Skycoin solutions to 5 fundamental blockchain problems
Part II — Decentralization of node hardware
In Part II of this article series, we explore the problem of hardware decentralization. We discuss its importance for network resilience and the elegance of the Skycoin/Skywire solution which we believe will usher in a new era of monetary and data sovereignty.
The vulnerabilities of centralization
A cryptocurrency is decentralized a network of nodes. Each node deploys a full version of the coin software, retaining a complete copy of the blockchain and validating each block of transactions.
The more nodes, the more resilient the network to attack. However, not only is the number of interconnected nodes important, but also the degree of geographical dispersion of those nodes.
It is possible to run Bitcoin or Skycoin nodes in 3rd party hosted cloud computing services like Amazon Web Services. This may be cheap or convenient, but highly centralized. If Amazon decides to cut bandwidth of all instances running cryptocurrency protocols, then the entire network can be shut down. If a large number of nodes are run by a single entity, then the network is highly vulnerable to the whims of that entity. Network vulnerability comes from the existence of central points of failure.
For this reason, it is preferable that blockchain nodes are maintained by a large number of different users on different continents, different regions and different cities. The goal of any cryptocurrency should be to reduce the barriers to individual users running a full node as much as possible.
Synth saw the need for decentralized blockchain hardware in 2012. He saw that running the Bitcoin software on a laptop was far from ideal for a number of reasons — it would be forced to share computation power with other processes, could shut down, be etc. What was needed was dedicated hardware that exclusively ran the full node, and was easy to setup and operate.
Skycoin and Skywire — double decentralized networks
But in 2015, Skycoin integrated an ecosystem application that doubled the need for dedicated hardware — the creation of Skywire, a private, uncensorable new internet protocol.
Skywire was created to address the lack of a secure transport layer for cryptocurrency bandwidth traffic, and the vulnerability of traffic to internet shutdown. Skywire would be a new internet run by the people, who would forward encrypted bandwidth traffic on a global wireless mesh network in return for coins.
On the new decentralized Skywire internet, the same network fundamentals apply — it is preferable to have the largest number of independent nodes operated and maintained by unique users. This reduces the likelihood that a central entity can arbitrarily block, censor or throttle network traffic.
The Skycoin ecosystem was now running two distinct decentralized networks — the Skycoin blockchain and the Skywire internet protocol. A radical new hardware device was needed.
Enter Skyminer
This is how the Skycoin miner, or ‘Skyminer’ was born. It was designed with multiple computing units which could be programmed to serve as a network node on both of Skycoin’s decentralized networks — the Skycoin blockchain cryptocurrency and the Skywire encrypted internet protocol.
The Skyminer contains 8 low-cost computing boards (Orange Pis) that optimizes computing power and cost through parallel processing of cheap, replaceable single board computers.
As we have described previously, it does not compute hash functions and is therefore not ‘mining’ in the Bitcoin sense of the word. Instead, it uses its computational power to complete the useful work of sending and receiving internet packets on Skywire, in return for financial reward.
Any of the 8 computing boards can be deployed as income-generating nodes forwarding Skywire packets or as non-income generating blockchain-full nodes.
The genius of the Skyminer device is its multi-functionality — the Skyminer will act as a complete personal cloud computing device enabling sovereign data storage for individuals and businesses.
It is a revolutionary re-imagination of the cryptocurrency miner as it provides useful work to the network and allows small-scale income generation, which is not possible with ASIC-dominated Bitcoin mining.
This incentive structure is the solution to the hardware decentralization problem — people are highly incentivized to own and maintain the Skyminer as an income generation tool.
A sovereign digital future imagined
We see the Skyminer as a hardware backbone of an information age transition to a decentralized future in which functions of money, internet, file storage are controlled by sovereign individuals leveraging the power of encryption.
Bitcoiners are beginning to realize the importance of hardware node decentralization, reflected in the rise of plug-and-play Bitcoin full node devices like Casa, Nodl and the Samurai Dojo device. However, they are limited by in their vision to the decentralizing of only money.
On the Skywire/Skycoin networks, other previously centralized public services can be re-normalized to the lowest level of scale — the household. Every individual can become their own ISP or cloud storage provider.
Every household will contain a Skyminer earning passive income for forwarding Skywire bandwidth, providing storage and enabling completely private internet access.
There will be millions of Skywire nodes, and millions of Skycoin blockchain nodes in every corner of the world, linked by wireless mesh network, completely unstoppable and uncensorable.
This is inevitable because the financial incentives dictate it — and this is how Skycoin has solved the hardware decentralization problem.
