Welcome to The SuperNET
Monday 08 September 2014
TL;DR. Crypto has problems. The SuperNET offers some promising solutions. Whether you believe in it or not, you’re going to want to watch the outcome of this one.
Bitcoin and cryptocurrency more widely have a number of problems. These derive both from within the crypto world and from outside of it.
At the most basic level, not enough people are aware of bitcoin, and those that are, don’t trust it. Scams, hacks, the Silk Road and other issues given space in the media mean that few are willing to trust their cash to an unregulated exchange to buy bitcoins they believe may be stolen from them at a moment’s notice.
Cryptocurrency is currently small: according to CoinMarketCap, crypto has a total market cap of around $7 billion – not bad, perhaps, but not a patch on big tech corporations like Apple ($500 billion). Surely, there is plenty of room for growth? Maybe, but crypto is dogged by a pernicious zero-sum approach to economics. Put simply, if one cryptocurrency is going to grow, it must be at the expense of others. Watch how the different coins on CoinMarketCap shuffle up and down in the course of a week or month, and you’ll realise there is some self-fulfilling truth about this. As a result, currencies compete – sometimes vocally and manipulatively – for a limited pool of money.
Add to this the huge number of essentially pointless coins. These are the clones of bitcoin that offer zero innovation; instead, they simply tweak one or other parameter (block time, mining algorithm or, in the worst cases, name). And yet they are created, hyped, released, pumped and dumped – often in the course of only a week.
Their sole purpose is often no more than to enrich their creators
and early adopters at the expense of later bagholders.
This brings no confidence to the market.
Even apart from these scamcoins, as they are often known, there are plenty of coins that offer very little distinctive.
A very promising sector therefore has some serious problems. The SuperNET offers some impressive answers.
What is the SuperNET?
The SuperNET is the brainchild of jl777, a highly active member of the cryptocurrency community who has been responsible for a large number of different projects – including the Multigateway, the first distributed exchange.
As is almost always the case with the best ideas, it is elegantly simple. There are a few coins that offer real innovation or advantages (not least Bitcoin, due to its first-mover advantage and the network effect). So why not pool resources, collaborating instead of competing, and share the benefits?
A SuperNET thread on bitcointalk and linked PDF doc state what the SuperNET is and how it will achieve its goals – which include attracting ‘greater talent and wealth into cryptocurrency from fiat, strengthening cryptocurrency overall by rewarding innovation, talent and commitment. SuperNET is not designed to replace Bitcoin or any other cryptocurrency, but to enable cryptocurrency to compete more effectively with the fiat economy.’
SuperNET has raised over 3000 BTC in its first 48 hours. The fundraiser is a cryptoToken or asset, rather than a new cryptocurrency itself (there are enough of those around already). These funds will be used to buy 10 percent of the market caps of coins with promising tech. The coins will be bought off-exchange, with the large purchasing power enabling below-market rates. So the asset – ticker symbol UNITY – will at its heart effectively be a basket of currencies, a bit like a closed-ended mutual fund.
Regular coin IPOs are full of risks, not least since the value of the coin may never meet the value put in by investors. Because UNITY is backed by real coins, which will be held long-term rather than sold, there is less chance of the price crashing after launch – as so often happens. (Ethereum just collected 31,500 bitcoins or $15 million, prompting serious concerns that they will ever produce something as valuable as the up-front investment. Many predict a price crash immediately on release.) In any case, the material makes it clear that SuperNET is not a security and this is not an IPO: this is a volunteer movement. There are no investors, only participants, who donate for the cause. No promises of revenue are made. There are no shares, only tokens of membership and gifts from any incidental profits that may result.
‘Participants will need to pay their own way and will not receive any salary, office space or perks. There will be no guaranteed rewards for participants’ time, effort and commitment, other than a cryptoToken denoting SuperNET membership in proportion to the amount of their donation.’
It’s all couched in rather careful language that looks a bit like a lawyer may have had a look over it...
Two other things make this stand out. One is the integration of coin services. The ideal is that the unique features of each coin that joins SuperNET – coins are screened rigorously and only the ones providing real innovation are added – will be accessible to all of the others. Thus if one core coin member wants to use the ring signature technology provided by Boolberry, for example (a confirmed core member), they can.
The other is the integration of a series of further revenue-generating services, from targeted advertising and decentralised betting to instant trading applications and tradebots. All of the coins’ features and these add-on services will be cross-marketed to each other. The potential revenue from these is not included in the initial price: the book value is that of the underlying coins alone. After launch, well, the market will find their correct value.
The result? No one can tell. But the aim of the SuperNET is to promote and incentivise innovation (a proportion of revenue is being set aside for core coin development and other vital services), whilst discouraging worthless coins.
Ultimately it is intended that SuperNET will attract greater talent into crypto from the fiat world,
boosting Bitcoin itself in the process – after all, Bitcoin is still and probably always will be the gold standard of crypto,
so it makes sense to work with it rather than compete.
This, of course, is the whole point of SuperNET. We’re better together.
SuperNET raises a number of legitimate issues about the state of the crypto world, and offers viable and credible solutions: collaboration, synergy, sustainable investment in innovation, long-termism, and arguably stability and possibly significant appreciation in price in the underlying cryptocurrencies, whilst discouraging the creation of clones. Will it work? No one can tell the future, of course. What we can say is that this is something different than we’ve ever seen before in cryptocurrency. And that’s got to be worth a second look.
Having just launched on Saturday 6th, The SuperNet launch will last 2-4 weeks, depending on interest. Further information about the launch process and venue (BTER) can be found at http://thesupernet.org/ or the SuperNET bitcointalk thread.
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