The purpose of this page is to explain how and why value is created and maintained in the ScPrime ecosystem and also how and why project participants are involved in value creation and value enhancement.

The Distributed Datacenter

The ScPrime cloud (product name: Xa) is a new cloud architecture based on a sharing-economy at global scale. Designed initially as Object Storage, it is built for large amounts of unstructured data with backup and disaster recovery as a large, first “go to market”. Follow-ups include surveillance camera files, Internet of Things output, medical scanning images, audio/video media files and many more.

As cloud adoption grows, there is also a growing trend towards distributing data away for centralized architectures. There are many object based storage products on the market though none operate with the radical distribution implemented in the ScPrime cloud.

An Army of Contractors

The datacenter gathers thousands of contractor storage nodes (identified as Storage Providers or just Providers) into a global mesh network that delivers cost and performance benefits over traditional cloud. AWS spends upwards of 600 million dollars to build enterprise-scale datacenters that are environmental nightmares with extreme power/water use that require specialized staff 24/7. In contrast, The Distributed Datacenter has a minimized environmental footprint while delivering industrial grade security, performance and durability. Nodes operate from existing locations and take little additional power and cooling as individual units. Best of all, they provide passive income for contractors, running mostly unattended.

Paying contractors across the planet is an accounting nightmare, but The Distributed Datacenter removes borders and payment friction with blockchain technologies; “smart” contracts, digital currencies and public ledgers. Individuals, small datacenters and franchise operations are examples of potential operators who make up the cloud. The customer perceives no significant difference from current cloud services, paying as normal and continuing to use a huge ecosystem of existing applications like Commvault, Veeam and Acronis. Behind the scenes, everything changes.

Value Capture

For customers, slashing incumbent margins is a wonderful market capture strategy if you have unique value creation and efficiencies. Blockchain technology is efficient at contract mediation without third parties like banks or courts of law. It lets us marshal large amounts of purpose-built storage with low upfront costs and low ongoing overhead. Code is law and the mechanism of deriving agreement or “consensus” uses specialized computers in a process called mining. The “smart contracts” created with Storage Providers specify price, terms and lock away consideration from both parties to guarantee performance.

For stakeholders, SCP, Corp is unique in that while we offered common shares similar to a typical startup, we also included a giveaway, no-cost token (ScPrimefunds / SPF) that represents equity in the cloud network itself. Building cloud infrastructure at scale is a challenging exercise and our investors have full participation.

Consensus thru Proof of Work

Let’s start with the blockchain component as it forms the foundation on which contracts, payments and currency is based. Miners are independent agents who underpin the project to receive financial incentives by validating information on the blockchain. They spend real money on capital and operating expenses to create “blocks” of transactions on a public ledger, thus creating base value. Miners receive payment via ledger rewards, which we call a coin. As a self-contained economy, we can in turn use this money to contract for storage. ScPrimecoins are traded on public exchanges (Ticker symbol $SCP) where price is established and the miners/storage contractors are able to convert earnings into dollars, bitcoins or whatever currency is desired.

A Beautiful Mindset – How Contracts Work

We use public key cryptography to ensure Providers perform to contract specifications and store exactly the data uploaded. Data objects include cryptographic metadata that tells the network where data pieces are located and where they came from. This information is used by contracts to perform random audits called a Storage Proof, which cannot be faked or replicated. Upon receipt of this proof a micropayment is made directly to the Provider’s digital wallet. If proof is not provided because the Provider is inaccessible or data has been tampered with, payment is not made and the contract may be forfeit along with additional funds put up by the Provider.

At no point does any Provider hold more than a small percentage of any given dataset. Erasure Coding is algebra uniquely suited to large distributed groups, providing higher redundancy while mathmagically requiring lower data storage than traditional clouds. When AWS receives data, they typically send two full copies to backup datacenters using a process called Replication. Erasure Codes inside our software chop data into hundreds of slivers and distribute them to multiple nodes. The brilliance of this redundancy is that large numbers of individual nodes can fail and the data is still retrievable. We can also spread this data over broader geographic areas to protect from all kinds of natural and man-made challenges like weather, hackers, etc. We save on storage costs AND we save on bandwidth by uploading less data. More info is available in the Whitepaper.

The price in SCP coins that our company pays for storage is kept low with a marketplace mechanism where Providers compete for storage contracts by offering desirable characteristics. We publish guidelines that bound a range they can charge and be eligible for additional payouts known as Incentives. We incentivize higher performance, auditability, capacity, geographic need and more. For example, medical backups may require compliance with HIPAA, a privacy regime. Providers willing to pass equipment and personal audit requirements can earn higher payouts than average nodes.

MV=PQ, Declining Inflation and Velocity Sinks

Companies pay us with credit cards and purchase orders. We in turn act as their agent to contract with the network and purchase the required SCP coins for contracts. But what is the case for speculators? So-called utility coins are not much different from car-wash tokens, useful when you need them but hardly investable. The solution in economics or tokenomics as its called here, is to slow down the velocity of SCP as money through the network.

Contracts require us to put up a sum of coins equal to our customer’s forecasted data use (currently called Allowance). The Providers put up an equal amount (called Collateral) to dissuade them from cheating while providing high quality service. Coins are locked by the blockchain and not released until successful conclusion of the contract.

Collateralization is not 1:1 as Erasure Codes force contracts with hundreds of Providers, each providing collateral for contracts formed for each of our customers. The net result is a large number of coins locked up creating natural scarcity. This Velocity Sink slows the V in MV=PQ resulting in a higher value for P in the money supply. Translation: higher SCP prices.

Coincidentally, blockchain miners extract declining numbers of SCP with every block, making it more difficult to acquire coins as the project matures. This is a key feature of many cryptocurrencies and of particular interest in a world of rapidly increasing money supplies. While the total number of SCP coins is not finite, a declining inflation schedule makes the practical ceiling approximately 55m coins in 2023.

The coin has yet to experience any sort of price discovery, but with a large addressable market for business backup/disaster recovery and potentially dozens of follow-up applications, we expect greater recognition and perhaps dramatic repricing. It would take an almost trivial amount of buying today to increase the price significantly. These price changes have no impact on storage costs as Provider guidelines float with the price as measured in dollars.

Higher coin value is important to the project, product and stakeholders. The corporation holds 2 large wallets of SCP coins earmarked for Storage Provider Incentives to build and grow the network. At current price, we spend large numbers of coins to support new storage joining the network. Price increase will allow us to spend fewer coins, translating to a larger network through the first year of product/network launch. The scale we must reach to effectively compete is extreme and we need every possible advantage from a higher coin price.

Little-Box Store

We’re designing a custom storage appliance for Providers to purchase and earn passive income (Storage Mining). Designed for simplicity, there are no user-configurable software decisions. Plug it in, turn it on, earn SCP! The units are subsidized with additional incentive coins so buyers have reasonable certainty of return on investment. Higher coin prices increase demand for storage miner sales and thus lower the subsidy required, freeing us to sell many more units.

Current designs provide up to 80TB of storage capacity with future models going much higher. Instead of our corporation incurring large capital outlays to build an enterprise-scale network, our contractors pay us for the required equipment to build the network and receive passive income generation to form The Distributed Datacenter. We expect these units to be available early in Q1 with beta prototypes for early adopters and internal testers. If you are interested, please reach out to someone on the team. A website with pre-ordering info is expected to go live before the end of December 2020.

An Investment in the Network

Earlier we mentioned ScPrimefunds also known as SPF which are held by the corporation, investors and some community members. These unique equity tokens have a finite number of 200m and this supply shares a 10% tax on all storage network transactions. Fees in the form of SCP coins are automatically deducted from all storage contracts and fowarded directly to digital wallets of SPF holders. The amounts are small today, but when the network is operating at scale, the amounts are significant. People who own SPF effectively collect rent from the success of the products we sell and network use. Imagine getting a 10% cut of everything stored on Amazon’s AWS!

TL:DR

The network is made up of people around the world performing various roles with real Capex/Opex to maintain the network. Cryptocurrencies are key to the process and are currently priced very low. Raising the price of the ScPrimecoin helps ensure product/project success and supports valuation of SPF and common stock shares.

How to Become a Stakeholder

SCP, Corp concluded a pre-seed round in 2020 with no further investment in the corporation available. While future rounds are contemplated, none are currently planned.

ScPrimefunds do not trade on any exchange and have never been sold or marketing by the corporation who holds a majority of the emission. SPF have been given freely to pre-seed investors and also as a thank you to some community members who have supported the project. As of late 2020, SPF have no specific value. They may ultimately form an asset class for sale in the future or not.

The SCP utility coin is freely tradeable on public exchanges and can be mined by anyone.

SCP currently trades on Probit, Whitebit and SouthXchange.

Certain information in this post contains “forward-looking information” under applicable securities laws. Forward-looking statements are provided to allow potential investors the opportunity to understand management’s beliefs and opinions. These statements are not guarantees of future performance and involve known and unknown risks, which may cause actual performance in future periods to differ materially from any projections of future performance or result expressed or implied by such forward-looking statements. The Company undertakes no obligation to update forward-looking statements if circumstances or management’s estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.