Welcome to the September 2019 Spectrecoin newsletter, the first after a long summer break. There are some exciting development updates and a sneak peak into what we are working on. The team as always, works to improve the security of the wallet as well as the privacy of transactions. Yves (@Helix) is currently working on a Spectrecoin Android wallet and Philip (@Tek) is working on implementing ‘seed phrase recovery‘ for the wallet. The engineering side of things is obviously extremely important but work is also underway around business development, government relations and we are aiming to stay in line with upcoming regulations.
We will also be outlining our progressive strategy to safeguard the evolution of Spectrecoin through bear markets, upcoming regulations and make this development possible. We will not be left behind when the crypto world moves forward and we are putting in place novel solutions. This will support the long-term development of Spectrecoin with regards to both technology and as a brand. We will strengthen the Spectrecoin Foundation and we will involve the community in ways that have not been possible before. This is a new era for Spectrecoin with lots of good news coming your way over the next few months.
Finally there is some information on the chain issue / fork that occurred a few weeks ago. If you were not affected by this, not to worry, our competent devs acted and implemented fixes.
The latest release is always available on our website: https://spectreproject.io/index.html#downloads
We know that many of you are waiting for an Android wallet and work in underway to deliver this as soon as we can. @Helix has embarked on the rather time consuming task of ‘porting‘ the Spectrecoin software; that is adapting Spectrecoin for the purpose of execution on Android which is a different computing environment from what it was originally designed for. This is truly an intense and complicated task but one that we are confident will succeed. The end result is mouthwatering however and well worth the effort and the wait. We will have a fully functional Spectrecoin Android wallet w/ ALL the privacy features and ‘stealth staking‘ on mobile.
The current goal regarding a move to mobile is the first version of a Spectrecoin Android wallet, which uses the current code base as much as possible. The big advantage of this approach is, that we will have the same behaviour of our wallet on Android without introducing potential differences between Android and the wallets for other operating systems. As the build of Spectrecoin is very different for the supported operating systems, the build for Android would add another heavy layer of complexity to the build steps. To reduce this complexity a big goal is to simplify the build in general by using the same build tool and build steps on as many operating systems as possible. For this goal I am working on the migration of the whole build chain to CMake [https://cmake.org/]. CMake makes it a lot easier to setup the build system itself and to build for different targets in parallel. With CMake it’s also less painful to cross-compile for different architectures. Exactly this would be the case for a first version of a mobile wallet, as Android is ARM based and all the other wallets run on x86_64 architectures.@Helix - Spectrecoin developer
We all know that importance of keeping backups and how devastating it could be you lost access to all your coins. At the moment, we all have to keep multiple backups of the ‘wallet.dat‘ file to stay safe. I also keep copies of private keys and other forms of backup. We want to work towards a more secure way to backup your wallet, so we will implement so called “seed words“, “seed phrases” and also known as a mnemonic for the Spectrecoin wallet.
The upcoming seed word feature will give you access to your all your coins with only a piece of paper or your memory. Backup of your ‘wallet.dat’ will no longer be necessary.”@Tek - Lead developer
So what are “seed phrases” and how do they work? Firstly, a “seed phrase” / mnemonic is a random sequence of 24 words out of a predefined 2048 words from the BIP-0039 seed word list such as the following 24 words. I suspect many of you have encountered this before.
exercise expose hip brain motor chimney book drop vivid blade only human retreat essay cancel image one jump term screen defy victory island check
The mnemonic is created by following the specifications in BIP-0039 and the mnemonic can then used to generate a binary seed. This binary seed can be used later to generate all the key pairs in a deterministic wallet. Therefore, the mnemonic is all you need to keep your coins safe. This is a big improvement in security and also paves the way for possible integration into hardware wallets such as Trezor. If you want to explore this further have a look at this website: https://iancoleman.io/bip39/
In addition to the engineering accomplishments of the developers, I am doing work around getting Spectrecoin regulation compliant. I have had meetings with a London law firm that we hope will take us on as a client and advise us over the next few months. I am also reaching out to marketing agencies and we aim to find a marketing partner over the next few weeks.
Funding & Supply Increase
The Spectrecoin Foundation CIC needs to evolve to stay relevant and also solve the issue of long term funding. In order to innovate, keep up development and retain the highly professional core team, we need sustainable funding solutions. It’s as simple as that if we are to deliver a premier privacy product and survive long term. As you all know the crypto markets are in bearish turmoil, the dominance of Bitcoin is increasing (at the moment) and all the other smaller projects are suffering. This may change, nobody can tell. In addition to the pure development costs such as salaries for our core team and expenses, we are also forced to obtain legal advise around upcoming regulations such as the EU Fifth Money Laundering Directive (FMLD - see further explanation below). We will also need to engage with accounting services to fulfil all our obligations as a UK registered company. The total cost of all this far exceeds what the development funds brings in at this time. However, we can turn all this into a positive turn of events.
Therefore we face a stark choice; continue as before and hope for the best, with a slim chance of retaining professional developers and no real future vs. a well funded evolving, thriving project with a vibrant community that has a genuine potential to become a leading privacy cryptocurrency.
Below we will outline what we have decided in order to offer a solution that we believe will benefit Spectrecoin holders and potential investors. This is a solution we believe will secure our long term survival and evolution through regulations and bear markets.
We have decided to release Spectrecoin v4 with a hard-fork on Friday 27/09/2019 at 2000 hours (GMT) and increase the total supply for Spectrecoin by 3,000,000 XSPEC. That means that on 27/09/2019 there will be a one-off ‘super block‘ that will generate 3,000,000 XSPEC for the Spectrecoin Foundation CIC and the Spectrecoin community. This will take the total supply to around 25,700,000 XSPEC/SPECTRE which in real terms is a marginal increase. The current ‘Development Contribution Blocks‘ will be directed to a “Reserve Fund” and all the development costs will be funded from the new fund.
We have had long discussions about how to ensure the long term growth of the project and we believe this is the best way. It may initially seem counterintuitive, controversial and maybe this hasn’t been done before, but there are few other options and we are not afraid to break convention. We have invested a lot of time and energy getting to where we are now and it would be a shame to see this project perish along with much less innovative projects. This move is akin to a ‘normal‘ company increasing its share capital in the ‘real world‘ to raise funds for further development, something which is not uncommon. This is justified by the fact that Spectrecoin is undervalued as a company and as an asset and also on the basis of what we can achieve by doing this.
We had considered a ‘donation run‘ but this has several potential issues. Firstly, after consulting with lawyers we would need to conduct KYC / AML checks on donations and donors and this is not feasible and probably not desirable for our users at this time. It would also seem less fair for all as potential whales might not contribute proportionally. Furthermore, the chances of getting enough funds would be uncertain at best.
We will explain the value proposition for current users and future investors below in some detail. We encourage everyone to shed some long ingrained preconceptions normally held in the crypto world and open up for the possibilities this will bring to Spectrecoin. We want to be an innovate and progressive project and we invite you, the community, to follow us.
The increase amount has been chosen as we need to be certain that this is a one-time only event and that it will cover development far into the future and also supply XSPEC for community engagements. The total supply of any cryptocurrency is in itself a poor indicator of value. A quick look at the top 100 will show you other projects with higher supply, poorer tech and higher price. There is also another simple fact; the more people who own and use Spectrecoin the better our chances to reach critical mass and adoption.
The Spectrecoin Foundation CIC remains a not-for-profit endeavour and as such we are accountable to the UK authorities with regards to tax and so on. Therefore, there is no intention and no opportunity for the team to enrich themselves from these funds. The funds are solely for development expenses and to ensure that we retain our highly skilled and professional developers. As you can imagine, developers like Philip Mueller and Yves Schumann are in high demand and other projects would love to have such skilled programmers onboard. I think it’s easy to forget what kind of salaries they would command in the business world and also forget that crypto is not what it was a few years ago. The new fund will therefore cover salaries for the core team to work on Spectrecoin technical and business development.
There are many factors that played a part in coming to this decision.
- XSPEC trade volume is consistently very low and without trade volume there simply is no future. We suggest that the significance of the spot price of XSPEC as a value indicator is inversely proportional to the volume of trade. In other words, a high price with low volume and near zero liquidity is clearly a false indicator of value both for you as a Spectrecoin holder and also for the Foundation in planning ahead.
- There are around 3,000,000 XSPEC stuck, maybe lost forever after the Cryptopia hack and subsequent bankruptcy and administration. There are also likely several hundreds of thousands of XSPEC lost in other ways. That means that the supply increase in real terms only has a marginal effect for XSPEC supply at any given time.
- We ensure that we retain highly skilled professionals with a real incentive for success who also commits to a minimum amount of work and stays on long term.
- We will be in a stronger negotiating position with exchanges that may want XSPEC for listings.
- We will be able to pay contractors / outside developers in XSPEC.
- It will allow for the creation of a substantial ‘community chest‘ for community engagement and initiatives. There will be further information on this at a later stage. We will open for applications from the community for funds to be allocated to well defined initiatives.
- We will be able to realise a long term roadmap.
Spectrecoin ‘Community Chest’
We will set aside 10% of the new fund, so 300,000 XSPEC, for a ‘Community Chest‘, designed to encourage further community engagement and initiatives. The funds will be available to anyone in the Spectrecoin community via a simple application. We will set up a dedicated Raspberry Pi to stake the ‘Community Chest‘ and you can all follow the balance on the block explorer. This fund is earmarked for community initiatives and not for core team development. We will likely use some form of SMART objective (Specific, Measurable, Attainable, Relevant and Timely) to assess the proposals. We will publish the application procedure and we will also announce a ‘reward‘ scheme for anyone who submits a proposal that gets implemented unless they intent to implement it themselves.
Initial fund dispersal
The bottom line is that the total supply, whether 23 mill or 25 mill, will not determine the future value of the project and hence the price of XSPEC. These measures are necessary to survive the bear market and will stimulate trade. The alternative is that Spectrecoin falls into disrepair and devs will leave for other projects and instead of having a bright future with funding, Spectrecoin would die a slow death and vanish into obscurity. Spectrecoin has a highly complex code base and associated build system and needs proper professionals to develop and maintain. We value transparency and the initial distribution of the dev fund will be:
- Philip Mueller (@Tek): One-off initial payment of 100,000 XSPEC. This is warranted by the endless hours and tireless work by Philip over more than a year with no or minimal pay. Philip has shown an unwavering dedication to the project and he is key to our success.
- Philip will work for $90,- per hour contracted for 9 hours per week paid in BTC from sale of XSPEC. In addition, we have agreed a fixed rate of $360,- in XSPEC / week for overtime, support and extra maintenance and bug fixes.
- Yves Schumann (@Helix): One-off initial payment of 100,000 XSPEC. Yves has also put in endless hours and has designed one of the most advanced automated build systems in crypto for Spectrecoin. Yves is also key to our future success and is already working on our mobile app with dedication.
- Yves will work for $90,- per hour contracted for 9 hours per week paid in BTC from sale of XSPEC. In addition, we have agreed a fixed rate of $360,- in XSPEC / week for overtime, support and extra maintenance and bug fixes.
- Eirik Korsell (@Mandica): One off payment of 120,000 XSPEC to cover ALL previous expenses incurred over 2018/2019. Eirik will work for $45,- per hour contracted for at least 16 hours / week paid in XSPEC. This includes any overtime or other work as needed and most weeks the actual hours worked will go beyond this.
- Neil Borum (@Beachguy): One off payment of 10,000 XSPEC for previous expenses. Neil, who is instrumental in keeping our vibrant community in good spirits will work for $45,- per hour contracted for at least 8 hours / week paid in XSPEC. This includes any overtime or other work as needed. Neil has been loyal and hard working since day 1 and knows Spectrecoin and its history better than anyone.
If you have followed Spectrecoin over the last year or so, you will know that Philip and Yves together is a formidable dev team and can accomplish great things. When you follow this project from the sidelines, it’s easy sometimes to take this for granted. It’s easy to forget how much time and work is being put into this and it’s only right that the team is now being compensated.
As you will appreciate, the core team works well beyond this in an average week and this is the minimum that we can offer to increase long term value for investors and retain this team that works well together. We are aiming to work all angles over the coming 12 months, around technology, business and research and if the XSPEC price increases as a result the funding would stretch further into the future. We have made a rough estimate that around 1,600,000 XSPEC is needed for year one starting from October 2019. This estimate is obviously directly linked to the price of XSPEC. A low price will mean more XSPEC spent and a high price the opposite. We will have a much better idea once we are a few weeks past October. This should leave around 1,300,000 XSPEC going forward from October 2020 and around 130,000 XSPEC in a reserve fund.
The dev fund belongs to the Spectrecoin Foundation CIC and not the people involved, so therefore, if anyone were to leave there would be a real incentive for the right people to take over and continue the work.
Legal / Regulatory issues
The Spectrecoin Foundation CIC is registered in the UK and so far cryptocurrency activity in itself remains unregulated in the UK. This does not mean that a UK company operating in crypto do not need to adhere to various laws and other auxiliary regulations, such as those related to money laundering and terrorist fundraising. In spite of this, the UK remains one of the least regulated countries in the developed world for crypto businesses to operate, at this time. We have engaged a law firm to establish the exact relationship between Spectrecoin and the various laws and regulation in effect right now. We want Spectrecoin to stay within the law and will seek to follow safe procedures as far as that is possible.
The attitude to cryptocurrency regulations however changed in late 2015, after the Paris terrorist attacks. In the wake of this there were demands from EU ministers for a “strengthening of controls” related to cryptocurrency businesses. There has since been increasing concern that cryptocurrency has a potential use in terrorist fundraising and money laundering. Hence, the EU 5th Anti-Money Laundering Directive was created. The 5th AML Directive brings the EU in line with cryptocurrency measures introduced in the US several years ago. All EU countries must bring this into domestic law by January 2020.
Hence, with the so called “transposition” of the 5th AML Directive into law by January 2020 the regulatory environment for crypto will be extreme. This will make it very difficult for crypto businesses to operate without seeking legal advice and adhere to regulations. We believe that this will effectively force many projects to shut down and there will be an increase of KYC/AML checks all around. That means that exchanges like Txbit.io and others that currently do not have any KYC checks will be forced to change their policy, so use whilst you can. Although most cryptocurrency projects may not fall under this directly, we expect to see increasing checks by exchanges. I would not be surprised if exchanges will soon start AML checks on crypto listed and it will become increasingly difficult to just “stay under the radar“. Spectrecoin would like to stay legal and regulated but with no compromise for privacy. This means that we have to hire legal representation. This might be the difference between success and failure over the coming months.
July sync issue / Fork
On 27th July 2019 on block 1,232,433 there was an unintentional fork and some users may have found that they couldn’t sync their wallets. This was quickly reported back to the team and Spectrecoin 3.0.12 was released shortly after and fixed a critical oversight introduced in the 3.0.10 release.
This unintentional fork was made possible because a node had staked the exact same ATXO (SPECTRE output) with the same ‘wallet.dat’ file on different network nodes. Normally one chain would win and the other blocks would become orphaned. In this case because of the oversight, a minority of 3.0.10 and 3.0.11 wallets which received the later orphaned block before the block of the main chain, continued to stake the fork. We informed the exchanges and to our knowledge they have always been on the main chain. We believe that a vast majority of users have updated their wallets. If you have not updated yet, please update your node to the latest version as soon as possible. The latest wallet will check if you are on the main chain and if not abort with a corresponding message. You may then have to re-sync, but please use the bootstrap. We are truly sorry for this inconvenience.
Block explorer (v3): https://chainz.cryptoid.info/xspec/
Testnet explorer (v3): https://chainz.cryptoid.info/xspec-test/
Txbit (SPECTRE): https://txbit.io/Trade/XSPEC/BTC
Twitter (official): https://twitter.com/Spectrecoin
Twitter (official): https://twitter.com/XspecRising