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Bitcoin and Ethereum’s Fallacy to be Fixed by Skycoin

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by Eugenia Kovaliova · 3 min read
Bitcoin and Ethereum’s Fallacy to be Fixed by Skycoin
Photo: Skycoin

Skycoin, a Blockchain ecosystem, will counter power centralization and resource consumption of the major cryptocurrencies.

When Satoshi Nakamoto mined the first Bitcoin, it was followed by a range of events aiming to change the way people transact with each other. Cryptocurrencies have given financial freedom to the public, excluding the role of banking institutions charging hefty amounts for safekeeping and transferring people’s money. In the recent years, an explosion of cryptocurrencies have been observed, with hundreds of them being developed and launched each year.

The launch of Bitcoin by Satoshi Nakamoto was a dream come true for many people, presenting the world a digital form of currency, extremely safe, fast, secure and cheap to send around the world. By putting the control over money transactions in people’s hands, Bitcoin became the first successful non-governmental currency.

In a few years, Ethereum was developed and launched. While Bitcoin represents itself a blockchain-based cryptocurrency, Ethereum is a whole platform working on Blockchain, with its own cryptocurrency, Ether, allowing users to make smart contracts and develop their own crypto coins and tokens for specific projects.

When developed, both Bitcoin and Ethereum were perfect in the eyes of its developers and users. Yet, today, both are racked by pitfalls that are becoming major issues. The main issue is their Proof of Work system, where miners are incentivised when solving complex calculations to release coins in the system. This leads to huge mining pools, where one or two become the major source of mining, potentially taking control of the system and influencing it. This is against the concept of decentralization – the founding principle of cryptocurrencies.

Another issue lays in the race to gather mining power and more coins, pushing mining pools on developing large servers or farms, where dedicated, complex computers are run to get more monetization. This is the reason why both Bitcoin and Ethereum are rapidly turning into immense power hungry platforms. According to the forecasts, by the year 2020, the mining operations of Bitcoin would consume more power than Denmark consumes today.

Skycoin is a Blockchain ecosystem, not much unlike Ethereum, that is specifically developed to counter power centralization and resource consumption of the major cryptocurrencies. Skycoin is based on the concept of decentralization, having ensured that there are no chances of one single group of miners or nodes that can take over the system.

The Skycoin platform offers its users high transaction speed, less than 2 seconds. All transactions are “zero fee”, as they are paid through a dedicated Coin Hour token, a separate cryptocurrency given to users for holding coins. Moreover, Skycoin effectively renders threats, such as 51% attack, reversal and duplication useless, which means high security level.

Being sustainable and trustworthy, it does not allow mining farms to run on the platform, so that even a small cell phone can run a node. Instead of miners, the platform runs on nodes. Scalable and low resource demanding, the Obelisk (Scycoin’s feature) makes sure that everyone can be a node, making centralization impossible.

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Eugenia Kovaliova

Eugenia can call herself a multy-interested person, as she is always in search of new proffessional fields to encompass. After graduating from Belarussian State University with Bachelor degree in both International Communication and Public Relations, she joined a travel startup Fresh Adventures, where she worked for 3 years creating unique itineraries through exotic countries, travelling around the world and developing the company as a partner. Currently, she works as a business analyst in the field of information technologies. She believes that IT is the future, that is why it is so important to keep up with the latest trends in this rapidly growing industry.

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