Skycoin is a project which claims to be in the works for 8 years. Skycoin boasts ZERO transaction fees, an Ethereum killer smart contract platform, and a planned world-wide wireless mesh network. These are some pretty big claims, but does it live up to them. In this article, I will give you all the information about Skycoin so you can decide for yourself if it is legitimate or not.
On the official website www.skycoin.net the team is listed as Synth (he goes by this all the time and I can’t find his real name anywhere), Houwu Chen, and Steve Leonard. It seems that Synth is the PR guy, Steve is the technical person, and Mr. Chen wrote the whitepaper. None of these people are particularly well known. When Synth posts on the telegram group, Reddit or speaks he sounds kind-of like Craig S. Wright to me. He never talks about technical stuff and instead focuses on wild ideas.
Much of Skycoin’s technical prowess comes from their consensus algorithm called Obelisk. Obelisk seems to be a blatant copy of the Stellar Consensus Protocol (SCP). Trust and consensus is essentially defined in the config file of the staker. Unlike Stellar however staker/miners must be whitelisted to participate in the network which makes it resemble Ripple more closely. Either way, Obelisk which they claim as revolutionary is not original at all. The most peculiar part of consensus is that the Skycoin team is selling a “Skyminer” hardware unit decked out with several Orange Pi’s in a fancy case. The crazy part is that they are selling it for 1 BTC!!! All except for $500 gets refunded in SKY, but that is still a lot of money! You may be asking yourself why anyone would buy something for an order of magnitude of what they could DIY it for. The answer is because official Skycoin hardware gets automatically whitelisted…………. This is REALLY starting to look like a scam!
Lets give them the benefit of the doubt on the Skyminer situation and look into the other aspects of this coin. The claim of ZERO transaction fees may get you scratching your head. There has to be something to prevent spam transactions… RIGHT? How the Skycoin team has solved this is by a second coin called coin hours. You earn coin hours every hour based upon the amount of SKY that you have in your wallet. You have to pay a small transaction fee in coin hours. This is, in essence, a limit on the transactions a wallet can do. I would argue that simply instituting a small fee like Stellar Lumens and Ripple (XRP) did would be better, but HAY… whatever floats your boat.
Next up is the smart contract platform called Fibre. There is not much to say about it except that it seems to be a Turing complete version of Stellar’s platform. The only Dapp I know of currently on the network is KittyCash. This is, as you might have guessed, a complete copy of CryptoKitties or as they put it, “Kitty Cash is designed to implement Satoshi’s original vision on CryptoKitties and fixes breading problems in other incarnations.“
The real reason for Skycoin’s existence is Skywire. Skywire is a wireless mesh network that uses specialized antennas connected to Skyminers. It is planned to incorporate end-end encryption and take out the last centralized part of the internet which is the ISPs. This sounds like a really cool idea, but I have many doubts about if it will ever come to fruition. Firstly, making a mesh network that is completely self-dependent would require a ridiculous amount of nodes. Just think about trying to create a mesh from coast-coast! Not an easy task! Second is that the Skycoin team seems to be stalling the development of it. They recently released the test-net of it, but the mesh-net is not a part of it. In its current form, Skywire is simply a decentralized VPN. The reason it seems like they are stalling is that no technical ideas have been released on how they will accomplish the largest mesh-net ever! I mean sure, the idea is awesome, but without an implementation strategy, it is pretty worthless.
In summary, Skycoin seems like a coin that offers very little value in comparison to the other coins with much higher market cap and seems to have lots of shady business practices. Is it a scam??? I HOPE not because the idea of decentralized internet service is awesome, but that is up to you. If you enjoyed PLEASE consider commenting and upvoting and visiting my website http://discoveringtec.com/