Welcome to the hub of Spacemesh knowledge! As a part of the growing blockchain and crypto ecosystem, Spacemesh introduces unique approaches to decentralization and energy efficiency. To help both newcomers and experienced enthusiasts explore and understand this innovative project, I’ve created a series of Twitter threads under @Spacemeshindia. Each thread breaks down complex concepts, updates, and features of Spacemesh in an easy-to-follow format.
In this post, you’ll find a collection of all my Twitter threads, curated to guide you through Spacemesh’s key ideas and latest developments. Whether you’re here to learn about the basics, deep-dive into technical details, or stay updated on the project’s progress, these threads have you covered.
Cryptocurrencies are all about innovation, and Spacemesh is no exception. At the heart of any successful cryptocurrency lies its Tech and tokenomics—the rules governing how coins are distributed, earned, and circulated. For Spacemesh, its SMH tokenomics are designed to promote fairness, decentralization, and long-term sustainability.
But what exactly makes Spacemesh’s tokenomics stand out? Why does decentralization matter, and how does vesting play a crucial role in the network’s growth? In this post, we’ll break down these concepts in simple, digestible terms.
What is Tokenomics?
Before we zoom in on Spacemesh, let’s get a handle on what tokenomics is in general. Imagine you’re the owner of a bakery. You need to decide how many loaves of bread you’ll bake, how you’ll distribute them, and who gets them. Do you make a lot of bread upfront and give it all away, or do you slowly bake loaves over time so people can always get fresh bread? Tokenomics works the same way for cryptocurrencies, but instead of bread, you have coins.
Tokenomics answers important questions like:
How many coins will be created?
How will these coins be distributed?
What rewards will miners or participants receive?
How can the economy of this cryptocurrency remain sustainable?
Now that we have a sense of what tokenomics is, let’s dive into Spacemesh.
Spacemesh Tokenomics: Designed for the Long Term
Spacemesh takes a unique approach to distributing its native token, SMH. Unlike some cryptocurrencies that flood the market with tokens, Spacemesh follows a model inspired by Bitcoin—but with important tweaks that make it even more gradual and sustainable.
Why Gradual Issuance?
Instead of dumping a large number of $SMH into the ecosystem at once, Spacemesh releases new coins slowly—similar to how Bitcoin does it, but even slower.Why? This allows the economy to grow steadily, prevents inflation, and ensures there’s always some incentive for new participants to join in and mine SMH.
Here’s the fun part: Spacemesh’s issuance rate is 7.3 times more gradual than Bitcoin! To put it simply, Bitcoin cuts the number of new coins it releases every four years in a process called “halving.” But Spacemesh is much more patient. Its issuance decreases steadily with a half-life of 31 years. Think of it like a slow-release vitamin, giving the network just the right amount of “energy” over time to keep it healthy and growing.
How SMH is Distributed
The Total Supply of SMH
Spacemesh has a total supply of 2.4 billion SMH coins. These coins will be distributed slowly over hundreds of years. In fact, the last full SMH won’t be issued until 2299! Talk about thinking long term, right?
But don’t worry—you won’t have to wait until the 23rd century to get your hands on some SMH. Here’s how the distribution works.
No Premine: Starting on Equal Footing
Unlike many cryptocurrencies that give early investors or insiders a huge number of coins before the network even launches, Spacemesh takes a different approach. There is no premine.
What does this mean? On the day the Spacemesh network went live, zero coins was being handed out to early investors or developers. The only way to get SMH in the first year is to mine it yourself, just like everyone else. This helps ensure a fair start for all participants.
Vesting: Slow and Steady Wins the Race
Now, while early investors and builders won’t get coins right away, they are still rewarded over time. This is done through something called a vesting schedule.
What is Vesting?
Think of vesting like this: You’re given a big chocolate cake (or coins in this case), but you’re not allowed to eat the whole thing at once. Instead, you can only eat a slice every year for the next few years. That’s vesting! It ensures that early supporters can’t flood the market with coins all at once, which could cause prices to crash.
How Vesting Works in Spacemesh
For Spacemesh, 150 million SMH coins are set aside for early investors and core team members. These coins will be locked in smart contracts, and they’ll start to unlock after the first year of the network. Over the next three years, these coins will slowly unlock, meaning early supporters will get their share gradually rather than all at once.
Here’s the breakdown:
Year 1: No coins unlock.
Years 2-4: Coins unlock gradually, so by the end of year 4, they’ll be fully vested and tradable.
By the 10-year mark, these early coins will represent 25% of the total supply issued up to that point. But over time, as more SMH is mined by the community, this percentage will decrease to 6.25% of the total supply. You Can Track Vault Unlock Here
Adapting to Community Feedback: Tokenomics Adjustment
One of the standout features of Spacemesh is its commitment to community-driven governance. Unlike some projects where decisions are made behind closed doors, Spacemesh listens to its users and adapts based on their feedback.
Originally, Spacemesh had a steeper vesting cliff. What does that mean? It means that after the first year, a large portion of the tokens reserved for early investors and supporters would unlock all at once. This would have caused a sudden increase in the circulating supply, which raised concerns within the community.
To address this, the Spacemesh team listened to the community and smoothed out the vesting schedule. Instead of a sharp release of tokens, the coins now unlock gradually, reducing the risk of a supply shock that could destabilize the market.
This change shows Spacemesh’s commitment to fairness and maintaining a healthy ecosystem. By responding to community concerns, they ensured the network remains stable, and early supporters still get rewarded without disrupting the broader market.
Why This Matters
This adjustment highlights an important aspect of Spacemesh’s tokenomics: it’s built to evolve with the community. Instead of sticking to rigid rules, the team worked with the community to find a better solution. This kind of adaptive governance helps ensure long-term sustainability and keeps the project aligned with the interests of all participants.
A Long-Term Vision: Decentralization and Fairness
Spacemesh’s tokenomics are built with decentralization in mind. The team believes that anyone, anywhere, should be able to participate in mining without needing specialized hardware. In fact, all you need is a regular computer and some extra storage space to start earning SMH.
This makes the network more inclusive, allowing people from all over the world to join without expensive mining rigs. It’s a bit like saying: “Hey, you don’t need a fancy bakery to make great bread—just your home kitchen will do!
A Predictable Economic Model
One of the key goals of Spacemesh’s tokenomics is to create an economy that’s predictable and transparent. Since the rate at which SMH is issued is tied to an exponential decay function, the supply is always known and easy to calculate.
In other words, there are no surprises. Everyone can see how many SMH coins have been issued at any given time, and how many are left to be mined.
Why Does This Matter?
At its core, the way Spacemesh is handling its tokenomics and vesting schedule is about ensuring fairness and long-term sustainability. Instead of handing early investors a huge bag of coins upfront, Spacemesh ensures that they receive their rewards over time. This keeps the market stable and gives new participants a chance to mine and earn coins fairly.
The gradual issuance also ensures that there will always be new coins for miners to earn, even many years into the future. It’s a plan designed not just for now, but for centuries to come. That’s long-term thinking!
Conclusion: Building a Decentralized Future
Spacemesh’s approach to tokenomics and vesting is all about creating a fair and decentralized economic model that lasts for generations. By allowing anyone with a computer to mine SMH and by issuing coins gradually, Spacemesh is making sure the network remains healthy, inclusive, and sustainable.
The slow-release nature of SMH ensures that new participants always have something to mine, while the vesting schedule for early investors keeps the market balanced.
So, whether you’re a miner, developer, or investor, Spacemesh is giving you the opportunity to be part of a decentralized future. And it’s doing so with fairness, transparency, and sustainability at the heart of its economic model.
In this post, we’re going to unravel the mystery of how cryptocurrencies like Bitcoin manage to agree on who owns what, without a central authority calling the shots. We’ll start with the classic proof of work, then explore newer ideas like proof of stake, and finally dive into an exciting new approach called Space Mesh. Buckle up, because we’re about to take a journey from the digital mines of Bitcoin to the frontiers of blockchain technology!
Background and Context: The Birth of Distributed Consensus
To understand consensus mechanisms, let’s first hop in our time machine and travel back to the 1980s. No, not for the music (though that was pretty great), but because that’s when computer scientists started wrestling with a tricky problem: how do you get a bunch of computers to agree on something when some of them might be lying?
This problem, known as distributed consensus, is like trying to organize a potluck dinner where some guests might be secretly trying to sabotage the meal. How do you make sure everyone brings the right dish when you can’t trust all the RSVPs?
Fast forward to 2008, and along comes a mysterious figure named Satoshi Nakamoto with a brilliant idea: what if, instead of counting votes from people (who can easily create fake identities online), we count votes based on computer power? This was the birth of Bitcoin and its consensus mechanism: proof of work.
In-Depth Explanation: From Proof of Work to Spacemesh
Proof of Work: The Digital Gold Rush
Proof of work is like a never-ending mathematical treasure hunt. Imagine thousands of computers around the world trying to solve a really hard math problem. The first one to solve it gets to add a new “block” to the blockchain and receives some shiny new bitcoins as a reward.
Here’s how it works:
Transactions are grouped into a block.
Miners (powerful computers) compete to solve a complex mathematical puzzle.
The first miner to solve the puzzle gets to add the block to the blockchain.
Other miners verify the solution and move on to the next block.
This system is clever because it makes it extremely expensive to cheat. If you wanted to change a past transaction, you’d need to redo all the work from that point forward, which would require more computing power than the entire honest network combined.
However, proof of work has some drawbacks:
It’s energy-hungry. Bitcoin mining now uses as much electricity as a medium-sized country!
It can lead to unfair reward distribution, with big mining operations getting a head start.
It limits transaction throughput because only one miner can add a block at a time.
Proof of Stake: The Digital Stockholders Meeting
Enter proof of stake, the eco-friendly cousin of proof of work. Instead of a computational race, proof of stake is more like a lottery where your chances of winning are proportional to how many coins you hold.
Here’s the gist:
Validators “stake” their coins as collateral.
The network randomly selects a validator to create the next block.
If the validator acts honestly, they earn transaction fees. If they cheat, they lose their stake.
This system uses far less energy and allows for faster transactions. However, it’s not without its critics. Some argue it could lead to centralization, with the richest validators accumulating more power over time.
Spacemesh: The New Kid on the Block(chain)
Now, let’s talk about an exciting new approach: Spacemesh. Developed by a team of researchers, Spacemesh aims to combine the best of both worlds while addressing their shortcomings.
Spacemesh is based on a concept called proof of space-time. Instead of using computational power or staked coins, it uses storage space over time. Here’s how it works:
Participants allocate space on their hard drives to the network.
The network selects participants to create blocks in each “layer” (think of layers as time periods).
Selected participants create blocks and include transactions.
The network uses a combination of voting and randomness to agree on which blocks are valid.
What makes Space Mesh special? Let’s break it down:
1. Race-Free Consensus
Remember how in Bitcoin, miners race to solve a puzzle? This can lead to wasted effort and unfair advantages. Space Mesh eliminates this race condition. If you’re selected to create a block, you can do so without worrying about someone beating you to it.
2. Increased Throughput
Because multiple blocks can be created in each layer, Space Mesh can potentially handle many more transactions per second than traditional blockchain systems.
3. Fair Reward Distribution
In Spacemesh, your chances of being selected to create a block are directly proportional to the amount of space you contribute. This makes it harder for large operators to gain unfair advantages.
4. Environmental Friendliness
While not as energy-efficient as proof of stake, Spacemesh uses far less energy than proof of work systems. Storing data is much cheaper and more environmentally friendly than constantly running computations.
5. True Decentralization
Unlike proof of stake, where the rich can potentially accumulate more power, Space Mesh allows anyone with spare hard drive space to participate meaningfully in the network.
6. Formal Security Proofs
The creators of Spacemesh have put a lot of effort into formally proving the security of their system. This means we can have more confidence in its resistance to attacks.
The Tortoise and the Hare: Spacemesh’s Dual Protocol Approach
Spacemesh uses two protocols working together: the Tortoise and the Hare. (And no, we’re not talking about Aesop’s fables here!)
The Tortoise protocol is like the steady, reliable backbone of the system. It slowly but surely confirms blocks and transactions, making them irreversible over time. It does this by having blocks vote on the validity of previous blocks.
The Hare protocol, on the other hand, is the quick decision-maker. It helps honest participants agree on recent blocks quickly, so you don’t have to wait for the Tortoise to slowly confirm everything.
Together, these protocols provide both fast initial confirmation and long-term security. It’s like having your cake and eating it too!
Real-World Applications and Implications
So why should you care about all this blockchain mumbo-jumbo? Well, consensus mechanisms are the beating heart of cryptocurrencies and blockchain technology. They determine how fast transactions can be processed, how much energy is used, and who gets to participate in the network.
Imagine a world where:
International money transfers happen in min, not days, and cost cents instead of dollars.
Voting systems are transparent and tamper-proof, ensuring fair elections.
Supply chains are fully traceable, reducing fraud and improving safety.
These are just a few of the potential applications of blockchain technology. The consensus mechanism used can make the difference between a slow, energy-hungry system and a fast, efficient one that can handle real-world demands.
Spacemesh, with its innovative approach, could potentially unlock new use cases for blockchain technology. Its increased throughput could make it suitable for high-frequency applications like micropayments or real-time asset trading. Its fairness and accessibility could lead to more decentralized networks, reducing the risk of manipulation by powerful entities.
Conclusion
We’ve come a long way from the early days of Bitcoin’s proof of work. Through proof of stake and now to innovative approaches like Space Mesh, we’re seeing the evolution of consensus mechanisms in real-time.
These aren’t just abstract computer science concepts. They’re the foundations upon which the next generation of financial systems, supply chains, and decentralized applications will be built. As we continue to grapple with issues of trust, transparency, and fairness in our digital world, these consensus mechanisms will play an increasingly important role.
So the next time you hear about a new cryptocurrency or blockchain project, take a moment to look under the hood at its consensus mechanism. It might just give you a glimpse into the future of how we agree on things in our increasingly digital world.
Remember, in the world of blockchain, consensus isn’t just about agreement – it’s about building trust in a trustless world. And that’s something we can all agree is pretty amazing.
Further Reading
If you’re hungry for more blockchain knowledge, here are some resources to continue your journey:
“Mastering Bitcoin” by Andreas M. Antonopoulos – A deep dive into Bitcoin and proof of work.
