What is SolarCoin?
SolarCoin is a distributed peer-to-peer digital currency that can be transferred instantly and securely between any two people in the world. It's like electronic cash that you can use to pay friends or merchants. SolarCoin is designed to help spur solar energy generation.
What are SolarCoins?
SolarCoins are the unit of currency of the SolarCoin system. A commonly used shorthand for this is “SLR” to refer to a price or amount (e.g. “100 SLR”). There are soon to be physical SolarCoins, but ultimately, a SolarCoin is just a number associated with a SolarCoin Address. A physical SolarCoin is simply an object, such as a coin or folded piece of paper, with the number carefully embedded inside.
How can I get SolarCoins?
There are a variety of ways to acquire SolarCoins:
- Submit documentation for a 3rd party verified facility showing nameplate capacity of solar electrical production to the SolarCoin Foundation.
- Accept SolarCoins as payment for goods or services.
- The most common way to buy SolarCoins is through exchanges.
- Find someone to trade cash for SolarCoins in-person through forum or other online service.
- Participate in a mining pool.
- Visit sites with faucets that provide SolarCoins to members.
Does SolarCoin guarantee an influx of free money?
Since SolarCoin is a new technology, what it is and how it works may be initially unclear. SolarCoin is sometimes presented as being one of three things:
- Some sort of online 'get-rich-quick' scam.
- A loophole in the market economy, the installation of which guarantees a steady influx of cash.
- A sure investment that will almost certainly yield a profit.
In fact, none of the above are true. Let's look at them independently.
- Is SolarCoin a 'get-rich-quick' scheme?
- If you've spent much time on the Internet, you've probably seen ads for many 'get-rich-quick' schemes. These ads usually promise huge profits for a small amounts of easy work. Such schemes are usually pyramid/matrix-style schemes that make money from their own employees and offer nothing of any real value. Most convince one to buy packages that will make them earn hundreds a day, which in fact have the buyer distribute more such ads, and make minute profits.
- SolarCoin is in no way similar to these schemes. SolarCoin doesn't promise windfall profits. There is no way for the developers to make money from your involvement or to take money from you. That SolarCoins are nearly impossible to acquire without the owner's consent represents one of its greatest strengths. The primary goal of SolarCoin is to incentivize renewable Solar electricity production as a charitble offshoot. SolarCoin is currency for better life.
- As an investment, is SolarCoin a sure thing?
- SolarCoin is an electronic currency, the value of which is not backed or guaranteed by any single government or organization. Like other currencies, it is worth something partly because people are willing to trade it for goods and services. Its exchange rate fluctuates continuously. Anyone who puts money into SolarCoin should understand the risk they are taking and consider it a high-risk currency. Later, as SolarCoin becomes better known and more widely accepted, it may stabilize, but for the time being it is unpredictable. Any investment in SolarCoin should be done carefully and with a clear plan to manage the risk.
Where can I find a forum to discuss SolarCoin?
What's the total number of SolarCoins in circulation?
The 98.1 Billion total number of SolarCoins in circulation is the sum of:
- The mined coins (representing previously produced but unclaimed Solar MWhs) - 105 Million
- Earned coins (representing proven generated solar electricity with a minimum of 1 MWhs per SolarCoin) - 97.5 Billion
- Genesis Pool and Operation Fund of SolarCoins - 500 Million
How divisible are SolarCoins?
A SolarCoin can be divided down to 8 decimal places. Therefore, 0.00000001 SLR is the smallest amount that can be handled in a transaction. If necessary, the protocol and related software can be modified to handle even smaller amounts.
What do I call the various denominations of SolarCoin?
There is a lot of discussion about the naming of these fractions of SolarCoins. The leading candidates are:
- 1 SLR = 1 SolarCoin
- 0.01 SLR = 1 cSLR = 1 centiSolarCoin (also referred to as Solarcent)
- 0.001 SLR = 1 mSLR = 1 milliSolarCoin (also referred to as msol (pronounced em-sole) or millisole or even solemill)
- 0.000 001 SLR = 1 μSLR = 1 microSolarCoin (also referred to as usol (pronounced yu-sole) or microsole)
The above follows the accepted international SI prefixes for hundredths, thousandths, and millionths. There are many arguments against the special case of 0.01 SLR since it is unlikely to represent anything meaningful as the SolarCoin economy grows (it certainly won't be the equivalent of 0.01 USD, GBP or EUR). Equally, the inclusion of existing national currency denominations such as "cent", "nickel", "dime", "pence", "pound", "kopek" and so on are to be discouraged; this is a worldwide currency.
One exception is the ,"photon" which is smallest denomination currently possible
- 0.000 000 01 SLR = 1 photon
If no more coins are going to be mined, will more blocks be created?
Absolutely! Even before the creation of coins ends, the use of transaction fees will likely make creating new blocks more valuable from the fees than the new coins being created. When coin generation ends, these fees will sustain the ability to use SolarCoins and the SolarCoin network. There is no practical limit on the number of blocks that will be mined in the future. These are generated to process transactions safely and securely providing a valuable economic function.
If every transaction is broadcast via the network, does SolarCoin scale?
The SolarCoin protocol allows lightweight clients that can use SolarCoin without downloading the entire transaction history. As traffic grows and this becomes more critical, implementations of the concept will be developed. Full network nodes will at some point become a more specialized service.
With some modifications to the software, full SolarCoin nodes could easily keep up with both VISA and MasterCard combined, using only fairly modest hardware (a single high end server by todays standards). It is worth noting that the MasterCard network is structured somewhat like SolarCoin itself - as a peer to peer broadcast network.
Where does the value of SolarCoin stem from? What backs up SolarCoin?
SolarCoins have value because they are useful and because they are managed to be scarce. As they are accepted by more merchants, their value will stabilize. These two sources of economic value are transactional utility and collectible utility. The goal of SolarCoins is to derive value from Transactional utility like more traditional forms of currency. Transactional utility allows for more stable value representation rather than collectible utility which is more fad like in nature.
When we say that a currency is backed up by gold, we mean that there's a promise in place that you can exchange the currency for gold. SolarCoins, like dollars and euros, are not backed up by anything except the variety of merchants that accept them. SolarCoin is conceptually a mix of BitCoin and a derivative of the "DeKo" delivered KiloWatt hour currency concept put forth in a 2011 white paper http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1802166.
Each SolarCoin in circulation represents a minimum of 1MWh of electricity equivalent power generated by Solar Energy. 1MWh of energy is roughly equivalent to the energy consumption of one month for an average American house. 1MWh is equivalent to the exergy or recoverable electrical energy of 0.588 barrels of oil. Generating electricity with Solar Energy rather than fossil fuels like coal or natural gas means that 1,200-2,180 pounds of Carbon Dioxide were saved from entering the atmosphere. http://www.eia.gov/tools/faqs/faq.cfm?id=74&t=11
It's a common misconception that SolarCoins gain their value from the cost of electricity required to mine them or the price of Solar Electricity they represent. Cost doesn't equal value – hiring 1,000 people to shovel a big hole in the ground may be costly, but not valuable. Also, even though scarcity is a critical requirement for a useful currency, it alone doesn't make anything valuable. For example, your fingerprints are scarce, but that doesn't mean they have any exchange value.
Alternatively it needs to be added that while the law of supply and demand applies it does not guarantee value of SolarCoins in the future. If confidence in SolarCoins is lost then it will not matter that the supply can no longer be increased, the demand will fall off with all holders trying to get rid of their coins. An example of this can be seen in cases of state currencies, in cases when the state in question dissolves and so no new supply of the currency is available (the central authority managing the supply is gone), however the demand for the currency falls sharply because confidence in its purchasing power disappears. SolarCoins do have a central authority managing the issued circulation of the coins with the mandate of maintaining value stability and incentivizing solar energy production.
Is SolarCoin a bubble?
SolarCoins only have value in exchange and have no inherent value. If everyone suddenly stopped accepting your dollars, euros or SolarCoins, the "bubble" would burst and their value would drop to zero. But that is unlikely to happen: even in Somalia, where the government collapsed 20 years ago, Somali shillings are still accepted as payment. Money is a network of agreed beliefs and behaviors.
Is SolarCoin a Ponzi scheme?
In a Ponzi Scheme, the founders persuade investors that they’ll profit. SolarCoin makes no such a guarantee.
A ponzi scheme is a zero sum game. Early adopters can only profit at the expense of late adopters. SolarCoin has possible win-win outcomes. Early adopters profit from the rise in value. Late adopters, and indeed, society as a whole, benefit from the usefulness of a stable, fast, inexpensive, and widely accepted p2p currency. Society may also benefit from the extra Solar energy generation that might occur due to the SolarCoin incentive. Society will also benefit from SolarCoin grants to energy research and field projects which are intended to replace fossil fuels.
The fact that early adopters benefit more doesn't alone make anything a Ponzi scheme. All good investments in successful companies have this quality. Early creators engage in high risk investments of time and resource seeking returns.
Doesn't SolarCoin unfairly benefit early adopters?
Early adopters and the Genesis Pool have a large number of SolarCoins now because they took a risk and invested resources in an unproven technology in the hopes of providing outsized benefits for society. By so doing, they have helped SolarCoin what it will be in the future (hopefully, a ubiquitous decentralized digital currency) stimulating thousands of TWhs (TeraWatt hours) of renewable energy production offsetting billions of tons of CO^2.
In any case, any SolarCoin generated will probably change hands dozens of time as a medium of exchange, so the profit made from the initial distribution will be insignificant compared to the total commerce enabled by SolarCoin and the environmental benefits of incentivizing thousands of TWhs of solar energy globally.
What if someone creates a new block chain, or a new digital currency that renders SolarCoin obsolete?
That the block chain cannot be easily forked represents one of the central security mechanisms of SolarCoin. Given the choice between two block chains, a SolarCoin miner always chooses the longer one - that is to say, the one with the more complex hash. Thusly, it ensures that each user can only spend their SolarCoins once, and that no user gets ripped off.
As a consequence of the block chain structure, there may at any time be many different sub-branches, and the possibility always exists of a transaction being over-written by the longest branch, if it has been recorded in a shorter one. The older a transaction is though, the lower its chances of being over-written, and the higher of becoming permanent. Although the block chain prevents one from spending more SolarCoins than one has, it means that transactions can be accidentally nullified.
A new block chain would leave the network vulnerable to double-spend attacks. However, the creation of a viable new chain presents considerable difficulty, and the possibility does not present much of a risk.
SolarCoin will always choose the longer Block Chain and determines the relative length of two branches by the complexities of their hashes. Since the hash of each new block is made from that of the block preceding it, to create a block with a more complex hash, one must be prepared to do more computation than has been done by the entire SolarCoin network from the fork point up to the newest of the blocks one is trying to supersede. Needless to say, such an undertaking would require a very large amount of processing power and since SolarCoin is continually growing and expanding, it will likely only require more with the passage of time.
Is SolarCoin open to value manipulation?
The current low market cap of SolarCoin means that any investor with deep enough pockets can significantly change/manipulate the rate. Is this a problem?
This is only a problem if you are investing in SolarCoin for short period of time. A manipulator can't change the fundamentals, and over a period of 5-10 years, the fundamentals will win over any short term manipulations. An objective of the SolarCoin Foundation is stabilizing the SolarCoin value.
Sending and Receiving Payments
Why do I have to wait a few minutes before I can spend money I received?
Blocks (shown as "confirmations" in the GUI) are how the SolarCoin achieves consensus on who owns what. Once a block is found everyone agrees that you now own those coins, so you can spend them again. Until then it's possible that some network nodes believe otherwise, if somebody is attempting to defraud the system by reversing a transaction. The more confirmations a transaction has, the less risk there is of a reversal. Only 6 blocks or 6 minutes is enough to make reversal computationally impractical. This is dramatically better than credit cards which can see chargebacks occur up to three months after the original transaction!
One minute was chosen as a tradeoff between first confirmation time and the amount of work wasted due to chain splits. After a block is mined, it takes time for other miners to find out about it, and until then they are actually competing against the new block instead of adding to it. If someone mines another new block based on the old block chain, the network can only accept one of the two, and all the work that went into the other block gets wasted. For example, if it takes miners 10 seconds on average to learn about new blocks, and new blocks come every 1 minute, then the overall network is wasting about 12.5% of its work. Lengthening the time between blocks reduces this waste.
Do you have to wait until my transactions are confirmed in order to buy or sell things with SolarCoin?
YES, you do, if the transaction is non-recourse. The SolarCoin reference software does not display transactions as confirmed until six blocks have passed (confirmations). As transactions are buried in the chain they become increasingly non-reversible but are very reversible before the first confirmation. Two to six confirmations are recommended for non-recourse situations depending on the value of the transactions involved.
When people ask this question they are usually thinking about applications like supermarkets. This generally is a recourse situation: if somebody tries to double-spend on a face-to-face transaction it might work a few times, but probabilistically speaking eventually one of the double-spends will get noticed, and the penalty for shoplifting charges in most localities is calibrated to be several times worse than the proceeds of a single shoplifting event.
A Double-spending attack is where an attacker mines a block containing a movement of some coins back to themselves. Once they find a block solution, they quickly go to a merchant and make a purchase, then broadcast the block, thus taking back the coins. This attack is a risk primarily for goods that are dispatched immediately, like song downloads or currency trades. Because the attacker can't choose the time of the attack, it isn't a risk for merchants such as supermarkets where you can't choose exactly when to pay (due to queues, etc). The attack can fail if somebody else finds a block containing the purchasing transaction before you release your own block, therefore, merchants can reduce but not eliminate the risk by making purchasers wait some length of time that's less than a confirm.
Because pulling off this attack is not trivial, merchants who need to sell things automatically and instantly are most likely to adjust the price to include the cost of reversal fraud, or elect to use special insurance.
Why does my SolarCoin address keep changing?
Unlike postal or email addresses, SolarCoin addresses are single-use. This means that whenever you want to receive a payment, you need to generate a new address.
While it is technically possible to receive coins multiple times with a single address, this compromises your wallet's security as well as the privacy of the entire SolarCoin network, and also makes it impossible to know for certain who sent the coins or why.
How much will the transaction fee be?
Some transactions might require a transaction fee for them to get confirmed in a timely manner. The transaction fee is processed by and received by the SolarCoin miner. The most recent version of the SolarCoin client will estimate an appropriate fee when a fee might be required.
The fee is added to the payment amount. For example, if you are sending a 1.234 SLR payment and the client requires a 0.0005 SLR fee, then 1.2345 SLR will be subtracted from the wallet balance for the entire transaction and the address for where the payment was sent will receive a payment of 1.234 SLR.
A fee might be imposed because your transaction looks like a denial of service attack to the SolarCoin system. For example, it might be burdensome to transmit or it might recycle SolarCoins you recently received. The wallet software attempts to avoid generating burdensome transactions, but it isn't always able to do so: The funds in your wallet might be new or composed of many tiny payments.
Because the fee is related to the amount of data that makes up the transaction and not to the amount of SolarCoins being sent, the fee may seem extremely low (0.0005 SLR for a 1,000 SLR transfer) or unfairly high (0.004 SLR for a 0.02 SLR payment, or about 20%). If you are receiving tiny amounts (e.g. as small payments from a mining pool) then fees when sending will be higher than if your activity follows the pattern of conventional consumer or business transactions.
What happens when someone sends me a SolarCoin but my computer is powered off?
SolarCoins are not actually "sent" to your wallet; the software only uses that term so that we can use the currency without having to learn new concepts. Your wallet is only needed when you wish to spend coins that you've received.
If you are sent coins when your wallet client program is not running, and you later launch the wallet client program, the coins will eventually appear as if they were just received in the wallet. That is to say, when the client program is started it must download blocks and catch up with any transactions it did not already know about.
How long does "synchronizing" take when the SolarCoin client is first installed? What's it doing?
The popular SolarCoin-QT client software from SolarCoin.org implements a "full" SolarCoin node: It can carry out all the duties of the SolarCoin P2P system, it isn't simply a "client". One of the principles behind the operation of full SolarCoin nodes is that they don't assume that the other participants have followed the rules of the SolarCoin system. During synchronization, the software is processing historical SolarCoin transactions and making sure for itself that all of the rules of the system have been correctly followed.
In normal operation, after synchronizing, the software should use a hardly noticeable amount of your computer's resources.
When the wallet client program is first installed, its initial validation requires a lot of work from your computer's hard disk, so the amount of time to synchronize depends on your disk speed and, to a lesser extent, your CPU speed. It can take anywhere from a few hours to a day or so. On a slow computer it could take more than 40 hours of continuous synchronization, so check your computer's power-saving settings to ensure that it does not turn its hard disk off when unattended for a few hours. You can use the SolarCoin software during synchronization, but you may not see recent payments to you until the client program has caught up to the point where those transactions happened.
The team at the SolarCoin Foundation is working on tools to make this better including light wallets.
Do I need to configure my firewall to run SolarCoin?
SolarCoin will connect to other nodes, usually on TCP port 18181. You will need to allow outgoing TCP connections to port 18181 if you want to allow your SolarCoin client to connect to many nodes.
How does the peer finding mechanism work?
SolarCoin finds peers primarily by forwarding peer announcements within its own network and each node saves a database of peers that it's aware of, for future use. In order to bootstrap this process SolarCoin needs a list of initial peers, these can be provided manually but normally it obtains them by querying a set of DNS domain names which have automatically updated lists, if that doesn't work it falls back to a built-in list which is updated from time to time in new versions of the software. In the reference software initial peers can also be specified manually by adding an addr.txt to the data directory or via the addnode parameter.