Could a digital currency function without blockchain technology? The developers of CloudCoin say ‘yes.’

DNS tech-based digital currency

CloudCoin has announced the launch of a cloud-based digital currency, with no blockchain, public ledger, accounts, or encryption. Instead the currency uses internet Domain Name Service (DNS)-derived technology to enable secure email-to-email, or email-to-wallet transactions. 

According to CloudCoin, it’s the most private digital currency ever developed, and eliminates the risk of theft because there are no private keys. They even say lost CloudCoins can be recovered. 

Introducing the new currency, President of the CloudCoin Consortium, Sean Worthington, said:

“Cryptocurrencies built on blockchains come with a host of challenges, making it difficult to do simple things like buy a cup of coffee. Transactions take too long, fees are too high and it is still too difficult to scale. We developed CloudCoin to overcome these challenges and pave the way for mass adoption.”

Efficient, and “quantum-secure”

CloudCoin’s cloud-based Redundant Array of Independent Detection Agents (RAIDA), is based on DNS technology and distributed across twenty-five national jurisdictions. Its transactions require such a small amount of energy that gas fees aren’t needed.

Furthermore, CloudCoin says it’s unhackable, can’t be double-spent, and not even governments have the ability to spy on it. This is because the RAIDA system only authenticates transactions, and all the information about the coins is held in the actual coins themselves – with each CloudCoin basically being a JPEG image file.

The CloudCoin White Paper gives a simple explanation of how it works as follows:

“I have a JPEG image with twenty-five random GUIDs (Globally Unique Identifiers) embedded in it that only I know. We call this JPEG a CloudCoin. Each RAIDA cloud knows one of the twenty-five GUIDs. I can prove to you that I am the owner by authenticating the GUIDs in parallel with the RAIDA using simple free open-source software made by the Consortium.

If I want to buy something from you, I will give you the JPEG image and now we both know the secret numbers. Anyone who knows the secret numbers can change them by contacting the RAIDA. Now you can use the secret numbers to change them to your own secret numbers. Now, you are the owner of the CloudCoin, and I no longer know the numbers registered in the RAIDA.”

Because authentication data is shredded instead of encrypted, and distributed across the RAIDA, the system is said to be “quantum-secure.” Speed isn’t going to be an issue either, with CloudCoin claiming 100,000 CloudCoins can be transacted, totally securely, in less than 3.5 seconds. 

CloudCoins can be transferred using ProtonMail, a free encrypted email service, or using a Sky Wallet. 

Available only in set denominations

Interestingly, because each CloudCoin is a file, they can’t be subdivided in the same way a crypto like Bitcoin (BTC) can be. Instead, just like real physical cash, they are issued in denominations of one, five, 25, 100, and 250 CloudCoins. But, unlike real cash, CloudCoin isn’t inflationary, with a set limit of 16,777,216 CloudCoins in the cloud. 

CloudCoin has even patented its “Method of Authenticating and Exchanging Virtual Currencies” in an attempt to stop copycats. 

Inspired by Stefan Molyneux?

According to its official website, the United States-based CloudCoin Consortium was created in October 2016, by founding member Sean Worthington. Apparently, he realised “monetary systems are physical implementations of information systems and money is data”, while sitting in the bath listening to Canadian YouTuber Stefan Molyneux. 

As many of you will know, Stefan Molyneux is nothing if not a controversial figure, having recently been banned from YouTube for “white supremacist content and hate speech.”

AYO.NEWS says:

While the CloudCoin system is very novel and interesting, I can’t help but notice what seems like a major flaw.

Sean Worthington points out that the complexity of blockchain-based cryptocurrencies makes it “difficult to do a simple thing like buy a cup of coffee.” But, while there may be some truth in this, if there are only ever going to be just under 17 million CloudCoins, and you can’t subdivide it beyond 1 unit, it’s clearly not scalable for everyday “simple” uses like buying a cup of coffee – because pretty quickly that cup of coffee would get very expensive!

But, we have to give the CloudCoin developers some serious kudos for “sticking it to the man” – even the graphic for a “One CloudCoin” bill features the famous image of the so-called ‘Tank Man’ of Tiananmen Square.

And, as for the part Stefan Molyneux played in inspiring the project – well, while it may seem tempting to run from anything even partly inspired by an alleged creator of “white supremacist hate speech”, can we really take anything at face value when it comes to YouTube censorship in the era of the “woke” witch-hunts and “cancel culture?”

I’ll keep an open-mind on this one, for now… 

‘AYO.NEWS says’ features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited or its affiliates or associates. 

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