Last week we talked about Substratum, an ecosystem coin that has been doing quite well, but it isn’t the only one on the market.
With multiple coins popping up that address the same problems, some healthy competition emerges, and we see what happens when multiple solutions exist for the same problem.
SkyCoin is one such example. Having been in development since 2011, it has received input from some of the early developers of Bitcoin and Ethereum. In 2017, it officially launched its ICO, and what sets it apart from many of the other coins in the space is there is an actual product available. Many other projects ICO with the understanding the money will be used to fund the development over the next few years. SkyCoin was very close to launching their testnet, and did so eventually in April.
Differentiating SkyCoin from the Market
As a potential investor, it helps to realize what the differences are between many of these coins. One thing that sets SkyCoin apart from its competitors is the protocol is uses. Rather than using POW or POS, it uses an algorithm called Obelisk that depends on a protocol called “web of trust dynamics”.
This is special for the singular reason that it is not nearly as costly to run the SkyCoin network. From the very beginning, it was designed to be energy-efficient in a way Bitcoin’s network (and others) are not.
The Mechanics Are Unique
Critics find it easy to claim that many cryptocurrencies are designed to be speculated upon more than having an actual use case.
The actual goal of SkyCoin is to decentralize the Internet at the hardware level. This means managing the bandwidth, storage, and computational resources in a way that allows for fair access to the Internet and maintains net neutrality. SkyWire is SkyCoin’s flagship application, and it is designed to achieve this ambitious goal by leveraging the incentives presented by blockchain technology to circumvent the human nature driven errors of the past.
SkyCoin’s proprietary coin is SKY and can be used to rewards users for providing bandwidth. There are many benefits to the way SKY and the market mechanics behind it are designed. SKY is resistant to 51% attacks and has transaction times lower than 2 seconds. Additionally, SkyCoin has its own coin-mixing service called CoinJoin that allows for privacy to be maintained on transactions. Additionally, SkyCoin has a proprietary ICO platform called Fiber.
In a manner similar to NEO/GAS, dividends are paid for holding SKY in the form of Coin Hours. Transaction costs may be covered by Coin Hours, since the network is designed to avoid transaction fees and mining rewards (due them causing an inflation in the amount of energy required).
The Long Case
By having a different model and approaching a big problem in a unique way, SkyCoin sets itself apart from other participants in the market. The coin is currently ranked 181 in terms of market capitalization, and is trading at approximately 0.0003 BTC.
With scalability seeming to be much less of a problem for SkyCoin than it would be for other platforms attacking the same problem, this could be a good price to make a purchase. Especially considering it is at a yearly low.
Featured image courtesy of Shutterstock.