There are so many cryptocurrencies out there in the world that no matter how much you learn, there will always be new ones to learn about. Not to mention that some cryptocurrencies, although they may be great projects, are quickly overshadowed by players in the space. One of these often-forgotten cryptocurrencies is one known as Slimcoin.
Slimcoin is famous for becoming the first eco-friendly coin in the cryptocurrency space. And even though it hasn’t been successful yet, it really sets an example in the cryptocurrency space and there is a slim chance that it may rise to become an important coin in the future.
Whether or not you are a believer in Slimcoin, it’s important coin to know about because of its unique consensus method. So keep reading to improve your knowledge about Slimcoin and the way cryptocurrency functions as a whole.
What is Slimcoin?
Slimcoin is an alt coin, which is another way of saying that it is a cryptocurrency that isn’t Bitcoin. Like Bitcoin, Slimcoin has no company overseeing it, and is considered a decentralized cryptocurrency. Additionally, it is a method of storing value and sending it to someone else via a peer-to-peer transfer, making it a store of currency rather than a platform to build on (like Ethereum).
What makes Slimcoin unique is that it is the first cryptocurrency to use a proof of burn consensus mechanism. This was designed to be more energy efficient than the proof of work mechanism employed by Bitcoin, while also being fairer and more decentralized than the proof of stake mechanism that Ethereum plans to implement (though at the time of its invention, no one knew that Ethereum would be changing to this system). This was done in order to speed up the time of block creation without sacrificing security or decentralization.
How Does Proof of Burn Work?
Proof of burn is a consensus mechanism that operates as sort of a hybrid between proof of work and proof of stake. When a miner wishes to mine a coin on a proof of burn blockchain like that of Slimcoin, they will need to purchase the coins native to the system in order to begin. In this case it is the Slimcoin cryptocurrency called SLC.
The miner then has to send the SLC to an anonymous specified address, and they are in turn given the power to mine SLC using their very own computer. There are no ASIC cards necessary, making the barrier to entry quite low. Additionally, since regular computer can be used for the mining process, this lowers the power draw overall making mining this coin economically and environmentally friendly.
Over time, the coins the miner paid to be able to mine Slimcoin begin to depreciate, and at some point, they will need to buy in again. This is to keep the mining field fair and to encourage activity on the blockchain. The reason this is considered a hybrid consensus mechanism is because miners are able to mine more when they invest or burn more initially. All miners are rewarded for mining in SLC. Although they won’t earn their initial investment back immediately, Slimcoin had proven to be profitable to mine over time.
The nice thing about this system, is that it lowers the need to hoard coins, which can be seen in many proof of stake mechanisms. Sure, miners in the Slimcoin system earn more SLC for having more SLC, but only if they agree to burn it, which is effectively getting rid of it and keeping the system competitive and moving. In a pure proof of stake system like that behind Ethereum, stakers are encouraged to hoard coins as the larger stake they have will determine how much ETH they can mine.
Where Can You Buy Slimcoin?
Unfortunately, Slimcoin is not a very popular cryptocurrency, mainly because it is an open-source project backed by a community. This means there is no company paying for its promotion and oversight and coders work on the program when they are able to. Slimcoin is still around, and as of the writing of this article, you can buy it on Frei Exchange.
Should You Buy Slimcoin?
Currently, Slimcoin is listed as a low volume project. This means it isn’t generating enough interest or following to be on the radar of most cryptocurrency and trading websites. If you are curious about improvements and ongoing work for the project, you can follow the community on Discord, or BitcoinTalk.
Because this project is so low volume, it is probably not a good idea to invest. This is because low volume projects like this tend to go defunct over time. Meaning there is even more of a risk of losing your entire investment than normal. While Slimcoin is monumental for educational purposes, it isn’t considered an investment grade coin, although it did hit an all-time high of $9 back in 2018 before crashing to costing a fraction of a cent.
Who Invented Slimcoin?
Despite its low profile, Slimcoin was actually released in 2015, almost seven years ago. This means that this project pre-dates Ethereum and several other alt coins. It was founded by Piotr Borowczyk, but as previously mentioned, there is a community that stands behind the coin currently as there is no company running it. As of the writing of this article, most of the official social media channels discussing the coin have gone dark, but the BitcoinTalk thread has had action as recent as May 2021. Most of this action was developers discussing possible improvements and changes to the software.
Will Slimcoin Come Back?
Although Slimcoin is famous for its consensus mechanism, it is highly unlikely that it will once again become popular. This is because Slimcoin is just too close to Bitcoin without the market volume to compete. Not to mention that there are too many other players in the space like Litecoin and Monero for there to be room for the energy efficient Slimcoin. And without the expanding capabilities provided by a blockchain like Ethereum, there honestly isn’t a place for this coin among the high-ranking cryptocurrencies.
Overall, Slimcoin was a great project, but it is also proof of how difficult it is to promote a truly decentralized project to the public. Whether or not you think Slimcoin is a cool idea, it does make you realize how amazing it is that a project like Bitcoin was able to get as far as it did on community support alone.