SiaCoin (SC)

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SiaCoin
Consensus mechanismbuilt as a derivative of Bitcoin
Websitehttp://sia.tech/

Basics

  • Founded in: 2014
  • First stable release was published on June 2016
  • Based in: Boston

"Sia is a platform for decentralized cloud data storage, getting built by a team at Boston-based Nebulous Inc., founded in 2014. The aim is to provide a platform that allows for peer-hosted storage of files, without the need for a single centralized entity. Sia itself would store only the storage contracts formed between the parties."

  • Is focused on bringing full decentralized disaster recovery to market. Knowing nothing more than a wallet seed, a user should be able to recover their most precious data.

History

"Originally, Sia used Proof of Storage consensus, not Proof of Work. Hosts would be grouped into “quorums” that were jointly responsible for storing users' files. The wallet was also fully scriptable, with its own bytecode interpreter capable of arbitrary computation. However, towards the end of the Summer, David discovers some insurmountable flaws in the Proof of Storage algorithm. By this time, David was active in the Bitcoin core developer community, and his understanding of cryptocurrency's unique challenges had greatly matured. The team made the difficult decision to throw out all the existing code and start over from scratch. The new iteration of Sia was based very closely on Bitcoin, deviating only to improve its known deficiencies and to add the transaction type that enables storage contracts."

"Sia was originally conceived by David Vorick during the Summer of 2013. He discusses the idea with Luke Champine over email, calling it “the Nimbus network.” At the HackMIT hackathon in September, David formally outlines the concept in the first draft of a whitepaper. David shares his idea with friends at college and they begin programming a prototype. Luke Champine becomes involved with the project when David asks him to review a presentation outlining the idea, now called “Bytecoin.”

In early 2014, the project is renamed once more to “Sia,” after the Egyptian god of perception, and is announced on BitcoinTalk. Seeing the positive response, David decides to turn the project into a startup company and work on Sia full-time. David and Luke apply to the Y Combinator startup accelerator in April. They make it past the initial screen and fly out to California for an interview, but are ultimately rejected. The rejection letter states: “we feel that this project will take significantly longer to build than you anticipate, and may require additional domain expertise.” (David and Luke had told the interviewers that Sia would be ready for release within three months.)

After a BitcoinTalk user fraudulently raises money using David's hand-drawn diagrams, David realizes that there is sufficient interest in Sia to raise money via crowdfunding. “Sianotes” are sold via Bitcoin and on the NXT Asset Exchange, and are later convertible to Siafunds. The crowdfund is successful, and Nebulous, Inc. is formally incorporated soon after."

Token

Launch

"Nebulous raised around $120,000 via a token sale in 2014. Last year, it reached a settlement with the U.S. Securities and Exchange Commission over an unregistered securities offering and paid nearly $225,000 in penalties."

  • The developers mined the first 100 blocks or so before releasing the code and miner to the public. Other than these first blocks, there was no premine for Siacoins.
  • The initial block reward was 300,000 siacoins. Each block reward after that is one siacoin smaller than the previous block reward (299,999, then 299,998, and so on). When the block reward reaches 30,000, all remaining blocks will give a 30,000 siacoin reward. The block time is 10 minutes.

Token allocation

  • Token supply: "Unlimited – there will never be a cap on the number of Siacoins generated. Humans produce so much data that it is effectively a limitless amount – and when Sia is the industry standard storage layer of the Internet, we'll need lots of Siacoins to fulfill all those contracts. Additionally, the Proof of Burn mechanic (more on this later) functions to eliminate coins from the supply, so there needs to be a constant allowance of new Siacoins being created.  As of July 2018, about 35.4 billions coins have been created, but the number of new coins introduced will slow as each new block is produced. By 2020, we should have about 45 billion coins in circulation."

Utility

  • Utility token: “The most important features of Sia can only be accessed by using Siacoins. All storage contracts and all Sia payment channels require owning Siacoins. This requirement means that as Sia grows in usage, so too will demand for Siacoins. As demand grows, the price will increase. If Sia is being used for billions of dollars of storage, billions of dollars of Siacoins will be required. The value of the Siacoin is inextricably tied to the amount of storage in use on the Sia network.”

Token Details

  • Each Siacoin is composed of 10^24 indivisible units (hastings).

SiaFund

  • Sia has a second cryptocurrency called the Siafund (SF). 3.9% of all successful storage contract payouts go to the holders of the Siafunds.
  • There are 10,000 siafunds in total, and all 10,000 are completely premined.
  • Sia's parent company, Nebulous Inc., holds 8835 of these Siafunds. The remaining Siafunds were sold in a crowdfund which helped finance Sia's early development.
  • The primary goal of Siafunds is to provide a way to finance the development of Sia without relying on donations or a premine. More people using Sia means more funding available to hire more developers.

"Instead of pre-mining a certain amount of Siacoin, Nebulous intends to generate revenue from a fees on all contracts. This is done through the existence of so-called siafunds. When a contract is created, 3.9% of the contract fund is removed and distributed to the holders of siafunds. Nebulous Inc started off holding 88%, with the remainder held by early crowd-fund backers of Sia.. Siafunds can be transferred to other addresses but not used as payments on the platform."

Update: "Nebulous, Inc. originally owned all 10,000, but over the years have conducted multiple Siafund sales to fund development. As of April 2019, Nebulous holds about 8,600 and the rest have been issues to third parties."

  • From the Sia website:

"An Initial Public Offering (IPO) was announced on May 13, 2014 with the idea of selling 1250 SiaNotes for fundraising 250BTC (at that time about $100,000) on the NXT Asset Exchange platform. That meant a value of 0.167BTC per SiaNote or 2400 NXT or $73.

The huge interest on the project drove to finally sell them for $192 (about 0.5BTC at the time) per SiaNote during the IPO, representing a total fundraising of about $240,000. All SiaNotes were sold in two days.

SiaNotes were later redeemed at 1:1 ratio by current SiaFunds during early 2015."

  • In an AMA the question was raised why the team hasn't sold more SiaFunds to the public:

"We didn't sell any siafunds in the last round because we didn't need to."

From Proof of Work #76 (16-10-2019):

  • "Nebulous announced their settlement for Siafunds sold in 2014. This is a landmark crypto settlement that may influence many other coins that have had a securities sale in the last few years." The fine was $225,000 for a $120,000 unregistered sale.

Coin Distribution

Tech

  • Whitepaper can be found here (29-11-2014).
  • Code can be viewed here.
  • Programming language used:

Transaction Details

How it works

"In the future, we'll be implementing a mechanic called Proof of Burn. Using this, sellers of storage on the network will burn coins to prove that they are real and have good intentions towards the network. It also offers another layer of network security."

"Hosts burn coins by sending them to a provably unspendable address. Hosts are expected to burn a portion of their revenue (~4%) as a demonstration that they are real. Renters will select hosts that have burned coins with a probability that grows in a linear relationship to the total number of coins burned. Therefore, a host that has burned 2x as many coins will be twice as likely to be selected as another host that has all other factors the same. This provides a very important defence against Sybil attacks. An attacker that is trying to manipulate a renter will need to have all of the excess redundancy of a file before being able to commit an attack. For a file with 3x redundancy, that means the attacker will need to get at least 2.1x of that redundancy, which means that the attacker will need to burn enough coins to look like 67% of the network. That entails burning 1.5x as many coins as the rest of the network has burned combined. Especially as the network grows and matures, collecting that many coins is going to be prohibitive." 

"In the platform, files of individual users will be broken up and spread across a number of storage providers, known as hosts. These hosts will need to provide proof of file storage on a regular basis in order to receive payment and not be penalized. Payment is in the form of Siacoin and penalties involve the host losing Siacoin collateral that was put up. The proofs provided by hosts are available on the Sia blockchain for verification by miners, who also receive payment in the form of Siacoin for their verification work."

"Sia is being built as a derivative of Bitcoin, with the additional required support for the creation and enforcement of contracts. These contracts contain a number of items of information including a hash, duration of the contract, frequency of challenges and payment parameters including the reward for a valid proof and for an invalid or missing proof. If a valid proof is provided during the required window an automatic payment goes to the host. If the proof is missing or invalid the coins are sent to a “missed proof” address, likely an unspendable address.

Hosts will be able to advertise themselves in different ways, e.g. as highly reliable, requiring a higher price and with higher penalties for losing files, or as less reliable, with lower prices but with lower penalties for losing files. The intention is for this to result in an optimized, efficient market place."

Mining

Staking

Liquidity Mining

Scaling

Interoperability

  • SIA partners (28-6-2020) with Quant Network to establish blockchain interoperability solutions for financial institutions.

Other Details

Privacy Method being used

"Completely Private. Sia encrypts and distributes your files across a decentralized network. You control your private encryption keys and you own your data. No outside company or third party can access or control your files, unlike traditional cloud storage providers."

Oracle Method being used

Their Other Projects

DEX

Governance

Foundation

"Sia’s co-founder, Luke Champine, posted a proposal to reddit calling for the creation of the Sia Foundation, with Champine as president. Though posted by Champine, the proposal refers to “we” throughout, suggesting that it comes from the entire Sia team and/or Nebulous. (Champine has not yet responded to a request for comment.)

The foundation would theoretically play a large role in pushing the Sia blockchain forward, but to fund it, Champine proposes a hard fork of the protocol. Each block reward would be doubled from the current rate of 30,000 Siacoins (roughly $94) so that an additional 30,000 goes to a Foundation Fund. There would also be a one-time transfer of 1.57 billion Siacoins ($4.94 million) after the hard fork. In other words, Champine et al are proposing expanding the coin supply; annual inflation for 2021 could run as high as 10.4%—though the proposal calls for capping the amount in the fund at 5% of total supply and burning any unused coins. 

Additionally, the foundation would be tasked with maintaining and improving the core software, controlling a legal defense fund, deploying security upgrades to defend from attack, promoting adoption of the coin, and getting it more exchange listings. Twenty-five percent of the funds would go to things like “grants, bounties, hackathons, and other community-driven endeavours.” All funds, Champine wrote, will be managed by a multisig."

  • From their blog (13-1-2021):

"Sia v1.5.4 was released today, marking an important chapter in Sia’s history. This release incorporates the Foundation subsidy hardfork, which is scheduled to activate around midnight, February 3rd, at block height 298,000. The hardfork introduces a subsidy that will fund the Sia Foundation, a new non-profit entity charged with supporting, developing, and promoting the Sia network."

  • From their blog (11-3-2021):

"The hardfork was a resounding success. All Sia network infrastructure like exchanges and pools upgraded."

Self Funding Mechanism

Upgrades

  • The Sia network hardforked to reject all ASICs on the network except for Obelisk miners. Was implemented on October 31st at a block height of 179,000. Blog post on the matter by the founder can be read here AMA by the team on the matter can be read here. In the AMA the team claims Obelisk does not mine itself, but only sells the hardware. Most of the questions were very critical towards the new move.
  • CoinDesk has reported (10-2018) on the Sia trying to block other ASIC companies except its own Obelisk:

"David Vorick, founder and CEO of Nebulous told CoinDesk that Sia will soon move to enact a software change meant to block certain types of specialized mining hardware from the platform, allowing hardware manufactured by Nebulous subsidiary Obelisk to remain one of the only ways to collect the blockchain’s lucrative cryptocurrency rewards.

“Sia’s decided to fork to obsolete or brick the Innosilicon and Bitmain hardware,” Vorick said, referring to Obelisk’s rival manufacturers of application-specific integrated circuit (ASIC) mining equipment for Siacoin.

Still, Vorick portrayed the code change as a near-unanimous decision taken by the community, and this Reddit thread – the closest thing to an official vote that was held in the community – appears to show broad support for the decision. (Side note: the AMA was very critical and it did not seem like there was consensus) The sentiments expressed represent a change from January, when another proposal to similarly fork Siacoin failed.

During those months of back-and-forth, some community members appeared just as concerned about Nebulous’ consolidation of power as they were about Bitmain or Innosilicon (the latter, Vorick made clear, is the “monopoly” he has in mind).

Meanwhile, some in the community saw a fork as amounting to a bailout of Obelisk by Nebulous – a way to turn back the clock on production delays, political rifts and threats of legal action. Obelisk missed its June 30 target for shipping the first batch of ASICs by weeks, leading to threats of legal action from at least two parties, as CoinDesk reported in August. The Reddit post containing the proposal argues, however, that it “seeks to protect the community members who invested in Obelisk ASIC units,” not the company itself.

Vorick said that Innosilicon controls 37.5 percent of the network’s total mining power through its own mining operation. The company also sells ASICs to other miners. Since they “have the only rig capable of competing,” Vorick wrote, Innosilicon is able to charge an estimated 100 percent markup on this hardware.

Speaking to CoinDesk, he described the method behind the so-called Sia kill switch, or the software change to disable hardware which the fork will activate: “Basically blake2b [Sia’s hash algorithm] is a circuit, and we added just a tiny extension in a clever place that you wouldn’t just naively think to add that extension. So basically we made our circuit just very slightly more complex in a very sort of random way, and this is something that we do not expect anyone else to have anticipated.”

As a result, as soon as the network’s nodes adopt the upgrade, chips designed to run the unaltered blake2b algorithm will be useless for mining Siacoin."

  • The fork had been activated on block 179,000, which took about 14.6 hours to be mined because of a bug in the difficulty adjustment algorithm, causing it to need a block to be mined before the difficulty adjustment kicks in to significantly drop the difficulty. The main chain continues with Sia version 1.3.7 and above.
  • A fork did result, called Sia Classic, according to a redditor:

"I think the consensus was that it was propped up by Innosilicon, one of the mining companies that got booted off the network. Either way, they now have no devs, ops, partnerships, hosts, or renters."

  • Weirdly enough now (8-2019) a miningpool called Luxor owns 77% of the network hashrate” and when the team was asked about it in an AMA they said “one centralized pool is not that big of a deal.” Which is a bit strange after the who Innosilicon ban. The Luxor pool is know to give 10% of their own 2% fee to Sia core devs. The COO of Luxor is Eddie Wang, also a software engineer for Sia.
  • There are three other mining pools, Siamining (32% on 8-2019), HyperPool (0.2%) and F2pool (0.0%)

"2018-07-01 Hyperspace fork

Early June 2018 community member Mark (known as 'toaster' at that time) announced that he would fork the Sia codebase and start his own project based on Sia called Hyperspace with a new currency called Space Cash (XSC). On the first of July all addresses on the Sia blockchain would be credited one tenth of the amount of siacoins they held in Space Cash. The total size of the airdrop was 3.5 billion Space Cash. A snapshot of the Sia blockchain was done on block 161,358 for a 10:1 (SC:XSC) ratio airdrop.

At the launch of the network an additional 600 million Space Cash was generated and distributed among developers and contributors to the Sia project. Developers NickH (Luxor mining), darval (Open source mining pool), RBZL (siasetup.info), Fornax (pixeldrain.com), drexel (siadrive), tbenz9 (Sia developer / documenter), hakkane (siastats.info), sebdude (siaberry), bryan (easysia.com) and atreides (Hyperspace contributor) received 54 million time locked Space Cash. Contributors CryptoHaag, moonshot, Wibs, Aura89, MasterHW and Spacing Radar101 received 10 million time locked Space Cash. These users are now all moderators in the Hyperspace discord server. The distributed coins would be locked until Hyperspace block 157,680 which should be mined roughly three years after the genesis of the blockchain."

Roadmap

  • Can be found here (18-3-2021).
  • Wants to get into files haring and streaming. But are considered long term goals.

"Matt published a roadmap update for 2019, detailing the next priorities of the development team: clearer financials, support for small files, continuous backups, and an SDK library for developers. For the long term, file sharing and a multi-device file system experience are planned."

Audits

Bugs

Usage

  • Numbers from the website (18-3-2021):
  1. 2.5PB Storage Capacity
  2. 395 Storage Providers
  3. 608TB Used Storage
  4. 1.2M Downloads
  • Numbers of Skynet, according to their blog (11-3-2021):

"1 million unique users. 5 million uploads. 25 million downloads. Hundreds of decentralized apps."

Projects that use or built on it

Competition

Pros and Cons

Pros

Cons

Team, partnerships, investors, etc.

Team

  • Full team can be found [here].
  • David Vorick; founder & CEO of Nebulous (the startup behind Sia and Skynet, which has now rebranded to Skynet Labs 23-9-2020)., lead dev
  • Luke Champine; co-founder, core dev
  • Chris Schinnerl; core dev
  • Zach Herbert; COO (also works for Obelisk)
  • Matt Sevey; core dev
  • Manasi Vora: Head of Product Strategy, led the MIT Bitcoin Expo
  • Marcin; "graduated with a bachelor’s degree from MIT in computer science with a minor in mathematics. Marcin is very active in the Bitcoin space, having served as President of the MIT Bitcoin Club, interned at Chaincode Labs, and worked as a researcher at MIT’s Digital Currency Initiative."
  • Eddie Wang, a software engineer for Sia and COO of the Luxor pool that has 77% (8-2019) of the Sia hashrate.

Partnerships

Investors

"Sia Tech, the blockchain startup behind the namesake decentralized cloud storage platform, has raised $3 million in seed funding to speed up the development of "free Internet." The seed funding round was led by Paradigm, with participation from Bain Capital Ventures and Dragonfly Capital Partners, among others. Nebulous raised around $120,000 via a token sale in 2014. Last year, it reached a settlement with the U.S. Securities and Exchange Commission over an unregistered securities offering and paid nearly $225,000 in penalties."

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