Not sure. White papers are taking forever.

I have five whitepapers to write and whitepaper four is only half done and its 16 pages. Writing the whitepapers is taking longer than implementing the consensus algorithm.

It would be unfair to do the IPO before people can read the white papers about what we are doing and before the client works on everyone's computer.

Skycoin does not have signature mutability, does not have transaction mutability, does not have duplicate coinbase outputs and dozens of other changes and improvements from Bitcoin. Skycoin makes dozens of changes from Bitcoin and each change has to be described. Most of the whitepaper for the blockchain design, is about flaws in Bitcoin and then how Skycoin addresses them.

Investors hear about "signature mutability" in the news and its bad, but they do not know what it is or what the difference between signature mutability and transaction mutability is. The white paper has to explain this.

The long white paper was split into three white papers, there are about five white papers total we have to write. Its exhausting.

Development Update:

We are doing a lot of writing and documentation right now. The white paper is being split up into three white papers. We are going to have a more general document on problems with Bitcoin and Skycoin's long term approach to each problem. We want to emphasize the design differences and choices Skycoin makes.

Documentation is becoming more important. New users cannot read the whole thread and need a compressed and organized overview of the project. This document will also help developers who are working on Skycoin infrastructure and create a road-map for the backend

IPO:

Documentation is taking all the time. Documentation is the first thing everyone will read and it has been something we have ignored until now. We are paying our debts.

Update: White Paper is Out

First Draft of Skycoin Distributed Consensus Whitepaper is on Github

https://github.com/skycoin/whitepapers

I need feedback. I feel like it should be trimmed down a bit.

The blockchain security is solid. No one can spend your coins without your private keys. We can guarantee that.

Our cryptographic security is higher than Bitcoin's. Ethereum is using the same cryptographic library and we have tested everything to death.

We are using golang so there are no buffer overflow attacks or way that remote party can take over the client and steal your wallet. The worse than can do is crash the client, but cannot loot the wallet remotely. Bitcoin is using C++ and OpenSSL and was affected by the HeartBleed bug. It was possible to buffer overflow Bitcoin through the OpenSSL library and possibly steal wallets through the merchant protocol.

Skycoin was implemented with almost no dependencies. There are no 3rd party libraries in Skycoin that can be exploited. The only 3rd party library we are using is for encryption and we fuzzed the library for days and put in strict constraints on the data allowed to pass into the library. The program is designed to crash, rather than accept the invalid input that could lead to leaking the private keys. Even if attacked, we do not know of any way that the client can be used to exfiltrate the wallet or private keys over the network.

On the client side, the security is already at level where it cannot be improved without moving the private keys to a dedicated hardware device.

The breaking changes we plan on making are related to networking. We have to make changes to the connection pool library and peer discovery protocol. The transaction related parts of the coinbase are finished and in a frozen state.

There might be an advantage to saying that this is a test network and the coins are tokens which will convert into a future coin when its ready rather than saying its "alpha". The blockchain is done and we are not making any large changes. The existing blockchain will just roll over, so its technically incorrect to call it a separate coin or a coin placeholder. However, it might be better to say that for the purposes of communicating what people are buying.

Development Update: Skywire

Everything was working in January; launch has been delayed because of refactoring. We are exhausted because of coding coin. Everyone wants to get coin over with and get meshnet working. We can get a lot of press on reddit by delivering the meshnet. People are rioting because of Comcast/net neutrality right now.

Everyone is ready to deploy nodes in their city, setup local meetings, develop hardware and coordinate deployment across North America. The software is not ready however. We are realizing that this matters 100x more than the consensus stuff right now. If consensus and security takes a year, its fine.

We should get coin minimally working, do the IPO, release the meshnet software and then hype the fuck out of it everywhere. The success of the Maidsafe IPO before they have even demonstrated the technical feasibility of their coin is another factor that has changed our perspective. Even if Skycoin has several long term goals for the coin in terms of security and usability, we should focus on what will have the greatest impact and create the most value right now.

On Reddit, people want Google to come in and save them with Google Fiber. Google is not going to save them. Google is only rolling out enough fiber that they can threaten Comcast if they start throttling Youtube and demanding money. Reddit want salvation and want to feel that there is something they can do to fight Comcast. Skycoin/Skywire is the salvation they want and something people can do now. We need to get the software working.

We need to bridge the last mile between the home and the fiber backbone.

This means,
- we should put the main blockchain in a personal blockchain
- Launch the mainchain now, so people can send and receive. Get IPO over with
- Move the wallet Javascript developers onto the Mesh network map for coordinating node deployment
- Get mesh working in a few days.  
- Release white paper and put one guy on consensus
- Cut whatever corners are needed until mesh is running
- Deemphasize Skycoin's security and other things. Focus on the Darknet Plan message.

Skycoin is now in Alpha. We are launching immediately. We will be pushing breaking changes frequently until beta. If we have to do resets, balances will not change and the total number of coins will not change. Any reasonable change except those two is fair game until beta. We will be breaking network protocol compatibility every week. We will try to put in alert system so people know to install updates.

- coin is done
- DHT lookup is done
- Services is done
- New blockchain sync is being worked on
- New transaction relay is being worked on
- IPO website has to be built
- IPO start

We spent a lot of time over last two weeks bringing on new developers for the meshnet project and getting them setup. That slowed down the coin a bit.

Development Update:

I have twelve Redbulls and will try to launch by tomorrow.

In Ripple you have a bunch of node. If a peer rejects a transaction, then to achieve consensus, the connection's peers will drop the transaction and the rejection of the transaction propagates through the network. That means that a single bad node can freeze the assets in a particular address.

Ripple is must more vulnerable to government influence and control than Bitcoin, because control of the network is centralized in financial institutions. Nodes are run by exchanges (called gateways in ripple). Exchanges are highly regulated by governments. They need licenses and government and bank approval to operate. Governments can court order exchanges to block transactions for particular Ripple addresses and the exchanges must comply and have the ability to comply. Governments can impose Know Your Customer Requirements through the exchanges that control the key nodes in the network.

The other flaw is that node consensus occurs in private in Ripple. Nodes can act maliciously and it cannot be detected by the public. In Skycoin, consensus is public record and malicious nodes can be held accountable. Ripple only works if you assume the nodes in the network are not malicious, which is a bad assumption.

The other problem with the Ripple network is that most of the nodes are still run by the development organization. Control of the Ripple network is centralized with the developers. When you consider the number of secret court orders that many crypto companies have been receiving lately to backdoor their software, its very dangerous. The government has gone to companies like Google and Lavabit and told them "You have to do this" and they have to do it. They are not allowed to tell anyone. Companies that have tried to resist or fought the court orders or did not comply voluntarily have been crushed.

You can comply with the court order, or you can comply with the court order.  Many people decide "I am not going to do this" and decide to shut down the company instead of complying with the order. The government produces another court order saying you are not allowed to shut down the company and still have to comply with the court order. They tell you that you will go to jail if you dont do it. This is what happened to Lavabit. Ripple will comply, they are not going to shutdown and lose their investors money and destroy the value of their stock options over ideological principals.

Skycoin started with a central account like Ripple has, but later decided it was too dangerous for privacy and security. Skycoin and Bitcoin use outputs and generate new addresses for each transaction and we feel this is a better long term solution than the choice Ripple made.

Skycoin vs Ripple:

Skycoin is similar to Ripple at a high level, but with extreme differences
- Skycoin uses Outputs and Addresses for increased privacy and security and Ripple uses Accounts (which we feel are dangerous)
- Skycoin has block level consensus, Ripple does transaction level, which makes it easier to allow nodes to freeze assets
- Skycoin node consensus decisions are public and published so nodes can be held accountable, Ripple node consensus decisions are made in secret
- Skycoin gateway protocol is not on the blockchain and allows anyone to create any asset they want. Ripple's gateways only support a subset of hardcoded currency assets that Ripple decided to support and they are on the blockchain. Ripple does not support contracts, loans, options or more advanced scripted assets.
- Skycoin nodes are run by users, Ripple nodes are run by financial institutions and the Ripple developers.
- Skycoin is much much simpler than Ripple. The core of Skycoin is only a few thousand lines of code and easy to audit and verify. Ripple is a few hundred thousand lines of code and no one can understand how it works.
- Skycoin is easy to run and users only have to run one program. Ripple requires running between one and three servers depending on what you are using Ripple for.

Ripple is extremely innovative and a great accomplishment, but flawed. The inventor of Ripple has done many great things and has always been on the forefront of innovation. He created eDonkey, MtGox and Ripple. Every single thing he has ever done has been technologically innovative, ahead of its time, achieved great things and then collapsed.

Jed McCaleb is like one of those bioroids from Blade Runner.

If you look at the top coins, Peer Coin, Ripple, Bitcoin, Nxt, Litecoin, its clear that most coins with a fundamental innovation on Bitcoin's security model have done very well.

- Bitcoin was the first and introduced Proof of Work
- Litecoin introduced a new hashing function Scrypt
- Peer Coin introduced Proof of Stake
- Ripple introduced a model of relational consensus, which is flawed but innovative. Has a new codebase
- Nxt introduced pure proof of stake. Has a new codebase.
- Namecoin introduced a key value store on the blockchain

Market Caps:
- Bitcoin: 6 billion
- Litecoin: 300 million
- Peercoin : 50 million
- Ripple: 1 billion (but users have less than 1% of coins; so free float is only 50 million)
- Nxt: 25 million
- Namecoin: 20 million

Skycoin has a fundamentally new consensus model that is a major advance by itself
- transactions in seconds
- transactions cannot be reverted by people who control hashing power
- low cost to run network

Just the consensus model by itself will do well. A major attack affecting Bitcoin exchanges or abuse by miners could move people away from PoW towards coins like Skycoin that guarantee against attacks that revert transactions.

We knew about signature malleability three years ago and a decision was made not to fix the problem in Bitcoin, until people began using it to steal coins. We know about several attacks on Bitcoin that are theoretical, but which are becoming more likely and profitable as the coin value goes up. If you can use a router exploit and hack an internet router that traffic for a Bitcoin node goes through, you can fork the network for that node and steal coins from exchanges, banks and gambling sites.

Skycoin is hardened against all known vulnerabilities in Bitcoin. We were immune to signature malleability before the attacks on Bitcoin even began. We check for hash collisions from the start and did not have to monkey patch it. If someone develops a widespread SHA256 preimage attack, Bitcoin is dead and Skycoin will probably still be running.

Banks and businesses do not want to learn about or check for Signature Malleability. They dont want to know how Bitcoin works. They want to be able to trust that the developers fix known vulnerabilities before coins get stolen. Bitcoin is not clean or mature software. Fixing many of the minor issues in Bitcoin require a blockchain reset, that the developers are unable and unwilling to do.

With the financial success of Bitcoin, we have forgotten that Bitcoin was first and foremost an experiment. Many of the earliest developers of Bitcoin were selling massive blocks of coins when the price hit a dollar, because they never believed it would even get that far. People talk about Bitcoin 2.0, but we should be trying to get to Bitcoin 1.0 . No one can look at the Bitcoin-qt wallet and tell me that this is the best we can do.

In other words, the first goal of the Skycoin project was not to surpass Bitcoin, but merely to get to where we believe Bitcoin should be. The meshnet may fail, but we will still have a solid coin implementation.

>How does MaidSafe's technology come into play here? It seems like it can complement Skycoin really well.

Yes. We are working on many things that have similar functionality to Maidsafe. If you read about Protoshares, MaidSafe and Skycoin there is a common thread. There are actually hundreds of these related projects going on right now, but Protoshares, Skycoin and MaidSafe are the coin based ones.

https://github.com/redecentralize/alternative-internet

Skycoin is a building an infrastructure for applications. We are building an API for communication, identity and the automatic exchange of services and resources for coins. The original Skycoin was actually a distributed DropBox like MaidSafe has. This is called "Agoric Computing" and its a thirty year old idea. Its not new, but has become popular again recently. Maidsafe has been around for seven years and a lot of companies have played with this, but no one has been successful at selling agoric computing. All the technology people think its cool, but its a technology that does not necessarily solve problems that make people want to use it.

We had our distributed file system  working and components of it are still in the github.

Skycoin originally had mining but added a distributed time stamping system to prevent 51% attacks, then we realized we didnt need mining for consensus anymore. Then we decided "we are going to be the first coin that is 51% attack proof, more secure than Bitcoin and without miners". That added a lot of work to the project. Then we had the wallet team come on and they wanted to build the best wallet that existed and they wanted a web wallet so they could use HTML and Javascript to make it look good, but they also wanted it locally hosted for security. So we had to embeds a web browser in a window and that took a while.

Then people on the cjdns project convinced us to do a meshnet. The meshnet was already very similar in design to the darknet we designed for the distributed file system. That created a massive amount of work.  Then we had to implement a new coin blockchain, which required months of security audits, refactoring and checking for potential hash collisions. The coin itself is only a few thousand lines of code, but every line has to be bulletproof and triple checked.

Then we had the coin working. The blockchain had been running for a few months, but I was not happy with the networking protocol. I started refactoring the networking and that turned into Skywire. It started with the blob replicator, which used a cryptographic variant of the Gossip protocol. I realized that a lot of things were Blob data and used blob replication and that the distributed metadata store for our distributed file system could be implemented on the blob replicator.  That means I could throw out 12,000 lines of code, pull in Skywire library and the whole application was 400 lines and it did the same thing.

The Skycoin distributed file system was called cFTP for cloud file transfer protocol. In traditional FTP, the directory information for files is on the FTP server and the files themselves come from the FTP server. In cFTP the directory information is in the cloud and the files are in the cloud. The directory information is distributed using a distributed metadata library called "Ether" and files could be looked up by hash and the system was like Bitorrent. It would distribute your files across all your computers.  If you drop a file in your folder on your desktop, the file would appear in your media computer attached to the television. The file would look like a normal file, but if the media player started playing it, the file would stream from the desktop over the network to the media player and media player would cache a copy. If you didnt have a copy of the file on the network, it would find someone on the internet who had the file and start downloading it from them. The directory information and the files contents were now separate.

The distributed metadata library is called "Ether" and it is revolutionary. It is as disruptive as the invention of the blockchain data structure. Blockchains are ordered, Blobs are not ordered. So Ether is like an unordered version of a blockchain.

This will be reimplemented someday, but it was decided that the meshnet was the most important thing. We wanted a meshnet and tried a bunch of them and they sucked. They were poorly designed, they were difficult to setup, there was no reason for people to run a node, they did not protect you from lawsuits and liability if the mesh traffic is going through your IP address. We designed a meshnet that did not suck.

When I was finishing up the coin networking, I realized that I needed to sync multiple blockchains for Obelisk (each Obelisk node is running its own personal blockchain, described in whitepaper). So I developed the services infrastructure. You run one daemon and then associate network services with the daemon. Now blob replication, block chain downloads, Ether and the darknet router were just "services". The Skywire library makes developing p2p applications very easy. We now had an application infrastructure that 3rd parties could extend.

Right now, peers are IP addresses. In the future its a very small step to use a Skycoin address (a public key hash) as the "address" of the node. Each node will have an address and you can send a message to the address and the node will receive them. You can put a Skycoin node on your car and drive down the street and as it is connecting and disconnecting from different wifi hotspots, the IP address will change, the networks its connected through will change, but the node will have the same address. It will still be receiving packets as it moves across networks. With IP addresses, connections reset as you change networks. They dont let you just move to the next network if a connection drops.

This means you can take your laptop and move it anywhere and it will have the same address. The address does not change based upon what network you are connected to, the address is associated with the laptop. You can unplug stuff and move it around and always be able to connect to it.

We also did source routing, which means that the host controls the routing path. This means you choose how your packets are routed, not the routers. If you are playing a video game, you want the low latency route and if you are downloading something you want highest bandwidth. Different applications can use different routing in Skywire. The latency is actually lower than latency for TCP/IP because ISPs use "hot potato" routing. There are gaming services that lower your latency by tunneling your traffic through a VPN tunnel to avoid your ISP's hot potato routing. The Skywire meshnet is essentially the same, but for free.

Since we have source routing, if you run a Skycoin public wifi node, no one can trace the traffic running through that node back to you. You cant be sued for someone downloading music on your wifi node. You dont know the destination, the person receiving the data does not know the source and you cant read the contents because its encrypted and everyone is being paid coins for the traffic. If someone DDoS attacks you, they are paying you coins for the bandwidth for the DDoS attack.

There is no reason why an app cannot be built, that rents out storage space on your computer to other people for coins. There are dozens of dropbox clones on github and you just have to add coins. Many of them are federated and allow you to choose a storage provider. You just have to add coins. Its not difficult.

In some sense, coins are becoming like badges. There was a fad a few years ago where people would take anything and try to add badges to it. "I am going to make Groupon, but with badges". Coins are becoming like that. The difference is that if you have a coin, you are liquid from day one. You have a public market. Its like companies being publicly traded as penny stocks from the day they are incorporated, before they have done anything. Some coins are even trading, before they have a coin. MaidSafe is using colorcoins on the Bitcoin blockchain, to sell MaidCoin before the coin exists or anyone knows how it will work. Protoshares is a coin for a coin that doesnt exist yet, but he probably should have used Colorcoins and cut out the miners. So will see an increasing role for colorcoins for coin presales.

Another thing I noticed. MaidSafe is accepting Mastercoin. Mastercoin has done very well. Mastercoin had a massive IPO and the price jumped after the IPO. Everyone made a ton of money. However, Mastercoin is extremely thinly traded. Mastercoin did not have any new users after the IPO, so there was no one to buy out the people who invested in the IPO. No one can sell their Mastercoins without tanking the price. However, now they can convert their Mastercoins into MaidCoins in the MaidSafe IPO.

So I like MaidSafe as an idea. I like messaging, distributed storage and identity. However, some questions such as "Who is MaidSafe aimed at?", "Who will use MaidSafe?", "How will it get users?", "How are SafeCoins secure if they dont use mining?", "What prevents the creations of infinite safe coins?", "Why would people using MafeSafe drive up the price?". I would have designed MaidSafe's economy a bit differently too. People are mining altcoins to sell them for Bitcoins. What if people run MaidSafe to get SafeCoins to sell them for Bitcoins. Someone buys SafeCoins with Bitcoin to buy storage space on MaidSafe and then someone else provides the space and sells the SafeCoins for Bitcoin. There is no net capital inflow into SafeCoin. The price has not changed.

Development Update:

- 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. https://github.com/skycoin/darknet/commit/21e08943e753d985d3f30f5dee1022f027831c3d
- 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.

Maidcoin IPO Update:

Maidsafe is IPOing 429,496,729 coins (10% of total coins) at 17,000 Maidcoins per Bitcoin.
25,264 Bitcoins for 10%, for a 250,000 Bitcoin (125 million dollar) valuation.
The IPO will last 30 days or until 10% of the Maidcoins have been sold. The developers will keep the other 90%.

We are looking at the Maidsafe IPO closely and will use it to determine if the Skycoin IPO needs to be changed. Our understanding is that generally people who bought into the IPO early, will never sell for less than they bought for. This means that coin price can only go up from the IPO.

We also believe that Maidsafe has an incentive to buy back coins to provide a price floor, if the price goes below the IPO starting price.

However, Maidsafe is offering a 40% discount for people buying into the IPO in the first week. This means you can buy in early, then sell at the later IPO price and make a profit. We think the post-IPO price might end up being between the starting and ending IPO price. However after the IPO, there is a tendency for a media storm and the coin to pop.

We are watching Maidcoin very closely.

Skycoin IPO:

Skycoin will be IPOing 1% of coins for $50,000 or 100 Bitcoins, to create liquidity and allow exchanges to begin trading Skycoin.
- they may be a series of larger IPOs later
- they may be a gradual disbursement of coins onto the market
- there will be disbursement to people people building out the mesh network as a subsidy and incentive

We want to disburse the majority of the coins, but want to do so gradually and without pushing down price or being irresponsible.
 
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 dont 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 IPO 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.

To prototype Skycoin, we used a mix of centralized and decentralized components for prototyping.  We prototyped Skycoin and the emphasis was getting each component working. Over time the centralized components have been replaced by fully decentralized components. Skycoin will be fully independent of any developer run servers and infrastructure by the time Obelisk is finished.

Right now
- the ledger is decentralized, everyone has a copy of the transaction ledger
- transactions are decentralized and the transaction relay is peer to peer
- blockchain consensus requires Obelisk for full decentralization

For the mesh net, we will use a centralized routing database and payment clearing, to get it working as soon as possible. We have less than two months to do the IPO and get the meshnet working to stay on schedule. We will decentralize those components as soon as possible. However the priority is getting the network working as soon as possible.

The meshnet balances being exchanged are microtransactions that should not pollute the blockchain, so we are creating a system where the balances are stored and moved around internally by a third party and automatically withdrawn to a wallet after a threshold balance is reached. The current Skycoin implementation allows coins to be divisible to 6 decimal places, but rejects transactions whose outputs are not a multiple of a whole coin, to reduce blockchain spam. This system will be replaced by the decentralized Gateway Protocol at some point.

The idea is that we are making it easy to move around subcoin balances off chain and do microtransactions without polluting the blockchain. Then when your balance is large enough enough, it can be withdrawn to your wallet.

Ideological Differences in Skycoin's Decentralization Philosophy:

"Decentralization" means a lot of things to different people. Bitcoin has an ideology of "decentralization" in terms of zero trust and zero counter party risk. Bitcoin takes an ideologically motivated stance against trusted third parties. Skycoin accepts that complete technical decentralization is necessary, but rejects Bitcoin's ideological insistence against trusted third parties. For instance, anyone using and exchange or making a purchase is creating a trust relationship.

Skycoin is not ideologically opposed to trusted third parties, as long as the user is the one choosing the third parties.

Bitcoin Decentralization: No Trusted Third Parties
Skycoin Decentralization: No Trusted Third Parties When Possible, but Trusted 3rd Parties are OK when technically necessary and where choice of the third party is under control of the user

The Bitcoin developers would reject any feature on ideological grounds, that would introduce a third third party relationship into any officially sanctioned part of the Bitcoin protocol, because it would compromise the ideological purity of Bitcoin's decentralization philosophy. Skycoin has technical decentralization but accepts that trusted third parties are sometimes a necessary evil (example: you cannot currently have exchanges without using a trusted third party).

For example, If there are multiple exchanges and Skycoin has an exchange API, that API is interacting with a trusted third party. This is OK in Skycoin as long as we dont force the users to use a particular exchange and they choose which exchange they are extending trust to.

In Skycoin, 3rd party escrow in the protocol is OK as long as the user gets to choose which escrow authorities they will accept. The Bitcoin developers are ideologically opposed to any third parties and would not include sanction for escrow in the protocol or client, unless it can be enforced mathematically and under zero trust assumptions.

The Bitcoin developers are ideologically opposed to official support for anything that introduces trusted third parties into the Bitcoin protocol. Skycoin is slightly more pragmatic and accepts trusted third parties as a necessary evil for doing necessary things conveniently.

For instance, the Bitcoin developers are ideologically opposed to a check pointing system. Skycoin will have a check pointing system where the hash of the current consensus block will be signed by a particular public key and broadcasted. The purpose being to detect network failures or a successful attack and trigger an alert for human action (to detect, not to take a specific action which may introduce a security vulnerability through the checkpoint system). Such a system can be extremely useful for determining if the local client state has diverged from the network because of an attack or manipulation and for prompting human action. If the checkpoints were published by the Skycoin developers, this would introduce a single point of centralization and possible security vulnerability. However, if the check pointing system is a service and trusted community members and other large Skycoin stakeholders are each able to publish their own checkpoints and each user is able to choose whose checkpoints their clients will verify against and to verify against multiple parties (no single point of failure), then it is acceptable within the Skycoin decentralization philosophy, but would be unacceptable in Bitcoin because it introduces a trusted third party.

That is what "decentralized but pragmatic" means.

Skycoin Controversy:

Skycoin will receive a lot of criticism from hardcore Bitcoin people, because Skycoin is taking the perfect ideologically pure, identity less, trustless, creditless garden of Eden that Bitcoin has created and reintroducing the sin of trust and credit that is required for day to day financial transactions.  Bitcoin takes an ideological perspective on money as a "hard" mathematical commodity concept, but Skycoin takes the perspectives of money as arising out of social relationships. The messaging systems (systems for communication), personal block chains (identity and markets) play a much larger role in the long term vision of Skycoin than Bitcoin, which merely aspires to be a mathematical perfect form of commodity money.

We are not keeping 99% of the Coins like Ripple did. The majority of coins will be distributed to the users. The developers will have less than 50% of the total coins at the end of five years.

Whatever we do, it will be as fair as possible. However, there is nothing we can do that will make everyone happy.

Coin IPOs:

Ripple: Create 100 trillion coins, keep 99.9% of them and sell coins at below market price to investors in backdoor deals
Mastercoin: Sell all the coins at once
NXT: Sell all the coins for 9 Bitcoins and close the IPO when the public tries to buy in
Bitcoin: Distribute the coins over 40 years
Dogecoin: Distribute all 100 billion coins within first year and then 10k coins/block to keep people mining
Skycoin: IPO 1% of coins and distribute the majority of the coins to the userbase over time (within five years)

Skycoin is trying a new model.

Maidsafe is raising 6 million dollars at 120 million dollar valuation.

Ethereum is raising 30 million at over a 100 million dollar valuation.

Ripple IPOed  at over a 100 million dollar valuation.

Skycoin is IPOing at 5 million dollars and only raising 50k. The IPO is oversubscribed. We are doing the IPO at such a low price so that more people can get coins early.

Reasons for the Structure of the IPO:

The reason a 50k IPO was chosen was because we have experience with previous coins. We know of people who buy up allotments of coin in an IPO, wait until the price goes up 30x and then DUMP the coin, completely destroying the equity of the other coin holders.  A coin going from a 1 million to 50 million dollar market cap, with 30% of the IPO participants dumping, needs between 5 and 15 million dollars capital inflow just to maintain the price. Skycoin is not a pump and dump and a smaller IPO reduces the impact of speculator dumping and improve price stability.

A majority of the Skycoin will be distributed to the user base within the first five years. We learned the mistakes of Ripple and will not repeat them.

We believe that distributing all the coins at once, hurts the users who came in later and are committed to a gradual, Bitcoin like distribution. Mastercoins and other coins that did a single large IPO, failed to create an incentive for users who came in after the IPO and there was no financial incentive for later users to adapt the coin.

Coin Distribution:

We are looking at different models for distributing the rest of the coins and we have a few options.

1. Release 0.1% of the coins per day and taper the release rate over time
2. Give coins away as subsidies and incentives for running mesh network nodes (example: $200 subsidy per mesh network node)
3. Hoard all the coins so we feel rich
4. Developer bounties

We like the mesh network node subsidy, because it requires buying hardware (proof of burn), can be verified and increases the value of Skycoin. We are able to verify the geographic location and setup of the nodes, through third parties.

The official policy is to keep Skycoin scarce and to protect and grow the equity of the existing Skycoin equity holders. This means, that we will give out coins for things that may increase the value of Skycoin, but will not give out coins randomly or dilute the existing stakeholders.

The official policy is to promote price stability and gradual appreciation.

IPO Security Measures:

We made the final changes to the deterministic wallet generation. Final security preparations for the IPO are beginning.

Recently, hackers have been targeting coin IPOs for attack. We are generating the private keys for the IPO addresses offline, from a computer that has not been connected to the internet and then moving the addresses via USB drive in 1 million coin batches.

We are taking measures to proxy the server authorizing the IPO transactions to prevent identification of the server. The server will have all incoming ports firewalled and will only allow outgoing connections to specific IP addresses on specific ports. The Bitcoin received will be immediately distributed to the project teams and the rest will be placed into cold storage in paper wallet addresses generated by a computer not attached to the internet.

How the IPO Will Work:

1 million coins (1%) will be sold for 50k in Bitcoin.

The objective of the initial  IPO is to get coins in the hands of as many people as possible.

The IPO will work as following.
- A person will generate a Skycoin address (to receive coins to), they will input the address into a form.
-  They will receive a Bitcoin address (address to send coins to). They will send coins to the address.
- If the IPO is over subscribed, coins which could not participate in the IPO will be sent back to the address.

People have suggested that Coinbase does not work well with receiving coins back to one of the addresses they were sent from. Therefore we may also need a return address if this is the case.

The number of Bitcoin per person that may participate in the IPO may be capped.

We have a special firm doing bot detection, browser fingerprinting based upon IP address, ad network tracking and browser metadata. If a user is suspected of being a bot or multiple participation, we reserve the right to ban their participation from the IPO. We highly recommend using an unproxied internet connection, on a residential network on a computer with a web history.

After the IPO, the balances received by Skycoin addresses during the IPO will be published, so that  people have information on the distribution of coins in the IPO. The Bitcoin addresses will not be published, to protect user privacy.

After the IPO, all logs on the server will be nuked by overwriting the disc multiple times with random data.

We have had several people who want to buy out the whole IPO allotment, so the IPO will probably be over subscribed. An alternative to a fixed valuation IPO is an auction, but the downside is that early investors will benefit less from appreciation and the coin will be more concentrated in the hands of a small number of wealthy people.

Conditions for the IPO:

The IPO will not begin until the wallet is working for the majority of people. We will not start the IPO if people on OSX cannot run the wallet.

The IPO will not begin until there are wallet binaries for each platform. We are giving a few coins to developers to help test the network on different operating system and help fix any bugs.

Post-IPO

After the IPO, you will be able to check balances, send and receive coins on the main blockchain. Exchanges will be able to begin trading Skycoin.

However, there is still work to be done. We need a blockchain history library that parses the blockchain and gets account histories (for the block explorer) and we need to work on Obelisk and the wallet is still under heavy development.

We are saving each address and all account balances hourly. In the event of an attack, major security breach or major changes to the blockchain, we are taking measures to ensure that we have the data required to restore account balances and minimize disruption.

Finishing the remaining components of the mesh network before July is likely to push Obelisk and security related improvements back by a few months, but will greatly improve coin adaption.

>or have a system for assigning trust (like a clone of Ripple, thats not so amazing) it would be more interesting.

Yes. You could implement Ripple (the old original Ripple, not the new Ripple) on top of it. The important thing is making it easier for developers to build new stuff and creating a system where this stuff is exposed and interoperable while developers experiment.

As you pointed out, messaging and identity are very important. If you can message an address, it means they can give you newly generated addresses for each transaction. You can send the amount to 5 addresses instead of 1 address with change. It increases privacy, security and you get a transaction receipt from the person.

>This basically provides (in a distributed manner) one of the key features of Silk Road: its a way to build reputations associated with identities which you can send messages and money to.

Yes. Merchants could post things they have for sale in their personal blockchains. It would form a distributed market.

>In short: I don't think all the grand claims about features possible with personal block chains are that great: personal block chains might be a fun toy for devs, but they only solve a small part of the problem (part of the tooling).

Yes, this is incremental. However, crytocurrencies need these tools to advance to the next stage of development. These tools and standards are the TCP of the crytocurrency movement. They are the building blocks for the next stage and for applications that have not been imagined yet.

We do have a new solution for the byzantine generals problem. We do not have a solution for cross blockchain transactions.

Cross Blockchain Transactions:

We do not have a solution for cross blockchain transactions. What we are planning is personal blockchain for each user, a scripting language and counter signed receipts for transactions.

What Skycoin is providing, is the libraries for creating personal blockchains and ability to synchronize personal blockchains and providing some infrastructure. We have no idea what people will use this for in the future. This is for developers and people who want to experiment with blockchain technology and is not a component in any planned consumer facing application. \

You could embed a game like huntercoin in your own blockchain or Piratebay could dump their torrent files into their own blockchain. I am sure people will do something creative with it.

There is no "Skycoin" or way to force a transaction in the off blockchain transaction. It requires voluntary compliance on the part of the counter party. Zero trust cross blockchain transactions are currently an unsolved problem. Even if the problem can be solved, it is not clear that people would use it.

Until someone solves the problem, what we were planning to do is
- each person has a personal blockchain and signs each block with their private key
- in a contract between A and B, person A signs the hash of the contract and then B counter signs
- the contract signatures and counter signatures are published publicly in A and B's personal blockchain
- A contract that says "A will pay B 500 coins within one month to address X" cannot be enforced, but if A does not fulfill the contract, the default can be verified publicly if B publishes the contract
- contracts can involve a trusted 3rd party escrow that personally guarantees execution of the contract.

If you have an options contract for "right to sell 5 Bitcoin at 20,000 Dogecoin" between A and B. There are two issues
- transferring the contract
- executing the contract

Assume A issued the contract and will fulfill the contract on execution. B wants to transfer the contract to C. B and C sign a transfer agreement and countersigns the agreement. They hand the agreement to C and C signs and then A,B,C publishes the signed transaction (delete contract between A and B, create identical contract between A and C) into their personal chains.

A simple transaction between a user and an exchange is "You owe me 500 Dogecoin". You deposit 500 Dogecoin into the exchange and receive a signed contract saying "You have 500 Dogecoin" and the contract has provision for withdrawing them to a public address.  Now you can transfer the ownership of the 500 Dogecoin withdrawal contract to another person and the exchange signs the transfer and the receiving person can now authorize the withdrawal of the 500 Dogecoin to a blockchain address.

The exchange is obligated, but not required to sign the transfer agreement and is obligated but not forced to send the Dogecoin at execution. However, if the exchange tries to send you a different amount of dogecoin, claims the contract does not exist or wont honor the contract; you can publish the contract and it proves in automated way that the exchange is a fraud.
- If the exchange says the contract is not valid or wont honor it, the exchange has to produce a valid receipt showing you authorized a transfer or withdrawal (which the exchange cannot produce without your private key)
- The exchange cannot make money appear or disappear
- You can transfer your obligation and ownership of assets held by the exchange to a third party

We dont try to eliminate fraud and make it zero trust, we just make it so you can detect and prove fraud to third parties in an automated manner. This allows you to give some data to a third party that proves the other party is not trust worthly and can be verified independently.

A contract may entail a trusted 3rd party. So if A defaults, the escrow agent will execute the contract on behalf of A, but the escrow agent may require holding collateral from A, to take on the risk of default.

It sounds complicated. Its easier to look at example contract scripts and then it makes sense. Scripts take in inputs, have conditions and output new scripts on execution. A script input should be a public condition. A script output may be an action, that can be verified publicly such as "Pay 5000 Dogecoin to address X".

The personal blockchains are public broadcast channels and are used to get inputs which refer to particular transactions and may trigger execution of the scripts. People publish hashes of the blocks from the chains they subscribe to as receipts of the data, in their personal blockchains. This prevents selectively denying receipt of information which would trigger script execution and establishes a distributed time stamping system through the linked cross signed chains.

A script for "I am holding 5000 Dogecoin for person with public key A" reads "If I receive a valid signature for the hash of this transaction, signed by the private key of A as input 1, output (SendObligation Dogecoin 5000 AddressInput)". The script has two inputs a signature to verify that the withdrawal is authorized by the person who the Dogecoin are owed and an address to do the withdrawal to.

The exchange will then send the coins and the person on the other end may publish a signed receipt confirming fulfillment of the obligation. If the obligation is not fulfilled by the exchange, you can publish the contract and it can be publicly verified by anyone that the obligation was not fulfilled.

So its not really "cross blockchain transactions". Each script only exists and executes in a single blockchain. Its more like cross signing receipts and publishing them in your chain. When script conditions can be triggered by events in another chain, then it begins looking like a cross blockchain transaction. However, payment obligations and contracts involving coins are voluntary and not enforced by the protocol. Its not zero trust.

I would say that it is similar to open transactions, but using the personal blockchains as a ledger. Its much simpler, much less code and designed for the convenience of developers who want to build something on the technology.

The contents of the personal blockchain blocks are just bytes. You can use any scripting language or extension to the scripting language you want. A single person may have contracts in three different scripting languages on the same chain. As long as the counterparty accepts the scripting language and it can be parsed, its a decision between the peers.  For simplicity and determinism, we might have a base language with a simple VM and communication primitives and let people implement their contract scripting languages on top of that.

Development Update:

Development is exhausting. We pushed too hard to get to launch and underestimated the time and effort required. Getting things working has been easy, but 90% of the effort is in achieving quality and has been impossible to budget for.

We are distributing development further. The project is being split into bite sized pieces, documented with specifications and additional developers are being hired to work on the individual components. Developers from the community who help with the development effort will receive generous allotments of coins.

New infrastructure is being developed to facilitate collaboration between the project teams. We are expanding project capacity to work on multiple components concurrently.  Additional full time developers are being hired, we are writing source code tutorial for using Skycoin libraries and creating a wiki for documenting project milestones and components.

Community Organization:

The community and number of developers has now grow to the size where adhoc communication between the individual developers is breaking down. We are starting a wiki, a project board like Trello and maybe a message board to coordinate development and marketing.

White Papers:

We are writing academic and technical whitepapers. The academic whitepaper lays out the theoretical and mathematical foundation of Skycoin's distributed consensus system and its inspirations. The academic paper is focused on the mathematical formalisms, assumptions which allow us to prove security guarantees.

The technical papers outlines implementation details, milestones and software architecture. The technical paper is focused on security as a process and defense in depth.

Marketing:

The Skycoin project incorporates a variety of concerns and objectives and its important that we create documentation and brainstorm about how to communicate to the media and public. The community needs to help create simplified, high impact messages for communication to potential new users.

Strategy:

We are writing marketing materials that clearly explains the capacities and strategic position of Skycoin vs alternatives such as Etherium, Ripple, Maidsafe, Mastercoin, Open Transactions, Color Coins, Protoshares and Bitcoin.

We feel that Skycoin is not as locked in to a particular model and is positioned to adapt and improve on any new technologies that have been suggested by competitors. Skycoin is adapting a standardized, coin agnostic "gateway protocol" which we believe improves upon Ripple and Open Transactions. Skycoin's infrastructure for personal blockchains gives Skycoin the ability to coop and implement crypto-assets, contracts, scripting languages and cross chain transactions if these become popular.  Skycoin's wire protocol and service architecture allows third parties to implement distributed services which expose computing resources for coins (like maidsafe). Skycoin is also the only coin with a coherent strategy for user acquisition and adaption based upon utility instead of marketing.

We also believe that standardization of exchange APIs and "distributed exchange" will completely eliminate the network effects that Bitcoin has previously benefited from. With the distributed exchange service, there will be one API and numerous exchanges implementing the API. Different coins will be instantly, effortlessly and invisibly convertible to each other at the current spot prices. A person holding Dogecoin, Skycoin or Bitcoin will be able to make payments in any currency at the spot price, from a single wallet (the Skycoin wallet).

Once Bitcoin's network effects have been eliminated, coins will compete based upon security, usability, speed and price stability. Traditional proof of work coins will not be as competitive as emerging alternatives which offer higher security, faster transactions and lower operating costs than mined coins. People will earn coins through providing services instead of mining.

Many new coins will likely be associated with geographic regions (Iceland), groups (native American tribes), companies (reddit) or be issued for specific purposes (time shares, gift cards). Mining becomes both a security risk (51% attack) and overhead. Ubiquitous, society wide adaption of crpytocurrencies will require moving beyond Proof of Work for securing the blockchain and will benefit from standardization between coins.  Skycoin's consensus system is both distributed, immune to 51% attacks (perfect security) and very low cost to run.

Bitcoin and proof of work coins allow anyone with enough hashing power to revert transactions. Higher security in Bitcoin means higher mining costs and higher network overhead. Mining also creates new coins to create an incentive for miners (to waste money), which makes existing coins less scarce and less valuable. Coin creation dilutes the equity of existing coin holders.

With recent advances in scripting languages and digital contracts we expect the development of collateralized digital assets which track fiat currencies such as the United States Dollar and Euro. We expect these assets will replace legacy bank transactions for payments to exchanges and may displace the legacy banking system for some types of international payments. Skycoin is being positioned to take advantage of and benefit from these advances, should they occur.

We believe that transactions with counter parties will become increasingly important in the future. In order to issue options or receive a loan, each a node needs an identity and a reputation. Skycoin is developing a standardized identity, messaging and transaction receipt system (the gateway protocol) to support the development of transactions that are not currently feasible within the Bitcoin framework. This will enable, for example distributed systems of credit that bypass banks and credit card companies.

For instance you may say "I am willing to loan up to $5000 to my friend Adam at an 8% interest rate, with minimum monthly payment of 10% of the outstanding balance". This will enable people to earn interest on assets and the resulting debts will be verified by cryptography, enforceable by reputation and potentially by court systems. The Skycoin project has designed and is beginning implementation of the infrastructure these transactions require.

Personal blockchains and the purposed scripting language for the gateway protocol is flexible enough to represent equity, convertible debt instruments, different classes of shares, vesting and voting rights. The purposed protocol has the potential to replace lawyers and paper with a machine executable scripting language for private equity transactions. Cryptoequities can be transferred without intermediaries, can be publicly traded and may enable crowd funding over the internet.  The gateway protocol will expose and record the information required to automatically compute and document the basis of transactions for tax purposes.

The messaging protocol will enable merchants to send receipts for payments, send shipping tracking numbers and low friction reoccurring payments for payroll and renting equipment such as computer servers. Messaging is prerequisite for identity, reputation and more complicated financial transactions.

We believe that standardization of cloud computing will allow polling price information and provisioning servers from multiple providers over a common API. We believe cryptocurrencies offer a lower overhead, lower friction, automated payment options compared to credit cards, which require dealing with each service provider individually.

The Skycoin Project does not prescribe a single correct monolithic software entity. Skycoin exposes a framework of independent components as libraries and permits competition between different implementations. Developers are able to easily extend Skycoin and offer new distributed services.

Additionally, the Skycoin project is funding development of applications to drive user growth, spread awareness of Skycoin and improve the world we live in (the meshnet project, distributed exchange service).

Yes. The source code is on github.  We are trying to release client before the IPO.

There are a bunch of people working on it. We are trying to improve coordination between the different groups. We are hiring more developers after the IPO and assigning coin bounties to speed up development.

Development Update:
- the wifi controller library is a few days from completion
- the wallet update to new RPC is almost done
- the deterministic address hash function is being modified to use ECC curve multiplication instead of signature operations
- transaction relay is being moved out of daemon into the skywire repo
- blockchain replication is being moved out of daemon into the skywire repo
- all the unit test are broken or will be broken
- we wont have cross compilation of windows binaries from linux until golang version 1.3 is released. We hope binaries compiled from XP will run on windows 7

After the transaction relay and blockchain replication service is implemented in skywire, the IPO will start.