.skycoin.net/
19
“So, basically we have a script now for launching coins. If you have a developer, he just reads the readme, he launches the coin, you message us, you give us your ticker, we validate your ticker, we have to make sure there is no conflict. Then we add your genesis block in your chain for platform and then suddenly your coin will be in every Skycoin wallet, because it is a multiwallet. And we have hardware wallet support…”
Synth; YouTube; Skycoin Unleashed – Bold, Driven, Futuristic; 07.03.2018
20
“A CoinJoin transaction is a transaction that mixes multiple outputs, from different wallets in a single transaction. – Even a modest rate of coin mixing through CoinJoin (5% of transaction volume) introduces enough diffusion into network to severely frustrate association of specific addresses to individual wallets or users from public data. Especially for high volume services that end up processing most of the transactions on the network. – If the third party CoinJoin server is trusted, this has the same level of privacy as ZeroCoin and quantum zero knowledge proof schemes, but with a much simpler protocol. In Bitcoin, you can tell CoinJoin transactions apart from normal transactions. in Skycoin, there is no difference between a normal transaction and a CoinJoin transaction. The protocol is simple: – you send inputs and outputs to a 3rd party CoinJoin server – they take inputs/outputs from multiple users, randomize order, send back transaction – each user signs their outputs and sends signature back to the server – the server injects the transaction into the network.”
Skycoin; Skycoin Blog; Development Update #62; 26.03.2015
21
(On Obelisk) “We have done several simulations. There are several peer reviewed academic research papers published about it. There are open source simulations in the github repo. The exchanges are worried about us enabling the full consensus algorithm without enough testing. We have to do a lot of testing before we turn everything on. Currently the exchanges forced us to use a masternode dev check-point system. Over time, we are going to make extensive changes to the node and keep minting on the checkpoint system, while rolling out everything. Then after extensive testing, will roll out everything in stages. The testing of the new features and stages, needs to be done on a smaller coin (other Skyledger coins) before being rolled out to Skycoin. Skycoin’s market cap is too large and we have to be cautious about bugs and not rolling out new code before its tested. The dev check-point system is a compromise that allows us to test new consensus algorithms, while protecting the exchanges. If the exchanges lose money from a bug and lose $200,000 in Skycoin then we have to pay them for the lose basicly. The exchanges are all short-staffed because of massive user base growth. They are taking weeks sometimes to upgrade the Skycoin node version, after we release a new version. We have to carefully coordinate our release and upgrade schedules to minimize exchange downtimes.”
Synth; Skycoin subreddit; Part 2 of our first Skycoin Official AMA with Synth; 06.03.2018
Sources – Future Benefits of Fiber
22
“Skycoin Fiber is the blockchain of blockchains. It is the foundation of cryptocurrency 3.0. A network of blockchains laid side-by-side, like strands, that is infinitely scalable. Bitcoin’s single blockchain can handle 6 TX/s, Ethereum’s single blockchain can handle 30 TX/s. With Skycoin Fiber, each blockchain string can handle 300-3000 TX/s. These strands run parallel to each other, are deeply customizable, and have no limit. Whereas a single strand is limited in its capability, wrapping multiple strands together creates cords that can raise bridges to connect communities. Each blockchain strand added to Fiber strengthens the whole system into cords that hold the bridge for the new information super-highway. Skycoin is bringing transaction speeds and on-chain scalability to a new dimension with Fiber’s integrated parallel blockchain technology. Skycoin Fiber does not compete with first and second generation cryptocurrencies like Bitcoin and Ethereum, it replaces them by allowing each customer their own dedicated and customizable blockchain strand for free.”
Several moderators; Telegram; Skycoin main channel; 06.03.2018
23
“Here is the problem: If you look at Skyminer, there is eight CPU boards in that and that’s a small one. There is gonna be a 64-board CPU one and there is gonna be a Skyminer eventually, that has 256 CPU boards. … If you want to do 300 transactions a second, you need dedicated hardware. You are not gonna be running that blockchain on your Windows 98 laptop. You have 256 nodes, you run blockchain 1 on node 1 and blockchain 2 on node 2 and application b on node 3. So, if you are running 60 blockchains, you need 60 nodes. I don’t want 60 nodes running on one computer fighting with each other and each of them getting 2% CPU and the network would slow down. So, if you are a company and you need 300 transactions per second you need have dedicated capacity in terms of CPU and memory. The Skyminer is a personal cloud. It is like having your own amazon EC2 in your bedroom. It is our hardware platform for launching these blockchain applications.”
Synth; YouTube; Chris Coney & Skycoin ☁️ Lead Developer Synth; 29.03.2018
24
(On launching tokens on Fiber) “… you will be instantly listed on the exchange if you want. People will be immediately able to exchange Ethereum, Bitcoin, Litecoin, Monero, Qtum, Ark, Lisk, all these 40 coins to buy your coin. And eventually they even will be able to spend the coin. We have a feature called ‘Spend the Bitcoin’. You will be able to send Skycoin or any of these coins to a Bitcoin address. So, if you want to hold Ark or Lisk or Qtum, but you want to pay people in Bitcoin, on our backend it sends our server the coins and it sends the person the Bitcoin. We are working on these interoperability projects, on the hardware wallet, the mobile wallet.”
Synth; YouTube; Skycoin Unleashed – Bold, Driven, Futuristic; 07.03.2018
Sources – Fiber’s Early Adopters
25
“This month we bid adieu to Skyledger and said “bon jour” to Skycoin Fiber.”
Skycoin; Medium; All Clear, Skyfleet, Take to the SKY!; 04.04.2018
26
That conclusion derived from SPO and MDL being mentioned in the Skycoin business whitepaper as adopters of Fiber, while other tokens based on Skycoin’s technology (SHELL, METL) are not listed there.
Christian Ott; refering to the section “Application ecosystem” in Skycoin’s Business Whitepaper v1.0; 04.04.2018
27
There will be an event about Skyledger held in London on April 20th, 2018. Steve Leonard stated on 03.04.2018 in the main channel of Skycoin on Telegram, that this is not a Skycoin event. Since all projects on the official website of the event are tokens associated with Shellpay (with the exception of planet blockchain), it seems as if the event itself is organized by Shellpay.
Christian Ott; see http://skyledgerlondon.net/ for more information; 04.04.2018
28
“Shellpay itself is a skycoin clone afaik – Shellpay then made more skycoin clones or had involvement with them (suncoin appears to have a separate team) and then called this “Skyledger” (shellpay’s invention) – Skyledger was made up by shellpay to market their skycoin clones with the “sky” brand, which wasn’t really acceptable – Skycoin can’t really do anything to stop them, so skycoin is going to control the name “skyledger” and prevent shellcoin from trying to claim that “Skyledger” is the main thing (with skycoin subordinate to it),. The reality is that Skycoin is the main thing and “Skyledger” is the basket of clones beneath it, that use skycoin’s blockchain technology (and notably do not include the rest of the skycoin application stack, such as skywire (meshnet), bbs, cxo)”
Steve Leonard; Telegram; Skycoin main channel; 25.08.2017
29
(On Jane Zhang, CEO of Shellpay) “she is doin bussiness development for skyledger and setting up companies up with coins and ICOing them, but they are sort of seperate”
Synth; Telegram; Skycoin main channel; 06.11.2017
30
“Companies have already begun adopting Fiber as the foundation for their blockchain solutions: … Spaco … MyDailyLife (MDL) Talent Hub”
Skycoin; Business Whitepaper v1.0; Application ecosystem; 02.04.2018
31
“Spaco is a decentralized service built on Fiber, running storage and data transfer, a peer-to-peer encrypted Internet browser with built in anti-spam and versatile user-controlled feed filtering, as well as secure future applications in custom site-creation, shopping, games, video, and much more.”
Skycoin; Business Whitepaper v1.0; Application ecosystem; 02.04.2018
32
“The SPO Storage Layer is the essence of SPO Smart Networking. This network is formed by nodes that hosted and run by any individual “miner”. Basic storage services, CDN services, API services and Live Streaming are all integrated in one place. Our attempt with SPO Storage Service lies within the instant availability to our users, while it maintains supreme quality on its high speed and limit-less storage space.”
SPO; Official Website; SPO poster series; 09.03.2018
33
“Site-building under SPO will greatly benefit from the SPO Storage base. NO MORE server rental, site crash or DDOS attacks.”
SPO; Official Website; SPO poster series; 09.03.2018
34
“SPO Teller is our main method when distributing SPO Tokens, the SPO Teller system marks its own stability and convenience by letting our users achieve instant-trading with BTC, ETH, SKY.”
SPO; Official Website; SPO poster series; 09.03.2018
35
“SPO strives to bring our users a customised browsing experience by continious iteration of Text Information Filtering.”
SPO; Official Website; SPO poster series; 09.03.2018
36
“MyDailyLife (MDL) Talent Hub – MDL aims to build a trustchain for the $2.3 trillion entertainment industry. The MDL platform features a unique prosumer-based ecosystem marketplace and micro-KOL (Key Opinion Leader) partnership programs to raise revenue.”
Skycoin; Business Whitepaper v1.0; Application ecosystem; 02.04.2018
37
“Its core technology enables the MDL platform to have efficient and transparent economy ecosystem that has several revenue streams – the marketplace, where talents can trade, rent, or exchange their gear, equipment, or memorabilia to other talents or their fans; partnership with brands that are eager to promote their products and services with the most outstanding demographic layers, insurance system that secures business performance; livestreaming; extended functionality; commission from deals; and more.”
Dimitry Doronin; Telegram; MDL Talent Hub main channel; 04.04.2018

Skycoin

Skycoin Currency
SKYCOIN
29.03.2018
THE CURRENCY OF THE SKYCOIN ECOSYSTEM
CHRISTIAN OTT
AUTHOR
Introduction
While the Skycoin project today covers multiple areas such as a platform for other tokens or a decentralized internet, the currency Skycoin was the first piece of the puzzle. Motivated by the goal to create a currency that improves Bitcoin, the team went on to develop much more.1 During the past six years, they developed a currency that is fast, scalable, has zero transaction fees and rewards holders with a parallel currency, all while being environmentally friendly. Concisely, Skycoin unites major features of other cryptocurrencies and is therefore definitely worth a closer look.

Basis of Skycoin
Creating something unique and innovative is highly challenging. It involves the different stages of planning, researching, strategically designing and implementing a product, often followed by a tremendous amount of time spent on testing and refining. It is a series of constant incremental innovation with changes evolving each day, and the creation of Skycoin was no different.2 Starting from 2012 on, the development team implemented several different versions of their software. This process included some fundamental changes, that made them start from scratch again multiple times, until they had developed an extendable, future-proof foundation for Skycoin.3,4 This foundation includes readable and non-bloated code,5,6 as well as a high security of storing and transacting the coins,7 which both evolved from years of testing and refinement. While these are all implementations, that were made in the back-end of Skycoin, a lot of development was done in the front-end as well, including an intuitive wallet, a stand-alone blockchain explorer and a huge amount of informatory technical blog posts.
BASICSSKYCOINCLEANSECUREWALLET</>
Smallest Unit
So, let us look at the coin itself, starting with the smallest unit. Skycoin supports up to 6 decimal places, because the team stated that 6 digits after the decimal point would be the most human readable.8 Currently, the coin is restricted to 3 decimal places to prevent spam in the network.9 Like Satoshi in Bitcoin and Wei in Ether, the smallest unit of a Skycoin has its own name, it is called Droplet (0.000001 SKY).10
SKYCOIN0.000001DROPLETONE
Distribution of Skycoin
Looking at the grander scheme, a total of 25 million Skycoin are available for distribution right now.11 Approximately ten million will be distributed via ICO and OTC sales,12 while five million might be used to reward contributors to the project.13 Another ten million will be used to incentivize bandwidth providers in the Skywire network.14 Due to the team preferring a long-term distribution, just 7.7 million Skycoin were put into circulation in three years since the first public offering in April/May 2015.15 If we assume, that 3.6 million Skycoin will be distributed per year from now on, we will reach the mark of 25 million Skycoin at the end of 2022. After that mark is reached, 5 million Skycoin would be unlocked per year,16 until a maximum of 100 million is reached.17 A possible distribution plan could look like this:18
DISTRIBUTIONESTIMATED2017202220377m25m100m
Coin Hours
In case you gathered some of the 7.7 million Skycoin in circulation, there is an incentive to hold them in your wallet rather than at an exchange. Each wallet address with a certain amount of Skycoin is automatically awarded a parallel currency called Coin Hours, with each Skycoin receiving one Coin Hour per hour.19 These Coin Hours are mainly used to pay transaction fees but will have several other use cases in the future. As soon as they are independently transferable, they could be used to purchase bandwidth in the Skywire network or to buy in-app items in games like KittyCash.20
COIN HOURSUSE CASESIN-APP BUYSTRANSACTIONSKYWIRE
Transactions
With the help of Coin Hours, Skycoin transfers do not require you to pay a percentage of your Skycoin holdings as a fee.21 Furthermore, Skycoin transactions are not only free, they are fast as well. The Skycoin network can execute 300 transactions per second,22 which means that transfers are processed very quickly. The developers behind Skycoin also aim to make transactions more private with a future implementation of the CoinJoin protocol, that mixes multiple outputs from different wallets in a single transaction.23,24 The privacy of transactions will even further increase, once users will start to execute transactions over Skywire, without their internet service provider being able to track their online movement.25 Speaking about the consensus, Skycoin currently uses a masternode developer checkpoint system. However, this will change in the future, as the development team aims to implement Obelisk, which is their consensus algorithm for a truly decentralized cryptocurrency.26
TRANSFERSSKYCOINFEESFASTPRIVACY
Wrap-up
On top of an efficient, secure and extendable foundation, the Skycoin project implemented a coin with major features, that can absolutely compete with other cryptocurrencies. Skycoin transactions are not only fast and free, with the parallel currency Coin Hours, there is also an incentive to hold Skycoin for a longer time period. Future plans of further developing Skycoin include the introduction of CoinJoin as a privacy protocol, enabling Coin Hours to be transferred independently and the implementation of Obelisk as the new consensus algorithm.



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Infographics
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Sources – Basis
1
“Skycoin started out just improving the Bitcoin blockchain and building Bitcoin into a mature technology that would be usable because Bitcoin still has a lot of rough edges. Over time, the project just expanded and expanded.”
Synth; YouTube; Coin interview with Skycoin; 30.10.2017
2
“When the Skycoin project started, we took the best tools available and began there. I believed the project was going to be finite, that we would fix Bitcoin, change the hashing function and a few things and the launch. That turned into: – Writing a new cryptography library – New consensus algorithm – New programming language (golang instead of C++) – New deterministic wallet generation function – New bipartite transaction graph structure instead of a multigraph – Local webwallet – New blocksync algorithms – New networking primitives – etc…”
Skycoin; Skycoin Blog; Development Update #63; 01.04.2015
3
“So we came in and we ended up spending the next six years rewriting the whole thing from scratch like three times.”
Synth; YouTube; Coin interview with Skycoin; 30.10.2017
4
“Cryptosystems for Geographic Time Scales: Future Proofing Skycoin … Future Proofing Skycoin: Salted Hashes at Network Level … Future Proofing Skycoin: Rolling State Hashes at Blockchain level … Future Proofing Skycoin: Cryptography For Geographic Timescales … Future Proofing Skycoin: Attacks on the Address Generation”
Skycoin; Skycoin Blog; Development Update #43; 09.12.2014
5
“Bitcoin is 53356 lines of C++, 15847 lines of C/C++ headers. 15,000 lines of bash scripts. Skycoin is 14,210 lines of Golang. At peak Skycoin was over 80,000 lines, but has become more elegant over time.”
Skycoin; Skycoin Blog; Development Update #57; 04.02.2015
6
“… so Skycoin’s main blockchain is only two thousand lines of code. There is no scripting language and nobody even thirty years from now could come in and say, “We need to add a feature to this and try to take over.” There is nothing to add. This is done. We have not changed it in four years and it is not going to change for the next one hundred and fifty years.”
Synth; YouTube; Coin Interview with Skycoin 02; 11.12.2017
7
“We are using golang so there are no buffer overflow attacks or way that remote party can take over the client and steal your wallet. The worse than can do is crash the client, but cannot loot the wallet remotely. Bitcoin is using C++ and OpenSSL and was affected by the HeartBleed bug. It was possible to buffer overflow Bitcoin through the OpenSSL library and possibly steal wallets through the merchant protocol. Skycoin was implemented with almost no dependencies. There are no 3rd party libraries in Skycoin that can be exploited. The only 3rd party library we are using is for encryption and we fuzzed the library for days and put in strict constraints on the data allowed to pass into the library. The program is designed to crash, rather than accept the invalid input that could lead to leaking the private keys. Even if attacked, we do not know of any way that the client can be used to exfiltrate the wallet or private keys over the network.”
Skycoin; Skycoin Blog; Ask the developers #5; 10.04.2014
Sources – Smallest Unit
8
“6 decimal places. Skycoin has 6 (not 8 like Bitcoin). 9 would be too many (difficult to count) and 6 digits before . and 6 digits about the decimal was the most human readable.”
Synth; Telegram; Skycoin main channel; 03.12.2017
9
“the coinhours and artificial decimal limits are in place to minimize basic DDOS attacks like mempool”
Steve [Sky Dev]; Telegram; Skycoin main channel; 08.03.2018
10
“The smallest skycoin (called a droplet) is 0.000001”
Steve [Sky Dev]; Telegram; Skycoin main channel; 14.10.2017
Sources – Distribution of Skycoin
11
“75 million coins (75%) are timelocked (hardcoded in skycoin.go scroll down to bottom) and 25 million coins are currently unlocked.”
Skycoin; Skycoin Blog; Understanding the Skycoin Supply & Distribution; 25.01.2018
12
“We will set the total cap of the OTC sale to bring Skycoin’s distributed percentage to be between 10% and 15%. Currently, Skycoin is at 6%. The remainder is reserved for the Skywire network subsidy, until we hit the 25% timelock cap and enter a maximum 5% per year distribution.”
Skycoin; Skycoin Blog; Skycoin Distribution Plan; 09.10.2017
13
“If you come in and you do a VPN app or videosharing app or a messaging app on Skycoin, we might give you half a million dollars of Skycoin. We fund our developers. We invested in a lot of different development teams and we distributed the coins to the people that are doing the work and promoting it. If you are doing a meetup, we will give you Skycoin. If you are doing T-Shirt designs, we will give you Skycoin. If you help with translations, we have a bounty program. So, we are busy distributing the coins to people moving the project forward.”
Synth; YouTube; AMA hosted by Crypto Brahma; 11.03.2018
14
“We have 10 million skycoin allocater for coinhour buybacks over a few years to bootstrap the skycoin to coinhours market.”
Synth; Telegram; Skycoin main channel; 25.11.2017
15
“2500 Skycoin per Bitcoin. Which is about $0.10 / Skycoin. Bitcoin to USD is too volatile so just set it to that. … I think we started getting bitmessage requests for IPO in about two months ago and are just sending out coins now. … There are about fifty people in the IPO so far. The average amount is $2000. About half the coins in the allotment are already accounted for. Very good so far.”
skycoin; Bitcointalk; [SKY] Skycoin Launch Announcement; 18.04.2015
16
“The Skycoin distribution is timelocked. This means that, of the undistributed Skycoin, 25% are immediately distributable. The remainder cannot be distributed until the first 25% have been distributed. Once the first 25% have been distributed, an additional 5% is unlocked for distribution. For each subsequent year thereafter, an additional 5% is unlocked for distribution. This gives Skycoin a 14 year distribution timeline, after the first 25% is distributed. We may extend the unlocking process to take up to 25 years, but we will never shorten the timelocking schedule. There is no requirement that the yearly 5% be distributed. The unlock only enables that amount to be distributed. The locked Skycoin are allocated for expansion of the Skywire Network via targeted network subsidies and for bounties for platform development.”
Skycoin; Skycoin Blog; [SKY] Skycoin Distribution Plan; 09.10.2017
17
“So there’s one hundred million total and the reason that number was chosen was that one million coins is exactly 1% of Skycoin.”
Synth; YouTube; Coin interview with Skycoin; 30.10.2017
18
“So, how could a concrete distribution plan look like? We saw, that it took 3 years to distribute 7 million Skycoin. Let us assume, that 3.6 million Skycoin will be distributed per year from now on, which is already a high amount compared to the distribution in the past. This would mean, that it would take until the end of 2022, until the immediately available 25 million Skycoin are distributed. After that mark would be reached, 5 million Skycoin would be unlocked per year. If, for the next 14 years, each of these Skycoin would be distributed in the same year, the whole amount of 100 million Skycoin would be in circulation at the end of 2037.”
Christian Ott; christianott.co; Distribution of Skycoin; 24.03.2018
Sources – Coin Hours
19
“Holding Skycoin in a Sky wallet automatically generates Coin Hours at a rate of 1 Coin Hour per Skycoin per hour.”
Skycoin; Medium; Skycoin Coin Hours; 18.03.2018
20
“Coin Hours aren’t just for maintaining zero transaction fees on the network, they will also be used to purchase services, buy bandwidth on Skywire, play games, and more. Because they will be transactable in various use cases, Coin Hours will also have a monetary value that is set by the market.”
Skycoin; Medium; Skycoin Coin Hours; 18.03.2018
Sources – Transactions
21
“Unlike Bitcoin or Ethereum, Skycoin users do not need to give away part of their balance as incentive for miners to process their transaction.”
Skycoin; Medium; Skycoin Coin Hours; 18.03.2018
22
“We can right now do 300 transactions per second, easily. There are three limitations. The first is bandwidth, … the second is storing all your transactions … and the third one is signature verification. We could do 100,000 transactions per second on Skycoin, but we can’t verify the signatures fast enough, because the CPUs are not fast enough.”
Synth; YouTube; AMA hosted by Crypto Brahma; 11.03.2018
23
“A CoinJoin transaction is a transaction that mixes multiple outputs, from different wallets in a single transaction. – Even a modest rate of coin mixing through CoinJoin (5% of transaction volume) introduces enough diffusion into network to severely frustrate association of specific addresses to individual wallets or users from public data. Especially for high volume services that end up processing most of the transactions on the network. – If the third party CoinJoin server is trusted, this has the same level of privacy as ZeroCoin and quantum zero knowledge proof schemes, but with a much simpler protocol. In Bitcoin, you can tell CoinJoin transactions apart from normal transactions. in Skycoin, there is no difference between a normal transaction and a CoinJoin transaction. The protocol is simple: – you send inputs and outputs to a 3rd party CoinJoin server – they take inputs/outputs from multiple users, randomize order, send back transaction – each user signs their outputs and sends signature back to the server – the server injects the transaction into the network.”
Skycoin; Skycoin Blog; Development Update #62; 26.03.2015
24
“This will be implemented when there is enough free manpower to do so. Most of the development team is clamped up by the upcoming Skywire testnet”
K. | Systems Integrator | Skycoin; Telegram; Skycoin main channel; 04.03.2018
25
“once coinjoin is implemented and network is running over skywire; then its higher level than zcash. The skycoin coinjoin is next level. – you can encrypt a transaction and send it to third party over Skymessanger to decrypt (only he can read it) and you can even use ephermeral encryption (generating a new public key that is only use once, to encrypt a single piece of data). This means zero information leakage on the network. – then you can mix in multiple transactions from multiple wallets in the same transaction. Gmaxwells coinjoin. This is samething as zerocoin but uses a third party and is fifty times simplier than zcoin and no overhead.”
Synth; Telegram; Skycoin main channel; 02.12.2017
26
“We have done several simulations. There are several peer reviewed academic research papers published about it. There are open source simulations in the github repo. The exchanges are worried about us enabling the full consensus algorithm without enough testing. We have to do a lot of testing before we turn everything on. Currently the exchanges forced us to use a masternode dev check-point system. Over time, we are going to make extensive changes to the node and keep minting on the checkpoint system, while rolling out everything. Then after extensive testing, will roll out everything in stages. The testing of the new features and stages, needs to be done on a smaller coin (other Skyledger coins) before being rolled out to Skycoin. Skycoin’s market cap is too large and we have to be cautious about bugs and not rolling out new code before its tested. The dev check-point system is a compromise that allows us to test new consensus algorithms, while protecting the exchanges. If the exchanges lose money from a bug and lose $200,000 in Skycoin then we have to pay them for the lose basicly. The exchanges are all short-staffed because of massive user base growth. They are taking weeks sometimes to upgrade the Skycoin node version, after we release a new version. We have to carefully coordinate our release and upgrade schedules to minimize exchange downtimes.”
Synth; Skycoin subreddit; Part 2 of our first Skycoin Official AMA with Synth; 06.03.2018

Skycoin – Coin Hours

Coin Hours
COIN HOURS
14.03.2018
PARALLEL CURRENCY OF SKYCOIN
CHRISTIAN OTT
AUTHOR
Introduction
Did you know that there is an incentive to hold Skycoin in your wallet instead of keeping it on an exchange? Each wallet address with a certain amount of Skycoin is automatically awarded with a parallel currency called Coin Hours. These Coin Hours are not only necessary to maintain the zero fee transaction costs of Skycoin, they will also have several other use cases in the future. What these use cases are and how Coin Hours are distributed among Skycoin holders, will be discussed in the following.

Distribution
The distribution of Coin Hours is actually very easy to describe: Each Skycoin in your wallet address provides you with one Coin Hour per hour, meaning one Skycoin produces 24 Coin Hours per day. As an example, if you have a wallet address with 10 Skycoin, this wallet address will receive 240 Coin Hours per day. To put this number into perspective, the current circulating supply of 7.7 million Skycoin produces about 185 million Coin Hours per day. This shows, that Coin Hours are highly inflationary. The circulating supply of Coin Hours as of the time writing this is about 36 billion. You can find the circulating supply of Coin Hours under this link in the section ‘current_coinhour_supply’. Let’s visualize all these numbers:
Coin Hours8760Coin Hours24Coin Hour11 SkycoinDistribution of Coin Hours
Fuel for Skycoin transactions
Okay, so everybody holding Skycoin earns a ton of Coin Hours per day, but what are their actual use cases? First and foremost, Coin Hours act as the fuel for transactions in the Skycoin network. Since Skycoin transfers do not require you to pay a percentage of your Skycoin holdings as a fee, you could theoretically execute a vast amount of transfers per second between addresses without paying anything. This would cause a huge backload of transactions in the network, which would increase the execution time of a transaction. Therefore, every time you transfer an amount of Skycoin to another address, a certain percentage of your Coin Hours is used as a transaction fee. As soon as you ran out of Coin Hours, you can’t execute any further transfers, which means that Coin Hours are an important mechanism to prevent spam in the network.

When you transfer Skycoin to another address, 25% of the Coin Hours in your wallet address are transferred with the sent amount of Skycoin to the receiving address. Additionally, 50% of the Coin Hours in your wallet address are burned, meaning neither the sender nor the recipient will receive these Coin Hours, they will be erased from the network instead. The burn ratio of 50% is documented in this file in Skycoin’s GitHub. In general, this means that only 25% of the Coin Hours remain in your wallet address after a transfer. However, if you transfer the whole amount of Skycoin in a wallet address to another address, all your Coin Hours will be gone and the recipient will receive 50% of your Coin Hours instead of 25%. To execute a transfer, you need to have at least 1 Coin Hour in your address.
Coin Hours allocation in transfers50%BURNED25%SENT25%REMAIN
Purchase bandwidth with Coin Hours
As of right now, Coin Hours can not be transferred independently without transferring Skycoin. However, once this is possible and Skycoin’s decentralized internet Skywire launches, Coin Hours will be used to purchase bandwidth in the network. Paying for bandwidth is important to grow the network, because the motivation to run a node will be much higher, if there is a monetary incentive to node providers. It might be also possible to purchase higher priority bandwidth, if you pay more Coin Hours for your connection than other users.

Buy items in apps with Coin Hours
The Skycoin project aims to launch several apps on top of their underlying technology. The first two apps that were announced and are currently in development are the games KittyCash and Skycoin Poker (name is yet to be determined). These games will probably have in-game items, that can only be purchased with Coin Hours. It is for example rumored, that you can buy food in KittyCash with Coin Hours.

Coin Hours as a currency
Parallel to the items in the Skycoin network, that can be exclusively purchased with Coin Hours, it is also imaginable, that Coin Hours could be used as an actual currency to purchase goods. The constant rise of the price of cryptocurrencies compared to the U.S. Dollar is actually a big challenge for cryptocurrencies. Nobody wants to spend a cryptocurrency, if it might have doubled its value a few days later. However, as Coin Hours are highly inflationary, it makes a huge increase in price less probable compared to a currency with a fixed supply. In fact, the price might even decrease, which is a great incentive to spend Coin Hours instead of holding them.
Use Cases of Coin HoursTransaction FuelCurrencyIn-App BuysBandwidth
Wrap-up
What started out as a mechanism to prevent spam in a network with zero transaction fees is now aiming to become much more. As soon as Coin Hours will be transferable independently, a value for them will be determined by the market and they will have more use cases than just to serve as a transaction fee. While the purchase of bandwidth in the Skywire network will be a major use case for Coin Hours, with KittyCash there is already the first app in development, that aims to enable in-app purchases with Coin Hours. The inflationary nature of Coin Hours also tackles the problem, that the majority of crypto enthusiasts don’t want to use their cryptos as a currency to purchase goods, because they might rise in price compared to the U.S. dollar. If there is a high inflation of the currency, the price might decrease, and the incentive is higher to spend it. All in all, there are a lot of possible use cases for Coin Hours in the Skycoin ecosystem and it will be interesting to see, how they will develop in the future.



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