Skycoin (SKY) is a third generation cryptocurrency that is made up of several parts. The Skycoin infrastructure ecosystem started around 2013. Skycoin is not just a coin. It is an ecosystem that aims to strengthen some of the weaknesses of the blockchain technology. Skycoin supports the following:
- The elimination of the need for miners in network consensus through the development of new algorithm
- Reduction in the complexity of implementation
- 51% attack proof and strengthening against various attacks
- Blockchain/transaction/history storage database with constant time lookup, etc
- Skycoin is designed to be straightforward, easy to use and more secure than the bitcoin
Skycoin has a supply limit of 100 million coins created in the genesis block, and the current supply is at 7.278.040 SKY (~7,2%). These coins can neither be mined nor destroyed. The bedrock of the Skycoin ecosystem is the Skywire.
What is Skywire?
This is the technology that the company wants to use to change how people interact with the internet. The Skywire protocol is more concerned about privacy, anonymity, peer-to-peer and decentralized mesh net. The Skywire network is private; this makes it difficult for IP address to be traced.
Different internet service providers’ rates vary for the content their subscribers view. The aim is to prioritize these content, and this is against what the internet stands for.
Users of Skywire connect to the network using a Virtual Private Network (VPN) server. These servers are called ‘Skyminer.’
What is Skyminer?
Skyminer is a customized VPN. The Skyminer hardware powers the Skywire network. It has an integrated router technology with a server that has a quad-core processor, 16GB ram, a storage space of 128GB and a graphics card of 8 core Mali 450. This server helps users to connect to the internet thereby ensuring that connection to the internet is fast, secure, and cheap.
Using this hardware, Internet Service Providers do not have control over the content users access on the web.
Skycoin is not mined like most cryptocurrencies because the company does not believe in Proof of Work (PoW) consensus algorithm where miners are rewarded for gathering information on the network and using it to solve a complex mathematical puzzle, instead, Skycoin has its unique customized consensus called- ”Obelisk’.”
What is Obelisk?
The Obelisk is a unique algorithm that was developed by Skycoin. It works in a way that nodes comply based on a web-of-trust consensus. That is, nodes connect to one another base on trust. When a node is seen as trustworthy by other nodes which are determined by the number of nodes that have the highest connection, that node is ranked as the most trustworthy in the system.
The obelisk was developed to solve security flaws and the centralized nature of other altcoins thereby making it very difficult for any attack to occur in the system.
In this unique algorithm, each node has its blockchain and serves as a broadcasting channel to the public. This aids other nodes to know whether or not that node acts in the interest of the entire network.
Even though Skycoin does not believe in Proof of Stake (PoS) where users are rewarded for merely holding a coin in their wallets, what it does is that it gives coin hours to its users for just holding a coin in their wallet according to the amount of time they hold the coin. In simple terms, the company doesn’t give Skycoin for holding a coin. Instead, they give coin hours. If a user holds one Skycoin for five hours, he will be given five coin hours.
Coin hours is the currency that user transact to buy bandwidth and other services on the Skywire ecosystem.
The distribution technique of Skycoin is very open. As more Skycoin is supplied to the public, the slower the coins are distributed thereby giving the public more advantage to own Skycoin instead of miners.
Out of the 100 million coins created, 75 million coins are locked as a reserve while the other 25 million coins are being distributed. After the first 25 million coins have been successfully distributed, 5 million coins out of the 75 million coins reserve will be distributed yearly. With this technique, there will be a balance between coins distribution and user growth.
Benefits of Skycoin
Speed and Cheap: Skycoin transaction is very fast with a transaction confirmation time of approximately 2 seconds with zero transaction fee. The transaction cost of Skycoin is covered by coin hours.
Saves Energy: With its web-of-trust algorithm, energy is conserved. This makes it easy for Skycoin to be used on many devices – even on a 30-watt mobile phone. This increases mobile payments.
How to Buy Skycoin
Skycoin cannot be purchased directly with fiat currency. The easiest way to buy Skycoin is to first get other cryptocurrencies like Bitcoin and Ethereum from crypto exchange platforms and then exchange them for Skycoin. Exchange can be made on the Skycoin official website. It is also available in Cryptopia, ChaoEx, C2CX, IQuant, etc.
Skycoin has proven that it is more than just a cryptocurrency. It aims to use the solutions in its ecosystem to solve the flaws in the blockchain technology. It also aims to change how people interact with the internet by restricting the authority ISPs have over contents that users view with its sophisticated technology which makes users experience on the internet to be safe, secure, and cheap.