Introduction

The genesis of the Skycoin started back in 2012 when a couple of developers working on the bitcoin protocol realized that there are serious issues with Proof of Work (PoW) consensus algorithm and sought a better solution. In Q4 of 2012, research began on how to effectively replace PoW consensus, which led to the development of Skycoin in early 2013. The problem at the time (and still today) was the issue with miners who wanted higher fees — being in miners’ best interest — leads to the centralization of mining power, as seen now with three Chinese pools controlling most of hashing power for Bitcoin.

Skycoin claims they’re upholding Satoshi Nakamoto’s true vision by creating a brand-new protocol that does not have transaction fees as well as establishes a completely new network with brand new infrastructure to not only create a completely decentralized cryptocurrency but a new internet as well. The coin was quietly worked on and wasn’t even available to buy until 2017 when they got listed on some smaller exchanges and opened an over-the-counter market for Skycoin. This project is the combination of many different projects, starting with being a cryptocurrency that is blazing fast (2 sec transaction times) and highly scalable, due to the new consensus mechanism they developed called Obelisk.

Obelisk is a completely new type of consensus algorithm, where consensus is reached by trust nodes rather than PoW or Proof of Stake. You can read more about Obelisk and its advantages here → https://blog.skycoin.net/statement/obelisk-the-skycoin-consensus-algorithm/

Outside of being a cryptocurrency, Skycoin has their own mining rigs that are for sale and are currently shipping as of the time of writing. These mining rigs allow you to earn Skycoin as you help support the network. The innovative aspect of sky-miners is that they essentially are network hosting hub/internet infrastructure for a decentralized new internet.

This reminds me of SUB as they’re trying to do something similar, but SUB are planning on using existing infrastructure to decentralize hosting rather than ship out new infrastructure around the world to decentralize all aspects of the internet. However, building a new internet with all the infrastructure would be a scope to large for most companies. Though, the Skycoin mining software can be used on any computing device and can send data through any means (fibre, WIFI) including over traditional ISPs, therefore its apt to call this project hardware agnostic, which should help adoption. Importantly, Skycoin is aiming at being an alternative to ISPs as opposed to SUB which are aiming to be decentralized hosting. Learn more about Skycoin mining, Skywire and the miner here →

https://blog.skycoin.net/statement/skywire-miner-hardware-for-the-next-internet/

As for the other aspects of the project, they’ve created a platform that can spin up a million blockchains so that each new business or project that is using the SKY platform can have their own blockchain independent from their main chain. This sub-project is called Skyledger and is currently used as an ICO platform for companies wishing to launch their blockchains on the Skycoin technology platform. Among these ICOs on this platform we find Solar Bankers, SPACO and MDL.life. Lastly, they have a social media platform called BBS, which would decentralize and create a social networking platform within the Skywire internet. Essentially, this coin is the one stop shop for all things decentralized in terms of blockchain. You can visit the repos for each of these projects here →

https://www.skycoin.net/architecture-overview/

Pros:

• I think this coin is largely unknown right now because there was never an ICO and the team hasn’t really kicked up their marketing until December of 2017 with the hiring of a professional marketing team. While we’ve seen some big movements in its price recently, given the low circulating supply and the slow release of coins going into the future, we can easily see triple digit prices for Skycoin as this project raises more awareness.

• The idea of a decentralized, new internet has been thrown around for a while and some have been trying to utilize the existing infrastructure, but this is the first project that I’ve seen ship out their own dedicated hardware to build a completely new internet from scratch. That is highly impressive, I can’t even begin to imagine what will happen if they’re successful.

• The fact that they’ve built a completely new consensus algorithm as well as create an entire platform/blockchain from the ground up is highly impressive. Their consensus algorithm does solve some of the big problems BTC is facing right now with the conflict of miners wanting higher transaction fees. Skycoin has zero transaction fee, allowing it to be mass adopted and make it well-suited for a medium of value transfer. This working innovative blockchain demonstrates the technical competence of the Skycoin team.

• They have like 5 white papers and they’re all very technical, which makes me nervous since I can’t really understand a lot of what they’re saying. This is to be expected as their whitepapers are published in academic journals and are not aimed at laymen. There are more conventional whitepapers on the way with a lower technical level, however, these are not yet published to the extent of my knowledge.

• The team were relatively unknown until very recently. However, their team page has been updated and they have leading industry professionals involved from several established cryptocurrencies and traditional companies. Learn more about their team here → https://www.skycoin.net/team/

• The project is open source and have many active developers currently and many more that have contributed over the long 6 year development. All their development has been done on their public GitHub, so can be easily checked for accuracy.

• The team have announced several other projects that can spur market adoption if successful. This includes a hardware wallet, a hardware VPN, a hardware cryptocurrency terminal (like a Bloomberg terminal for cryptocurrencies), and games (online poker) on the blockchain with their programming language CX.

• Skycoin has no transaction fees, no rewards for mining blocks, is 51% attack proof, creates a brand-new internet with the same hardware you can mine Skycoin. They have many potential projects that are potential growth sources. If they deliver on just a fraction of their promises, I think this project can be very successful in the long term.

Cons:

• Their marketing has been pretty much non-existent due to the developers being busy with creating the platform. They didn’t even have a marketing team until a few months ago. Their current marketing team hasn’t been on the job long enough to judge if they are a competent addition.

• It costs 1 BTC to buy the mining rig/network node, which is a pretty high barrier for entry and won’t be accessible by many people. However, the 1 BTC is rebated in Skycoin so it’s not an out-of-pocket loss. It remains to be seen if they can produce enough miners to keep up with demand.

• They can very well be trying to do too many things at once and end up failing at all of them. I’m usually wary of projects that try to do too much at once and would much rather have them focus on the key components of the project rather than spread themselves too thin. The project of creating a completely new internet and is ambitious enough without all the other things they’re working on. However, they have made much progress on their projects this far with a fully implemented new blockchain and consensus algorithm, so it will be interesting to see how far this platform can go.

Technicals (17 Feb 2018)

• Market Cap: ~$158,915,303

• Ticker: Skycoin (SKY)

• Circulating Supply: 7,449,376 SKY

• Total Supply: 25,000,000 SKY

• Today’s $ price: ~$21.33

• Today’s BTC price: ~.00199

• ERC20 token: No

Fundamentals

Website: https://www.skycoin.net/

White paper: https://downloads.skycoin.net/whitepapers/a-distributed-consensus-algorithm-for-cryptocurrency-networks.pdf

Working Product: Yes

Roadmap: https://www.skycoin.net/roadmap/

Github: https://github.com/skycoin

Overall Thoughts:

I’m very bullish on Skycoin and think it will perform well 2018. The developers seem to be very competent and have chosen to focus on development instead of marketing this far. They’re trying to do it right. The code was re-written several times from the ground up to ensure stability and reliability for their network.

I’m intrigued by this idea of a brand-new internet with new infrastructure, and with the current political climate, this project can be a solution to the net neutrality issues plaguing the traditional internet. The fact that they’re not listed on any major exchanges should provide major price growth when they are listed on high volume exchanges (planned for Q2). There’s very little risk of the project running out of capital, although I’d like to see a more official budget assessment and a more detailed roadmap going into 2018.

Overall, I can see this platform growing to become one of the top 15–20 crypto-projects within 2018, equating to 15X price increase. There’s so much I’ve oversimplified for the sake of this write-up, so do yourself a favour and look more into this project. Thank you for reading and as always, do your own research and feel free to email me with any questions.

Analyst at the Crypto Investeringar AB

Sceniex@gmail.com

Disclaimer

• This is not financial advice; please do not invest more than you can afford to lose.

• I do not own any Skycoin at the time of writing. Though I am considering investing some personal funds.