SUMMARY

The Skycoin Project is an elaborate ecosystem that has been in development since 2010. Like Ethereum, it is a turing-complete platform for blockchain development. The Skycoin team realizes that the internet is outdated, centralized, censored, and inaccessible to more than half the world. They also believe the Ethereum framework is not yet sophisticated enough to achieve its ambition and that Bitcoin has failed Satoshi Nakamoto’s vision. As a result, Skycoin is attempting to succeed where others have failed.

The project consists of five core components.

SkyCoin (SKY) is the currency of the ecosystem, and mixes multiple wallet transactions by default via CoinJoin for true fungible obfuscation and default privacy. Coin Hours are generated as a representation of ¨holding-time¨ to allow users to purchase SkyWire Network services or be exchanged for SKY or other decentralized coins. The SkyCoin currency system features a highly efficient smart-contract framework through its dual specification and programming language. CX is the programming language and is claimed to outperform Ethereum´s Solidity on every front. It has zero-fees, two second transaction times, and is backed by an actual tangible utility: bandwidth.
SkyWire seeks to replace the entire current internet framework in a truly decentralized manner. Initial deployment piggybacks off of current Internet Service Providers (ISPs) to facilitate network adoption, but eventually, as adoption ensues, SkyWire (via SkyMiner nodes) will become a Wireless Mesh Network(WMN) effectively decentralizing the internet. SkyWire is comprised of a peer-governed node system that gives control of the entire network to its participants via the Web of Trust (WoT).  

SkyMiners are the custom-built hardware VPN units that will provide the computing power, networking capabilities, and storage capacity needed to operate the SkyWire Network. SkyMiners are a low-cost, energy-efficient, plug-n-play device designed for non-technical user adoption. Furthermore, users may build their own SkyMiner variants in accordance with SkyCoin´s open-sourced and decentralized nature.
Obelisk is a Web of Trust(WoT) consensus algorithm that is immune to both 51% attacks and centralization. It claims to be superior in efficiency, security, and decentralization when compared to both proof-of-work (PoW) and proof-of-stake (PoS), as it does not rely on mining or staking. Furthermore, the entire network has built-in detection techniques that sever bad actors from the WoT before they have a chance to propagate.

Fiber serves as ¨the infinitely-scalable and highly customizable parallel peer-chain architecture of the Skycoin platform¨ [1]. However, thanks to the parallel construction of its framework, interoperable platforms will be free of the many network congestion issues prevalent today. In stark comparison to ERC-20 tokens operating on the Ethereum Virtual Machine, ¨Each project hosted on Fiber receives its own fully customizable, private blockchain capable of Visa-like speeds¨ [1]. Fiber also serves as the launchpad for decentralized applications.

TEAM

Skycoin is being supported by a vast global community. Co-founders Synth and Houwu Chen have notable industry backgrounds. Synth was one of the earliest contributors behind Bitcoin, and Houwu Chen was one of the earliest contributors behind Ethereum. To supplement their notable backgrounds, their Key Advisors include Coin Agenda CEO Michael Terpin, SIWA Therapeutics Charmain John Otto Peters, the entire TokenKey team. Their key investors are listed as Qtum CEO Patrick Dai, Digital Currency Fund Alphabet, and Hive Chain Labs.  

Sentiment analysis

The Skycoin Project has a strong community, with 3.4k redditors, 2.1k members on Telegram, 1.7k members on Discord, 13.9k followers on Twitter, 2.2k YouTube subscribers, and thousands of commits between 49 repositories on Github. There are 9449 active nodes at the time of this writing.

UTILITY AND INCENTIVE SCHEMES

There are many uses for SkyCoin (SKY). First and foremost, much like Ethereum's ether, SKY is the native token to the Skycoin infrastructure. However, unlike Ethereum´s ¨gas¨ transaction method, transactions on the Skycoin Platform are paid for in Coin Hours, which (assuming you own any SKY at all) are readily available and rewarded hourly on a 1:1 ratio. SkyCoin´s true value comes from its direct association to bandwidth; unlike most coins, the value of SKY is actually derived from the purpose of its infrastructure. As a user, you will spend Coin Hours derived from your SKY holdings as a means of accessing various services on the new decentralized, secure, net-neutral community owned internet infrastructure. Consensus nodes (likely any device with an active chaindata copy) and SkyMiners receive SKY to compensate for their network contributions and network maintenance costs.

Tokenomics

The initial distribution of SkyCoin and its ICO are not readily available. It appears, however, that the majority of SkyCoins were distributed to developers and early adopters on a much larger scale than those purchased through one of their ICOs. In May of 2015, the first ICO sold 450k SKY. In September of 2015, 1 million were sold to a large investor. Another 550k were sold to early adopters between April and December of 2016. Around 600k in total were distributed via C2CX in the year 2017 with another 1 million sold over the counter in December of 2017. One million Skycoin were once again distributed to a large investor in December 2017. As an incentive to buy SkyMiners, 330k SKY were distributed as rebates. After being listed on Binance in May of 2018, the team provided 85k SKY for liquidity and another 50k for the Binance trading competition. Finally, another 110k have been distributed since June 2018 as a part of the Skywire Testnet Rewards program [2]. The total supply of SKY is capped at 100 million coins, of which 25 million are available and 12.5 million are currently in circulation [3].

CONSENSUS ALGORITHM & SCALABILITY

Skycoin utilizes their proprietary distributed consensus algorithm dubbed “Obelisk” which uses a “web of trust” to exert influence over the network. The web of trust requires every node to have a list of other nodes that it subscribes to. The weight of a node’s network of subscribes is instrumental in determining its influence on the overall network. Each node is assigned a personal blockchain that publicly records all of the actions of the node while being completely visible [4].  Furthermore, the public nature of each individual blockchain allows the network to react to malicious actions of nodes by electing to eliminate connections with these nodes. Skycoin’s consensus algorithm allows the community to shift the balance of power within the network if they collectively change their trust relationships. SkyCoin aims to solve the scaling issue with their architecture solution called Fiber. Fiber has been engineered to enable vertical and horizontal scaling without network deficiencies existing at scale. Building on top of the Obelisk blockchain ecosystem, every token ran on Fiber will be ran independently of one another, ensuring that they never impact each others network stability, security, or throughput [5]. Skycoin utilizes a symbiotic peer-chain system permitted by the implementation of Obelisk and Fiber, with a focus on developing into a global peer-to-peer mesh network.

SENTIMENT ANALYSIS

0x is an open-source protocol with a repository on Github for everyone to see. 0x has a strong community following as well, with 146k followers on Twitter, 1.5k on Discord, and 15.5k on Reddit. At the time of writing, there are several Dapps using or planning to use the 0x Protocol:

Aragon, Auctus, Augur, Balance, bZx, Blocknet, ChronoBank, Coinbase Wallet, CoinGecko, Emoon, Dharma, District0x, dYdX, EasyTrade, Gods Unchained, Hut34 Project, Lendroid, Maker, MelonPort, MyCrypto, OpenANX, Paradigm Protocol, Request Network, Set, Settle Finance

There are also several relayer services that are using or plan to use the 0x Protocol:

Amadeus, Bamboo Relay, Dextroid, ERC dEX, Ethfinex, IDT Exchange, Instex, Lake Project, LedgerDex, MobiDex, OpenRelay, Paradex, Radar Relay, Shark Relay, Starbit, The Ocean, Token Jar, Tokenlon, Weswap

Adoption analysis

Skycoin faces many well established competitors, but has distinct advantage due to its low-cost of entry and vast utility. The Skycoin Project has a longstanding reputation in the cryptosphere, and many notable supporters within it. For the project to reach its noted end-goal of replacing ISPs, however, a very large-scale user adoption movement will need to take place. The Skycoin network is reliant on the connectivity of clustered SkyMiners. The cost for this hardware and deployment of such hardware is a barrier to adoption. In practice, purchasing a SkyMiner is no different than the router most people rent from their ISP. Even in smaller markets, relatively large adoption will need to occur for users to fully leverage the SkyCoin network as their connection of choice. Mass adoption for Skycoin is years away considering they haven’t launched their mainnet yet. However, Skycoin has a strong community behind it, surviving now for almost 5 years, which is a lifetime in Crypto. Skycoin will need to launch pilot programs while producing cost effective hardware to bootstrap their network and drive adoption.

Current Status and Growth Opportunity

For now, Skycoin is playing it smart; they are not directly combating ISPs just yet, and are instead piggybacking their infrastructure until they believe they are able to break free. Furthermore, due to the way they have constructed their consensus algorithm, the Skycoin Platform can survive on a very scarce and lean-node infrastructure, far leaner in fact than the 9,449 active nodes they have today. SKY was listed on Binance around late May last year and subsequently gained a market cap of $216 million, but currently sits at a market cap of $12 million [3]. Skycoin has yet to launch their Mainnet which should be a good short term price catalyst assuming all goes well. The Skycoin Project is poised to disrupt, reshape, and move into many markets. That being said, they have only rolled out their testnet and deployed the first-wave of SkyMiner hardware.


[1] https://www.skycoin.net/blog/infographics/skycoin-fiber/

[2] https://christianott.co/skycoin_distribution_en/

[3] https://coinmarketcap.com/currencies/skycoin/

[4] https://www.skycoin.net/blog/statement/obelisk-the-skycoin-consensus-algorithm/

[5] https://www.skycoin.net/fiber/