Spacemesh consensus protocol is designed to run on home desktop PCs, filling free space on users’ hard drives to create a Proof of Space-Time (PoST). The goal of this blockchain protocol is to solve energy efficiency and centrality issues with Proof of Work (PoW) and Proof of Stake (PoS).
Why was Spacemesh created?
Replace PoW with another (environmentally-friendly) scarce resource
Trusted miners must use as much CPU power as they can otherwise honest majority assumption can be violated. Higher mining costs leads to higher transaction costs, must reimburse miners to ensure they participate.
Remove competition/leader-election requirement
The removal of competition and fulfilling a fair leader-leader election requirement consists of a combination of fair reward distribution, high throughput, and incentive compatibility. Competitions has 3 main problems: (1) they are time-sensitive => high competitive cost for large blocks (2) Lead to perverse incentives, as from various reasons it might be better for miner to withhold blocks (3) and last, unfair reward distribution, as previous leader has a head start.
Formally analyze and proven security
The Spacemesh protocol is designed to have security (under described assumptions) with rigorous mathematical proofs to reduces the attack surfaces to our assumptions. In the cryptocurrency space, we must not rely on fact something hasn't been hacked thus far, as a proof for its future security.
Spacemesh is designed to run by home desktop PC owners from around the world. There are tens of millions of such people with sufficient system and Internet connectivity who can join the platform, form a global decentralized cryptocurrency and provide security for it. Decentralization is achieved where there’s a large number of non-coordinated entities with a high-degree of geographical distribution and since the barrier for entry for such people is extremely low in Spacemesh compared to any other blockchain platform.
In the case of POW systems - the only way to be profitable for a miner is to purchase dedicated hardware which is not useful for any other purpose in the range of few thousand dollars at minimum and join a mining pool. Mining pools cause centralization as they are means of coordination and cooperation between miners.
There are two main aspects of decentralization - mining power decentralization and coin distribution decentralization.
Spacemesh achieves both as the same home miners which provide mining power to the network with an extremely low barrier-to-entry, are the ones who mint Spacemesh coin as award for their contribution. So, Spacemesh will create the world’s most decentralized crypto currency with coin distributed by the miners to other people.
To achieve a high-degree of decentralization these decentralization vectors need to vastly away centralization vectors which are for Spacemesh are rich entities who run dedicated storage mining farms - mining whales. The cost model for Spacemesh greatly favor honest home users over mining whales as the cost model for honest home user with an existing PC amounts to just the increase of the electricity bill due to leaving his computer on and the loss of free storage space which could be used for useful user data while whales have data-center, computing hardware, networking, storage media and devops costs.
Whales get discounts on hardware costs advantage due to economies of scale factors - discounts on storage and computing due to large-scale purchases. Because storage is a commodity, this discount is limited to about 20% compared to home users with limited budgets who will purchase dedicated storage for purposes of using it for Spacemesh. However, the hardware cost of an honest user is zero as he’s reusing hardware already purchased for purposes of interactive pc apps usage at home. In the long term, and as the network grows, it might not be profitable to mine with dedicated hardware at all so whales can’t price out honest users.
The Spacemesh mainnet basic security never uses more than ⅓ of the total storage space committed to the platform by all full nodes who participate in the consensus protocol.
While an attack by more than ⅓ of the storage is on-going, honest parties may not be able to agree on a canonical transactions history. This means that during the attack (i) Users may not able to execute transactions. (ii) Honest miners may spend resources and won’t get awarded due to blocks that seems valid, but turn out to be invalid. (iii) A seller may think that a payment was confirmed with high level of confidence but it is going to be reversed after the attack ends. So an attacker may be able to double-spend by paying for 2 sellers with the same coin - a history rewind attack.
Once the attack ends Spacemesh self-healing method restores both liveliness and safety and all honest parties will agree again on one true transaction history that doesn’t include invalid transactions (for example: 2 transactions that spend the same coin) so the attack’s damage is limited to what can happen during the attack as described here.
Altogether there will be 6 million total fixed coin supply created over 10 years from Genesis. 5.5 million coins in circulation will be created by miners via mining awards with a rapidly declining inflation rate, and 500 thousands coins will be minted at genesis. 75% of minted coins in the first 7 years from genesis go to miners and 25% to developers and investors via a percentage of each mining coin award. Out of the total fixed supply, 73% goes to miners and 27% to developers and investors. Out of the coin that goes to investors and developers, 55% goes to investors and 45% for developers.
On September 5, 2018 Spacemesh completed their series A funding round with $15 million in funding from Polychain (lead investor), Gumi Cryptos Capital, and Lemniscap.
December 29, 2017
Spacemesh White Paper 1
Tal Moran @ Epicenter
Tal Moran CSEC 2018
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