Spacemesh is a cryptocurrency and payments-focused smart contract platform operating on layered directed acyclic graph (DAG) infrastructure and utilizing a Proof-of-Spacetime (PoST) consensus algorithm. Through both attributes, the project seeks enhanced efficiency leading to lower transaction costs and network-wide egalitarianism resulting from low barriers of entry to mining, relative to Ethereum and other peers. Spacemesh is made unique by its combination of a DAG and PoST, as few projects have utilized either—IOTA and Filecoin are the only notable instantiations of DAGs and PoST, respectively—and none have employed both. The team behind Spacemesh is based in Tel Aviv, Israel and includes Tal Moran, professor of computer science at IDC Herzliya, and Iddo Bentov, professor of computer science at Cornell University.
In a proverbial race to address the blockchain trilemma, Spacemesh separates itself from competitors through its novel combination of two relatively unutilized variants of standard blockchain mechanisms. First, block production rights are determined by a Proof-of-Spacetime (PoST) consensus algorithm, which is, in many ways, an egalitarianism-driven hybrid of PoW and PoS; that is, PoST strives for a more equitable distribution of mining rights by conditioning them on access to low-cost, widely available, and often already-held data storage resources. At a high level, the consensus process begins when a prospective ‘miner’ dedicates a portion of their personal computer’s storage space to the protocol, on which initiatory Proof-of-Work activities are conducted in order to create a cryptographic data structure. Following this one-time procedure, Spacemesh consensus procedures run in the background on the given device, allowing miners to use PoST to prove exclusivity of space allocation space over a period of time elapsed. Such dedication of space is quite analogous to staking in various PoS environments, as the miner may not use the space for any other purpose and is, in turn, granted pro rata chances of creating a block and earning block rewards.
Spacemesh, however, is not a decentralized data storage network like Filecoin; users do not rent available storage to other users, but rather confer it to the network itself for rights to participate in block production and receive block rewards, directly comparable to the function of hashing power in the Bitcoin network. Developers theorize that such an exchange will prove more egalitarian than traditional PoW protocols, as the mining procedures are optimized to perform best on local hard drives, economically disincentivizing the production or utilization of expensive ASICs or other specialized hardware. Further, to obtain a personal computer for the sole purpose of using its storage to mine on Spacemesh is likely to result in a short-to-mid-term net loss for the miner, making use of storage on one’s existing personal computer—effectively, a sunk cost—the only reliably profitable means of mining. By the same logic, PoST aims to be more equitable than a PoS system, as the former maintains an exponentially lower point at which ‘buying’ mining power becomes economically irrational. Generally, derivation of mining power from individuals’ existing resources is intended to result in a greater number, or ‘long-tail,’ of PC-based miners than exist in PoW or PoS networks, mitigating centralization by large entities who do purchase mass storage for the purpose of Spacemesh mining. Ultimately, PoST aims to achieve egalitarianism through the negation of mining power’s status a function of financial means, either through the purchase of cryptoassets or specialized hardware.
Following block producer selection, a consensus procedure commences. Notably, Spacemesh is not secured by a blockchain but rather by another variant of distributed ledger technology: a directed acyclic graph. Essentially, DAGs are two-dimensional, web-like ledgers in which multiple interconnected chains exist, and blocks may reference adjacent blocks in their own ‘layer’ as well as any blocks in the preceding layer; this existence of parallel chains theoretically reduces work wasted on ‘orphan chains,’ contributing to the ledger’s immutability in the process. As such, multiple blocks are produced by multiple producers, chose, lottery-style according to aforementioned PoST protocol, for each ‘layer.’ At a high level, initial consensus is achieved through an off-chain, BFT agreement algorithm, while final consensus is achieved by each new block voting on all previous blocks’ validity, with overall network acknowledgment of a block determined by an ongoing, simple majority vote. That is, old blocks will continue to be voted on by each new block until their talley, negative or positive, reaches a point at which point new blocks may choose to forgo voting on them, considering them to be already immutable.
Spacemesh’s governance model is highly centralized: the network and ecosystem are entirely overseen by the Spacemesh Foundation, which is responsible for any code and/or policy upgrades, and developers explicitly state their intent to not implement any permanent form of on-chain governance in the future. However, annual replacements for one outgoing foundation member are decided by community vote, as are certain governance matters permitted by the Foundation to be decided in this manner.
Development of Spacemesh began in the first half of 2018, initially funded by a $3M seed round. Further financing was obtained later that year via a $15M Series A round led by Polychain Capital; the year concluded with the release of the Proof-of-Elapsed-Time whitepaper, from which the Proof-of-Spacetime mechanism later evolved. A local testnet, Spacemesh 0.1, was launched in July 2019 and followed shortly thereafter by the release of the project’s protocol whitepaper. Spacemesh remains in its testnet phase, with a mainnet, Spacemesh 1.0, set to go live in the first half of 2020.
The Spacemesh Coin (SMC) is the platform’s native, fungible and freely-tradable cryptoasset.
Many of SMC’s functions resemble those of Ethereum’s Ether, including its use as compensation for smart contract execution according to a ‘gas’ model. However, unlike Ethereum, Spacemesh places a greater emphasis on its token’s ability to function as a medium of exchange (for non-network-related payments) than purely as a utility token (compensation for distributed computation, a la Ether). There exists little-to-no publicly-available information regarding the Spacemesh Coin’s supply, monetary policy, or general distribution; it is known, however, that there is not currently any plans to impose a limit on the number of Spacemesh Coins outstanding. No public token sale was conducted, as the team chose to finance development through equity fundraising instead.