The first Skycoin transaction executed today. Public builds will be ready within week.

run "go run wallet.go" to start wallet.

Future advances in mathematics may render Bitcoin insecure. This is a draft protocol for securing cryptocoin transactions against future advances in mathematics or computing which render discrete logarithm based public key cryptography insecure.

TwoStep is part of QuantumEclipse, a suite of next-gen cryptocoin protocols developed under OP Darknet Plan for the Skycoin Project.

This protocol is
- simple
- adaptable to Bitcoin
- lower overhead than Lamport Signatures
- works with SHA256 preimages equally as well as Secp256k1 signatures
- not dependent on the security of discrete logarithm based public key cryptography

Overview:

Protocol:
1> A user creates a transaction and publishes the SHA256 of the transaction onto the block chain
2> The user waits several blocks and publishes the transaction. Miners enter the transaction onto the block chain.

A transaction has a pre-published hash it is "timestamped" by the publication of the hash. A transactions without a prepublished hash is a "non-timestamped" transaction.

Rules Followed by Miners:
- if an unconfirmed non-timestamped transaction spends outputs used by a non-confirmed timestamped transaction, the non-timestamped transaction is invalid (time-stamped transactions have priority over non-timestamped transactions).
- if two unconfirmed timestamped transactions spend non-disjoint sets of unspent outputs, the transaction with the earliest timestamp is the valid one.

Analysis:

This protocol relies on
- address pub keys are not published until they are first used in a transaction (address non-reuse)
- private keys cannot be recovered from public keys until the public key is published (preimage resistance of ripmed120(sha256(sha256(x))) )
- the publication of transaction hash into the block chain is a reliable timestamp (no 51% attack, total ordering on transactions)

This protocol delays the publication of the public key for an address until transaction publication and then renders any transactions an attacker creates from the recovered private key invalid.

The attack must now recover the private key, 51% attack the block chain to orphan the user's timestamp and enter an earlier time-stamp for his transaction that would steal the Bitcoin. The longer the user waits between the publication of the hash and the publication of the transaction, the more difficult the required 51% attack becomes.

Integrating into Bitcoin:

Skycoin supports this protocol naively. Bitcoin requires a small modifications to support TwoStep.

- We need an op code for the publication of transaction timestamps. The OP code should include a time or block number when the hash expires. The expiration should be capped, to allow pruning of old timestamps.
- Miners should obey the two precedence rules. The protocol is only secure if miners do not collude with people who are able to recover secp256k1 private keys from public keys.

Weaknesses:

There is no way in Bitcoin to enforce precedence rules if miners are dishonest. There is no way in Bitcoin to prove that a particular block violated the precedence rules. Bitcoin can therefore only support soft/voluntary precedence rule enforcement. There is no mechanism in Bitcoin to blacklist provably dishonest miners.

Enforcement of TwoStep transaction protocols requires new cryptocoin blockchain primitives. The Skycoin Obelisk whitepaper will introduce two new block chain primitives which enable "hard" enforcement of transaction precedence rules.

More information about Skycoin: https://bitcointalk.org/index.php?topic=380441.0

The first post has been updated.
- rational for eliminating mining from Skycoin was added.
- information about Skycoin's TwoStep post-quantum transaction protocol added
- build system and bunch of code pushed to github
- Skycoin peer bootstrap from DHT working
- Webkit embedding for Skycoin Wallet working
- Wallet GUI first draft pushed to github


Non-mined altcoins are like stock in a corporation. A few people start with all the stock and these people sell it off and it becomes more widely distributed. Employees and key contributors get stock. The public buys the stock from employees and the founders.

Companies are about product and it matters what the company produces and does more than who owns the company. Crytocoins however are about community instead of being about product. If early founders hoard as many coins as they could get away with, then it will hamper user growth of a community based coin. That is the lesson of Ripple.

Skycoin needs a driver that will acquire hundreds of millions of users. Having the best coin is not good enough. From the beginning Skycoin was aimed at a number one position. Bitcoin is niche and the challenge of any new coins is not to become the next Litecoin, but how to surpass Bitcoin in terms of adaption.

If you dont have a strategy for surpassing Bitcoin, then the coin should be positioned to take over if/when Bitcoin is destroyed by internal/external forces. If the coin does neither, then its a pump and dump, or at best an inspiration for the successor to Bitcoin.

To succeed Skycoin must be radically different and more intentional than previous coins. Skycoin must achieve a level of necessity that Bitcoin has been unable to achieve.

The transition will occur when someone figures out a protocol for doing it in a decentralized manner and someone implements it. I want to get voting and bounties working as soon as possible, because it would speed up development.

There are other issues we are dealing with besides voting. For instance, we could make a very simple coin or a coin with very powerful support for contracts. In the extreme a simple coin would have no multi-sig, no scripting, no digital contracts. It just has your coin balance and you hit send and the other person gets the coin. It just works. This is how 99% of users use Bitcoin and the other alt-coins.

We noticed Bitcoin supports multi-sig and contracts but no one uses it. Mastercoin takes the prospective of "put everything on the block chain" but maybe contracts should not be on the block chain at all. For distributed exchanges and other types of assets, it appears to be more flexible to keep them off the blockchain.

A block chain is just a public ledger. We are thinking of letting each person create their own personal block chain, which support a more powerful scripting language. Each chain can choose the scripting extension and restrictions it supports.There is one central distributed ledger for Skycoin balances and each identity has their own block chain and securities live on these side block chains and can be moved from one chain to another. So we need a protocol for transferring assets between public ledgers, maybe a two phase commit protocol.

There are several considerations
- protocol for transferring assets between block chains
- preventing the owner of the chain from backdating or rewriting the ledger without it being detected (counter signing, linked timestamping)
- securing the "identity" of the ledger owner, without public key reuse
- handling assets on ledgers whose owners go off line or disappear
- ensuring no one has to replicate the ledgers of people they are not engaging in transactions with (anti-spam)

I want to get voting worked out, but there are many other things we are working on,

>A coin should not rely on us to trust anyone.  The algorithm should ensure that.

Skycoin is designed to survive if the original development team is eliminated. This is a darknet coin.

The developers do not control who gets coins created from inflation. Skycoin holders vote to determine the distribution. Community voting and coin distribution is part of a mechanism to ensure financial incentives for developers to improve and maintain Skycoin.

Many previous coins have died because the volunteer developers of the coin disappeared and no new developer had an incentive to work on the coin. For a coin to survive for a century, it has to ensure survivability and robustness under unknown future conditions. The community needs to be able to mobilize financial resources to ensure continuity of the blockchain.

With the inflation/voting mechanism, if the community does not like the current development team, they can hire a new development team. Without inflation/voting, the community is at the mercy of whichever developers volunteer to work on the coin.

Voting/Inflation allows the community to decide the direction and priorities of Skycoin, instead allowing the current developers to dictate that direction. For instance, currently the Bitcoin is completely controlled by the development organization. Bitcoin holders do not have any meaningful input into the direction of Bitcoin. Users can sell their Bitcoins for other coins (exit) or theoretically decide to fork the block chain if there is a major disagreement (wont happen) but Bitcoin stakeholders do not meaningfully participate in the governance of Bitcoin.

Bitcoin's reliance upon the development organization and reliance upon miners are the only two things that could destroy Bitcoin in the long term. These are known threats and future coins should reduce their susceptibility to these threats as far as is possible.

>The coins will be distributed in a fair, open process."  (Fair and open according to who?)

Less than 1% of Ripples are owned by the ripple user base. The majority of the free float of Ripple was sold to investors, in secret, in backdoor deals at below market price. Skycoin will not do this. The users will own the majority of the issued Skycoin and no one will receive secret backdoor deals.

>If we are trusting these guys to "fairly distribute" the coins, and fairly allocate the 2% inflation (robbery) of those holding the coins, then how is this any different then trusting a central banker?

Skycoin inflation is distributed through a digital direct democracy. Skycoin stake holders vote and determine who receives the coins and for what. Inflation will be 0% if the majority vetos every project. The inflation is capped at 2% to prevent abuse by large stakeholders.

The voting and distribution process will be centralized at the start, for technical reasons. It will switch over to an autonomous decentralized process as soon as possible. The first project RFCs that will be funded through voting, should be decentralization of the voting and distribution process itself.

Overview of Obelisk: Distributed Consensus

In Obelisk, each person runs their own Obelisk nodes. Each node has a set of trust relationships with other nodes. Each node has a list of servers it "trusts". A new node can be initialized by randomly choosing a few dozen existing nodes to trust, with only two or three of the nodes being nodes run by trusted institutions or persons.

Servers publish "blocks" every 5 seconds. Blocks are sequential and it is detected when a node backdate a block or retroactively change an already published block. It uses a very secure linked time stamping scheme.  The block publishing creates a "public broadcast channel" and that is the key primitive in the Obelisk protocol.

In Ripple, clients can cheat or fail to obey the protocol and it cant be detected. Consensus protocols only work if all nodes obey the protocol, which is a bad assumption if there are financial incentives to cheat.

Skycoin solves this by having Obelisk nodes publish both their decisions and the data needed to reconstruct the decisions. Obelisk nodes receive blocks from other nodes, time stamp them and include the time stamps in their blocks. We can audit servers for causal violations.

Obelisk nodes publish enough information for 3rd parties to replicate their internal state. During an audit a 3rd party can reconstruct the internal state and simulate decisions of a particular Obelisk node and will produce the same successor block as what the server published, if the server is in fact obeying the protocol.

If a node cheats, other nodes will sever their trust relationship with it. You can create a proof that a node cheated and it give it other node and they can verify it. If the node is colluding or something something strange, that is not provably wrong, it can be detected because decisions are public and people running nodes can make decisions about their trust relationships with the colluding nodes.

Obelisk is a very simple protocol. Obelisk is designed to be simple to allow  security properties to be easily modeled with mathematics and simulation.

Alternative Uses for Obelisk:

With a well defined state machine and scripting language, Obelisk may in in the future support OT style digital contacts off the block chain which can be executed between counter parties. Each counter party would be an Obelisk node with its own independent block chain.

However, right now are extremely focused on a version of Obelisk specialized for blockchain consensus.

Open Problems.

When Skycoin development began, there were two open problems with Obelisk. The first problem was proving the identity of a node without key reuse. Key reuse introduces timing side channel attacks and weakens the crpytographic security of Skycoin. In our security audits we found that attacks on the identity infrastructure for Obelisk nodes would be significantly easier than attacks on the Skycoin blockchain and transaction infrastructure.
 
It was not until last week that we had a solution to avoid key reuse in the identity protocol. We have a very good solution now, that meets our standards for elegance and cryptographic security.

The second problem, is that consensus protocols need to take into account netsplits. If connectivity is severed between two sub-graphs of the network, it breaks some of the assumptions when the networks remerge. We like the assumption that a block is consensus is final once it has been reached because it eliminates double spending. However, if two subgraphs come to different irreversible consensus results during a netsplit, it is problematic. Either the fork must become permanent or consensus is not in-fact irreversible.

The netsplit problem is not unique to Skycoin and is actually much worse in Bitcoin. There are netsplit based attacks on Bitcoin that allow double spending. The ability to selectively control the peers a node can connect to, enables very specific and highly targeted attacks that Bitcoin does not even attempt to address. This attacks require control of hardware at the ISP level and we have not seen them yet, so they are still theoretical.

Skycoin has a preliminary solution to the network split problem.  However, it is not high on our priority list right now.

Not having cryptography libraries is a problem for Nxt. I have to re-examine Nxt.

These are the Skycoin libraries for the blockchain parser, including the libsec256k1 library
https://github.com/skycoin/skycoin/tree/master/src/lib

This is the blockchain implementation
https://github.com/skycoin/skycoin/tree/master/src/coin

In particular
https://github.com/skycoin/skycoin/blob/master/src/coin/address.go
https://github.com/skycoin/skycoin/blob/master/src/coin/crypto.go
https://github.com/skycoin/skycoin/blob/master/src/coin/blockchain.go
https://github.com/skycoin/skycoin/blob/master/src/coin/transactions.go

Notice the elegance and simplicity of the code compared to Bitcoin.

Problems with mining
- in CPU coins, all coins go to people with botnets
- in GPU coins, all coins go to people with GPU farms
- in SHA256 coins, all coins go to people with ASICs
- mining gives all new coins to a small cartel of already wealthy miners
- most miners are invested in coins for the short term and not really part of the community

The vast majority of mined coins today are extremely well organized pump and dumps.

I wont address criticisms by two week old socket puppet accounts which are pumping Catcoin.  

Anyone can read the Skycoin source code and determine if Skycoin is a scam.

The exciting thing is not where the coin is today, but what it will be.

One possible distribution method is releasing a certain percentage of the coins per day onto an exchange.

Another distribution method involves people putting Bitcoin into a pot and they receive coins proportional to how many coins were put into the pot. This is the distribution strategy used by Nxt and Mastercoin, which many consider to be unfair.

A continuous release of coins may be more fair than a single large IPO.

If the majority of Skycoin holders feel that they are being "taxed", they can vote against all funding for all programs. In which case the inflation falls to 0%. Both Skycoin holders and the people running Obelisk servers can collectively veto the inflation or "tax".

Skycoin has no miners. There is no group of people that can form a cartel and send transaction fees through the roof. There is no guarantee that Bitcoin miners might decide that you are not paying enough money for their services and start "taxing" you.

The problem in Bitcoin is that the currently accepted head can be orphaned. In Skycoin a block has three states "accepted, rejected, or open". Blocks go from an open state to an accepted or rejected state. Each Obelisk node will eventually come to the same consensus about each block. A block can be in the candidate set for consensus, it can be the accepted consensus block or it can be outside of the candidate set. The network narrows the consensus set until each block has a single parent that is accepted.

After consensus is closed for the block, it cant be orphaned by later decisions (under usual circumstances). If a transaction has been accepted by all blocks in the consensus set then it is effectively executed, even the network has not decided on which chain is valid yet.

In Bitcoin you cannot know that the current head will not be orphaned later by someone with more hashing power. In Skycoin you know definitely whether a particular block can or cannot be later orphaned. We get 15 second block times because Obelisk does not wait for a decision to be made about a branch. The nodes can debate multiple branches at the same time, without waiting for decisions about the parents.

The inflation is capped at 2% per year.  If you do not think a particular project will increase the market cap of Skycoin more than what it cost everyone in inflation, you can vote against it.

If inflation works as intended, each dollar spent through inflation should create multiple dollars of Skycoin market cap for Skycoin holders, by driving the price up. So if used correctly, the inflation will cause deflation, not inflation in the Skycoin price.

The reason we added inflation is because of Bitcoin-qt. The Bitcoin community has billions of dollars but the default wallet is horrible. It is so bad that it is probably the worse piece of software created since 1995. I always wonder "If we have all this money, why cant we bring in a designer? Why is it so poorly designed? Why does it have all these bugs and security problems? Why is it so ugly and difficult to use?".

The Bitcoin community collectively has billions of dollars, but few people spend their own Bitcoin to improve Bitcoin. We needed some mechanism to ensure that improvements to Skycoin are funded.

---

Self Governance:

The inflation is the financial part of a system of governance that allows the community to collectively deploy resources against threats and to pursue opportunities which will increase the value of Skycoin.

If governments begin censoring Bitcoin clients from the internet, the Skycoin community might decide to fund a massive number of open source projects to improve security and decrease the ability of governments to identify and block Bitcoin/Skycoin traffic. They might even fund a darknet or peer to peer mesh network running on software defined radio.

The inflation will ensure that development is well funded and survives the current development team.

---

Voting Protocol Draft:

There is a simple site like kick-starter or reddit where people can post projects. We want wiki functionality and discussion threads for each project. The website backend should be in Golang or Python.

Everyone who wants to vote puts a hash into the unspent outputs for coins they hold. The person who knows the preimage for the hash can claim the vote shares for that output. Vote shares can then be applied towards projects.

There are better ways to do it, but this can be up and running extremely quickly.


 

Website design.

Nxt is interesting. I think Nxt is doing something very innovative. However, I want to see the source code.

Ripple does not achieve our definition of security.

The Ripple network relies on a very small number of central nodes which need to be compromised to fork the network. The Ripple protocol also assumes that nodes obey the protocol and is not robust against adversarial nodes. The Ripple protocol is extremely complex, difficult to audit and is extensively undocumented.

Ripple is very interesting, but no one considers it to meet the security standards set by Satoshi.

Exactly! Yes. We love Dogecoin.

After witnessing the success of QuarkCoin we realized how important marketing and getting buy in from key people is to a coin's success. We have the best PR firm in the Bitcoin space. We are positioning Skycoin as an environmentally friendly, ecologically aware coin.

Tech first, marketing later. For adaption, Skycoin is part of a larger project and there will be Skycoin integration in several applications that will be announced later.

Successor to Bitcoin + A new Internet


Github Organization: https://github.com/skycoin
Skycoin: https://github.com/skycoin
Skywire: https://github.com/skycoin/skywire
CX: https://github.com/skycoin/cx
CXO: https://github.com/skycoin/cxo
BBS: https://github.com/skycoin/bbs
Messenger: https://github.com/skycoin/net

Website: http://skycoin.net
Wallet Client: http://skycoin.net/downloads
Blog: https://blog.skycoin.net/

Telegram Group: https://t.me/Skycoin
Slack Channel Signup: http://skycoin.herokuapp.com/
Slack Channel: https://skycoin.slack.com
Discord: https://discord.gg/MTepVHE

Twitter: https://twitter.com/skycoinproject
Reddit: https://reddit.com/r/skycoinproject
Facebook: https://www.facebook.com/skycoinproject

Market Tracker: https://coinmarketcap.com/currencies/skycoin/

Exchanges:
- C2CX: https://www.c2cx.com/trade_sky (Yuan/SKY, BTC/SKY)
- Cryptopia: https://www.cryptopia.co.nz/Exchange/?market=SKY_BTC (BTC/SKY)
- NEXT

Github Repos:

Skycoin Core: https://github.com/skycoin/skycoin

CX: https://github.com/skycoin/cx

CXO (object system): https://github.com/skycoin/cxo

CX Games: https://github.com/skycoin/cx-games

Teller: https://github.com/skycoin/teller

BBS: https://github.com/skycoin/bbs

Skywire (Meshnet): https://github.com/skycoin/skywire

Summary

Skycoin is a third generation cryptocurrency. The Skycoin project is a long term infrastructure project that began around the time Litecoin was launched. Skycoin is designed a successor to Bitcoin.

Skycoin is focused on implementing Satoshi's original vision for a cryptocurrency. Satoshi originally intended the Bitcoin network to be decentralized, over hundreds of thousands of computers. Today, the Bitcoin network is completely controlled by three mining pools. Bitcoin is no longer decentralized. Skycoin Project has developed a new consensus algorithm to achieve true decentralization.

In addition to fixing the outstanding technical issues with Bitcoin, the Skycoin Project is implementing a new next generation of foundational networking, storage and application primitives (a new internet). We believe that "blockchain" is just one of several new mathematical and algorithmic primitives, which will underly the foundation of the successor to the current internet.

- CX is the Skycoin Project's computation primitive (analogous to EVM, Solidity, Go, C/C++, Rust)
- CXO is the Skycoin Project's peer-to-peer immutable data storage and replication primitive (analogous to IPFS)
- Skywire is the Skycoin Project's communication primitive (analogous to MPLS, open-flow, TOX, mesh networking, darknet, i2p)
- "Skycoin" is the Skycoin Project's blockchain primitive, token and transaction infrastructure (analogous to Bitcoin, Ethereum, etc)

The Skycoin Project is not a simple blockchain project, but is designed as a platform and foundation infrastructure for supporting an ecosystem of applications.

=== Skycoin (SKY) ===

The Skycoin Project Coin (SKY) is focused on core features, security, usability and simplifying Bitcoin instead of adding features as a marketing gimmick.

There are still major outstanding problems with Bitcoin and those are the problems we are addressing.
- Elimination of the need for miners for network consensus through new algorithms, elimination of dependence on the human element in the network operation
- Duplicate coinbase outputs
- Signature malleability
- Reduction in complexity in implementation
- Dozens of security/crypto related improvements
- Elimination of external dependencies that create security concerns in Bitcoin
- 51% attack proof and strengthening against various attacks
- Simplified, more powerful data, transaction and wallet APIs
- Brainwallet, deterministic wallets as default
- Network security improvements
- Intrinsic support for gmaxwell's CoinJoin transaction privacy protocol
- New networking protocols to enable the verification of the mathematical prerequisites for consensus network convergence
- Separation of coin creation from the consensus network, to eliminate Bitcoin's tendencies towards mining centralization
- Directed bipartite TX/UTXO transaction graph structure which is more elegant and efficient than Bitcoin's multi-graph structure
- Provably upper bounded network, RAM and CPU resource usage for network operation
- Soft coded, adjustable blockchain size parameter to enable network transaction rate scaling
- Rolling unspent output state error correction coding in the block header for early detection of software/hardware non-determinism
- Blockchain/transaction/histrory storage database with constant time lookup, indexless operation for all major blockchain history queries
- Etc...

Skycoin is 51% attack proof and addresses many of the security issues in Bitcoin. Skycoin is designed to be a simpler, easier to use, more secure Bitcoin. Skycoin emphasizes simplicity, security and usability.

Skycoin is a major research undertaking and has taken several years. We are finishing up phase one of project implementation and then focusing on services and driving adaption.

Skycoin is being developed in collaboration between AKS, Myth and Syndicate under Darknet Plan and OP Redecentralize.

Infographics



















Skycoin Distribution

Skycoin distribution explained here:

https://blog.skycoin.net/statement/skycoin-distribution-plan/

You can also trade Skycoin on Cryptopia and C2CX.

Skywire Meshnet Whitepaper

https://blog.skycoin.net/overview/skywire---skycoin-meshnet-project/

---

Obelisk is what makes Skycoin "Bitcoin 2.0". Obelisk is a sustainable alternative to proof-of-work. Obelisk is a system that replaces proof of work for blockchain consensus and eliminates the possibility of a 51% attack.

Obelisk was inspired by academic research into adversarial distributed time-stamping and algorithms such as Ben-Or's, Paxos, and the Castro-Liskov PBFT algorithm. Obelisk is a new solution to the Byzantine Generals problem which offers strong mathematical security guarantees, even when the majority of nodes are hostile.

- Obelisk whitepaper: http://downloads.skycoin.net/whitepapers/a-distributed-consensus-algorithm-for-cryptocurrency-networks.pdf
- Obelisk "layman" explanation: https://blog.skycoin.net/statement/obelisk-the-skycoin-consensus-algorithm/
- Obelisk technical explanation: https://blog.skycoin.net/overview/obelisk-skycoin-consensus-algorithm-information-pages/

---

Skycoin cannot be 51% attacked. No matter how much money or hashing power an adversary has, they cannot reverse transactions.

Skycoin Transactions are fast. Obelisk and specific design decisions may allow Skycoin to achieve transaction confirmation times as low as four seconds, without compromising security.

Skycoin does not waste electricity or consume exponentially growing, unsustainable amounts of electricity unlike Bitcoin.

Skycoin has no transaction fees. Users receive "coinhours" for holding coins, which are used for paying transaction fees. Transactions bid to enter a fixed sized block.

Skycoin transactions offer increased privacy. Skycoin is designed for advanced CoinJoin support.

---

Besides building a better, more robust, most secure, more usable Bitcoin, the Skycoin project is working towards several long term goals we believe are necessary.

Skycoin Darknet Project:
- Users receive Skycoin for contributing resources to network and expend skycoin for consuming resources
- Almost as secure as TOR/I2P, but with much high bandwidth throughput.
- Very difficult for ISPs to identify and throttle
- Inspired by cjdns

See: https://github.com/skycoin/darknet

Skycoin Meshnet Project:
- Uses Skycoin Darknet protocol over wifi mesh network
- Uses receive Skycoin for providing transit
- bridge the "last mile" between homes and fiber with a distributed wireless mesh networks and community ISPs.
- SOPA, PIPA, ACTA and the Comcast/Time Warner merger have made it clear that political solutions are no longer viable.

---

Development Process:

All Skycoin components are written in Go (Golang). There are multiple teams working on Skycoin and multiple independent software components required to achieve the long term vision of the project. This is an open source project.

Substantial coins are reserved and available for developers who want to contribute to the project.

---

Team:

https://blog.skycoin.net/statement/skycoin-team/

---

Design:

Skycoin tries to offer more security, greater privacy and better usability than Bitcoin.

Skycoin Philosophy:
- Complex systems cannot be secure
- Simplicity over complexity
- Decentralized but pragmatic
- Emphasis on usability

----

Partial feature list:

Security:
- Higher level of security for non-technical users with improved ease of use
- Deterministic ECDSA, enforced signature mutability
- Hardening against SHA256 pre-image attacks, hardening against side channel attacks
- Hardening against "offline" attacks on secp256k1
- Optional quantum computer resistant TwoStep protocol transactions
- Standardized remote signature HMAC API for hardware wallet devices

Privacy:
- Skycoin transactions have higher privacy than Bitcoin transactions ("wallet mixing", "money pot")
- Skycoin protects its users from identification for increased safety in hostile countries (ex. HTTPS/TLS tunneling)
- Stenographic wallets

Usability:
- Wallet supports Bitcoin and Skycoin
- 15 second transactions (point-of-sale)
- Simple 256-bit deterministic wallets
- Clients only need unspent output set instead of whole block chain ("Snapshot")
- Coins divisible to 6 places

Distributed Exchange:
- Off blockchain Transactions (through standardized API, "gateway")
- Powerful scripting language for contracts (non-turing complete statically typed LISP variant)
- Open Transactions type crypto-equities, bonds, options and other securities
- OTC gateway API (based upon FIX, SWIFT, FIXatdl)

The blockchain is for settlement between counterparties. Price data and bid/ask orderbook data is not in the blockchain, but supported through the gateway API. Fractional Skycoin transactions and micropayment are handled as off block chain transactions.

---

No Mining:

Satoshi has stated that mining is Bitcoin's only flaw. Miners are the greatest non-crpytographic threat to Bitcoin retaining value on geographic time scales. Mining introduce human factors and greed into the survivability of Bitcoin as a currency

- Dishonest miners may destroy Bitcoin
- We are close to a 51% attack
- gigahash.io has abused its hashing power to steal Bitcoin from gambling sites
- Services such as cex.io allow people to rent a 51% attack by the minute
- Mining pools will form cartels to orphan blocks mined by non-cartel members, to enhance their block rewards
- Mining cartels will rent capacity to orphan blocks from other pools, if the reward is greater than the cost
- Pools have begun capping block size to drive up transaction fees. Bitcoin transaction processing rate may be unable to keep up with growth in transactions from new users. Bitcoin is becoming unusable for micro-transactions.
- Every month more mining power is concentrated in the hands of a smaller number of people
- Mining ensures majority of new crypto-coins go to people with botnets, GPU farms and ASICs not available to the public.
- No one benefits from mining except miners and electricity companies
- Electricity used by mining is wasted. Money spent on mining is being thrown into a hole, burnt and the costs are passed on to every Bitcoin holder
- Mining will substantially increase transaction fees to unsustainable levels when block rewards decrease. Bitcoin transaction fees may reach a level higher than the banking system Bitcoin was created to replace.
- Miners selling newly created Bitcoins to pay equipment and electricity costs, drives down the price of Bitcoin.
- If Bitcoin reaches viability as the next global reserve currency, the incentives for nation states to monopolize and control mining will be too great to contain.

Skycoin was designed to eliminate mining completely and eliminate the problems it creates. Skycoin replaces reliance on honest miners with reliance on mathematics.

- Skycoin is more secure because it does not rely upon the good will of miners
- Skycoin transactions will be cheaper because there are no mining costs being passed on to users
- Skycoin transactions are not subject to 51% attacks by mining cartels
- Skycoin is environmentally friendly and sustainable. Skycoin does not require twelve coal power plants to power mining

Distribution will be as fair as possible.

---

These are some things we are working on.

Off Blockchain Transactions:

You can send and receive coins, instantly, with ~120 bytes of overhead, without cluttering the blockchain. Skycoin supports a secure, standardized interface for transmitting and receiving coins (and other assets) held by third parties.

You will be able to see, withdraw to the blockchain and transmit coins held by third parties, from within the Skycoin wallet. This protocol automates withdrawing and depositing assets into exchange accounts and enables bandwidth micro-transactions.

CoinJoin RFC:

- Skycoin naively supports a simplified CoinJoin protocol
- CoinJoin mixes transactions from multiple wallets to increase transaction privacy
- Skycoin is designed so that it is impossible to determine which transactions are CoinJoin transactions

Skycoin Coin Join Protocol:
- Three people send their inputs and outputs to a remote server
- Server creates a transaction containing the inputs/outputs from all three people
- The server sends each person the transaction.
- Each person verifies the transactions and sends the signatures for their inputs
- The server publishes the transactions.

This protocol is much simpler than zero coin while dramatically improving transaction privacy.

Wallet Shuffle RFC:

Shuffle provides a very easy way of moving coins between deterministic wallets. Shuffle is one of the ways Skycoin will improve wallet usability.

Wallet shuffle takes a seed for an existing deterministic wallet and seed for a new deterministic wallet and moves coins between the wallets using the Money Pot protocol. Every shuffle operation entails additional coin mixing and increased wallet privacy.

For instance,
Input wallet: 5a42c0643bdb465d90bf673b99c14f5fa02db71513249d904573d2b8b63d353d
Output wallet: 1d26c392b3c1b6c5c7947e07934d8256bdf084bcf89f58d82ebef3c986e4836c

This account is for the Skycoin Foundation. We are coalition of Bitcoin stakeholders funding development projects to improve Bitcoin security and privacy.

The Skycoin foundation is involved in open source projects related to
- Post Proof-of-Work block chain security (secure alternatives to proof-of-work)
- wallet security (hardware wallets)
- transport layer security (reducing ability to identify Bitcoin users from IP data)

We will be announcing a new alt-coin soon, which is the first provably secure coin that is not based upon Proof Of Work.

There are still many challenges to be resolved by the community.

Miner cartels are becoming greater threat than 51% attack.  Miners need 2 million dollars a day to pay electricity bill. When block rewards decrease miners need higher fees. Miners cant make money unless they reject low fee transactions.

Some of the greatest problems facing Bitcoin
- Governments can determine who is using Bitcoin from IP data. Some governments do not want citizens to have access to technologies like Bitcoin. The identities of the people running the Bitcoin client are not protected.
- Bitcoin only supports 8 transactions/second and Visa's network clears 2,000 transactions/second
- Bitcoin transactions are too easy to track. Bitcoin does not offer the privacy required for widespread use in many countries.

These problems are being worked on.