Updated: Dec 20, 2019
Loki is an Australian based privacy network that allows users to communicate and transact privately over the internet. The network provides a suite of tools that helps in providing a user, the maximum amount of possible anonymity while transacting, browsing, and communicating online. Loki is a decentralized blockchain network that is creating new and more private methods of interacting over the internet. The coin trades under the ticker symbol of LOKI.
This guide explains the purpose Loki is designed for, the team behind it, the way it works, and various uses and applications.
What Is Loki Designed For?
Loki is created out of a fork of Monero but is not designed to compete with it, as forks usually do. Monero is already one of the most private and anonymous cryptocurrencies, and with Loki, the developers intend to take things further by creating a completely anonymous, secure and private network for communication and trade.
Loki differentiates from Monero in several ways. One of the biggest differences is that Monero makes use of ring signatures where all but one signer is a decoy, whereas, Loki uses peer-to-peer protocols to route traffic over the internet.
The platform is designed to allow users to trade and communicate with absolute freedom, using privacy tools that enable secure untraceable transactions and anonymous communication.
Who Is the Team Behind Loki?
The founder of Loki is Simon Harman who is also the project lead. He has a notable background in web development and project management. Harman is also a member of Australia’s Blockchain Center. This is the largest community of blockchain experts, entrepreneurs, mentors and investors in Australia.
In total there are 4 executive team members, 10 developers, and 8 supporting organizations, including Hashed, Passport Capital, Fengshui Capital, Continue Capital, TLDR Capital, 1KX, Astronaut Capital, and Seal.
How Does Loki Work?
Loki uses peer-to-peer protocols, which aid in creating a decentralized network useful for routing internet traffic privately. Loki makes use of Monero’s privacy features, to establish a foundation for its second service layer of Service Nodes. These Service Nodes make use of an architecture, which is similar to other private internet protocols that allow for private communication to occur on the Loki network.
Loki also has its unique technology in the form of Mixin Distribution and Service Nodes. Mixins are the decoys used in ring signature along with the only true unspent output. Mixins may look like unspent output but they are not necessarily that.
The platform samples various Mixins based on individual user spending habits. This means a third-party can’t just outrightly assume that the oldest Mixin is the decoy.
Loki makes use of the staking component of the hybrid Proof-of-Work and Proof-of-Stake consensus model. A node operator is required to lock or stake a certain amount of their LOKI tokens, for a portion of the block rewards. This provides network protection against Sybil attacks that make use of market-based incentives.
What are Current and Future Applications of Loki?
LOKI is primarily a utility token on the Loki network. It is useful for voting, rewarding, and accessing various products. For instance, LOKI is required for staking purposes when a Service Node operator wants to commence operations.
Users can set up a staking Service Node if they hold enough LOKI and access their routing protocol, called Low Latency Anonymous Routing Protocol or LLARP.
Loki is expected to reach super dominance in the coming years because it is the first blockchain-based mixnet protocol, which already has a working main-net. Privacy and net neutrality are increasingly becoming hot topics. Many blockchains have begun focusing on privacy functionality. Currently, privacy-oriented crypto projects, such as the NIX platform don’t have any other popular solution for integration other than Tor.
Lokinet would be the logical solution for these projects that would trigger network effects and user adoption, of all existing projects. Loki is also successfully tackling the blockchain trilemma of decentralization, scalability, and security through its hybrid PoW/PoS structure and other technologies.
All indicators point towards the success of Loki, including the team backing it and achievement of milestones on their roadmap. They recently released their SNapp Open Source SDK on March 2019, which was a huge step in enabling developers to build their solutions on Loki.
As a privacy coin, Loki has made numerous improvements over Monero. Loki Messenger is a strong attraction to those interested in private messaging. The only limiting factor right now is the exchanges on which Loki is available. Unless Loki can get some of the major exchanges such as Binance, OKEx, and Huobi to pick up LOKI, it may not see additional traction.