The SafeCoin Beginners Guide
In this article, we will explore the basics of what the SafeCoin ecosystem has to offer. We will be going over the basics of Safecoin but also, How to buy, store and stake SafeCoin, and much more.
What is SafeCoin?
Like Ethereum, SafeCoin is a cryptocurrency; both are L1 smart contract platforms capable of running decentralized applications (Dapps), everything from NFTs to decentralized exchanges (DEX). However, SafeCoin’s major innovation is speed via a bundle of new technologies first introduced by Solana, including the consensus mechanism called proof of history. As a result, Solana and SafeCoin can both process roughly 50,000 transactions per second (TPS). When comparing this to Ethereums 15 TPS, we can see why this is a massive advantage for Solana and SafeCoin. Furthermore, because Solana and SafeCoin are so fast, blockchain congestion and gas fees remain low. These high speeds and low fees set Solana and SafeCoin up to scale and eventually compete with centralized payment processors like Visa.
What sets SafeCoin apart?
When Satoshi Nakamoto invented Bitcoin more than a decade ago, it solved a really tricky problem: Satoshi Nakamoto made it possible for strangers to make financial transactions over the internet from anywhere in the world without needing a centralized payment processor like Visa or PayPal in the middle. This technology, which many of us use today, is called blockchain. The one downside of blockchains compared to centralized systems is that that they are slow. For example, as of Oktober 2021, Ethereum typically processes fewer than 15 transactions per second, Whereas companies such as Visa or Mastercard can process tens of thousands of transactions per second.
SafeCoin is one of many new crypto solutions aiming to make crypto networks faster and more scalable. SafeCoin does this by using a suite of clever technologies originally introduced by Solana, including an improved version of the novel consensus mechanism called proof of history.
Solana utilizes a combination of Proof-of-Stake and Proof-of-History (PoH), giving Solana a unique hybrid consensus algorithm. PoH enables the Solana blockchain to be extremely quick while at the same time keeping the blockchain decentralized and secure.
Solana uses SHA256 hash functions to secure all events and transactions broadcasted on the network. This function allows Solana to take an input and produce a unique output that is extremely difficult to predict. For example, Solana takes the output of a transaction and uses it as input for the next hash. Thus, the sequence of transactions is now built into the hashed output.
Solana’s hashing process results in a long, unbroken chain of hashed transactions. Solana’s PoH consensus mechanism creates a precise, verifiable sequence of transactions that a validator adds to a block without the need for conventional timestamps.
For a more detailed explanation of how PoH works, you can watch the following video.
Problems with Solana’s Proof-of-History
Proof-of-History has tremendous amounts of potential. But with any consensus algorithm, there will also be drawbacks, which is also the case with PoH. If you want to participate as a Solana validator, you must meet strict hardware requirements for your validator. Any validator that does not meet these requirements is excluded from generating blocks. Because of this, Solana struggles to achieve true decentralization. When comparing Solana validators with traditional PoS validators, the hardware requirements are miles apart. With PoS, any standard computer equipment will be able to run a full node, allowing anyone to participate in the consensus, allowing for more decentralization.
Another problem with Solana’s implementation of PoH is the amount of data that is stored on-chain. Solana’s PoH is capable of thousands of transactions per second, but this generates enormous amounts of data. For example, one transaction is about 250kb. So 50,000 TPS of 250kb equals about 40 petabytes of data per year. This amount of data that has to be stored leads to an unsustainable consensus mechanism that will only result in more centralization as many companies, let alone private individuals, cannot save this amount of data.
SafeCoin utilizes many of the same features that make Solana such a great platform. The thing that sets SafeCoin apart from Solana is that SafeCoin is a fair launch community-driven project that has already made numerous improvements to its Proof-of-History consensus mechanism compared to Solana. So has SafeCoin improved the efficiency of its validators, drastically dropping the validator’s hardware requirements. This drastic decrease in hardware requirements allows the SafeCoin network to become much more decentralized as most modern computers are capable of running a full node. SafeCoin has also made improvements to the consensus, and on top of that, SafeCoin’s implementation of an improved compression algorithm decreases the amount of space a transaction takes up on the blockchain, resulting in less storage being required to keep a full copy of the blockchain.
How does SafeCoin’s staking work?
The SafeCoin blockchain is secured by computers which are called validators. Coin holders can stake their SAFE and become a validator, and in exchange for securing the network, they earn new SAFE and a cut of fees. Becoming a validator requires a high level of technical know-how. Because of this, it is recommended for most users to delegate their Stake to a validator such as mine in return for a fee. If you are interested in staking your SafeCoin, you can follow my guide here.
What kinds of applications can run on SafeCoin?
Safecoin is a computing platform just like Ethereum that can interact with and run smart contracts. Smart contracts power a wide range of Dapps. Some possible applications to run on Safecoin are decentralized exchanges, NFT marketplaces, DeFi, and much more. For example, SafeSwap, a decentralized exchange, is anticipated to launch on SafeCoin sometime in Q4 2021, officially bringing DeFi to the SafeCoin ecosystem. The SafeCoin blockchain will also be able to support stablecoins and wrapped assets through the wormhole bridge, which is anticipated to be released during Q4 2021. The wormhole bridge will allow coins and tokens to be bridged between the Ethereum, BSC, Terra, Solana, and SafeCoin blockchains.
If you have found this article helpful, please consider donating and staking to my validator. Otherwise, consider reading one of my other articles.
SAFE Donation Address: 3aHEKicGmWiTgcNifFkJjpJ3BCxgf5AqFnJrJfYqJUax
SafeCoin validator ID: 9UzheMmVr1eLAjFiwaYftTNrC8JTGSJKi7SBiCwfgC7H
SafeCoin Validator Name: “Martin”