SkyCoin Aims to Fix Various Flaws in Bitcoin and Ethereum Blockchain Networks with Blockchain 3.0

Bitcoin and Ethereum may have revolutionized the digital and financial worlds but both of them pose big challenges in the future. It is unlikely that they will improve as drastically and innovativally as required. Both are termed Blockchain 1.0 and Blockchain 2.0 technologies because Bitcoin gave the world the technology and Ethereum used the technology for its smart contracts, thus paving the way for its use in dApps and decentralized companies. But, scalability issues and slower transactions still plague the future development of cryptocurrencies and Blockchain-based systems. In order to move forward with this revolutionary idea, many other startups are working on reinventing the wheel for Blockchain-based systems.

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Why are Bitcoin and Ethereum Creating Problems for Decentralization?

SkyCoin is a concerted effort to progress the very idea of decentralization that Bitcoin was envisioned for but lost its way in the middle. The Proof-of-Work and Proof-of-stake algorithms used by Bitcoin and Ethereum networks are a fundamental miscalculation that will never amount to true decentralization and secure networks because big mining cartels can control and create soft and hard forks whenever they want to. The possibility of 51% attacks theoretically when more than 50 percent hashing power is dedicated on one entity was even put forward in the papers by Satoshi Nakamoto himself.

The issue of mining using valuable electricity for making these networks secure is also a big concern for the environment. According to Energy researcher Sebastain Deetman:

“If the bitcoin network keeps expanding…it could lead to a continuous electricity consumption…[equivalent to] the total consumption of…Denmark by 2020. The continuous consumption of electricity through the processing power required by mining incurs monthly costs in the tens of millions. There is little sustainability in this over the long-term.”

SkyCoin’s Obelisk System

SkyCoin eliminates the need for miners entirely by employing a web-of-trust system that is based on nodes rather than miners. Nodes require much less electricity and are cheaper to set up and are thus more energy efficient. The centralization of power that is possible with Bitcoin and other Cryptocurrencies cannot be possible in SkyCoin because virtually anybody can set up a node at a fraction of the cost.

To operate an Obelisk node, users can purchase a Skywire Miner or even build a DIY one at home. Running a SkyCoin node doesn’t add monetary value but it does keep the SkyCoin network safe. For earning the native SkyCoin (SKY), one can setup operating nodes on SkyWire network by dedicating bandwidth and resources.

This mechanism can give the new network the monetary value needed to be in contention with other cryptocurrencies and Blockchains. The value can then be successfully traded as soon as the Skywire’s testnet launches in the near future.

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