It has been almost two years since I first heard about the building of a new blockchain, Koinos. It all started here on Hive, most likely the news about Koinos circulated on LeoFinance. I probably wouldn't have heard about it if it wasn't for those who noticed the potential of Koinos and decided to share here. For me personally it began as a participation in a fun experiment. It was clever of the core team to come up with an interesting initial distribution system that was designed to be fair and decentralized. I thought by now we would have the mainnet running already. Mainnet has not been launched yet. However, the core team and the Koinos community have been busy with the testnets and building.
Today, Andrew Levine published an announcement with updates on the development of Koinos blockchain with a title - Koinos Dev Update: V4 Here We Come!. According to the announcement, version 4 of the Harbinger testnet is complete. This version seems to be a final one and is a feature complete version of mainnet. It includes codes necessary to incorporate ERC20 snapshot into the genesis block and enable KOIN holders to claim their tokens. Currently, KOINs only exist in a form of an ERC20 tokens and since mainnet has not been launched yet these are the real KOIN coins. Once mainnet launched, KOIN holder will be able to claim them with their Ethereum private keys or recovery phrases.
It will be interesting to see what will happen to the ERC20 KOINs after all KOINs are claim on the mainnet. Most likely they will become worthless and the trading activity will switch to the real KOINs. I haven't paid attention to latest news about Koinos for a while, and since I hold some Koins and the ticker is on my watchlist, I noticed some interesting price movements in the last few days. Koin has been trading around $0.20 for a while, and all of the sudden it started going up a couple of days ago. It is currently trading around $0.35, but went up to as high as $0.40 a couple of times within last two days.
I was curious if there was any reason, and also wanted to catch up on the latest updates. While I still have no idea about why the price went up, it was great to see that Koinos development progress is close to the finish line and potentially can be launched in Q4. Don't quote me on this, since mainnet launch timeframe has been delayed a couple of times so far. I am not in a hurry, I understand the importance of conducting rigorous tests before launching the blockchain, so that it works as designed and intended.
My Koinos journey started with the fun mining experiment. The core team came up with an interesting idea of letting all wanting to participate to mine the initial coins on their personal computers. It may not be same as mining bitcoin or ethereum. But it did sound fun and I had to try. The idea and intentions for mining and initial Koin distribution was a great one. However, just like with anything crypto, some participants figured out more efficient ways of mining that put them at advantage over other participants who were using their personal computers. After a couple of days mining on two computers, it became obvious that the cost of mining was equal to the cost of buying Koins in the market instead.
By that point we knew a little bit more about the project and what the goals were. I liked it, and wanted to participate by buying some instead of mining. A couple of month after that, bitcoin price started going up nonstop and the crypto bull market started. Initially, buying Koinos didn't look like a good investment, because I had to use bitcoins to buy them, and compared to bitcoin and other coins, Koin didn't do much in price action. It would be unreasonable to expect any drastic price movements for Koin at that point, since it was a new project, was under initial coin distribution stage and mainnet wasn't ready yet. Even testnet was ready at that time.
After a year since the beginning of the mining, Koin price decided to surprise everybody. In a very short time period its price went up as high as $1.50. That is impressive for a coin that was available in the markets for 2 or 3 cents the previous year. Since mid November of 2021, the price has been dropping. This has been the case for all cryptos including bitcoin, ethereum and hive. Perhaps if the bear market didn't start, its price could have gone even higher? or not. It has followed overall crypto market trend, and still was able to retain higher value than what it was worth during mining period. Nobody can predict the future, but sure will be interesting to see how markets will react once the mainnet is successfully launched.
Andrew Levine makes very ambitious claims in the latest announcement:
To be clear, with the launch of V4, Harbinger will be a complete version of Koinos mainnet with all the features that will make it the world’s first truly free-to-use, truly decentralized, and truly evolving L1.
Building a truly decentralized blockchain network is not an easy task. It requires community and continuous growth of the community within the network. It seems like there is a strong community being build around Koinos. Even before the chain is launched, people are building SDKs, wallets, DEX, libraries, etc for Koinos. So, it is not just the core team doing everything. This is a very good start, and a promising as an innovation in the crypto space. Unlike other blockchain networks that are mainly built using Proof-Of-Stake or Proof-Of-Work consensus mechanisms, Koinos will be using Proof-Of-Burn system for reaching the consensus. The idea behind using PoB model is to make participation in block production accessible to many regardless how wealthy they are or how sophisticated their machines are.
Burning is an action of making Koins unusable by anybody and possibly removing from the circulation. Usually, it is done by sending the Koins to special account that nobody has access to and the Koins received in that account have no way of getting back out to the circulation and essentially get destroyed. In Hive we have @null. If we want to burn some Hive or HBD, we can do so by sending them to @null.
Koinos will be using NFT mining rigs (virtual miners).
To efficiently track virtual miners, the Koinos system will manufacture miner NFTs which are acquired by aspiring block producers who submit proofs of their burns to a system-owned automated market maker contract.
Miners will be earning Koins based on blocks produced and will be receive these earning at various periods of time that change based on the demand for miner NFTs.
The more demand, the more the payback period gets pushed into the future. The less demand, the shorter the payback period becomes.
While Proof-Of-Burn mechanism is not a new one and was originally proposed by Iain Stewart in 2012, we rarely hear this algorithm being used in other blockchain networks. It does sound interesting, and will be great to see it in action.
Will Koinos deliver on all the promises and actually create something new in the crypto space? Time will tell. I hope it will turn out to be another success story. What are you thoughts? Let me know in the comments
Posted Using LeoFinance Beta
