SOIL-ex: A distributed subcurrency exchange on the SOILcoin network.

THEORY

The financial technology industry has recently accepted the benefits behind the application of the decentralized blockchain, along with its disruptive innovations against the traditional ways of doing business in the economic theater. The blockchain is most popularly represented by the distributed public ledger of Bitcoin. This accounting technology, disseminated across a global network of user-participating computers records every transaction - with little or no cost in way of fees compared to traditional monetary services - as a way to authenticate digital transactions, offering irrevocable proof of asset ownership with a traceable and immutable history.

This fiscal disruption, however, has remained thus far on the fringes of the industrial and commercial worlds. While cryptocurrencies have revolutionized the transfer and control of assets, wealth, and commodities; a very specific hindrance has restrained them from reaching their full potentiality and mass adoption. This complication resides in the ongoing dependency on online centralized, privately owned, cryptocurrency exchanges and the difficulty in purchasing currencies .

As more and more individuals have embraced blockchain technology, myriad alternative currencies ("altcoins") have sprung up, boasting a wide range of innovations, providing multitudinous options for investing in cryptocurrencies. Online exchanges have permitted trading between one altcoin to another, and have operated very similarly to real-world stock exchanges, with many available options such as lending, trade-bots, binary options and derivatives.

Within the short history of cryptocurrency trading, though, there is a long list of defunct exchanges that succumbed to poor security, mismanagement, insolvency or outright theft on the part of their owners. The victims of these centralized altcoin exchanges have lost millions as a result, and due to the pseudonymous nature of cryptocurrency, these pilfered funds prove difficult to trace, the perpetrators nearly impossible to locate and prosecute. Extensive adoption of the digital currency ecosystem beyond the cryptocurrency subculture has been inhibited by this problem; potential users, having learned of these disappearances, have chosen to avoid alternative-currency investment, remaining steadfastly in the familiar world of fiat currency.

The most famous theft, originating from the Mt.Gox exchange has even lead to the term "getting Goxxed". Mt.Gox was established by Jed McCaleb on July 2010 as a place to trade Magic the Gathering playing cards, and was subsequently sold to Mark Karpels on March 6, 2011. At its peak, Gox managed nearly 70% of all Bitcoin transactions. In February 2014, the company suspended trading, shut down its website, and filed for bankruptcy protection while 850,000 BTC vanished from customer wallets, valued at more than USD$450 million at the time. CEO Mark Karpels was arrested August 1 2015, by Japanese police for falsifying data on the outstanding debts on Mt.Gox, and was later also charged with embezzlement. He remains imprisoned to this day, and the majority of the missing funds remain unaccounted for.

Bitcoinica, launched on September 8, 2011, suffered heavy financial losses on March 1st, 2012, when its web host was victim to an internal security breach that permitted the attacker to have access to the exchange-wallet in which Bitcoinica stored it's user's funds. More than 43,000 bitcoins were stolen by the attacker. At that time, its operators (Intersango Ltd.) issued a statement guaranteeing its users that exchange reserves were sufficient to cover the loss, but again on May 11, 2012 Bitcoinica suffered another security incident in which its hot wallet was emptied once again, which lead to Bitcoinica's immediate shutdown. On August 6 2012, several plaintiffs filed a lawsuit against Bitcoinica citing "conspiracy, breach of contract, negligence and conversion". By February 2014, the three defendants representing Intersango had not responded to the allegations and plaintiffs were seeking a default judgment.

BitMarket.eu, launched April 5th, 2012, was a multi-exchange order matching market service that did well at first, but was prone to operator dishonesty. After increasingly degraded service, claims of being hacked, and refusals to process outgoing BTC transactions; on December 21, 2012, the operator Maciej Trebacz finally admitted that he had used the customer's funds for speculation, and that nearly 20,000 BTC of its customer's funds were lost. As of October 2014, many people were still searching for their refunds, receiving many excuses from Mr. Trebacz.

Even as recently as this year, Cryptsy threatened bankruptcy, claiming 13,000 BTC and 300,000 LTC were lost in a hack on their system. These losses were experienced over 18 months previously, in July 2014. Owner Paul Vernon claimed in an official blog post that trojan malware was inserted into Cryptsy’s code by the developer of Lucky7Coin giving access to the company’s wallets. Instead of revealing these losses to users, Vernon kept trading open in the hopes of regaining solvency, and did not report the theft as he did not know to whom he should report it. The exchange website remains online, but is considered inactive and has zero volume in trading on it.

These are just a FEW of the failed exchanges, at least three dozen exchanges have fallen by the wayside over the last few years, some due to regulatory issues, some due to security failures and some by sheer fraudulent practices by their owners. As altcoin exchanges go down, smaller currencies, many of them with hard-working development teams, and limited exchange presences, find they are losing their exchange platforms for their currencies. Crosschain integration bringing currencies such as this to be traded on a decentralized exchange will let smaller cryptocurrencies get out from under the thumb of trusting a third party to provide them a place to sell their currencies.

Thus, the need for a better approach: a way forward that will help bring an end to the phenomenon of getting “Goxxed”, a decentralized exchange built on the SOINnet virtual machine, SOIL-ex. SOIL-ex is built from the Ethereum project, EtherEx, and will serve, currently as a subcurrency exchange, and will grow into a pure cryptocurrency exchange with two-way pegged sidechain cryptocurrencies and commodities futures being traded in a secure and distributed fashion.

In August, 2015; Ethereum was launched, providing the opportunity to build smart contracts directly into the blockchain, enabling a previously unrealized scalability of innovative distributed applications (dApps). SOILcoin launched on October 17, 2015 as a fork of Ethereum, with a stated purpose to build dApps that would serve renewable energy, automatized agriculture and computational scientific concerns. Building SOIL-ex to include a pegged hard and soft commodities exchange, attached to a decentralized and contract driven cryptocurrency exchange platform, is where id like to see this project go, and while this basic layer of exchange is based on the EtherEx project for Ethereum, which is what drew me into the idea of truly freeing ones digital assets from any potential breaches of trust presented by centralized third-party exchanges.


TABLE OF CONTENTS

1. Concept
2. Limitations of current platforms
3. The distributed order book
4. Requirements
5. Challenges and potential solutions
      -Blockchain bloat
      -Cross-chain coins and fiat integration
      -Features
      -Adoption
6.Conclusion


1. CONCEPT - The NEED for an asset exchange decentralization

SOIL-ex is composed of several smart contracts running on the SOILcoin blockchain, chiefly etherex.se and etx.se. These contracts interact with each other to commit cryptocurrency trades, executed directly between users, with no middleman or fees between, excepting the computational cost of the transaction in gas. Users simply enter trade information and send funds to the master contract. Once this master contract receives and confirms both sides of the trade, it executes and sends the appropriate assets to the respective parties involved. This contract executes on the blockchain and requires no third-party human interaction to complete the trade. Even should the project be abandoned by the developer, the contract will remain live on the blockchain, its functions can be called by API and javascript bindings, and the open sourced frontend can be cloned via GitHub repositories within minutes, either on a cloud server or as a local instance by the user, maintaining market reliability.

Further contracts and interoperability can be seamlessly interwoven into the operations and features of the exchange, leveraging the web3 protocols and javascript in the frontend design, and will create a suite of contracts with an infinitely scalable and modifiable method capable of decentralized exchange of assets of many conceivable values. The present release of SOIL-ex is built to test out these contracts, in a live manner. To find new use concepts for subcurrencies, for "crosschain interoperability". This is the foundation upon which to build on, to improve. This is the "Frontier release" of decentralized asset exchange in the Wild West of a global smart contract machine.

The primary differentiation between a decentralized exchange such as SOIL-ex and a traditional online centralized cryptocurrency exchange is simply the location wherein your funds are held during a trade. On conventional exchanges, that are able to pay out withdrawals instantly can be said to be paying them from a "hot wallet"; one that is connected in some way, live, to the Internet. An exchange hot wallet provides easy access to an asset, but suffers the greatest risk of unrecoverable theft to the user in the event of security breaches or administrative fraud.

Operating a "hot wallet" is also a risk to the centralized exchange owner, as bugs or malicious exploits against their underlying computer systems have already revealed hidden vulnerabilities of one sort or another, and the probability of hackers or malware creators continuing to try to break into the system and steal the balances of digital assets in the blink of an eye, which can create immediate insolvency on the exchange, the inability to honor the digital representation of what proportion of exchange funds your asset represents. This scenario has played out with unfortunate consequences already. Users have no choice but to trust the exchange's owners to execute trades, and to hold their funds in a principled, honest and secure fashion, when many examples, recent and otherwise show that while many ARE honest, some definitely aren't.

The bottom line is, your funds are not really YOURS when theyre held in an exchange wallet, you do not actually own the security behind those assets. What you have is essentially a promissory note that you own this much of the represented asset that is held on that exchange, but there is no guarantee that those assets are absolutely secure. There is no warranty that the private keys owned by the exchange are definitively protected from malicious code or hackers, and you have little chance of retrieving those funds in the case of loss thru security flaw or criminal enterprise by exchange owners or employees.

Furthermore, online cryptocurrency exchanges often require much more detailed personal information, tied into your user account, and therefore tied onto your digital note of ownership to the balance of funds you have stored online in your exchange wallet. Ones private information security is another potential risk of centralized, privately-owned cryptocurrency exchanges. Some exchanges require scanned government issued photographic identification, scans of bank statements or utility bills displaying your name and address, even a photograph of yourself holding your photo id. Some exchanges will now use credit reporting agencies to access your credit score or potentially, the contents of your credit file using your name, date of birth and address information provided during account creation, in order to process user verification. Coinbase, one of the larger and well-established exchanges, has as of 2014 closed accounts of customers who transferred bitcoins from gambling sites.

In the case of a decentralized exchange, like SOIL-ex, the exchange takes advantage of an independent smart contract deployed onto the SOILcoin blockchain. This contract - and not the exchange contract deployer (owner) - controls user deposits and exchanges. This contract has no suicide function, that is: there is no ability for the contract owner to kill the contract and retrieve the contract wallet balance back to themselves.

Embracing the vision of true decentralization, SOIL-ex would maintain no user identifications. Exchanges are done, via smart contract between one private SOILcoin address and another. Ones identity on SOILex is ones wallet address, ones password is their private key, which remains stored on the users computer and off the blockchain. There are options in other sectors of the dAppsphere where one can, via smart contract, register their name or other information against their wallet address. In many cases, creating a verifiable digital identity and reputation is bound to become a more and more important need in this emerging PostCurrency world, but the level of personal information one broadcasts with their wallet address is by personal choice, and as such, not required by the exchange contract to complete an asset transfer.

SOILcoin will scale to produce a full exchange platform, beginning with the exchange of contract subcurrencies built into the SOILcoin ecosystem , which can be assembled with many imaginative parameters, to represent anything of "value", against the base currency (SOIL). There are many use-cases where this method of decentralized asset exchange can be useful on the present SOILcoin network.

Asset-backed DAOs can issue tokens in the value of shares, and have the ability thru their governing contracts to issue dividends. Micro-Lending and crowdsourced campaigns can issue tokens for value towards a funding goal in a fungible marketplace. Registered animal breeders can issue single-asset tokens representing a digital ownership and stored identification of an animal, which the rights to can be traded via a decentralized exchange contract alongside the physical asset, tracing ancestory, provenance and potentially veterinarian records. Microgrid renewable energy projects can build a token to pay participants with, as a reward for production, which can be exchanged for other assets living on the blockchain thru the exchange contract.

With next-step evolution in crosschain interconnectivity, and smart contract design, other offchain cryptocurrencies (altcoins) can be brought onto the SOILcoin network for purpose of decentralized trade via the exchange master contract. This will begin to mirror the general use-case of online centralized exchanges, with the difference that the user does not have to trust the opposite party in the trade; or trust that a private exchange owner will behave responsibly and ethically with user assets within the exchange's control, or to trust the security measures in place to protect both assets and personal information privacy.

Further scaling in operations towards bridging fiat integration for purchases on a decentralized exchange via smart contracts, and pegged hard and soft commodities trades in a decentralized mercantile exchange will be explored, as well as how to apply this sort of contract logic to other services.

SOIL-ex has borrowed MIGHTILY on the EtherEx platform (https://etherex.org/), and the developers: caktux and jorisbontje, and we owe a MASSIVE debt of gratitude for the fact their platform was released open-sourced, in the true sprit of decentralized knowledge, which has lead me to really investigate the technology and potentialities of what a decentralized exchange can BE and how it can serve the users of SOILcoin, now and into our future; and what the challenges ahead might be, and how easily surmountable.

SOIL-ex exists as a smart contract (etherex.se), code which lives on the SOILcoin network, and is auditable. The live SOIL-ex master contract address is deployed to: 0x87e45bfc1e0805b557790b00fbc878f797a185e6. SOIL-ex will also maintain a github repository of changes made from the parent projects, at: <https://github.com/soilcurrency/soilex> We will add further commitments to the platform which provide added functionality and further security as able, and welcome the community to improve upon this project, to find new uses for it, and to push its boundries.

2. LIMITATIONS OF CURRENT PLATFORMS 

The concept of a decentralized exchange has been gaining ground in recent months, and several projects have already surfaced, some of which are presently operational: such as Coinffeine (which requires use of centralized payment processors) or Bitsquare (which still maintains a need for third party arbitrators). Both implement the concept of asset exchange in a p2p fashion, and are built to access the Bitcoin network. Bitshares maintains funds in an online wallet, and states that each asset is backed "by up to twice the reserves of traditional centralized exchanges" This still requires the user to trust that statement, and to hand over their assets to the control of a third-party. However, these exchanges are also limited by the restricted nature of Bitcoin's blockchain technology. They approach decentralization, but remain just beyond it's cusp.

Bitcoin, by its fundamental essence, is designed exclusively for secure peer-to-peer currency transposition and transaction accounting; and truly, it is highly proficient at securely providing the technology for this behavior; when one user sends BTC to another, the distributed public ledger will prove that the sender now has less BTC and the receiver has more BTC. But while Bitcoin's inter-mutual registry permits BTC to thrive as a cryptocurrency, its particular design also introduces major constraints. BTC records every users balance, and every transaction ever made on the system, and provides a cryptographically secure way to transmit those funds to other users, and thats about it.

It is these limitations that make the Ethereum Virtual Machine, which SOILcoin parallels, a distinctly superior foundation for hosting a decentralized and secure cryptocurrency exchange.

3. THE DISTRIBUTED ORDER BOOK

With SOILcoin, leveraging the Ethereum-based programmatic system, there is now a secure infrastructure upon which a decentralized exchange can be built, one which requires no concessions of personal anonymity and asset security. Limitations presented by first generation blockchains such as Bitcoin, and the need for coarse bypasses against built-in systemic issues are rendered inconsequential through the use of the EVM protocol, which harnesses an authoritative suite of programming and cryptographic mechanisms built in from scratch.

SOILcoin provides an impeccable platform for trustless asset exchange transparency. The order book, the trading engine, and every rule we need to make an exchange work can be decentralized in the aspect of a pre-built front-end to the application- and we can do this in a way that can be achieved in a manner that is completely and verifiably transparent, with unconditional open-source availability, applying the demonstrable and substantiated security of blockchain technology.

When making trades, your wallet will use the SOIL-ex platform to find bid or ask offers opened by other traders. This service is centralized, but it is never involved in the actual transfer of funds so it doesn't require any trust. The trades are performed by the contract which the platform takes advantage of. This order book, built into SOIL-ex's front end, can be compiled and run on a traders own computer to access the contracts rather than viewed on the hosted server, and the determinative characteristics of smart contracts that run on the SOILnet brings a trustworthy explicitness to a decentralized cryptocurrency exchange.

4. REQUIREMENTS

Fully operational SOILcoin network, with a running local node capable of connecting to the front-end software component thru RPC.
Standard balance check API.
A trustworthy order-book and a secure network to process trade completions.
Cross-chain interaction with other cryptocurrencies.
A standardized subcurrency and token design parameter.

5. CHALLENGES AND POTENTIAL SOLUTIONS

As illustrated within the theory behind the need for this sort of innovation, privately held and centralized exchanges suffer from genuine confidence obstacles, owing from past abuses by unscrupulous operators and weak security measures. A decentralized exchange disentagles these risks, but also creates complications of its own. These include:

Possible blockchain bloat
Cross-chain coins and fiat integration
Features
Adoption
Ecosystem

The integration of other cryptocurrencies and sidechain interconnectivity is a real predicament of a decentralized exchange - and remains a challenge for all aspects of blockchain technology at present.  This is one of the chief reasons why few have emerged so far, in any capacity. SOILcoin provides a compelling solution to the security and decentralization issues that are needed to build a trustworthy platform for asset management, but also introduces the mandatory constituents for other cryptocurrencies to begin interacting across blockchains. A true decentralized exchange will be among the first distributed applications to take advantage of these possibilities.

Outside of the SOIL-ex platform, a decentralized exchange will need to communicate with secure wallets (such as SOILsafe) and the related exchange APIs to communicate information back into the trading engine. The initial operation of a SOILcoin/Bitcoin (SOIL/XBTC) trading pair would presently require a more centralized approach, depending on the tools available to secure cross-chain transactions and SPV proofs. Alternatives for sidechain communication will present themselves as the associated technology advances, and these will have to be considered when they emerge as to how they can be utilized on SOIL-ex.
 

      -Blockchain bloat-

Commonly referred to as "blockchain bloat", the problem arises as more transactions are made, causing the blockchain to have more data to record, and as it grows exponentially larger, it becomes difficult to efficiently download or store. As a decentralized exchange gains greater adoption, each transaction, from listing buy and sell orders, to completion of trades, is recorded on the blockchain, which all users of the ecosystem record on their personal nodes. SOILcoin's blockchain is presently approximately 700MB in size, but should SOIL-ex gain traction as a viable alternative to traditional privately run exchanges, this could add much gravity to the SOILcoin chain.

Another consideration will be the cost, in "gas", to make those transactions into the SOIL-ex platform. As such, a decentralized exchange such as SOIL-ex will be inadequate for high-frequency trading (HTF), which is characterized by high speed, high turnover, and high order-to-trade ratios that leverage electronic trading tools, called "trade bots". Also, due to gas costs, and block-time delays needed to record trade orders and completions, this sort of platform will also be unsuited towards very small trades. These sorts of transactions, recorded on the blockchain, would add to potential bloat issues as they accumulate.

As such, the system is set up with a minimum trade order value, equaling to 1 unit of the base currency. While SOILcoin maintains a fairly small market valuation, this 1 SOIL limit isn't prohibitive to trading, but as worth per share increases, such as Ethereum's current value hovering between USD $10-15, this can be a restraint against higher adoption of the system.

     -Cross-chain coins and fiat integration-

SOILcoin is a “private blockchain”, and like any decentralized cryptocurrency, is a world unto itself. Even though we run a parallel algorithm with Ethereum, SOILcoin cannot directly speak with ETH, or leverage smart contracts deployed on the ETH blockchain. SOILcoin also cannot directly communicate with the Bitcoin blockchain, or any other cryptocurrency. This means bridging cross-chain currencies into the SOILcoin network through implementations of smart contracts and oracles to communicate with the outside world.

With further development, it will be possible to integrate BTC and ETH "sidechains" inside of SOILcoin contracts, to bring those assets, and their "digital ownership" onto the SOILcoin network via a "SOIL-->contract XCOIN sidechain-->XCOIN" which would allow pegged sidechains for other cryptocurrencies implemented as a subcurrency contract on SOILcoin. Thus, these "smart contract XCOIN sidechains" would be a property of the crosschain currency, but not a part of its protocol. This contract exists separately from the currencys main-chain but is inter-operable with it.

Other options that have been explored to one-way-peg a subcurrency to a crosschain base-currency (e.g. BTC, GEO, ENRG) by releasing the units of base-currency into a sidechain, which would trigger a "proof-of-burn distribution", sending the incoming base-currency to a "burn address", returning a cryptographic proof of transaction, which would release a 1-for-1 purchase of the crosschain’s subcurrency within the SOILcoin network architecture.

These features don't exist ESSENTIALLY within the Ethereum-protocol language we have adopted, the contracts and frameworks have to be completely invented and designed out for this. The challenge with this is that in building pegs to other cryptocurrencies, while maintaining the pure decentralization and security of the SOILcoin network, we will need to ensure incoming crosschain protocols extend to support the SPV proof of possession.

Ensuring that asset security is met, transactions between crosschain currencies and their contract subcurrency sidechain, must be done without counterparty risk (no ability for dishonest parties to prevent the transaction), and should be atomic (happen entirely or not at all). There is a complexity issue to crosschain interoperablility. On a basic network level, there are multiple, unsynchronized and independent blockchains acting as the transaction ledgers for their specific base currency. User interfaces for wallet management would have to be reconfigured, to recognize digital ownership of offchain assets.

"Smart contract XCOIN sidechains" would, by necessity, need to be protected from the potential catastrophic failure of the offchain asset. The sidechain can act as a "fractional reserve" of the assets it is storing from its parent chain. Thresholds of "overall asset reserve" or an insurance contract could act as a way to prevent a "bank run" of withdrawals to or from the sidechain, leaving somebody eventually "holding the bag" on one network or the other.

Sidechains produce another potential issue in mining. Miners will begin to need to validate transactions relating to sidechain asset movement, thus more resources are needed to track and validate them all. With a scalable sized block size, SOILcoin should be able to handle these extra work loads, but many cryptocurrencies have a maximum block size, and transactions can become bottlenecked.

Another potential problem with a decentralized exchange, especially something like SOIL-ex which includes an inherent ability for any user to list their currency, is that some currencies LOSE developer support, dry up and die. As a protection to users, so that a market lister cannot just remove their market and disappear - once listed, a currency cannot be delisted. This will probably present an issue later on, but a process can be implemented to handle that when we have major upgrades to the system that require a new overall deployment, preferably with an oversight committee of sorts, with clear majority multi-sig decision having a voice as to not RELIST a currency during this process.

The use of certain contracts, like btcrelay and btc-swap, the latter of which is built in and deployed with the SOIL-ex exchange and relies on the former, act as an Ethereum-protocol smart contract for Bitcoin SPV. The underlying principle of the btc-swap contract is to purchase SOIL directly with BTC. Although its a little more involved, the simplest explanation is that an order is set, offering an amount of SOIL for a value in BTC, to be sent to an intermediary BTC wallet the purchaser creates. The purchaser performs a proof of work operation to solve a nonce based on the transaction hash produced by the BTC transaction. This nonce is verified, at which point the contract broadcasts the signed Bitcoin Transaction to the Bitcoin network, enabling the purchaser to claim their SOILcoins for BTC, directly, without middleman or centralized exchange.

What the btc-swap contract does, bare bones, is "send $X SOIL to A's SOILcoin address if $Y BTC has been sent to B's BTC address" The code allows the smart contract on SOILcoin to take action based on a BTC transaction hash, with the assurance that the transaction has been sufficiently confirmed and present on the BTC blockchain.

Fiat integration directly towards SOILcoin, be it for direct transactions for the base currency or as a SOILcoin-existant subcurrency, has its own whole set of challenges, as by nature, fiat is not decentralized. One possible solution to this may be the use of SchellingCoin contracts, programmed to hold a steady value against currencies such as the USD, CNY, EUR or towards commodities such as wheat, cattle, oil and gold.

      -Features-

As a rule, SOIL-ex, as a decentralized exchange, will never require a sign-up process, of any kind, from users, to allow them to access its normal operations. Users will be required to hold an initial balance of SOIL to interact with the network in the first place. The exchange will charge no fees for contract profit as all transactions are paid for by gas costs using SOIL, which goes to the miners working and maintaining the blockchain consensus engine through Proof of Work. The exchange will feature a trustless interface to directly exchange assets between SOIL users, without any middleman. One's identity on the exchange is their wallet address, the password - their private key.

Online, centralized cryptocurrency exchanges come with a lot of extra features, though. Implementing the usefulness of many of these will be integral to the ongoing maturation of a decentralized exchange. Some features online exchanges offer are in-house mining pools against many cryptocurrencies; marketplaces where goods are listed and requested in exchange for listed altcoins; daily and monthly cryptocurrency lotteries, and random number dice-games; random faucet-sized tipping rewards for making trades, participating in chats or forums, or sending "tips" to other users; altcoin faucets; arbitrage services comparing asset value across other exchanges; advanced market charts and studies, market news reports and releases; margin trading and cryptocurrency lending; incorporated block explorers... the list goes on.

Being that a decentralized exchange such as this can have “modular construction” and interacting smart contracts, adding in features such as those listed above will be available as more and more dApps are created on the SOILcoin network to increase financial functionality, or which leverage the (de)centralized order book.


     -Adoption-

The exchange of digital assets will play an important role within the growing SOILcoin ecosystem, and the provisions for a trustless and direct exchange of these assets will assist in currency and exchange adoption. Adoption of both exchange and base currency will accelerate once the exchange offers interaction with an assortment of cross-chain assets. A thriving subcurrency market, to start, will help build new ideas on how to redefine what we assign "value" to, and how we can apply the idea of "currency" to many many things. A full article on subcurrencies and implementations will likely be needed in order to cover the possibilities available therein. There are many different usage scenarios for subcurrencies on the SOILnet, and different stakeholders will have different needs, regarding how they might be traded, if at all.

The key is USABILITY. The test for a good dApp isnt the way its coded, its how its used. Or, more to the point, how MANY people use it REGULARLY. Use of the exchange creates transactions which enrich the miners, it tests out the possibilities of what we can "tokenize" and trade. As use of a decentralized exchange grows, so too does the base currency it rests upon. As we will base trading pairs exclusively against SOIL, this will hopefully increase the purchase and utilization of SOIL..

Naturally, the key to widespread adoption of any cryptocurrency is how it will offer real-world usability. This generally relates to the ability to use and spend one's crypto to purchase THINGS. The way current payment systems work throughout the world vary widely. The added value of cryptocurrencies therefore also hugely differs per geographical area, and thus, the adoptability of ones currency. A study from the Netherlands identified the three barriers facing comprehensive espousal of cryptocurrencies in general.

      1.Ease of use: generally, there is an opinion regarding cryptocurrency as having a lack of user-friendliness. Even though sending and receiving BTC has become much easier, it can still be difficult to actually purchase Bitcoin. With Ethereum, as was warned when Frontier came out, it came with the warning about its inherent user-unfriendliness. Much of the developments since have been to make it more accessible to more people. We've been trying, with SOILcoin, to demystify the EVM as we go along, and present things with a clear idea of how to actually WORK with it. I will have documentation written regarding SOIL-ex to assist users to work with it when it is released. This will be available on this website, and will be linked to from within the SOIL-ex user interface.


     2.Price stability: cryptocurrency, like ANY stock or tradable asset, will have periods of extreme price volatility, driven by speculation, lack of liquidity or outright manipulation, which makes it a risky proposition for a user to keep funds in cryptocurrency as the value deviates wildly, and oftentimes in a very short period of time. This undermines the function of cryptocurrency as a consistent store of value. In financial markets, though, past performance is no guarantee (and by any efficient market hypothesis and analysis, it is not even an indicator) of future results of expected value, especially when as a movement, cryptocurrency has an established reputation for extreme volatility; even with Bitcoin, the so-called "gold standard" of digital currency, the price can move up or down by as much as 25% in a single week.

Analyzing trends is difficult as cryptocurrency as a whole has not been a tradable asset for long enough to provide a comprehensive sample size. What is considered a short term trend in the NASDAQ market, for example, is something occurring over one months time. In crypto, where markets are open 24/7/365, these are more compressed. A short term trend might last a day, and an intermediate trend a few weeks at most.

SOILcoin has had a very slow and steady increase in valuation, without the typical massive spike upon release followed by a quick drop and long slow rudderless glide into obscurity that 75% of altcoins go through. Though not a pre-set stable value peg, SOIL has maintained higher average valuations for each of the last 12 weeks, with the latter 2/3rds having a much more exponential growth rate. Spikes in value occur infrequently, and generally followed by a slow dip well above the previous floor, before rising to break through another resistance level. It is safe enough, though, to say that SOILcoin has been experiencing a stable uptrend, that is a series of higher highs and higher lows. There will be incidences of strong downward trending for SOILcoin’s valuation, just as there will be periods of strong upward trends.

We have subscribed to many of the good practices that promote a positive valuation movement, mostly in reducing inflation of coin supply and slowing down the distribution model. Remaining in touch with our community and continuing to present a dedication to forward thinking innovation and development will make us an attractive investment. By adding SOIL-ex to the mix, I think we will see a slight increase in upward momentum, due to the new possibilities for USAGE that it brings, not only with promoting a vibrant subcurrency ecosystem, but other use cases that the exchange contract will bring about.

     3.Governance: One of the chief complaints about how the current BTC foundation is run is that it undermines the basic ideological aspect of cryptocurrencies by being very centralized and intransparent. I think we've done a damn good job with SOILcoin in that regard, as transparency is probably one of my most frequently used terms when I’m posting, it is one of the SOILcoin project's absolute cornerstones. With our voting process on fundamental protocol changes, we have moved much closer to decentralization, but as we use a 1SOIL/1vote schemata, that still leaves the possibilities open to voting blocs and "whales" holding much more power towards decision making. But, this is also the general model of most corporations when it comes to shareholder votes.

The move towards adoption of SOILcoin and its decentralized exchange will improve every time there is a news article regarding another centralized, privately-owned exchange brought down with scandal, fraud or security flaws. Will SOIL-ex replace online private exchanges? Not likely. There will always be those sorts of entities, which with a framework already built towards moving assets in and out easily, there will always be users approaching that as a quick solution. What a decentralized exchange does is provide the alternative, and provides security that ones own funds remain under ones own control 100% of the time.

Its very clear that cryptocurrency is much more than an ephemeral phenomenon. It has shown that it is well on the way to becoming a new phase of technology driven markets that will disrupt conventional market strategies, longstanding business practices, legal frameworking, and established regulatory perspectives. It is creating a macro-economic efficiency. To speed up cryptocurrency’s adoption process and transition, the product must shift from one being used by solely tech-savvy innovators to one with mass market acceptance, the general public needs to be aware and educated on this new form of currency.

6. CONCLUSION

The "ecosystem" of SOILcoin is that of a programmatic machine which allows any user to build, deploy and interact with smart contracts written on the blockchain, and held there in perpetuity. A decentralized exchange contract residing on this network will improve the ecosystem. The first likely scenario will be a greater investigation into subcurrencies, and how they represent value. Other uses for an exchange contract will emerge, as will a quickening towards crosschain intercommunication.

Built on the Ethereum Virtual Machine model, users can create decentralized, autonomous, and highly extensible application layers. These can built as not only decentralized currency exchanges, multi-sig wallet contracts and distributed escrow services, but decentralized autonomous organizations, forums, and derivatives risk analysis. As a decentralized exchange, SOILex will provide not only the opportunity for trading in custom built subcurrencies, but to peg those against existing assets in a variety of manners.

This is the first version of SOIL-ex, and is definitely not the last. Features will be added as they become available or when obstacles are surmounted. A more efficient front-end and access to analysis tools will need to be explored. Ive built this exchange with much thanks going out to the EtherEx development team. Ive done little more than rebrand the platform towards SOIL during this release, concentrating more on ensuring that trades are completed properly and balances of subcurrencies were accurately moved from one wallet to another. I will be releasing the SOIL-ex platform with an in depth user guide covering the features built into this iteration, including btc-swap, which will allow users to buy SOIL directly, using BTC.

Ive also borrowed, in style if not substance, from the white paper presented by EtherEx, and while I would appreciate any donations people would send in appreciation for the work done (in SOILcoin, please - my developers wallet address is 0xe46731382FbC47621A6C480d4b6118026bBBCb3A), I would be remiss not presenting the idea that those developers at EtherEx deserve your support as well. You can communicate with them, and see the present status of the EtherEx project at etherex.org.

SOILCOIN & SUBCURRENCIES

*TL/DR version*: Subcurrencies, whether as stores of value or as appcoins used to access the dApp's features, are becoming a large part of the cryptocurrency ecosphere, and pushing this technology through the SOILnet will be one of the biggest advantages towards seeing SOILcoin begin to function within the industries we have set out to serve.

With our release of SOIL-ex, we have created the first step towards what will hopefuly be a thriving subcurrency market on top of the SOILcoin blockchain. These tokens can be listed and traded using the SOILex platform, and truly, the only limitation is one's imagination. Subcurrencies, or tokens, are currencies that reside as smart contracts on the programmatic blockchain, and can act as value stores in many different ways, much as the Ethereum Frontier guide began to explore upon our mother currency's launch: "coins, loyalty points, gold certificates, IOUs, in game items". This is by no means the limit to how token contracts can be utilized on the EVM.

Useage as "shares" in Decentralized Autonomous Organizations is a very simple scenario that has already begun to show much promise, as outlined below regarding the DGD token. They can represent a Proof of Ownership in an asset of any sort, which is transferable. Subcurrencies can have have a fixed initial distribution, or be scripted to allow mining or Proof of Stake mechanisms to control distribution. Accounting contracts can control the minting and burning of assets to create two-way pegs towards other existing altcoins, or to provide an auditable real-asset backed token, such as the DGX token described below. Subcurrencies can be used as a crowdfunding mechanism, such as with the FarmShare project, or with the SOILcoin "Carbon Footprint Offset Program" using SEEDLINGS. 

Subcurrencies are, through smart contract design, able to emulate and represent the functions and capabilities of many other special-purpose blockchains and altcoins, with the advantage of having this new subcurrency, now paired up against the base currency SOIL, immediately protocol-compatible with other SOILnet resident subcurrencies, enabling contracts to be written connecting value or function between multiple subcurrencies. Currency balances reside alongside the parent-network wallet address, and are quickly interactive within the SOILcoin ecosystem thru the Dust wallet. Currency security is provided by the consesus mining of SOILcoin, and EVM-resident tokens using the subcurrency standard have an automatic compatibility with all contracts on the blockchain, allowing the tokens to interoperate on a transparent global machine.  

Subcurrencies residing on top of the SOILnet can also act essentially the same way as traditional altcoins do, and may eventually serve to replace a large number of special-purpose altcoins whose functions can be run through smart contracts. Where Ethereum is a "big player" on today's cryptocurrency ecosystem, SOILcoin has remained under the radar. We created SOILcoin to work for the planet, really. To harness the potential of the global virtual machine, and turn it towards making the world a more viable place, through smart contracts dedicated to our four pillars: renewable energy, precision agriculture and knowledge bases, scientific computational needs, and environmental awareness, education and implementation. I would like to see other special-purpose currencies redeploy onto the SOILcoin blockchain, much like the Destiny (DES) altcoin has made their scrypt-based asset a resident currency on the Expanse blockchain, while maintaining its presence as a tradable asset on exchanges. 

The use of subcurrencies that are native to a dApp, generally used crowdfunding these projects, has been termed "Appcoins". These are seen in the examples above regarding DGD, DGX and REP. Many others are cropping up, and while there's some in the cryptocurrency world that see the rise of Appcoins as being the mechanism to unseat BTC, articles on nakomotoinstitute.org tend to spread as much FUD as possible regarding their use. (I personally take their comments with a bucketful of salt as its fairly obvious that the authors have a stake in BTC and will do whatever is necessary to push competition out of the way.)

An article written by the developers at ConsenSys called "A token powered future" [https://medium.com/@ConsenSys/tokens-on-ethereum-e9e61dac9b4e#.fvai15wyp] gives some great examples of how subcurrencies are important to our future, and i highly recommend reading it. Before I start on about the potentials for token-reliant dApps on SOILcoin, Id like to give a bit of a rundown on some of the projects that exist already, how theyve siezed upon the use of subcurrencies.

 

Augur has been one of the most anticipated dApps that will be running on the Ethereum network. It is a "decentralized prediction market" where users bet, using ETH, on the outcome of events. Odds are generated based upon whether one is voting with the consensus or not, and payouts are generated based upon the results, which are verified using "crowdsourced reporting" by "oracles" who are holders of "Reputation tokens". REP is the Ethereum-resident subcurrency for Augur. While end-users wager on the result of a event, REP holders are responsible to act as the reporters on the outcome of these events, receiving a pro-rated portion of the system’s trading fees as reward. The more REP a user has, the more value or trust is assigned to that person’s input, and the larger financial incentive is provided to them. People who report truthfully on event outcomes earn REP tokens and are also awarded a portion of the winnings. People who report against the consensus (untruthfully) lose REP tokens and earn nothing. REP holders that do not remain active as oracles will see their REP balances penalized and redistributed to active oracles. 

All 11,000,000 REP tokens were made available in a crowdsale, and while Augur remains in beta testing, a token of the token, for arguments sake, is available in trade at Gatecoin. When Augur goes live, these will redeemable for the REP tokens that take part in the outcome reporting process. They have a present value of $7.17 each, giving this token a market cap in the neighbourhood of $80 million USD. Present volume daily in trades is averaging 15BTC/24 hours (about $7000 USD). There has been a lot of speculation to the value of REP, but the market seems to be that most holders of REP are holding on to their balances.

DGX is a "gold-backed" subcurrency for the Digix.io project. Each token is pegged to the value of 1 gram of gold, and is divisible to 0.001grams. This is done so using a Proof of Asset Process. Physical gold represented by the tokens is stored in custodial vaults, and represented on the blockchain by a Proof of Asset card, which contains information about that particular gold asset including serial number, chain of custody digital signaures from the vendor, custodian and auditors, purchase receipts, audit documentation, etc. This information is kept on IPFS (InterPlanetary File Storage) and accessed thru contract calls. 

The DGX token itself is minted via a smart contract, which accepts the PoA card for DGX tokens. The contracts check the gold asset Registry, to verify the ownership of the PoA card, sending new tokens to an accounting contract with this information regarding the underlying asset certificate. This contract credits the owner into the gold token ledger and issues the DGX tokens to the owner. These DGX tokens can again be "recast" into a Proof of Asset digital certificate, which in turn can be redeemed for the physical gold itself.  

Digix has also recently issued the DigixDAO (DGD) token. $5.5 million USD was raised in a crowdsale for 2 million DGD in 14 hours. DGD has been made available for trade on Gatecoin, Open Ledger and Yunbi. The current value for DGD sits at $13.33, and maintains a market cap of $26.5 million USD (or 58,000 BTC). 

Each DGD gives its holder a "share" in the DigixDAO project, as well as a quarterly "dividend", which is prorated from the transaction fees generated by the gold-backed DGX tokens. (Each DGD token will receive 1/2,000,000 of tx-fees). These 2 million tokens represent the current lifetime supply of DGD, but the project also has coded into its contracts, an automatic "crowdsale project proposal" which is submitted to current DGD holders, for a new round of crowdsale funded DGD issuance every 2 years which may increase the lifetime supply. This is put in place to ensure the sustainability of DigixDAO if more funds are needed. These additional mintings will only occur with majority consensus since it involves token dilution. Current shareholders would be eligible to purchase newly issued tokens prior to public releasing.

Storjcoin X (SJCX) is the appcoin for the Storj.io project. Storj aims to create a cloud storage platform with no censorship or monitoring. Files are encrypted client-side on users’ computers before they are uploaded. Each file is then split up into chunks which are encrypted and then distributed for storage across the Storj network. Users remain anonymous, and participants renting out their hard-drive space do not know what files they are hosting, nor will they be able to access them. Storj users earn SJCX by renting out their unused hard-drive space, and those who utilize the service pay out rental fees, which are used to pay the drive-holders.

500 million SJCX were minted, of which nearly 50 million are presently available. Traded at Poloniex and Bittrex, presently at $0.0556 USD with daily volumes averaging 12 BTC/day, SJCX has a market cap of $2,755,000 USD. Costs for rental space on the network are $0.015 USD/GB per month, and bandwidth usage costs $0.05 USD per GB. 

Destiny (DES) is an interesting case. DES started out as a scrypt-based currency with a short PoW period. The developers stated that their goal was to create a "zerocash", a system that would further anonymize transactions by encrypting the origin, destination and amount in a transaction from public knowledge. The developers achieved the switchover to EXP via a swap mechanism, where 1 "scrypt" DES was valued at 10 "EXP-resident" DES, with original assets sent to a burn address after the swap. 

The DES team followed the subcurrency standard, and released 1.6 million DES via the swap. A total of 2.1 million DES was minted when the EXP contract was deployed. DES now works similarily to a savings account, paying out interest based on the deposit size. Contract wallet accounts with >50,000 DES will recieve what amounts to a 20% per annum interest rate, while shareholders with less than 50,000 DES will receive 12%. Both the "burn" and "interest" functions are built into the DES token contract, although I havent been able to figure out the schedule for interest payments to be deposited into contract wallets. 

I think that the DES project's idea was innovative and bears looking into. Following the forum discussions regarding this asset on teh bitcointalk forum, it seems as though it now has a fairly angry community and prices have fallen precipitously, with the developer having seemingly disappeared. The currency which held a valuation of $0.56 USD before the swap onto the EXP blockchain in late March 2016, and a total market-cap of nearly $75,000 USD. It presently holds a value of $0.0122 USD, with a market cap just south of $20,000 USD. 

Use cases for tokens on the EVM are numerous, and go beyond the ideas presented above with the Augur, Digix and Destiny projects. Would these projects work on SOIL? A prediction market similar to Augurcould be utilized related to climate change or as an agricultural prediction market. In 2008 a project called Farmetrics allowed users to submit predictions for local planted acreage, yield and harvested acreage; participants earning Reward Ponits that could be redeemed on an online catalog. Participants were also allowed to donate their Reward Points to charitable foundations. It doesnt seem as though this project lasted very long, nor am I able to find out the metrics of participation, but the project seemed very popular at the time. 

Similarly, BOINC-related distributed computational science altcoins such as CureCoin or GridCoin could be built onto the SOILnet with little problems. These currencies use participant computer power to "fold" protien simulations for medical research or donate use of ones CPU and GPU power to make advancements in Earth sciences, Mathemetics, Physics, cognitive science and artificial intelligence. FoldingCoin, which can be merge-mined with CureCoin, also falls into this category. I have begun looking into setting up a Distributed Scientific Computing token tied to climateprediction.net which also runs the BOINC platform. (Berkeley Open Infrastructure for Network Computing). 

Projects such as Zerocash, which is working to offer total payment confidentiality, by automatically hiding the sender, recipient, and value of all transactions on the blockchain. Zcash is planning a release for September 2016, using "zero-knowledge Succinct Non-interactive Arguments of Knowledge” (zk-SNARK) privacy , a new memory-oriented PoW algorithm called Equihash, and an API. While end-use cases for fully anonymous transactions might not seem to fit the SOILcoin mission statement and desire for absolute transparency, this technology may become one of the most important and disruptive applications of blockchain mechanics. Beyond this, there is also the possibility for something similar to TorCoin, which would monetize anonymous web browsing. 

Like them or hate them, appcoins, subcurrencies and tokens are going to be a huge part of cryptocurrency going forward. They enrich the dApps that issue them, and provide a new source of crowdfunding that goes beyond venture capital or angel investors. SOILcoin has always been a currency that stands on its own two feet, and while we are working hard at implementing differing applications towards providing service to our core industrial targets, we have not delved into any crowdfunding or initial property offerings. All development has been done using our own time as the commodity. Many cryptocurrencies work to enrich the developers, and I think thats where SOILcoin's strength comes in, in that we aren't in this for sole monetary gain (we take no wage from this, and this remains true even while i live well below the poverty line). We built SOIL as a humanitarian currency, something philanthropic, so I hope that this article might incentivize some of you to build those dApps, issue you Appcoins and Subcurrencies and make a profit while making this world a better place. 

FREQUENTLY ASKED QUESTIONS

Why dont you guys become an Expanse (or Ethereum) asset?

something like Expanse or Ethereum might serve single-purpose decentralized organizations or gambling and the like, but that doesnt serve the vision we have for the SOILcoin project, or why its an absolutely necessary expression of using a Turing complete, programmatic blockchain.

SOILcoin is built as a smart contract delivery platform, as is EXP or ETH. except with specifically targeted sets of under-served industries that are on the breakout point of future IoT technological innovation and usage, expanding automation of systems from sensors to driverless tractors.... IF SOILcoin was merely a representative sort of currency, existence as a token would be ok, but our sole purpose is to build and deliver a full suite of dApps targeted towards renewable energy and environmentalism, towards automated agriculture and farm management, towards distributed scientific computational needs, towards open and accessible expert knowledge databases for agricultural practices.... we are building a brand, where SOIL may become synonymous with environmental responsibility, with climate prediction, with modern precision agricultural methods.

we NEED a specific and autonomous programmatic blockchain to build this, and this is also why we didnt simply build SOILcoin as a decentralized organization on Ethereum, as well. we are building a framework of applications towards the goal of providing targeted services. we view SOIL as the fuel behind these projects (much as ether is the gas running the applications on ETH) and as the framework upon which to build a special-purpose network. SOILcoin is the base layer upon which everything else will reside.

having some control over how the underlying framework is built is very important when building out a project like this, and we have so many directions that we are working on presently, confining ourselves as a DAO on another blockchain makes zero sense. SOILcoin will be built to serve many aspects of industry, and will do so in an interoperable way. to provide this, we have to be able to ensure that the platforms we offer have a solid base that they built out from, with control over the distribution curve to prevent absolute deflation in valuation, and to ensure that the guiding principles of the SOILcoin team are kept at the forefront of every project.

things such as SOIL-ex, our asset exchange, while not yet a fully operational altcoin market in the sense of what online exchanges can provide, still allows dApp developers who will use an appCoin to fuel their platform a currently available service upon which to list their asset in a decentralized peer-to-peer exchange process.  this is a major first step. other projects in the near future roadmap:

 - a decentralized marketplace

... distributed scientific computing on climateprediction.net

... a precious metals backed commodity

 ... a pedigree registration dApp

 ... an agricultural provenance application

... a carbon-offset program

- these are the foundations that further dApps will leverage. each project that we choose to port towards SOILnet residency and functionality takes into consideration the possible needs of the industries that we have chosen to serve.

i have nothing against Expanse, although im still  unclear about their overall vision. they have a talented team of developers over there, and they have their own projects they are woring on. i have my own road to follow, with clear set directions for implementations. i think having more than one functional ETH-parallel blockchain is absolutely necessary to ensure the innovation of how we can interact with them.

I continue to watch news and communities for Shift (SHF) and Krypton (KR), as well, because we share a common "programmability" and I feel pegged cross-chaining and interaction between protocols (i.e.: one chain holding light client of the other and vice versa  to ensure onchain and offchain transactions seamlessly) communicating with a common programming contract language..

SHF->ETH->SOIL->etc.....

where Microsoft and IBM are featuring blockchain as a service nodes reflecting ETH and EXP, i have questions about the erosion of decentralization, of pseudonymity. there will come ETH-parallel blockchains that are accessible on the front end via the TOR-network only, or via another ETH-parallel, but different needs will require smaller networks and lighter blockchains.

i dont like comparing apples to oranges, and while EXP and SOIL are vigorously different platforms, albeit operating with the exact same underlying protocols, our roads forward are very divergent; in the end i think that SOILcoin, operating as an sovereign blockchain offers greater advantages than ever becoming a simple asset on an incompatible blockchain that doesnt possess the strong philanthropic and responsible vision of SOIL. i wont measure our success against EXP, or any other currency. i think the merits of what we HAVE produced so far should stand on their own, as should the applications we release as part of the SOILcoin network.

i dont worry about our valuation as it sits right now. nor do i worry about how our valuation matches up with those of other ETH-parallel currencies. MANY cryptocurrency investors dont practice due-diligence regarding the altcoins they speculate in, and will simply follow the volume being traded rather than the developments being done. SOILcoin will always remain autonomous, and our very very small development core will consistently work towards bringing forward dApps that will have practical use for the future of SOILcoin. SOIL's value will increase, of that i have no worry. but id rather it be on the back of what we have already built and the competency of our development team to produce further practical applications built towards our end-user industries than having it increase thanks to flashy graphics and vaguely worded promises.

SOILcoin is an Ethereum-parallel cryptocurrency, using smart contracts and distributed applications (dApps) run over a "global computer network" secured by blockchain technology utilizing the Dagger algorithm. This "Ethereum Virtual Machine" (EVM) is fueled by the digital currency called SOIL, which acts as the gas that runs the computational processes on the SOILcoin network, and is minted through Proof of Work mining. SOIL is also a speculative currency available to trade against Bitcoin on Bittrex, an online cryptocurrency exchange.

This network features a Turing-complete programming language upon which anyone can build, deploy and interact with smart contracts. Smart contracts are accounts which contain code functions and can collaborate with other smart contracts. dApps (pronounced "eth-apps") can be built from solitary or suites of contracts, and can be used to make autonomous and automatic decisions, store data, perform computations and send SOIL to other accounts. These contracts will exist, and be executable, as long as the SOILcoin network exists. 

The ability to create smart contracts on the EVM is becoming more and more simplified, with very flexible programming languages The SOILcoin wallet, DUST, contains tools for anyone to get started. Smart contracts can be used to create "tokens" that reside on the SOILcoin network which can be used to represent anything of value, from a new altcoin to a federated peg of an existing crosschain cryptocurrency; from a participation reward for distributed scientific computing to shares providing dividends or voting rights within a Decentralized Autonomous Organization (DAO); from casual gaming in-game currencies to crowdfunding pledges; from an asset-backed method of investment to an AppCoin built onto a service; to an ownership certificate representing anything imaginable. 

Contracts are code-verifiable, and many applications and contracts are released open source. Each project featured as a SOILcoin Project Release will always maintain an up-to-date source code repository at GitHub, and we will endeavor to provide a consistently easy to follow user-guide with each of our releases. 

Complex dApps can be built, leveraging a symbiotic network of smart contracts, providing services and functions to end-users, running on SOIL as their computational fuel. The SOILcoin project was conceived to provide the platform upon which we could establish a scalable framework of applications that would ultimately serve several key life-essential industries: precision agriculture, environmental science, and renewable and green energy. 

Building upon the foundation of a perpetual and consensus-driven blockchain,the SOILnet virtual machine is censorship-free and collusion-resistant. Blockchain technology is hardened against tampering and revision, with a unanimity of record hosted by every node equally. Transactions, contract code storage, and code execution fees are recorded on continuous blocks on the network ledger, cryptographically secured and time-stamped. The peer-to-peer validation model of blockchain transactions is self-governing; with incentivization through the mining process of block rewards and transaction fees paid to participants These low-cost transaction fees, can be built upon with incentivized AppCoins for distributed cloud-storage, social networking, expert databases, contributions to scientific computational modelling, global and free education, renewable energy credits, etc.

Our goal is to provide decentralized applications tailored towards our pillar industries, in every manner imaginable. The SOILcoin Project is built on a futurist vision, and will take advantage of our position on the threshold of an imminent world revolutionized by Internet of Things (IoT) hyperconnectivity and hyper-innovative FinTech technology, a world of remote and autonomously driven precision agriculture and hyper-linked renewable energy grids, to build a cryptocurrency with a value not only to the miners and investors, but as a value to end-users by producing platforms and services relevant to bridging the worlds of cryptocurrency, virtual computing and our core industrial and social communities together.

SOILcoin leverages an infinitely scalable future-compatible and hyper-innovative programmatic platform, and as the technology available to use on this platform evolves at a meteoric rate, we will always be on the leading edge of this coming cryptocurrency fueled "blockchain revolution". As a development team, we maintain a dedication to managing our protocol to the highest standards for security and reliability as well as meeting the highest standards for personal and professional transparency and responsibility. We posses an enudring visionary approach to the ongoing evolution of the SOILcoin project, and we have the dedication and single-mindedness to succeed along the long road ahead of us to achieve these horizons. 

We will work continuously on official releases of services beyond wallet updates and the like. We are presently working on several projects, which will be detailed below in our short-term and long-term road maps. We welcome anyone who wishes to contribute to the future core development of SOILcoin to write us and introduce yourselves and your ideas. SOILcoin can only exist as a COMMUNITY. I have a THOUSAND ideas for projects that can be adapted to run on the EVM, making them UNIVERSALLY ACCESSIBLE for ever so long as SOILcoin exists, available to everyone and everyone EQUALLY..

SPECIFICATIONS

ALGORITHM: DAGGER 

a "memory-hard to compute, memory-easy to verify" Scrypt alternative, based on moderately connected "directed acyclic graphs" (DAGs). Memory-hardness is important to make the PoW (Proof of Work) function generally ASIC-resistant. This produces a more democratic distribution of cryptocurrency mining, making it cost-ineffective to run Application-specific integrated circuit (ASIC) mining rigs of the sort that have dominated Bitcoin mining over the past few years, pushing out the average cryptocurrency user in favour of large scale "mining farms" consisting of dozens (if not hundreds) of ASIC units, which leads to a centralization of mining into the hands of the few. The Dagger algorithm is designed to be resistant to that sort of mining,  making it feasible for the average user with either CPU or GPU mining to effectively take part in the mining process and blockchain verification.

We will be utilizing the PROOF OF WORK protocol to validate computer processing work for solving the equations required to validate the Blockchain. SOILcoins are "mined" using the "Hashcash proof-of-work" function by individual nodes which are verified by the decentralized peer-to-peer SOIL network. The process of "mining" is essentially the process of competing to be the next to find the answer that "solves" the difficult-to-answer block-unique mathemitecal problem for the current block. 

The mathematical problem in each block is extremely difficult to solve, but once a valid solution is found, it is very easy for the rest of the network to confirm that the solution is correct. Because there is a reward of newly minted SOILcoin for solving each block, each block also contains a record of which SOILcoin addresses or script is entitled to receive the reward. This record is known as a generation transaction, or a coinbase transaction, and is always the first transaction appearing in every block. 

TARGET BLOCK TIME: 15 seconds. 

We are working on creating not only just a speculative currency, but also a generalized network platform for decentralized applications. In the context of non-financial applications people tend to expect a much more rapid response time for the confirmation of transactions. Therefore, for the purpose of a stable AND efficient transactional platform, having a blockchain that is faster than the 10 minute blocktime for Bitcoin is essential. Arguments have been postulated that a faster block time creates more orphaned blocks (uncles) due to the delay of block propagation over the entire network, Having paid attention to our network intelligence page for some time, we have averaged less that 0.5% uncles with a 15 second block time which is statistically insignificant. 

BLOCK REWARD: 1 SOIL per block. 

Thus, with a proposed 15 second block time, the goal is propagate and verify approximately 5760 blocks per day, minting the same amount of SOILcoins each day.We have chosen this slow distribution model presently to combat inflationary pressure on the currency. 

TOTAL COINS TO BE MINTED: 33,000,000SOIL

A "soft-cap" of 33 million SOIL has been put into place. At our present distribution model, it would take approximately 15 years to reach this level. Not strictly set in stone, this issue will be revisted when SOIL approaches within 5% of its maximum mintage. 

SOILcoin has been built to ultimately provide services dedicated towards our preferential communities, and where we are NOW as opposed to where this project must grow towards is a massive undertaking. Technology has yet to catch up with my vision. But, as I have declared since our genesis, this is a long term project, and Im in it for the long haul. 

Ethereum (ETH) itself has teams of independent developers creating absolutely  wonderful applications and are consistently pushing the envelope of what we CAN build on the EVM, as well as a core group consistently working on the protocols behind the blockchain. And, as a massive sandbox of ideas, Ethereum may prove to be one of the most important inventions of this century. Within 5 years, programmatic blockchains will be the engines behind nearly everything we do. 

Having the SOILcoin Project as an independent blockchain, with a focus towards industries that not only are essential to our survival on this planet but are also among the fastest expanding into automation and interconnectivity, is important. Running parallel to Ethereum, and leveraging the technology available, repurposed to industries that are beginning already to rely on blockchain technology and the Internet of Things, makes for a more efficient network. 

Already, multinational corporations such as Microsoft (Azure) and IBM (Bluemix) have started "Blockchain as a service" entities, leveraging Ethereum and others. Costs can quickly become prohibitive for their services, and maintain external (centralized) services for cloud storage. But blockchains are about to become big business, and those services will become a part of the overhead of doing business and running a private special-purpose blockchain for ones company. 

Being able to provide these sorts of services, at a fraction of the cost, will be the lure in the end. SOILcoin must maintain a value on the market, as an asset. But the main reason that this blockchain has been built is to provide computational functionality, to RUN THINGS. Things connected by smart contract. 

SOIL is the fuel to run the network. The distribution of SOIL must meet an equilibrium to incentivize the miners AND keep the price below a certain threshold in order to keep the price of automated computations much lower than what corporate (centralized) offerings are.  

The SOILcoin network is just a machine. It is an instrument. It is a tool. One with unlimited potentials. Ethereum was described variously as Bitcoin 2.0 or Web 3.0... I think the programmatic virtual machine, either the EVM or SOILnet or Expanse, Shift, Krypton... each has its place. We may have changed the overall signpost to Homestead but this is still the Wild West.

SOILcoin isnt JUST another cryptocurrency. This isnt a development reached by changing a few lines in a parental algorithms code and releasing a clone for the simple sake of releasing a new currency. The SOILcoin project is the blockchain itself , and all its protocols; coupled with this is the development and repurposing of dApps built on the blockchain. Expanding it in new directions, testing its limits. Yes, we built ourselves our own little playground to play "what if?" on. 

There have been many cryptocurrencies released over the years, some poorly thought out, some outright scams, and some wonderful visionary projects. But its led to a glut of special-purpose blockchains built in order to incentivize distributed scientific computing, or zerocash protocols, or decentralized storage options. Each of these projects has merit on it's own accord, but each blockchain remains unable to operate with another blockchain. Each blockchain must rely on not only building its application and feature, but also in maintaining the community to mine the currency and make its engine run. 

Any cryptocurrency protocol can be duplicated to run as a smart contract hosting its own token on the SOILcoin network. And these sorts of protocols, along with a host of other smart contracts, can be built to ultimately serve the needs of the Pillar Communities that SOILcoin has been built to provide service to. Each token is immediately compatible with other contracts running on the SOILnet. 

As disruptive as blockchain technology is, I have always been a believer in the "information should be free" mantra. I think thats what attracted me to the open source concept of cryptocurrency in the first place. It is truly the technology of the people. 

And in building this programmatic global (slow) super-computer, we have built the foundation for building a community on top of a cryptocurrency. 

Beyond being a high-end financial application, which the blockchain excels as doing, it is a network upon which anything can communicate. 

EVERYTHING is becoming automated. The "Internet of Things" is creating an interactive network populated not only by computers and smart phones, but also televisions, coffee pots, clothing, drones, digital cameras, tidal bouys, streetlights, weather stations, vehicles, houses, office buildings, bridges, offshore wind and tidal farms, seaports... each with its own unique address. Each, a sensor that evaluates, measures, gather data. 

The SOILcoin network is the intersection of this data, and then leveraging it with an infrastructure that can autonomously analyze it in real time. SOILcoin is already integrated into the ROKOS OS build for Raspberry Pi as one of its core flavours, which gives the ability for the SOILnet to be integrated into anything. 

The smart contract system, which improves in accessibility every day, makes it possible to simply have these devices, as represented by their addresses and the data they provide, interact with one another... or with end-users. The scenarios of these implementations are endless. With SOILcoin, I wanted to build a project that focused on how to deliver these same disruptive future technologies to industries and communities outside of the direct financial technology circles.

A "Massive Global Computer" linked by independent participatory nodes, upon which one can create anything, can be truly the engine of a revolution on how we interact as a species. The SOILnet makes borders invisible, and a community arises that is not geographically based, but spiritually so. We can harness this "potentiality engine" to build services that are dedicated to making this world a better place. 

Cryptocurrency has often been billed as the harbinger of the end for global poverty because it eliminates the need for centralized currency against arbitrary and regulated values. It provides global access to asset management to the "under-banked" and bypasses governmental regulation and prohibitive third-party fees. In the same way, I see the SOILcoin project as bringing a dispersed access to value and information, to becoming a BRAND. 

We have a long road ahead of us, and presently, have been flying under-the-radar. We have a lot of projects building in the wings, and will be developing aspects of the SOILcoin project into the distant future. The belief is that by using collaborative innovation, fueled by open processes and open accessibility we can accelerate innovation – to make a better world – and to leave nobody behind. 

NO cryptocurrency can survive without an involved community of investors and miners. While the focus of this currency is on the end-users who essentially stem from industries without a specific connection to altcoins, we must at the same time keep our vision turned inward and maintain an informed and empowered community of users.

The SOILcoin Project is envisioned as an authentic community-managed cryptocurrency, with democratically realized stakeholder input put forth towards the further evolutions of the core protocol and its applications. The core development team maintains an adherence to an implicit dedication to verifiable transparency and professional responsibility. 

Source code for the project, as well as for any project the core development team is releasing, will always be maintained in our github repositories, and we will maintain a commitment to an open source, free license technology with unfettered access.  

The overall decision making on core protocol issues will be achieved through consultation with the community of users, utilizing a fair voting process by the people who invest in SOIL. This process, using a vote weighted strictly by ones wallet balance, where 1 whole unit of SOIL conforms to one vote on an issue.

Much of this process will soon be enshrined in the SOILcoin DAO. The SOILcoin Foundation will own the contracts that will enable the voting process to be achieved through democratic balloting as well as host such services such as digital identity registrations and "domain name" registries. 

Projects released by the development team; such as SOIL-ex, our distributed exchange and BTCrelay; will be treated separately from the DAO, but in the overall scheme of things, are the property of the SOILcoin Foundation, and will be hosted on the community development servers. 

Should a board of directors be decided upon as a means of going forward, this Organization will host the contracts responsible for the operation of the "official" developmental entity of SOILcoin. This is a more complex but perhaps more desirable scheme, and in a sense each director would be represented by a smart contract, combined to interact with a "board of directors" smart contract. 

Any community member that wants to work on the protocols and core development projects of SOILcoin, please feel free to write me a note. 

COMMUNITY PROJECTS

2nd half 2016 

-SOIL-DAO : an expandable suite of contracts to facilitate democratic voting and decentralized governance of the SOILcoin project
-KYC dApps : "Know Your Customer" applications featuring identity verification and linkage between identity, reputation and wallet.
-SOILex phase2 : streamline front end, adjust platform to allow delisting of subcurrency registration on exchange, incorporation of further relays to SHA256 currencies (Namecoin[NMC], PeerCoin [PPC], Unobtanium[UNO],  etc.)
-SafeMarket : porting of project onto SOILcoin network for decentralized p2p asset trading
-PreciousMetals : asset-backed precious metals market, tokens pegged to platinum, palladium, silver, gold (already purchased as part of SOIL coommunity assets: 1oz PT and 2ozPAL to begin setting up tokens.)
-Android and iOS wallets : update of Android wallet  and build of iOS wallet
-decentralized storage : IPFS and Storj-type availability
-3D printer contract

Farmers and ranchers worldwide are quickly migrating towards "precision agricultural" methods, integrating satellite observations, ground-based sensors, and automated tractors and farm machinery to apply the exact amounts of seed, water, fertilizer, and so on - literally meter by square meter - so that maximum efficiency, spatial and time management in food production is realized. Automation also assists in combating the endemic labour shortage 

Nursery operations rely on automation for planting, pruning, grafting, etc. Poultry farms rely on heavily automated controls to work with their flocks and herds, to run incubators, candling machines and chick sorters. Dairy farms run automated milking machines, herd monitoring and biosecurity programs. Biomass generators using farm waste and perennial energy crops to provide electricity and fuel are becoming more and more common, 

IOT "food computers" invented and shard by MIT's OpenAg program, to warehouse sized "vertical farming" initiatives are changing where we grow food, and using network connectivity to micromanage each plant individually. Concerns over our genetic modification, food sources and supply-chains are changing the way we purchase our food.

A new movement is gaining momentum regarding "open source agriculture", freely sharing not only participants technological innovations, but also its business model, operations manuals and marketing materials, with the goal of creating an ecosystem of similar enterprises cooperating as a sort of bottom-up, decentralized franchise. Hyper-inclusive farm management software, run on cloud services, gives modern farmers and ranchers access to soil maps, rainfall tracking, nitrogen monitoring, crop health monitoring as well as accounting and inventory control.

Many of these processes are controlled by centralized servers which are subject to real world hardware failures which cost productivity and affect the bottom line. Studies have shown that the average annual electricity cost of an in-house server in the United States, accounting for both direct IT power and cooling costs, runs $731.94USD.

Other agricultural applications are run on subscription based cloud servers, many of which can cost anywhere from $25-85 a month in basic costs, with surcharges for outbound bandwidth, etc. on top of that. The higher CPU power, storage space and RAM you need, this cost increases exponentially. Dedicated Farm Management platforms charge subscription rates of $70USD/month and more.

By placing these sorts of applications in a cryptographically secure and globally decentralized environment, the end-user can see reduced costs compared to both on-premise servers and virtual cloud servers. SOILcoin will, within the next few years, be capable of hosting any sort of these applications, run on a "pay-as-you-use" format, utilizing SOIL to fuel those needs, with computational costs coming in at thousandths of a penny per use.

Smart contracts running on the SOILnet can potentially provide end-users with ersatz cloud farm

management capabilities, managing everything from driverless tractors to poultry incubators, from seed genetic registration to livestock registries and provenance, from irrigation sensor controls to robotic nursery pruning machines controls, from rainfall forecasts to soil analysis and diagnostics.

ResearchMoz has predicted that the agricultural autonomous project  market will grow from $817 million from 2013 to a staggering $16.3 BILLION by 2020. The Food and Agriculture Organiztion (FAO) at the UN predicts that food production must increase by 70% over the next thirty years, in spite of limited availability in arable lands, climate change and a diminishing supply of fresh water. The aim of the agriculture sector is to optimize its production processes and streamline how it uses resources such as arable land and fresh water. Use of automation, the Internet of Things and a decentralized application network can enable all that. Ag-business is going through a re-interpretation of the farming practices through use of data-centric technologies. creating a smart agri-food industry. 

A major concern is also raised about the role of giant companies such as DuPont, John Deere and Monsanto and agricultural data ownership. Who is the owner of soil sensing data collected by sensors connected to a Farm Management Network? The farmer, the software company or Monsanto? And if it is the corporate body, what does it do with that information? This can quickly lead to price discrimination: data on the soil or on the water could be used by biotech giants to charge farmers and ranchers  differing amounts for the same product or service.

AGRICULTURAL PROJECTS

2nd half 2016

- Commodities : oracles set to fetch hard and soft commodity prices from Chicago Mercantile Exchange APIs. 

- Provenance : food-chain custody records

- FarmShare : community realized local agriculture support

- FarmHack : IPFS stored open source Farm Hack projects. 

2017

- AgSmart : expert knowledgebase records and forums

- Farm Manager : first phase of Farm planning, accounting, analytics and management contracts. 

- OpenAg : integrate SOIL node into MIT food computer system.

- sensor integrations with SOIL-enabled RaspberryPi synthesis  (livestock health and welfare monitoring, Electronic ID tags assimilated with single animal wallets, air and soil sensors, equipment telematics, livestock biometrics, etc)

A report released by the US Department of Energy's National Renewable Energy Laboratory found that the ability to provide 80% of America's electricity needs by 2050, using renewable energy with  technology that is commercially available today is a reasonable proposition. European and Asian nations have embraced renewable energy as part of their strategies for energy production going forward. What is needed is a system that can dynamically meet the supply/demand balance with technologies such as "smart grids", demand forecasting, and increased operational coordination.

Software applications are currently being utilized to conceptualize the collector systems, determine wind and solar penetration and perform grid interconnection studies. Other  programs are used to monitor wind turbine performance, solar panel & inverter performance, solar and wind penetration studies, and grid interconnection studies.   

Smart contracts are already being designed to help monetize microgrid generation, and build community energy markets. Virtual metering and local energy trading applications are in the process of being built, and projects such as Reposit can be built onto the SOILnet, wherein one uses smart contracts to automatically buy energy during off-peak hours and sell it back when the grid is short of power.


Virtually every green energy design, development and delivery application can be built, and interconnected using smart contracts as the dApps ecosystem on the SOIL virtual machine is enriched. As smart contracts can be built to be inter-communicative, bridging these technologies to collaborate with one another will be possible.

Distributed generation is produced or stored by a variety of small, grid-connected devices referred to as distributed energy resources (DER) which include small hydro, biomass, solar, tidal, wind, and geothermal power.

These energy technologies can benefit from inter-communicative smart contracts governing every part of renewable energy deployment from collection design, optimization and eventual grid deployment, from large scale distributors to small community run collectives.

RENEWABLE ENERGY PROJECTS

2ND HALF 2016

- MICROgrid contracts : set up of microgrid photovoltaic generated power to be recorded and shared among participating neighbors. This will make it possible to purchase and sell renewable energy among local community members, offering neighbourhoods with microgrids a way to create a local incentivized energy market while reducing emissions and pollution.

- "open source energy" : expert knowledge forum and database to promote the free distribution of open-source renewable energy technologies as well as research into "free energy" (pulsed, gravitational and magnet-based systems), leveraging IPFS. 

- SolPy on SOIL : model solar (photovoltaic) system power performance based on design, geolocation, solar penetration, time of day, etc. This will be one of the first renewable energy databases set up o SOILcoin.

One of the first things we decided when working on the mission statement for SOILcoin was that we wanted to create an "Environmentally Conscious Cryptocurrency". Beyond building applications spotlighted for renewable energy, we wanted to provide a platform that provided positive socioeconomic growth for end-users involved in environmental organizations to organize DAOs,

ENVIRONMENTAL PROJECTS

2nd HALF 2016

-SEEDLINGS : The "seedlings" token is available for purchase on SOIL-ex, and will act as a "good karma" sort of program. SOIL will be partnering with treecanada.ca, supporting a forestry replanting effort. Costing 125 SOIL apiece, when valuation has higher, this would have covered the $4 CAD towards each seedling. 

This program is set up to help offset the carbon footprint that SOILcoin produces by running the blockchain, and the electricity used to make consensus from the separate nodes. The best estimation by formula shows that SOIL would need to sponsor one tree a day in order to cover the CO2 emissions created by SOIL. Twice a year, on the equinoctial days, the funds raised in SOIL would be sold off to market, using a 2 of 3 multi-sig wallet  and the results will be sent to treecanada. 

Using the SOILcoin virtual machine will leverage the global network for advanced computing capabilities to understand and solve complex problems. Algorithms and simulation/modelling applications will be developed to reconstruct and understand events such as earthquakes, tsunamis and other natural disasters as well as predicting weather, sub-atomic particle behaviors. Data analysis applications will be used for oil exploration geophysicsand computational linguistics.

Use of the blockchain and smart contracts to model real-world conditions, and smart-databases stored via sharding and IPFS gateways on the blockchain will solve the need for interconnected scientific assets, enabling transparent, reproducible and trans-disciplinary research.

As the SOILnet potentialities are nearly limitless, many scientific computational fields of study can be adequately designed, performed, shared, and stored on the verifiable blockchain ledger. Everything from protein sequencing and bioinformatics, to computational archaeology, chemistry, economics, engineering, forensics, geophysics, particle physics or neurosciences can be performed on the blockchain. Results can be verified, shared and reproduced. Geographic Information System technologies can be used for everything from LiDAR mapping to agricultural strategies and forestry management.

COMPUTATIONAL SCIENCE PROJECTS

2nd HALF 2016

-climateprediction.net : The SOILcoin Project is actively working with climateprediction.net to build the BOINC (Berkeley Open Infrastructure for Network Computing) platform onto the SOILcoin network, to incentivize users to run climate models on people’s home computers to help answer questions about how climate change is affecting our world. These computer models simulate the climate for the next century, producing predictions of temperature, rainfall and the probability of extreme weather events.

CONCLUSION

All of these use cases are within the purview of development within the SOILcoin project, one that provides zero censorship, reliant up-time, cryptographic security and unhaltable scalability. We have planned, from our genesis, that this project will be several years of work, and here, within our first six months, we are already building the basic frameworks necessary to provide these services as the technology available catches up with our vision.

We encourage our community to become involved, to help design the distributed applications of tomorrow, to give their input where SOIL can grow and to tell others about this project. We encourage community members to build Decentralized Autonomous Organizations, and hope to bring DAOs to vast and varied associations such as environmental advocacy groups, agricultural collectives and scientific cooperatives.

We aim to be something much more than just a speculative cryptocurrency, much more than just a sandbox full of unconnected dApps. We have a vision to provide those services for the future for renewable energy from start to finish, to provide the necessary applications for every sector of agriculture and to contribute to the future of humanity thru the accommodation of an open source scientific computational platform.

Is the scale of our imagination untenable? Not at all. Where Ethereum wishes to produce Web3.0, we aim to provide something lasting and important for humanity. We hope you become a valued member of the SOILcoin community, and help us achieve that vision.