Introduction to Syscoin – Blockchain-Based Marketplaces 🚨 This article is 6 years old...
Introduction to Syscoin – Blockchain-Based Marketplaces
9 min read
Updated: Mar. 24, 2020 at 7:01 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
The cryptocurrency market is emerging from a lengthy bear run, with major players such as Bitcoin and Ethereum entering recovery mode. While high market cap cryptos are slowly regaining lost ground, however, quiet performer and decentralized market platform Syscoin has discreetly gained 36% in the past week.
Distributed marketplaces have taken center stage over the last year, with platforms such as Blocklancer and DECENT providing blockchain-based marketplace solutions for freelancers and content creators respectively.
The concept of a distributed marketplace, however, is as old as the blockchain itself— and was part of Bitcoin creator Satoshi Nakamoto’s original concept of for the Bitcoin client.
Long-time distributed marketplace platform Syscoin, developed by Blockchain Foundry, has been the leader of blockchain-based marketplace innovation since launching in 2014 and, over the last three months, has released a rapid-fire barrage of updates, partnership announcements, features, and releases.
What is Syscoin?
Syscoin is a blockchain platform that, like Bitcoin, facilitates extremely low-cost transactions, but is focused primarily on creating the infrastructure necessary to bring businesses onto the blockchain. Instead of focusing solely on value transfer, Syscoin provides support for both decentralized and centralized marketplaces.
The most interesting element of the Syscoin platform, however, is “Blockmarket”— Syscoin’s combination wallet and marketplace. The Blockmarket wallet provides users with the tools necessary to both buy and sell as well as send and receive currency or encrypted messages.
The Blockmarket Desktop v1.0 app launched in September of 2017. According to the website,
The Blockmarket Desktop is now the official Syscoin “flagship” software and we will ensure to keep Blockmarket Desktop updated with new functionality and any required maintenance. We will also continue to support the Syscoin QT wallet, however, future releases will no longer include the additional features that Blockmarket Desktop now provides.
Syscoin’s high-frequency onslaught of releases and innovation over the last few months culminated in the release of the Blockmarket Desktop 1.2 update, which contributed to the rapid recovery of SYS from the torpid Q1 2018 crypto market
Syscoin Origins
The release of the Blockmarket desktop wallet app may be relatively recent, but Syscoin has been a strong contender in the distributed marketplace ecosystem since development was announced back in 2014.
As the brainchild of Sebastian Schepis, Syscoin began life as a Litecoin fork that integrated distributed marketplace features.
An ICO, which raised over 1,500 BTC, was launched on the 14th of July 2014, 750 BTC of ICO funds was stolen by digital services organization Moolah in a dramatic turn of events.
Syscoin is currently working with UK authorities to bring Moolah to justice in a larger fraud case, which would also help them get back the stolen 750 BTC.
Syscoin integrated a graphical interface in May 2016, and launched Blockchain Foundry later in the year. Recently, Syscoin has secured a significant amount of private placement financing, which has accelerated the rate at which the platform has developed.
Features & Functionality
Syscoin offers a rich feature set accumulated over the lengthy tenure of the platform. As Syscoin is geared toward bringing businesses on to the blockchain, it offers arbitrated escrow, encrypted messaging, and Bitcoin as a payment option.
In a move no doubt designed to minimize the threat of market volatility, Syscoin allows users to peg to fiat currencies such as USD, EUR, and GBP, and includes the option of arbitrated escrow. A unique feature integrated into Syscoin’s decentralized marketplace is wallet aliases— users are able to establish easy-to-remember aliases instead of complex wallet addresses.
The ability to trade in fiat currency often brings up questions regarding regulatory compliance. Syscoin, however, appears to be ahead of the game when it comes to Know Your Customer and Anti-Money Laundering requirements with Syscoin Identities.
Syscoin Identities
Syscoin Identities aims to store identity information off-chain with a blockchain anchor, which makes it possible for users to store a greater amount of identity information without slowing down the chain.
This process also makes it possible for Syscoin to add features to and evolve the specification of Syscoin Identities without forking the network.
Syscoin plans on developing their Identities solution in parallel with specifications outlined by the Decentralized Identity Foundation.
By proactively adjusting to the constantly-changing KYC and AML requirements placed upon blockchain networks— especially with regards to crypto/fiat transactions — Syscoin is displaying a keen sensitivity towards regulated markets.
Security
Security is also a priority for the Syscoin team — recently the platform was subjected to an independent security audit performed by Digital Boundary. Syscoin posted the results of the audit publicly via their Medium account, demonstrating that the platform highly secure according to third party standards and requires minimal additional security work — which is likely completed by now. It is refreshing to see platforms taking a proactive stance to security, however.
Our Blockmarket Desktop Security Audit is well underway, and being managed by Digital Boundary Group @DigitalBoundary pic.twitter.com/PCXFyv69VF
— Syscoin (@syscoin) July 13, 2017
Token Issuance
Some of the most recent features rolled out by Syscoin are the most interesting, however. Late last year Syscoin announced the integration of token issuance functionality into the Syscoin platform. This feature could potentially allow users to create token-based loyalty programs, reward point systems, or even run their own ICOs on the Syscoin blockchain.
Instant Asset Transfer
Syscoin has also recently announced Instant Asset Transfer functionality, which has some strong real-world use cases that could be highly disruptive. Instant Asset Transfer on the Syscoin network could allow prediction market platform users to cash in and out of online casinos without waiting for long confirmation times or traditional fiat bank transfers, or allow users to use SYS for instant in-game purchases such as loot boxes or power ups.
Importantly, tokens minted on the Syscoin blockchain can be colored — or signed — with unique additional data. This allows Syscoin users to integrate SYS directly with their business branding, or even use SYS tokens as an avatar in virtual environments.
Changelly and Flyp Integration
The latest release of the Blockmarket Desktop app also includes Changelly and Flyp integration. This feature allows users to exchange 32 of the most popular cryptocurrencies directly through the Syscoin wallet, increasing potential adoption rates. The Blockmarket Desktop app is available for both Windows and Mac computers.
Humorously, Syscoin has also made the dream of buying a Lamborghini with cryptocurrency profits a reality — by partnering with a Vancouver-based motor dealership, it’s now possible to buy luxury vehicles such as Lamborghinis, Ferraris of a Mercedes-Benz with any of the 32 cryptocurrencies supported by Changelly and Flyp via Blockmarket.
2011 Mercedes-Benz SLS AMG Coupe available on Syscoin #Blockmarket from https://t.co/tyeG7AsmbK Offer ID# 1b7e6cc8ef9fbb30 #blockchain #marketplace pic.twitter.com/EQ7iXOtBlG
— Syscoin (@syscoin) February 8, 2018
Integration with Microsoft Azure
Syscoin has also recently announced integration with the Microsoft Azure ecosystem, which makes it possible for developers to deploy a full Syscoin node through Azure, or access Syscoin’s entire suite of services and smart contracts via the Syscoin API.
Technical Teardown
While Syscoin 1.0 may have begun as a Litecoin fork based on the Scrypt algorithm, the current Syscoin 2.0 solution switched to the SHA-256 algorithm. Syscoin developers have chosen to make Syscoin merge minable with Bitcoin, which, according to Syscoin, caused the Syscoin network to grow 100-fold in less than one day.
Merged Mining
Syscoin founder Sebastain Schepis broke down the impact of the decision to use merged mining on the Syscoin network in an interview with CryptoSlate:
“One of the reasons that we were able to secure our network so quickly in terms of hashrate was due to our decision to use merge mining. Our decision to make Syscoin a merge-mined coin mined alongside BTC enabled us to very quickly get large miners committed to SYS, since there were no additional requirements on their part past the initial setup of a Syscoin node – our miners did not have to dedicate hashing power just to SYS, and could ‘share’ the mining they were already doing with BTC.
Hashrate
Syscoin’s hashrate is currently around 3333.137 PH/s, which is roughly one-quarter of Bitcoin’s hashrate. The major advantage of merged mining is that it allows low-hash cryptocurrencies to dramatically increased their network hashing capacity by bootstrapping onto more widely mined currencies.
Smart Contracts
Smart contracts are used on the Syscoin blockchain as the building blocks for blockchain-based ecommerce. Other tech specs include a 60-second block time and an 888-million maximum coin limit, with the latest release — Syscoin 2.1 — halving block reward 16.39 SYS. More technical information on Syscoin 2.1 is available via the recently-updated Syscoin whitepaper.
Lightning Network Implementation
Interestingly, Syscoin has no immediate plans to integrate the Lightning Network solution despite having the capacity to do so as evidenced in a Syscoin Twitter post from April 2017
We've performed our first Lightning Network transaction on the Syscoin mainnet. #lightningnetwork pic.twitter.com/FKpyhUCiRD
— Syscoin (@syscoin) April 27, 2017
Schepis notes that Syscoin will implement LN when network demand demands it, as Syscoin already boasts an extremely high transaction per second rate:
“Currently, the Syscoin network mines one block every minute, and Syscoin blocks are sized at a maximum of ten megabytes. This gives us a current theoretical maximum transaction capacity of about 700 transactions per second, assuming an average of 250 bytes per transaction.”
The ability to process 700 transactions per second places Syscoin in a strong position to keep up with the increase in demand that is likely to increase alongside user adoption. Another unique solution developed by the Syscoin team is a novel zero-confirmation double-spend prevention algorithm called Z-DAG, which Schepis explains will improve transaction processing speed:
“…along with the additional transaction relay capacity provided by Syscoin Masternodes, (Z-DAG) should allow SYS to process even more transactions per second and provide strong assurance that no double spends have occurred within just a few seconds of receiving the transaction.”
The Future of Syscoin
The most promising launch from Syscoin in the near future is the impending web app iteration of the Blockmarket platform, which aims to dramatically increase the agility and interactivity of Blockmarket.
Blockmarket Web
According to Schepis, the Blockmarket Web solution will be implemented using a traditional multi-tier web architecture with a blockchain-based back-end. Unlike traditional database back-end, the Blockmarket Web platform uses the Syscoin network both as a store of available items and as the payment network itself.
Blockmarket Web appears to be designed with ease of use and fast set up in mind — Schepis states that the platform will function in a similar manner to Shopify on the blockchain:
“Blockmarket Web will allow sellers to stand up Shopify-like websites where they can earn SYS from selling they own products. Sellers will also be able to stand up themed portals which sell some or all products listed on the Syscoin network and allow them to take a closing fee for any item purchased through their Blockmarket Web install.”
Simplification has also taken a priority with the Blockmarket Web dev team — the entire Blockmarket web experience is completely wallet-less.
Users are able to register and log into Blockmarket Web by simply creating an alias and a password, which serves as an identity across the entire Blockmarket network.
This alias is also linked to an address that is associated with balance on the network. By streamlining wallet management, the Blockmarket Web application is likely to attract a larger demographic of less crypto-savvy users.
Users of Blockmarket Web will be able to sell and buy both physical and digital products. Items sold on the web app won’t be limited to static pricing, either — Schepis advises there will also be “make a bid” and auction-style functionality available:
“We expect the Blockmarket Web release to be the most beautiful, functional, and easy-to-use decentralized marketplace offering available. Now that our core technology has been proven to work via our Blockmarket Desktop release, all our focus is going into making a beautiful and easy-to-use ecommerce product that everyone can use as easily as they would use eBay or Shopify. We want this release to be functional— Blockmarket Web will not be a ‘proof-of-concept’— it will be a fully usable and useful ecommerce platform.
Syscoin is set to release Blockmarket Web, a web-based version of the Blockmarket Desktop app, in the first quarter of 2018. The implications of the Syscoin web app are obvious — by removing the barrier to entry represented by a downloadable wallet and UI, user awareness and adoption of the platform should increase dramatically.
Syscoin Community
Syscoin has a strong community of supporters, boasting over 65,000 followers on Twitter and over 4,000 members in its Telegram group.
Closing Thoughts
Syscoin’s strong product development and technically competent founding team have managed to create a cryptocurrency that is robust and wide-ranging in terms of the potential applications. The large Sycoin community of developers, merchants, and customers is an extra testament to how well-received its product offerings have been thus far.
For more information about Syscoin, including current price, market cap, team information and links to social media profiles, please check out our coin profile or visit the Syscoin official website.
Posted In: Coin Intros, KYC
