WTF is Safecoin?
Following the pre-Christmas Bitcoin boom, many more people have been getting involved in the world of cryptocurrencies (whether that is a good thing is a whole different conversation…). But this increase in demand has highlighted some of the flaws of blockchains — notably scalability and the power of miners. The SAFE Network is developing a unique cryptocurrency that will solve these issues — Safecoin.
But what is Safecoin and how is different?
First off, it should be noted that Safecoin is currently in the design and implementation phase. In the meantime, MaidSafeCoin (an OMNI token) can be found on a number of exchanges today and this will be swapped 1:1 for Safecoin once it goes live.
So how is Safecoin unique?
Safecoin, like most cryptocurrencies, is a decentralised token. However, it differs significantly in that it acts as the incentive mechanism for a fully autonomous data network. And what does that mean? Put simply, there is no human intervention required. Once launched, the Network will use a series of algorithms to distribute and set the value of Safecoin by balancing supply and demand for network resources.
Crucially, unlike most other cryptocurrencies however, Safecoin will not have a blockchain. This has a number of key consequences and benefits. For starters, this means that Safecoin will be highly scalable (unburdened as it is by an ever-growing ledger of transactions). This combines with what is known as Close Group Consensus mechanism on the Network and provides something truly special in cryptocurrency terms — transactions that are confirmed at network speed (i.e. almost instantaneously) and with zero transaction costs.
Sounds too good to be true? Well, there’s more.
Without a ledger, Safecoin acts as a better form of digital cash. At any point in time, without a blockchain recording transactions, only the current and previous owner of each coin is known by the Network. As you would expect from the SAFE Network which is obsessively focused on both privacy and security.
If you’re familiar with other cryptocurrencies, there’s another unique factor that you should be aware of. Most blockchain-based currencies employ a Proof of Work mechanism in which miners solve mathematical challenges (to put it simply) in order to verify transactions. The SAFE Network instead creates a resource-led economy. In other words, users who provide resources (such as unused storage space, bandwith and CPU) to the network are paid in Safecoin.
The Network uses this Proof of Resource mechanism to randomly check the continued availability of the resource pledged. And the amount of Safecoin earned by each user is judged on the quantity and quality of resource that they’ve made available. There will only ever be 4.3 billion Safecoins in circulation at any one time (and it’s worth noting these will be continually recycled as they are spent on Network services).
Hopefully that’s a useful introduction for anyone who thinks that Safecoin will be ‘just another cryptocurrency’. Safecoin not only has a list of unique benefits — it’s an integral part of the SAFE Network’s design. No Safecoin, no Network. And I, for one eagerly await its release!