The Cypherfunks is a new digital currency and online music experiment that wants to find out what would happen if a loose online collective like Anonymous, a virtual band like Gorillaz, and a cryptographic currency like Bitcoin had a love child.
Founded by Simon de la Rouviere from Stellenbosch, South Africa, the Cypherfunks cryptocurrency is described as a “scrypt coin”, while the idea behind the musical arm is to create a music collective anyone can be part of.
De la Rouviere said that the idea for Cypherfunks originated 3 years ago from a skit performed by South Africans that imitated being local band “Fokofpolisiekar”.
“They actually claimed being the band, and not a cover band,” de la Rouviere said. “It was an interesting idea.”
Everyone is The Cypherfunks
“Music is often limited in time and space. A band has to gig, and tour,” de la Rouviere said.
“But what if everyone could be the same band? What would that look like?”
Wanting to learn more about what goes into making a cryptocurrency, the idea came back and de la Rouviere said it made sense to combine it.
“It is the digital age. The sum of contributions from across the world always ends up being greater than the parts,” de la Rouviere said.
“A decentralised band and a decentralised currency. The one represents the other. It’s an experiment that will be interesting to see how it unfolds!”
Altcoins and launching a cryptocurrency
The other half of The Cypherfunks experiment is a new cryptocurrency that Rouviere said lets Cypherfunks members tip, pay, and transact with others in and outside the collective.
Bitcoin may be making headlines and stealing much of the world’s attention when it comes to digital currency, but so-called “Bitcoin alternatives” (collectively called “altcoins”) have also risen to some prominence amongst the more tech savvy.
Cypherfunks aims to be such an altcoin, with the idea that members would all benefit from the success of the collective. “If the collective releases great music, we all become successful,” the website states.
Asked what is involved in setting up a cryptocurrency, de la Rouviere said that because cryptocurrency code is open-source, you have to modify it to fit with what you want to achieve.
“It ranges from technical changes to different branding changes. You have to know your way around some code,” de la Rouviere said. He said that he believes it will get easier in future as people release software to automate this process.
The Cypherfunks technical details
Among the technical decisions made when setting up a cryptocurrency is how many units of the currency to release when a “block” has been successfully “mined”.
“Mining” in the context of cryptocurrencies is a term used to describe the process of using a computer to improve the encryption of the shared ledger of a currency. Effectively, miners are rewarded for the work they do to help improve the security of the currency.
According the Cyperfunks website, the currency is configured to release about 50 billion units in the first 4 years, after which there will be a constant increase in supply of 1,314,000,000 “funks” per year.
This is in contrast with Bitcoin, and many other top cryptocurrencies by market cap, which opted to cap the number of coins that can be mined over the life of the currency.
Dogecoin, which at the time of writing was ranked by Coinbase as the sixth largest cryptocurrency by market cap, is an example of a currency without a cap on its supply of coins.
The Cypherfunks is also described as a “scrypt coin”, which de la Rouviere said refers to the hashing algorithm used to secure the ledger in the cryptocurrency.
De la Rouviere explained that the key point here was that different hardware is required to mine scrypt-based currencies than Bitcoin, which uses the SHA256 algorithm.
“It’s a way to diversify and enable different people to get involved with mining cryptocurrencies,” de la Rouviere said.
Getting some [FUNK]
Asked how someone can get started on mining Cypherfunks, de la Rouviere said that he has put together a guide on the Cypherfunk website.
“In short, you download the wallet, and then have to download separate mining software to be able to start mining,” de la Rouviere said.
There are also other ways to get involved in the project (and get your hands on Cypherfunks), according to de la Rouviere.
Firstly, you can contribute music and be tipped for it if people like it.
Secondly, you can buy and sell Cypherfunks for fiat currency using Cryptorush.in as an intermediary service to convert between Cypherfunks and Bitcoin, de la Rouviere said.
All of these methods require that you first set up a Cypherfunks wallet, however.
Exposure for contributors
When asked where musicians who wish to contribute to Cypherfunks should post their music to get exposure, de la Rouviere said that they should join the subreddit.
De la Rouviere said he has also created a group on SoundCloud and will also use the @thecypherfunks Twitter account to keep members of the collective updated of its goings-on.
Cryptocurrencies and the SA Reserve Bank
Asked if he is worried that the South African Reserve Bank (SARB) might clamp down on cryptocurrencies in South Africa, de la Rouviere said that it is a concern.
“I hope not,” he said. “Cryptocurrencies enable so many new ideas and innovation, like this experiment. There is no malicious intent, and community currencies exist in South Africa anyway.”
The SARB previously told BusinessTech that it is actively monitoring developments in virtual currencies “to inform any future regulatory approaches that may become necessary within the South African jurisdiction.”