The first batch of Skycoin Skyminers were sold in 2018 for 1 Bitcoin each, and the purchaser was reimbursed with 1 BTC worth of Skycoin, minus the cost of the components ($600). For example, when Bitcoin was worth $10,000, a Skyminer buyer was reimbursed with $9,400 worth of Skycoin, which they could sell to recover the majority of the initial 1 BTC cost. This approach was designed to help distribute Skycoin to the community.
A new cost model was introduced in 2019. Skyminers sold in 2019 cost $2000, and the purchaser is guaranteed repayment of $2000 worth of Skycoin over 24 months, in addition to the normal Coin Hours earned by the Skyminer. This means official Skyminers are now effectively free, because the cost of the Skyminer is fully reimbursed.
Another benefit to buying an official Skyminer is that Skycoin packages all the necessary components into one box and delivers to your door, which is easier than having to source the components individually.
Click here to purchase an official Skyminer.
Skycoin also encourages community members to build DIY Skyminers using commonly available components that can be purchased from AliExpress and other retailers. To build an 8-node Skyminer costs approximately $600, while a simple single-node Skyminer can be built for as little as $40.
As of February 2019, approximately 10,000 Skyminer hardware nodes (official and DIY) have been deployed around the world by members of the Skycoin community.
All Skyminers earn Skycoin or Coin Hours, regardless of whether they are purchased directly from Skycoin.net or built DIY. But earning coins with a Skyminer differs from traditional Proof of Work mining.
The term “mining” originally referred to the extraction of natural resources from the earth. When Bitcoin and other Proof of Work currencies first emerged, the term “mining” started to be used to refer to the process of solving complex math puzzles in exchange for digital coins.
Skycoin doesn’t involve traditional mining. All 100 million coins were created in the genesis block, and these coins are distributed to individuals who provide useful services to the Skycoin network. Some ways in which coins can be received are listed below.
Because Skyminers don’t mine in the traditional PoW sense, some people prefer to use the term “Skywire Node” instead of “Skyminer”. But this is really a matter of semantics. There is more than one definition of the term “mining”. Bitcoin miners earn BTC by providing a service to the Bitcoin network, and Skyminers earn $SKY for providing services to the Skycoin network. The difference is in the type of service provided.
Bitcoin miners compete with each other to solve energy-intensive cryptographic puzzles. The miners with the most processing power will solve the puzzles more quickly, and hence earn the most Bitcoin. This has resulted in the creation of centralized Bitcoin mining pools, which are vast warehouses crammed with powerful ASIC processors. These are mostly located in China where electricity is subsidized. It is impossible for normal users to compete with these Chinese mining giants, so mining BTC is out of reach for most people.
Skycoin takes a different approach. Skyminer nodes instead earn coins by providing bandwidth, storage and computing resources to other users of the Skywire network. Skyminers are the hardware backbone for Skywire.
Skyminer nodes consume less power than a mobile phone and don’t require powerful or expensive hardware. There is no incentive for centralized mining pools to develop because Skyminer nodes must be widely distributed in order to provide bandwidth to as many users as possible. This means earning $SKY by running a Skyminer node will always remain a viable option for normal users.