What is LOKI (LOKI) - A Beginners Guide

What is LOKI (LOKI) - A Beginners Guide

By TrocProcLock | Earning that Crypto | 7 Feb 2020

The Loki Foundation was incorporated in 2018 and is a registered non-profit organization in Australia. As a non-profit it is legally bound to spend any money earned from block rewards on the network itself. So it is put back into work and no one person/employee is reaping millions of dollars off the success of Loki.

Loki is a fork of Monero. There are a million cryptocurrencies in the world now so how does this one stand out and what does it do differently? Well Monero was created to be one of the most private cryptocurrencies so Loki takes that a step further. Loki was created to create a 100% private, anonymous and secure network for trading and communication.

So one way that Loki takes what Monero has and makes it better is its Ring Signature. What Ring Signature does is that for a transaction there is a minimum of 10 users that all 'sign' the transaction. Monero uses 5 users per transaction. So when a transaction occurs the stealth addresses are used and of the 10 users 9 of them are just decoys in the transactions. The reason they do this is to create plausible deniability for any transaction. Because even if some way a "illegal" transaction occurred and you were one of the 10 addresses it could NOT be proven that you signed it because there are 9 others that could have been it and no way to verify who really was the 1. It's an ingenious way to create anonymity on the network.

Also every time a transaction is placed Stealth addresses are used. They are 1 time addresses used per transactions so that nothing can get linked back to you. So with Stealth Addresses and Ring Signature there is 99.999999% chance any transaction you do on the network will not get tied back to you.


Loki has a hybrid consensus model utilizing Proof-of-Work and Proof-of-Stake. Service Nodes are one of the backbones of the network. Service Nodes are also the staking component of the network (I will touch back on Service Nodes later).

Loki creates a suite of privacy tools that are its backbone of secure messaging and trading.

Session is a Private Messenger

Loki takes the same concept of Ring Signature and applies it to it's Private Messenger. When User1 wants to send a message to User2 they send the message to User2's Public Key, and each message generates a new shared encryption key (Perfect Forward Secrecy). That way if User3 wanted to find out a conversation between User1 and User2 they would have to find and decrypt every single message's shared key which is near impossible.


When User1 sends a message to User 2 who is online, it broadcasts to 3 randomly selected Service Nodes and each keeps the message for 24 hours. The receiver User2 also pings 3 random Service Nodes that then connect to the 3 user Service Nodes.


When User1 sends a message to User 2 who is offline, it used PSS routing. Swarms are logical grouping of 9 Service Nodes. Each user is tied to a swarm. When sending a message the Swarm User2 is in is identified and noted in the message. When a node in the User2 swarm received the message it distributed it to the other 8 nodes. When User2 comes online it pings two Service Nodes in it's swarm to check for messages.

The Private Messenger is planned to be available on the Loki Wallet and a stand-a-lone mobile app. There is no phone number tied to your account, and there is no digital footprint left behind. Session is cross device enabled so it's sync across all your devices natively. The entire app is Open Sourced. You can send Group Chats, Voice Messages and Attachments.
Here are the download links for Session:
Android: https://play.google.com/store/apps/details?id=network.loki.messenger
Apple: https://apps.apple.com/app/session-private-messenger/id1470168868?ls=1
Desktop: https://getsession.org/download/

**December 13th, 2019 Loki Messenger was rebranded as Session**

Lokinet is a Onion Routing Network

First lets define Onion Routing and then how it incorporates into Lokinet. Normally when a packet is sent across a network the sender and receiver is noted in the packet through all it's routing. The way Onion Routing works is that every node that handles the packet only know where they received the packet from and where they are sending the packet too. So any node doesn't know who you are. The Service Nodes that handle this traffic are evaluated by consensus and can be removed if they are not operating up to the standards set forth (expanded on further later).

Normally Service Nodes and Remote Nodes are different on other cryptocurrencies. On Lokinet they are one in the same to entice Service Nodes operators. They get rewarded for being a Remote Node and a Service Node.


Exit Node is another great tool in Lokinet. Exit Node is the ability to surf Lokinet and get routed securely and then exit the environment at a Service Node and get to the wider Internet. That could cause the Service Node to be in a tight situation depending on what is being searched or done in that session. By default a Service Node does not have it's exit node open. The operator has to opt in to that functionality. When a Service Node opts-in to become a exit node they earn double the reward as a normal relay.

Blink is Instant Transactions

What Blink does is make transactions almost instantaneous. Normally when a transaction is sent on a blockchain it waits in a queue to be authenticated and written into the blockchain, which cant take a few minutes. Loki wanted to change that and make payments instant. So when a transaction is initiated it is sent to 2 quorums of Service Nodes (2 sets of 10 Service Nodes). They then check the transaction for accuracy and legitimacy. Invalid or malicious transactions are denied almost instantly. If the 2 quorums of Service Nodes find the transaction valid the Sender and Receiver see the transaction confirmation. It then gets sent for inclusion into the blockchain.

Service Nodes are the infrastructure of Loki

The Service Node users have to lock down a certain amount of tokens for a certain amount of time to earn part of the block reward. The other feature of Service Nodes is they have the capability of creating SNApps (Service Node Applications) which are used to store private messages from Loki Messenger / Session. A Service Node needs a minimum level of bandwidth and storage it can share to the network. Service Nodes earn a portion of a block reward for there service. Service Nodes also help with being an Exit Node or a Relay, the Onion Routing for Messaging and for Lokinet browsing. They are also part of quorums for verifying transactions and Swarms for sending messages. The Service Nodes monitor other Service Nodes on their performance to ensure a high level of activity and consistency.

Service Nodes self-enforce each other. When the Service Node software is started a file is created with a predetermined size is allocated on the disk to ensure space is present. A bandwidth test is conducted next which is optional. If the bandwidth test is skipped or failed that Service Node is sent to the pool of un-trusted Service Nodes. If that happens their collateral is locked until a Swarm test is conducted. The Swarm tests are mandatory and can not be skipped. If a Node passes the Swarm tests they are awarded the Trusted Node flag and will start routing packets. If they fail the swarm test they are removed from the network and the collateral is locked for 30 days.

Token History and Pricing

Loki had a private sale in March of 2018 where they sold 15% of the 150 million tokens. They sold for $0.68 and raised $9 million. The rest of the tokens were saved for mining and a large airdrop. Loki never had a public ICO (initial coin offering). In June of 2019 LOKI hit it's low at $0.10. In November of 2019 Loki hit its high price of $0.44 (not including the initial bubble of $1.17 at May 31st, 2018).

There is a max token supply of 150 million, with roughly 45 million in circulation. KuCoin is the most active exchange for trading LOKI.


Mining Loki

Since Loki has Proof-of-Work and Proof-of-Stake you can mine for Loki. Loki can be mined through the RandomXL hashing algorithm which is CPU mining. In order to mine you will need to download the Loki Wallet to get your key and then setup a mining software. Loki suggest using XMR-Stak to mine. I currently use XMRig to mine and it works flawlessly. If you are curious to mining please check out my other article on Publish0x about how to mine. Here


Voting on Changes on Blockchain changes

Each Service Node is given a specific key for voting purposes. They are allowed to vote on each active proposal for the blockchain. Proposals are only passed when the yes votes minus the no votes is equal to 15% of the nodes on the network.


I am a crypto enthusiast and also a crypto noob :) Just trying to learn more each day.

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