Have you ever thought about what would happen if you combined the privacy features of Monero with the backend structure of Tor and the economic incentives of Bitcoin, Ethereum, and other cryptocurrencies? I hadn’t either until I found out about Loki who did just that. Today we’re going to be examining an up and coming project that blends the principles of many great technologies. We’ll be deep diving into Loki going through all of its key features including its private messaging service, nodes, and its outlook for the next year.

What is Loki?

Loki takes a lot of different ideas and brings them together to create a networking protocol. That networking protocol is built in a way to grant it security from outside attacks and operates in a manner to give those who use it privacy and an incentive for maintaining that network. From that protocol, developers will be able to build what they call SNApps or “Service Node Apps.”

These applications can be thought of as similar to DApps with one key difference. DApps run on the blockchain while Loki’s SNApps are running on the network node layer that is secondary to Loki’s blockchain. The importance of that distinction is that any SNApp is not bound by the blockchains ability to scale the two networks are independent in that fashion.

A Tale of Two Networks

With Loki there’s a blockchain layer like we’re all familiar with and then from that there is a protocol layer or network layer. The blockchain layer is built from the source code of Monero and it’s what imparts to Loki all the fantastic features like RingCT, ring signatures, and stealth addresses. Aside from those features the blockchain layer has some differences from Monero. The primary change being the hybrid Proof-of-Work/Proof-of-Stake consensus protocol and hybrid nodes that make its second protocol layer possible.

The protocol layer is a distributed network comprised of the service nodes and operates between the nodes themselves without the blockchain. Because of that design those operations taking place in this layer are off chain and is what gives Loki its scaling ability and is called Lokinet.

The nodes communicate with each other using onion routing which is a protocol that creates paths between nodes to communicate packets of information. The importance of that protocol is its used to obfuscate where the packets came from and where they’re going to give the user anonymity. It is on this layer that all SNApps will be hosted and accessed. Please see the image below for a visual representation of how the two layers would be organized.

Loki’s protocol is called Low Latency Anonymous Routing Protocol or LLARP for short. It’s a combination of The Onion Router (TOR) and Invisible Internet Project (I2P). Loki took the functionality they wanted from those two mixnet architectures to create their own protocol that is optimized for their nodes and give the properties they needed to have a fully running system. For a full breakdown of TOR, I2P, and LLARP and how they function please see pages 5 and 6 of the Loki Whitepaper.

Service Nodes

Service nodes are the key to the Loki project as they are the bridge between the blockchain and the network layer. With the blockchain layer, service nodes function as masternodes and they are rewarded for their verification of blocks from the block reward. Their primary functionality however is with the network layer where they host and run the off chain SNApps. Through this design Loki has created a mechanism that encourages off chain scalable growth through the on-chain rewards from blocks.

SNApps

SNApps are the front-end applications that people will be using off of the Loki network. They are hosted and run through the network layer of Lokinet. Because of the location of the applications they are completely off chain and therefore not impacted by classic DApp issues of clogging the blockchain network. With that design it makes Loki a very attractive platform to develop an application on as developers won’t have to worry about slowing down the larger network or being slowed down by it. The first SNApp that will run on Loki is Loki’s own private messaging application.

Loki Messenger

Loki Messenger is the messaging application that is being developed by the Loki team and will be the very first SNApp on Lokinet. The messenger is an end-to-end encrypted private messaging service aka it allows you to send private messages to other people. That front-end service already exists but where Loki differentiates itself is through the back end as described above.

What is meant by that is services like Telegram offer the ability to have encrypted messages they are still running off of a central server. With Loki that end-to-end encryption is offered and takes place on a distributed network that cannot be subpoenaed or shut down by any government entity.

LOKI

LOKI is the coin of the Loki blockchain and is used as a reward for those who maintain the network. The network itself is maintained in multiple ways thanks to the hybrid consensus model that Loki employs. Service node holders will be rewarded with 50% of the block reward when they launch in a couple of weeks and miners will be receiving 45% of the block reward. The last 5% of the block reward is allocated to governance.

Outlook

Loki has a straightforward roadmap with four major release goals. Each one of those goal is crucial for their project to be up and running. The first of those goals was the Loki mainnet release which occurred back in April of 2018. Currently, the team is working on getting their service nodes up and running for the blockchain. That milestone is scheduled for November of this year. 2019 brings with it the big guns and the release of the Loki messenger in January or February of 2019 and finally the release of the SNApp Open Source SDK in March 2019 which will be crucial for growing Loki.

The Loki team currently releases weekly developer updates and aside from their Twitter account would be the best way to keep up with the team’s progress. Those updates are released on Loki’s subreddit here.

Price

LOKI is currently traded at a price of $0.17 or 2454 Sats. Total supply for the coin is 31.9 million and the circulating supply is 26 million. Given those numbers the market cap for the coin is at $4.7 million and daily volume for the coin was $27K.

Exchanges

Both TradeOgre and Cryptopia offer trading pairs for LOKI. TradeOgre only offers a BTC pairing but it has the highest volume at 63% of the daily volume. Cryptopia has three pairings BTC, LTC, and DOGE for LOKI with the BTC pairing having the only significant volume at 36%.

TradeOgre — https://tradeogre.com/

Cryptopia — https://www.cryptopia.co.nz/

Community

Please see the following links to learn more about Loki:

Website — https://loki.network/

ANN — https://bitcointalk.org/index.php?topic=3016125.0

Reddit — https://www.reddit.com/r/LokiProject/

Twitter — https://twitter.com/Loki_Project

Whitepaper — https://loki.network/whitepaper

Conclusion

Loki is an up and coming player in both the privacy coin and private messaging blockchain world putting itself into contention with the likes of Monero and Mainframe. That’s some great company to be mentioned with in my opinion. What remains to be seen for Loki is how the Loki token itself will be utilized on Lokinet. At this moment the SNApps and their design is already an answer to a problem that many have been speaking about in regards to Ethereum for quite some time. With the base of Monero’s privacy combined with that scalability Loki looks to have a very bright and private future.

Thank you for reading today’s article! This is my first article for this week. I’ll have two more coming out covering what is a blockchain and Oceanchain on Wednesday and Friday. As always follow me on here or on Twitter @thant1194 or on InvestFeed @thant11 in order to stay up to date on all my articles as I release them. I am not associated with Loki team and am a holder of their coin. Thank you again for reading. I have to return some video tapes.

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