Skycoin claims to be a third generation cryptocurrency built on blockchain technology. Find out how it works today in our review.

What Is Skycoin?

Skycoin, found online at Skycoin.net, is a cryptocurrency designed to fix bitcoin’s problems while achieving Satoshi’s original vision for his cryptocurrency.

Skycoin uses a consensus algorithm called Obelisk. The goal of this consensus algorithm is to achieve true decentralization and avoid the centralized control of mining pools. Today, the bitcoin network is almost completely controlled by three large mining pools, which means it’s no longer decentralized. Skycoin’s consensus algorithm, according to the official website, “is designed to achieve true decentralization of blockchain consensus.”

The Skycoin project first appeared online in December 2013. In an announcement thread on BitcoinTalk.org, the project was called a “successor to bitcoin” and “a new internet”. The developers also claimed to have been working on the project “since bitcoin was launched to the public.”

Skycoin (SKY) was priced at around $1 during the early months. As of January 2018, the coin has a price of $36.50 USD and a market cap over $250 million USD, placing it in the top 120 cryptocurrencies by market cap. There’s a maximum supply of 100 million SKY, although there’s a total supply of just 25 million and a circulating supply of around 7 million.

What makes Skycoin different from other cryptocurrencies available today? Let’s take a closer look at how it works.

How Does Skycoin Work?

Skycoin’s key feature is its use of the Obelisk consensus algorithm. Obelisk is neither proof of work (PoW) nor proof of stake (PoS) consensus. Instead, it’s a next generation consensus algorithm based on a “web of trust”.

Skycoin also uses a new blockchain technology called UXTX, described as “the next generation after UXTO”, which enables native coinjoin.

Because of these systems, Skycoin has no mining and no opportunities for a 51% attack. There’s also no risk of double spending. The network can also process global transactions in seconds – not hours.

In the announcement thread from 2013, Skycoin’s developers called the project a third generation cryptocurrency, referring to bitcoin as the first generation and Litecoin as the second generation. It was designed to fulfill Satoshi’s original vision for a cryptocurrency.

Blockchain-Based Internet, Wallet & Messenger Products And Services

Today, Skycoin is a complete ecosystem of blockchain-based tools and services, including everything from a virtual private network (VPN) to an encrypted messenger service.

Here are some of the features, products, and services available through the Skycoin ecosystem:

SKY: A digital currency designed with fast transactions and easy international payments.

CX: A specification and programming language.

CXO: A file storage system designed to replace IPFS, FileCoin, Bittorrent, Mega, Dropbox, Google Drive, etc.

Skywire: A communications protocol designed to replace MPLS, IPv4/IPv6, OpenFlow, Tor, etc. It’s described as “the next internet”.

Viscript: A cross platform CLI and application launcher based on a signal library as a signal server.

CryptoSphere: A virtual private network (VPN) service designed to replace OpenVPN.

Sky Messenger: An encrypted messenger service designed to replace Telegram, Skype, WhatsApp, etc.

BBS: A social network similar to Steemit, Facebook, or Twitter.

Skycoin Features

Skycoin offers all of the following features:

No mining, which means dishonest miners cannot destroy Skycoin through a 51% attack and other methods

Higher level of security with improved ease of use

Hardening against SHA256 pre-image attacks, as well as hardening against side channel attacks

Higher privacy than bitcoin transactions, including built-in features like wallet mixing and a money pot

Users are protected from identification, which is helpful for payments in hostile countries (Skycoin uses services like HTTPS and TLS tunneling to achieve this)

15 second transactions

Simple 256 bit deterministic wallets

Clients only need unspent output set instead of the whole blockchain

Coins are divisible to 6 places

Distributed exchange, including off-blockchain transactions available through a standardized API “gateway”

Powerful scripting language for contracts

OTC gateway API based on FIX, SWIFT, FIXatdl

Off blockchain transactions, allowing users to send and receive coins instantly with about 120 bytes of overhead without cluttering the blockchain

Who’s Behind Skycoin?

The Skycoin project originally appeared online with an announcement thread in December 2013.

Today, the Skycoin team consists of key members like Synth (the architect and project figurehead who has a background in mathematics and cryptography), Steve (developer and project manager who wrote most of the original Skycoin software in 2013-2014), Iketheadore (a developer who has worked on Skycoin core for several years), Monty Crypto, or Xa No (a developer specializing in Skycoin wallets for desktop, web, and mobile devices), and Erich Quist (a developer designing the new Skycoin wallets and website).

Skycoin Conclusion

Skycoin is a cryptocurrency best known for its unique Obelisk consensus algorithm. That algorithm prevents centralized control of the network by powerful mining groups. It’s neither a PoS or PoW algorithm, but uses a “web of trust” to create consensus.

Today, SKY continues to grow in value, recently hitting an all time high over $48 in January 2018. To stay up to date on the project, visit online today at Skycoin.net.