Back to list

Development Update #16


  • The new developers for the meshnet are setup and working now.
  • The source routing implementation is almost done.
  • wifi controller library is working and just needs adhoc mode support and some bug fixes.
  • Last gui changes to wallet are being made. One of the coin developers who was on vacation for past two weeks is coming back to project.
  • First draft the of Obelisk white paper is done. Will be on Github soon.

Coin Distribution:

  • Should be fair
  • Should be responsible and not negatively impact price.
  • Should emphasize incentives, achieving market share and community members over speculators
  • Should taper. The rate of distribution should decrease over time
  • Should spread coins among as many people as possible
  • The rate coins going on to the market should decrease faster than the growth in the user base. Coins should become relatively rarer over time.

Fairness means:

  • Coin distribution policy should be open and discussed
  • No one should received coins at below market price in backdoor deals
  • As much information as possible should be given to allow users to verify the fairness of distribution
  • This might mean that we place undistributed coins in announced addressed addresses, so that their movement can be verified publicly.

This is our current understanding.

Skycoin Economic Policy:

  • If executed properly, Skycoin offers the prospect of a larger percentage of the Skycoin in the hands of users and community members instead of miners and speculators, compared to alternative distribution strategies.
  • coins should not be given out, except for actions that are costly or which increase the equity of all coin holders
  • If $1 in marketing results in a $5 increase in coin market cap, we are not spending enough on marketing
  • If a mesh network node cost $300 to deploy and we can verify it, a $200 Skycoin bonus to the node operator would be acceptable because the hardware purchase increases the value of the network, promotes adaption, increases the value of all Skycoins and is “proof of burn”. Community participants are much less likely to dump coins than speculators.
  • A Skycoin with a 2 billion dollar marketcap, is a Skycoin that can subsidize 20 million Skycoin users to deploy 600 million dollars in Skycoin nodes. The higher the price goes, the more users the subsidy can encourage to build nodes. 1,000,000 million users creates more value for the network than 10,000 users. A smaller initial distribution (1% vs 30% or 90%) leaves more room for larger more impactful, later distributions.
  • Coin in the hands of community members and participants are much more valuable to the network than coins in the hands of speculators.
  • We should encourage and support ownership by developers, active community members and network operators and discourage ownership by speculators.
  • A speculator who buys 1,000 Bitcoin worth of Skycoin and sits on it passively, does not contribute anything to the long term value of the Skycoin network.
  • Skycoin developers sitting on 10 million in Bitcoin that cannot be spent, will not increase the value of Skycoin.
  • the official Skycoin policy is the protection and growth of the equity of all coin holders.

Should Skycoin Developers Be Public and Should Skycoin have a Foundation:

  • The Bitcoin foundation is a complete failure and nothing good has come of it. Every high ranking member of the Bitcoin Foundation has outstanding legal troubles and is therefore under the threat of adverse influence. “If you want to stay out of jail for running an exchange without an MTA license, you will do what we say”. Evaluated on its merits, the Bitcoin Foundation has not advanced any projects that have significantly advanced or improved Bitcoin in any way. Every improvement to Bitcoin has come from outside of the foundation.
  • The public identities of the Bitcoin developers have decreased Bitcoin security and created a target list for hackers and governments. The processes and people that need to be influenced to infiltrate, destroy or discredit Bitcoin are now in the open.
  • An additional function and primary purpose of the Bitcoin foundation, is as a venue for networking between influential people in the Bitcoin community, Bitcoin developers and the CEOs of Bitcoin companies. These connections allow the extension of favors, influence, privileges and insider information. Insiders close to Mark Karpeles had advanced warning that MtGox had lost Bitcoin and was considering going into receivership. They were able withdraw coins or trade before the announcement. While the public was constantly reassured that nothing was wrong, despite the information the CEO of MtGox knew privately and had confided with people with privileged access to Karpeles.
  • A Skycoin foundation and publicly identified developers would increase the prestige, media profile and networking opportunities of the Skycoin developers, but would bias the developers towards influence by the power network. If a decision would benefit the users but negatively affect a large company or interest in the power network, the foundation would create bias toward the concerns of the interest.
  • The founder of Ripple left the company and all the insiders knew, but this information was not communicated to the user base by Ripple Labs and was not known to the public for seven months after he jumped ship. The news was broken in Wired, but was widely known by insiders. There is not a level playing field.
  • Ripple sold XRP to investors at below market price, in unannounced, secret deals. These deals were known by privileged people. Individuals at Ripple Labs were forced to quietly and reluctantly acknowledge the deals only after their existence was leaked.
  • The Skycoin developers must be embedded and represented in the power network, but not be influenced by it. There is reoccurring temptation to compromise moral principals for social advantage. Public identity and the networking advantages afforded by a foundation make the temptations more numerous and immediate.

Public identities for developers subject Skycoin to unnecessarily legal harassment. The Megaupload lawsuit demonstrates that governments will put protecting powerful economic interests ahead of due process and the law. Comcast and Time Warner have spent hundreds of millions of dollars to crush municipal broadband at the state and federal level. These companies exercise powerful influence over municipalities and foster political connections they use to exclude competitors. They buy nominees to the FCC, buy court systems through political patronage and have even corrupted congressional staffers to reclassify themselves as except from the common carrier access rules. Whitespace networking equipment that would threaten their monopoly over internet service has consistently been sabotaged before testing while in FCC custody.

They have a record of using frivolous lawsuits to bankrupt smaller competing ISPs offering faster, cheaper, internet service. Mesh networking is an inevitable threat to their business model and a threat these companies must address. They are likely to respond by pushing neutered mesh standards that maintain their power, while using patents, regulation and legal threats to kill off viable competitors. If Skycoin succeeds, the developers would in severe legal and possibly physical danger. I don’t even have to mention what is happening to the popcorn time developers now.

Bitcoin is a theoretical, remote and abstract threat to banks and the existing financial order. Bitcoin exists within the existing system as just another commodity. Bitcoin is now seen as no more a threat to the system than gold (which is tolerated).

Skycoin and mesh networking is an inevitable technology that is ready and could become dominate within a much shorter time frame. Anyone working on a viable mesh networking project should be prepared for the same legal response that competing ISPs and municipal broadband have faced. These companies have already begun filing patents and buying up mesh networking patents and deploying their own wifi hotspot networks. There is danger that we get a mesh network, but that its owned and operated by Comcast/Time Warner.

Skycoin Discussion:

  • Skycoin must be much more aggressive and proactive than Bitcoin. Bitcoin development has been extremely conservative. Bitcoin has not changed substantially or evolved significantly beyond what it was at launch five years ago. The usability of Bitcoin is still horrible, the security is still horrible, the existential threats remain. The Skycoin should not and cannot allow itself the level of complacency Bitcoin has shown for these issues. Issues such as signature malleability were known for years, had simple fixes and were left unresolved. Issues such as hash collisions and some forms of signature malleability fundamentally could not be resolved without a blockchain reset, which there was no political will for.
  • In the long term, we believe that Bitcoin was, as Satoshi said, an experiment. Bitcoin succeeded in sparking the cryptocurrency movement and setting in motion this chain of events. Bitcoin has changed the world forever and will we not go back. However it is becoming increasingly clear that Bitcoin will not be the final or best cryptocurrency.
  • Bitcoin is only five years old and its market cap is only 6 billion dollars. We believe that a successful, widely adapted cryptocurrency standard twenty years from now will have a market capitalization north of 200 billion dollars. We believe that crytocurrencies are still in their baby stages.
  • We do not believe the absolute number of coins matters, as much as their scarcity. The balance of money flowing in to a coin (influx of capital) and money flowing out (outflux of capital) determine coin price. During hype a coin can receive a large influx of capital and large market cap, but as the reality sets in, fewer new people will buy into the coin. The liquidity of the coin will become low and existing stakeholders will be unable to cash out without tanking the price (Ripple and Mastercoin). If a coin experiences constant user, growth, increasing adaption and its potential is substantiated (Bitcoin), it will receive an ever increasing valuation and influx of new new users and investment and will continue to grow. The long term average growth rate will track the user base growth. The coin will continue to grow until user growth stops or until the addressable market has been saturated or until competitors emerge which begin to steal market share.
  • There will be several cycles of growth and collapse as old coins die to new competitors.
  • Bitcoin may be the first and currently most popular cryptocurrency, but for an increasing number of people, it was a gateway drug into a larger cryptocurrency ecosystem.
  • Users of Bitcoin, once educated are likely to adapt other currencies. They will choose the currencies they use based upon liquidity, convenience, ease of use, security, price stability and brand. It cannot be ruled out that Bitcoin is merely creating a market of savvy, cryptocurrency proficient users for its successor.
  • Coins are in competition with each other. There will be thousand of coins. The coins with the best management, development team, vision, reputation and capacity for innovation have the best long term prospects. Therefore building up development capacity and community is essential the long term success of the project.
  • The current incentive for coin developers, is to launch a new coin, pump and dump the coin for Bitcoin and then repeat the cycle. Skycoin must not fall into this cycle and must be focused on the long term. A huge upfront ICO encourages developers to take the coins and run. Successful coins and communities such as Bitcoin and Dogecoin are highly focused on long term growth and adaption, not merely making as much money as possible in a pump and dump.

New Development Bounty:

There is a new development bounty for a golang library for saving blocks to disc. It should - keep track of when block was first seen - treat blocks as series of bytes, with a sequence number (incremented every block depth), a hash (current block hash) and previous block hash (hash of parent block) - the library should use callbacks so that it can support different blockchains and does not need to import the skycoin block struct specifically - assumes blocks have a ToBytes() method that returns the byte serialization of a block object - should keep an index of where each block is on disc, so that blocks can be pulled out quickly - we want to be able to pull out blocks by hash and also find children of block (blocks who have the block as a parent)

We will write a basic blockchain storage library and someone can come in and fix it. We have a working implementation, but its integrated tightly with the skycoin repo and we need it as a library. Our current implementation reads the whole blockchain file to ram and keep it there and when saving it saves the whole array of blocks over again. It cannot just write one block to disc or read one block from disc. It will work until the blockchain is a few GB in size.

No translation bounty

Read about the Skycoin Bounty Program