Altcoinist Review: $SMH, Spacemesh
Creating fairness and equality through layer-1 crypto.
"I think both Ethereum and Bitcoin, with all the best intentions, ended up unavailable to the home miner and centralized on the other end. So our intention was to create something that would always be open to the home miner. While going about it we also realized we can also support a very scalable blockchain which can handle thousands of transactions per second." Tomer Afek
- Objective: Aiming to revolutionize cryptocurrency mining, Spacemesh emphasizes inclusivity and ease of access for all.
- Symbolic Launch: After five years of work, its network genesis on July 14th aligns with a historical moment to underscore its revolutionary approach in the crypto world.
- Vision Statement: CEO Tomer Afek's strategy focuses on making the platform user-centric, striving for widespread understanding and accessibility of cryptocurrency.
Tomer Afek's Journey to Spacemesh
- Childhood and Personal Growth: Tomer Afek's story begins with his childhood struggles with social isolation, alleviated when he discovered the joy and "flow experience" of wave surfing. This marked the beginning of his transformative journey.
- Academic Excellence: Despite his initial challenges, Afek excelled in mathematics and abstract thinking during his university years, leading to a successful career in computer science and a deep interest in analytical philosophy.
Career Evolution:
- Venture Capitalism to Entrepreneurship: Afek's professional journey transitioned from venture capitalism in the late 90s and early 2000s to entrepreneurship. His venture capitalist phase saw him navigating the industry's shift to higher velocity models, while his entrepreneurial phase allowed him to develop and execute first-principle ideas divergent from consensus opinions.
Formation of Spacemesh:
- Motivation: The creation of Spacemesh was spurred by the industrialization of Bitcoin mining, which posed barriers for individual home miners. This challenge motivated Afek to start Unruly Technologies and develop the Spacemesh protocol with his team, aiming to reinvent the concept of home-based mining in the cryptocurrency world.
Spacemesh’s Unique Protocol Features:
- Non-competitive, Collaborative Mining: Distinct from the winner-takes-all model prevalent in traditional mining, Spacemesh’s "Collaborative Mining" fosters a community effort in block production, where all contributing miners are rewarded.
- Continuous Proof Reuse: Unlike systems that require a new proof for every mining challenge, Spacemesh miners reuse their initial proof, significantly reducing energy use and ongoing operational costs.
The Vision and Impact of Spacemesh:
- Social Change and Equity: Spacemesh is not just about technological innovation; it's about societal impact. The vision extends to creating a more equitable world through better cooperation and an inclusive, decentralized financial system.
- The People’s Coin Ideal: Spacemesh's philosophy revolves around creating a cryptocurrency that is accessible and fair, often referred to as “The People’s Coin Ideal.” This concept embodies the ethos of inclusivity, fairness, and broad-based participation.
Afek's Thoughts on Digital Gold Standard:
Tomer Afek argues for the need to revolutionize the financial system by transitioning from analog to digital currency. He emphasizes that digitizing money isn't just about digital transactions but involves redefining the underlying value of the currency by linking it to a finite digital resource. This approach aims to create a more honest, transparent, and equitable financial system, moving away from the flawed fiat currency model.
Afek believes blockchain technology is key in this transformation, offering a reliable, immutable ledger system.
Anchoring currency to a tangible digital commodity, such as spacetime, ensures stability and combats manipulation, making it harder to alter the financial "ledger" after the fact and bringing clarity and accountability to financial transactions.
This change, Afek suggests, is crucial for establishing a stable, decentralized store of value in the volatile cryptocurrency market.
Cultural Evolution and Cryptocurrency Adoption:
- Role of Individuals and Communities: Spacemesh recognizes the importance of cultural evolution in embracing new financial paradigms like cryptocurrencies. The platform envisages a role for individuals, communities, and governments in driving this change, emphasizing the need for a collective shift towards more equitable and transparent financial systems.
Technological Framework of Spacemesh
- Consensus Mechanism: Spacemesh introduces Proof of Space-Time (PoST), ingeniously combining Proof of Work and Proof of Stake efficiencies.
- Architectural Innovation: With a Directed Acyclic Graph (DAG) architecture a.k.a a "mesh", Spacemesh elevates transactional efficiency, moving away from conventional blockchain structures.
- Mining Model Reinvention: "Collaborative Mining" in Spacemesh eschews traditional competitive models, cultivating a community-driven mining process.
- Resource and Energy Optimization: Prioritizing storage over power, Spacemesh enables mining with basic PCs, significantly cutting down on energy usage.
Tokenomics and Distribution
- Market Dynamics: Maintains a market capitalization of around $50 million, with a total supply cap of 2.4 billion tokens.
- Emission Strategy: Plans for a gradual coin release over 941 years ensure long-term network stability and preservation of coin value. By 2025, there will be 180M tokens in circulation, and by 2028, there will be around 400M.
- Equitable Distribution: Designed to reward miners fairly based on their storage commitment, supporting a diverse mining community. Paid every 2 weeks. No disproportionate rewards for powerful miners.
Spacemesh Team
- CEO and Co-founder: Tomer Afek
- Team: The team consists of 25+ people including Lane Retting a former Ethereum core developer who is now CTO.
- Experience: They worked on the Spacemesh protocol for over 5 years before the launch.
- Active Community Engagement: Promotes active involvement across various platforms, nurturing a cooperative and vibrant ecosystem.
Accessibility and Inclusivity
- Low Entry Barriers: Accessible to anyone with a basic PC, lowering the threshold for crypto mining participation.
- Cost Efficiency: Maintains minimal operational expenses, making it financially viable for small-scale miners.
- Participation Incentives: Ensures equitable reward distribution, encouraging participation from diverse demographics.
Funding and Investor Support
- Robust Funding: Raised $23 million from leading crypto investors, including Polychain, Paradigm, Dragonfly, Electric Capital, Greenfield, Arrington XRP Capital, and 1KX, ensuring a solid financial foundation.
- Community Support Focus: Emphasizes supporting a wide range of users, enhancing the platform's accessibility and appeal.
- Vesting: 150 Million tokens locked which gets distributed amongst investors over years
Economic Model and Sustainability
- Issuance Strategy: Mirrors Bitcoin's proven model, aiming for a predictable and stable token supply.
- Long-Term Approach: Focuses on network and token longevity with a slow emission rate.
- Reward Strategy for Early Contributors: Balances immediate rewards with long-term network commitment.
Decentralization and Node Operation
- Encouraging Full Node Operation: Aims to counter declining node operation trends, simplifying maintenance and involvement.
- Commitment to Decentralization: Prioritizes a balanced and widespread miner distribution over other operational efficiencies.
Governance and Future Outlook
- Credible and Stable Governance: Seeks to maintain a stable and difficult-to-alter economic model.
- Transparent and Inclusive Decision-Making: Balances governance complexities while ensuring community input in key decisions.
- Challenges and Scalability: Focuses on balancing core values of decentralization and accessibility with evolving technological demands and network growth.
Spacemesh's Distinctive Role
- Potential for Global Impact: Positions itself as more than just a financial asset, aiming to be a tool for broader social and economic change.
- Design and User Experience Philosophy: Everything, from code to UX, is tailored to be approachable and comprehensible to a wide audience, not just crypto-savvy individuals.
Altcoinist Conclusion
Spacemesh's commitment to fairness, accessibility, and community-driven development, combined with a robust technological backbone, distinguishes it as a promising and potentially transformative force in the crypto space.
Although there is a pre-mine allocation, the unique tech combined with 5+ years of work in the protocol and the giga brains working on SMH signals us that the project has immense potential in the long run.