Spacemesh Investment Research Report: An explorer in the post-POW era, a new public chain using space-time proof

Project Description

Spacemesh is a decentralized consensus protocol based on blockchain technology. It aims to achieve a highly decentralized, high throughput and high security blockchain network. The Spacemesh protocol uses a resource called “space time” as its foundation, by building a mesh structure to store and verify transactions. At its core is a new mathematically proven consensus protocol that replaces Proof-of-Work (PoW) with Proof-of-Spacetime (PoST) and chains with a highly incentive-compatible grid. The protocol allows for a high degree of distribution, allows frequent rewards for independent miners, and has high throughput. By publishing multiple blocks in parallel to improve transaction processing speed, a scalable, secure and fair blockchain network is built to provide users with Efficient, decentralized trading and application platform.

author:

Elma Ruan, a senior investment researcher at WJB, has a double master’s degree in marketing/finance from an Ivy League school, 5 years of experience in WEB3, and is good at DeFi, NFT and other tracks. Before entering the encryption industry, he worked as an investment manager in a large securities company .

1. Research points

1.1 Core investment logic

The original intention of blockchain is to establish a decentralized currency system. Although Ethereum has successfully transitioned from Proof of Work (PoW) to Proof of Stake (PoS), turning PoS into a mainstream consensus mechanism is considered a more environmentally friendly way to prove stake. However, mining under the PoS mechanism requires miners to invest a lot of capital to provide economic incentives to become honest network participants who abide by the rules of the protocol, but this actually excludes the possibility of home users as potential miners. Instead, this drives the network to become more reliant on a small number of “whale” nodes that slowly but steadily control the network, resulting in a monopoly of computing power. This also means that there is only one class of miners in the network - rich miners. On the other hand, the previous mainstream PoW mining method required a lot of computing power, which led to mining becoming more and more concentrated in a few mines with the necessary computing power, and a lot of energy wasted at the same time.

Against this background, Spacemesh’s team has launched a sustainable and environmentally friendly alternative - PoST. At the same time, Spacemesh combines the protocol with a physical scarce resource in the real world - storage space. This feature allows Spacemesh to overcome new problems that arise when using PoS. By using storage space, anyone can participate at any time without the need to accumulate large capital from other protocol participants, as storage space is widely available to anyone with a home PC. This ability to join at any time greatly reduces the chance of collusion and censorship, and also makes the economy more fair, and the distribution of tokens is not limited to large mining farms, but covers all participants.

Therefore, Spacemesh is a leading blockchain operating system designed to solve the centralization trend and scalability bottlenecks in the current blockchain, providing support for smart contract global computers and cryptocurrencies without permission settings. Technically, it uses Proof of Space-Time (PoST) to replace traditional Proof of Work (PoW) to achieve efficient energy utilization and environmental protection, and at the same time, through the chain of mesh topology and the incentive compatibility protocol of layered Directed Acyclic Graph (DAG) , ensuring decentralized security and a highly scalable network. In addition, the Spacemesh protocol also lowers the threshold for user participation, allowing the use of unused hard disk storage space to contribute to the security of the network, and promoting extensive community participation. To sum up, Spacemesh brings an innovative solution to the blockchain field, pushing the entire industry towards a more sustainable and environmentally friendly direction.

There are some potential challenges with Spacemesh mining. First of all, the current version does not support multiple hard disks and multiple folders. Using multiple hard disks requires the setting of mounting multiple disks on a single machine and waiting for the verification to complete during the mining process, which may lead to low efficiency. Secondly, with the increase of mining participants, the computing power may increase rapidly in the future, which will lead to an increase in mining difficulty. There may be a situation where the first mine is faster but the follow-up mining output is slower. Finally, the Spacemesh protocol issues proofs to miners within deterministic intervals, which may lead to increased communication and storage costs. Although the protocol has tried to solve this problem, the communication overhead still needs to be realistically controlled.

Current observations show that the Proof of Space-Time (PoST) consensus mechanism is generally regarded as a very fair mining method. However, for the Spacemesh project, the token distribution plan scheduled for 4 pm on August 11 has not yet been implemented. In this mining-centric project, if the distribution of tokens is not transparent or cannot be cashed out, it may cause a large loss of users. Therefore, for this project, investors must continue to pay attention, carefully review its progress, and make investment decisions based on more consideration.

1.2 Valuation

According to the disclosure on the official website, ecological construction participants and investors will share 6.25% of the total token supply. Taking into account the current total financing amount of US$22.5 million, the current valuation of the project is about US$360 million based on this ratio.

2. Basic information of the project

2.1 Project business scope

The main business of the Spacemesh project is concentrated in fields related to mining. Its core goal is to use the Proof of Space-Time (PoST) consensus mechanism to integrate the computing resources of home desktop computer users into a decentralized network to achieve resource integration. The network enables mining activities through efficient use of storage space and time. Mining plays an important role in the Spacemesh project. It is not only a key means of economic incentives, but also provides security guarantees for the network. Through the PoST consensus mechanism, ordinary home users can participate in mining more conveniently and obtain corresponding token rewards. The realization of this mining process makes full use of the characteristics of storage space and time, making the whole process more friendly and easy for users to participate.

2.2 Past Development and Roadmap

Time event

2018-8-27 Release requirements and design draft of Spacemesh POET service

2018-9-03 Announced new financing and partnerships with Metastable, Polychain, Coinbase, 1kx, Dekrypt, Slow Ventures and other companies.

2018-10-01 Production work on the first version of Spacemesh Wallet completed, including detailed use cases and user experience

2018-11-19 Preliminary design of Spacemesh global state and transaction processor, the primary goal is to allow users to transfer tokens to each other on the network.

2018-12-1 Implemented Poet core APlgRPC client and server

2019-01-01 Release the HARE protocol

2018-02-11 Implemented a basic CLI wallet; added the definition and flowchart of the HARE protocol

2019-02-17 New Open Source Repository for Spacemesh Apps Live

2019-03-01 Integrates the first implemented reward system based on a token economy plan without inflation rules

2019-03-18 Spacemesh App - allows to check local node status without unlocking wallet

2019-04-01 Spacemesh CORE (full node + POET service) activation transaction process

2019-04-15 VRF Qualified for HARE Protocol Qualification Integration

2019-05-01 Updated POET and POST to more efficient Merkle trees

2019-05-13 Implementation of POST protocol

2019-06-01 Implemented XDR serialization for TXapi calls; changed default names for wallets and accounts

2019-07-08 Spacemesh local testnet for developers, supports OSX and Linux

2019-07-15 Spacemesh application (wallet + miner) releases the final visual design for the first time

2019-09-09 GO-Spacemesh client. Added event infrastructure and event collector sidecar for future statistics and block grid analysis; focus on issues stabilizing the Spacemesh Virtual Machine (SVM) code base

2019-10-01 Spacemesh enters China

2019-10-28 Names of tokens, nodes and other key Spacemesh components decided

2019-12-09 Refactored SVM codebase

2020-02-01 Spacemesh testnet application runs on Windows, OSX and Linux

2020-02-15 Start developing SVM wallet application

2020-03-01 Successful soft launch of Tweedledee - the first Spacemesh open testnet

2020-04-01 svm-gas box integrated into SVM runtime; advanced document planning SVM integrated into goSpacemesh

2020-05-01 Major update to the storage layer of SVM 0.2 (Spacemesh virtual machine based on design review meeting).

2020-05-15 Managed nodes moved to new, more efficient infrastructure, and new network launched (id 115)

2020-06-15 Released another version of the Spacemesh app; launched a new mini-product website with information about the Spacemesh project roadmap Spacemesh coin units, visual design, some additional specs, and more.

2020-07-01 Started development of Ledger application for Spacemesh token, providing token owners with enhanced

2020-08-01 SpacemeshCLIWallet and app will add Ledger support; initial mini-spec for wallet-only mode finalized; finalize initial specification for Spacemesh binary transaction format to be implemented across platform

2020-09-01 Completed the merge of the API code

2020-09-15 Finished building Spacemesh Network’s desktop and mobile web dashboards; published Spacemesh Web Apps and Web Services mini-specs

2020-11-01 Added an automated build system for all platforms via githubactions

2020-11-15 SVM added tracking for manually allocated resources. This added functionality should make debugging/avoiding memory leaks easier.

2020-12-01 Preliminary study on transaction structure and processing completed

2021-01-01 Released Spacemesh 0.2 transaction format and verification algorithm

2021-01-15 Simplified SVM transaction and receipt encoding

2021-02-01 Created a new project board that can be used to track the pipeline

2021-02-15 Refactored the Runtime component

2021-03-01 A new platform documentation website was launched, containing the Spacemesh protocol documentation, fully searchable and version controlled.

2021-05-01 Major upgrade to sync code; completed redesign of Spacemesh multisig vault screen for Spacemesh version 0.3; improved node error message display in upcoming network screen.

2021-05-15 The GPU-POST library works with Vulkan compute GPUs such as AMD and Apple M1 chips without requiring users to install the large Vulkan SDK.

2021-06-01 Investigate a “uniform block” design that overcomes many of the challenges associated with the coordination problem of transaction selection in the grid.

2021-07-05 Complete account unified SMIP, modeled on Ethereum’s EIP-2938, with many key changes to support Spacemesh protocol and data structure.

2021-09-23 TweedleDev 205 is online and is currently undergoing internal testing.

2021-12-06 Released Smapp 0.2beta0

2022-02-16 Implemented basic auto-update mechanism

2022-05-02 Completed the implementation of Mempool’s ordering and conservative state tracking of pending transactions; implemented P2P layer support for DNS entry points

2022-07-03 Completed the design of the Hare certification round and started implementation; conducted research on SVM and account/template/transaction models; the latest version of Smapp entered the final testing stage; developed Genesis product plans, including SMREPL updates, hardware wallets and Vault with MultiSig; developing new APIs for meshing state and reward estimation, to be further updated to use the latest transaction formats.

2022-08-17 SMapp released version 0.2.6. On the protocol side, continue to improve the resilience of the PoET server; on the Smapp side, released multiple versions, including major changes and fixes; completed the first phase of the Hare simulation, optimized the HARE protocol, and achieved major improvements in the parameterization of the mainnet Progress.

2023-03-05 The hash function was changed from SHA256 to BLAKE3 to improve processing speed; in terms of protocol, PoST development and HARE protocol optimization were carried out, including rewriting Rust to improve efficiency; more fine-grained in Go-Spacemesh Layer processing; Smapp implements cross-platform accessibility improvements; new test network released; research team develops a vision for Spacemesh 2.0 and discusses the remaining important topics of Spacemesh 1.0.

2023-04-17 Updates: 1. Product and roadmap 2. Release schedule 3. Testnet progress 4. Cultural vision

2023-06-20 Testnet-05 goes live; hire a third-party security research firm to help audit the Spacemesh code and conduct security testing before release.

2023-07-14 Spacemesh is officially launched and the main network is launched

2023-08-04 In terms of protocol, migrating to libp2p with a distributed hash table reduces the difficulty of PoST proof on the main network; after the launch of the Spacemesh main network, the difficulty of proof will be raised again; the node function is realized on Spacemesh Improvements, including event streaming and Smapp display improvements; made about phased PoET (PoET server: This is a centralized component that is responsible for verifying the waiting time proofs submitted by participants and broadcasting them to the entire network ) and commissioned research on K2pow and distributed verification; made progress in adding a full virtual machine to Spacemesh.

Future Vision:

1. Mobile devices: The project party is committed to realizing the operation of Spacemesh on various devices, including mobile phones, and mining at home in a profitable and sustainable manner. The project’s goal is to make Spacemesh even work on smartphones, and while it will take some time to get there, there’s no fundamental hurdle.

2. Comprehensive virtual machine: The project party pursues to let Spacemesh have a comprehensive virtual machine, not limited to a limited virtual machine like Bitcoin, nor limited to EVM. The project party plans to not only start with a small number of hard-coded “precompiled” smart contracts in the initial version, but also gradually expand to achieve first-class smart contract virtual machine functions.

2.3 Team situation

2.3.1 Overall situation

Spacemesh is an Israel-based company that aims to build a block mesh operating system that improves blockchain technology through a new consensus protocol - proof of time and space POST, PoST can run on any desktop computer, the goal is to resist expensive ASIC mines machine. The Spacemesh team is composed of professionals from many different backgrounds, and currently has 27 members on LinkedIn, covering fields such as computer scientists, cryptographers, mathematicians, engineers, and designers.

2.3.2 Founder

Co-founder of Aviv Eyal

Focus on building free, open-source blockchain operating systems and fair cryptocurrencies. As an entrepreneur and technologist, he is committed to innovative, easy-to-use, and consumer-grade digital products and services with a great user experience. He has extensive experience building high-quality full-stack systems and launching consumer media startups.

Co-Founder and CEO, Tomer Afek

Former co-founder and CMO of SHOWBOX, successfully transformed brands and publishers into digital video giants. Additionally, he has extensive experience in online advertising and investing, serving as CEO of ConvertMedia.

2.3.3 Core members

Raphael Ouzan Board Member & Advisor

Raphael Ouzan is the founder and CEO of A.Team, a team building platform. He also co-founded BlockNation with Apollo CEO Mark Rowan to invest in web3. In addition, Raphael Ouzan is an honorary officer in the S-technical branch of the Israel Defense Forces and was named an outstanding talent under the age of 30 by Forbes.

Yaron Wittenstein Lead Development Engineer

He holds a bachelor’s degree in computer science from the Technion-Israel Institute of Technology, where he was responsible for building a decentralized programmable cryptocurrency based on proof-of-spacetime, and has held the positions of software architect and back-end lead in the past work experience. Additionally, he worked as a software developer in the Israeli intelligence forces.

2.4 Financing

Spacemesh has closed over 2 rounds of funding, raising a total of $22.5M from leading cryptocurrency investors including Metastable, Coinbase, Dekrypt, Slow Ventures, Polychain, Paradigm, Dragonfly, Electric Capital, Greenfield, Arrington XRP Capital , BRM Capital, gumi Cryptos Capital (gcc) and 1KX and other institutions. The latest funding round took place on December 27, 2021, with Leland Ventures and Kosmos Ventures being the latest investors.

3. Business Analysis

3.1 Service object

1. Home desktop computer users: The Spacemesh project mainly serves home desktop computer users, especially those who have sufficient system resources and Internet connections. The original intention of the project is to allow ordinary home users to participate in the mining and consensus process of the blockchain, so as to realize the decentralization and security of the network. Through its Proof of Space-Time (PoST) consensus mechanism, Spacemesh allows ordinary users to participate in mining by contributing storage space and time resources without requiring special hardware equipment.

2. Large mining farms and large mining machine owners: Although the project focuses on ordinary home users, mining farms and large mining machine owners can also participate in Spacemesh. The mining farm can integrate multiple computers and hard disk devices to improve mining efficiency and profitability. They can take advantage of large-scale computing and storage resources to enhance the security and stability of the network.

3. Distributed system developers: Those developers who are interested in blockchain and distributed system development can participate in the development and innovation of the Spacemesh project and contribute to the development of its ecosystem.

3.2 Business Classification

Spacemesh’s business can be divided into the following main categories:

1. Distributed consensus protocol: The core business of Spacemesh is a distributed consensus protocol based on the Proof of Space-Time (PoST) consensus mechanism. The protocol aims to integrate the computing resources of home desktop computer users into a decentralized network, achieve network consensus by storing and verifying space resources, and provide a high degree of security and decentralization for the blockchain network.

2. Mining (Smeshing): The mining process in the Spacemesh protocol is called “Smeshing”, which is a process in which participants provide computing resources for the network to support consensus and obtain token rewards. Home desktop computer users can participate in Smeshing and become nodes of the network, thus providing security and consensus support for the network.

3. Ecological construction: Spacemesh focuses on ecological construction and cooperates with developers, communities, and ecological partners to promote more applications and tools to run on its network. Ecosystem builders can receive token rewards to support their contributions.

3.3 Business Details

1. PoST (Proof of Space-Time)

Definition: The resource used by the Spacemesh protocol is space-time. The project party turns spacetime into a publicly verifiable resource by letting miners publish Proofs of Spacetime (PoSTs). At a high level, PoST is a proof that a node has allocated a certain amount of space S for a given period of time T to participate in the mining process. The spatio-temporal resource of a node is calculated as S · T. Roughly speaking, PoST consists of two phases: an initialization phase (executed once), during which miners “commit” data to fill space S, and an execution phase (executed repeatedly), during which miners prove that they are still storing data. The temporal component of the spatiotemporal resource is the elapsed time between successive proofs—if the interval between initialization (or the previous execution stage) and the latest execution stage is T, it proves that the miner consumed S T spatiotemporal resources. Unfortunately, PoST does not actually prove that the miner stored data between two proofs. It proves a slightly weaker statement: “either the miner stored the data, or the miner reconstructed the data”. This is unavoidable as miners can always rerun the initialization process to recreate the data. Projects handle this by explicitly parameterizing the initialization cost in PoST. The initialization cost is important because its relationship to the storage cost determines whether data is stored or recomputed in the interval between two proofs. If the initialization cost is lower than the cost of storing the data, rational users will prefer recomputation - in which case the protocol is still secure, but essentially becomes a proof-of-work based protocol. Since the actual cost of storage and CPU in the real world can fluctuate, project parties must be able to adjust initialization costs to ensure that storing data remains a rational choice. In addition, in the Spacemesh protocol, the project party solves the problem of maintaining a fixed communication complexity by increasing the interval between successive proofs as the number of miners increases. This means that the cost of storing data between successive proofs grows linearly with the number of miners. Even if CPU and storage costs stay the same, eventually initialization costs will need to be adjusted to accommodate this increase.

Also, while the spatial component of PoST is publicly verifiable — it only relies on the content of messages sent in the PoST protocol — the temporal component is not: it requires verifiers to measure the time elapsed between PoST executions. The project party achieves this by converting PoST into a completely “non-interactive”, publicly verifiable primitive (NIPoST) by adding a Proof of Elapsed Time (PoET) in the construction. Intuitively, miners will use PoET to prove in a publicly verifiable way that an interval of length T has elapsed between PoST executions. In order to verify that miners have used S T space-time resources, it is only necessary to check whether PoST is S space and PoET is T time. Since the project has no direct way of proving that time has elapsed, the project uses sequential work as a proxy for elapsed time (similar to a sequential iterative cryptographic hash). The basic idea is that it is extremely difficult to make iterative hash sequences faster than the fastest mass-produced commercial CPUs, especially if the project party uses such hashes (such as SHA256), mainstream CPU manufacturers have invested considerable resources to speed up the hash computation. (This is in stark contrast to increasing the overall job throughput - which can be done through parallelization at a cost that is only linear in the required throughput). Therefore, in this article, project parties use PoET and PoSW (Proof of Sequential Work) interchangeably.

Spacemesh is based on Meshcash’s “Tortoise and Hare” framework. However, there are several major design choices that make Spacemesh fundamentally different from Meshcash:

• PoW (Proof of Work) “binds” consumed CPU work to specific tasks. Existing PoW-based protocols, including Meshcash, take full advantage of this property; it ensures that adversaries cannot reuse work already done to create an “alternative history”. In contrast, PoST (Proof of Space-Time) does not tie the already consumed space-time resources to the challenge (because the project side hopes to be able to reuse the stored data for multiple challenges to reduce energy costs). This means that adversaries can create “syntactically valid” blocks that reuse “old” time-space, and the protocol must be able to handle this situation.

• The time to solve PoW obeys random distribution. This feature is critical to securely implementing random sampling of miners in Meshcash (and other PoW-based protocols). Instead, Spacemesh replaces a lottery with certain eligibility criteria: every miner who consumes enough space-time resources is eligible to generate a block (with some randomness as to when a block is generated). Because eligibility is not random, Spacemesh is more effective than other protocols at preventing attrition attacks. A wear attack is an adversary attempting to increase the probability of being selected by performing additional work that does not conform to the protocol. "

In general, the Spacemesh protocol uses Proofs of Spacetime (PoSTs) to convert space-time resources into verifiable resources, and uses Proof of Elapsed Time (PoET) to construct non-interactive PoST, the difference from the Meshcash framework, and how to determine Miner eligibility can be determined decisively to improve the security and sustainability of the protocol.

2. Process:

To ensure that the Spacemesh network is safe from attackers taking over, the system employs a mechanism based on smashers allocating space over a period of time. To be eligible to participate and receive corresponding rewards, individuals must prove that they actually have the required storage capacity for a period of time.

Spacemesh smeshers must issue activation transactions every two epochs to prove their eligibility to participate in the next epoch. The activation transaction contains cryptographic proof that the author has access to the allocated storage space before and after a verified time span.

When smashers have finished initializing their allocated storage, they generate an initial PoST (Proof of Space). This only proves that the author accessed the PoST data at an indeterminate point in time, which was then time verified by PoET (Proof of Elapsed Time).

The PoET construction has two main parts: the member tree, which shows that a given smashers can access its PoST data before the PoET work, and the sequential proof of work, which shows that a certain amount of sequential work has been performed - Spacemesh uses this part as an approximation of time.

Once a proof of sequential work is done, smashers can use it as a task for another PoST, forming a chain that proves they accessed the data both before and after the sequential work.

ATX (Activation Transaction), which is used to activate the ID of miners and prove that they have a certain amount of storage space and time resources, so that they are eligible to participate in mining and other network services, ATX plays a very important role in the Spacemesh protocol. PoET is a consensus algorithm in the Spacemesh protocol, which is used to verify that participants have waited for a certain period of time. The waiting time of PoET proof is used to calculate the voting weight of ATX, so the longer the waiting time, the higher the voting weight.

The following simplified diagram illustrates the structure of ATX:

3. Smeshing Loop:

In order to avoid generating, transmitting and storing two PoST proofs in each ATX (activation transaction), all PoET registrants except the first will include in their ATX a reference to their previous ATX. Since the previous ATX contained a PoST and was included in the PoET membership tree, smeshers (i.e. miners) were able to prove that they had access to the stored data before the PoET work started.

There needs to be a time gap in order to ensure that smeshers have enough time to receive PoET, generate a PoST (which can take several hours), generate an ATX with both proofs, and register for the next PoET round. There is a 12 hour “Cycle Gap” between PoET rounds, which should be enough for most smashers to get through the process. To prevent smeshers from allocating more storage than they can generate a PoST in 12 hours, the SMApp (Spacemesh application) runs benchmarks and tells users what their maximum recommended allocation is during the smeshing setup.

KEY POINTS TO RECEIVE THE BONUS

Spacemesh rewards (consisting of transaction fees + block subsidy) are distributed to smashers (i.e. miners) who are able to provide Hare with eligible block proposals in time to be included in the final set to generate blocks. These rewards are distributed based on the relative weight of each proposal derived from the weight of ATX for previously released smashers.

A qualifying ATX consists of two PoST proofs (or a reference to a previous ATX and a single PoST proof), combined by PoET proofs, which together prove that smashers have access to data before and after a certain amount of time (two weeks) has elapsed.

The diagram below details all the required steps from initialization to earning rewards:

4. HARE Agreement

The HARE protocol is a consensus protocol used in the Spacemesh framework, designed to achieve fast and secure consensus in a network of participants. The following is a detailed explanation of its features and functions:

1. Multiple Proposers: Unlike earlier consensus protocols, the HARE protocol employs multiple proposers rather than designated proposers because all parties in the Spacemesh framework need to agree on a set of concurrent blocks.

2. Voting round function: The HARE protocol uses a verifiable random function (VRF) to select proposers in each round. This is a standard way to ensure a fair and random selection process.

3. Gossip Network: The HARE protocol runs on the Gossip Network, which is a communication network where participants exchange information through random connections. However, the results of the agreement are only recorded in the blockchain in the form of miners’ votes, and the execution of the agreement itself does not need to be stored.

4. Tortoise protocol: The HARE protocol is designed to ensure security, but if the underlying assumptions encounter problems, it may be at risk. To deal with this problem, the protocol uses a modified version of the Tortoise protocol. This modification allows the protocol to reach consensus from any initial state by randomizing the votes of honest parties with small voting margins but with coordination.

5. Tunable parameters: The HARE protocol has several tunable parameters that can be set by the protocol designer. These parameters include layer interval, HARE distance, epoch length, average layer width, bad beacon delay distance, NIPoST initialization difficulty, and confidence threshold. These parameters can be tuned to optimize the performance of the protocol and adapt to different network conditions.

6. Syntactic correctness: In order for a block to be considered syntactically correct in a certain layer, it must satisfy certain conditions. These conditions include having an active node ID, being eligible to produce blocks at that layer, having all blocks in its visible grid received and syntactically correct, and all transactions contained in the block being syntactically correct.

7. Preferred Modes and Implicit Voting: The HARE protocol ensures that preferred modes end up in older layers, which are the voting modes that get the majority of subsequent block votes. New honest blocks treat votes from old blocks in the same way as the most recent preferred mode, which allows the implicit votes of new blocks to be calculated for old blocks using the same preferred mode.

In summary, the HARE protocol combines multiple proposers, VRF, Gossip Network, and Tortoise protocol to achieve fast and secure consensus in the Spacemesh framework. It incorporates self-healing mechanisms and adjustable parameters to adapt to different network conditions and ensure block validity.

5. Spacemesh App Requirements

 Minimum requirements to run a node:

CPU: Intel or AMD x86-64 or 64-bit ARM, including Apple Silicon (but not Raspberry Pi), with 1GiB or more of memory.

Operating System: Windows 10/11, MacOS, Ubuntu 22.04+ or Fedora 36+.

Disk: Should have 50GiB of free disk space.

Speed: An always-on, unmetered Internet connection with a download speed of at least 5 Mbps and an upload speed of at least 1 Mbps.

 Additional requirements for smashing (in addition to running a node):

To support more than the minimum smeshing space allocation, or to allow uninterrupted use of the computer while the node is running, the following is recommended:

A hard drive capable of sustained reads at a sequential read speed of at least 100MB/s.

Multi-core CPUs produced within the last 8 years.

6. Costs and Warnings

Running a node requires a computer that can run continuously 24/7, which will incur energy bills that match the cost of electricity in the user’s area.

• EXTRA EQUIPMENT

If a user’s computer meets the minimum requirements, there is no need to purchase additional equipment to run a Spacemesh full node. In fact, the project side discourages such purchases because there is no guarantee that users will get their investment back. Spacemesh works best with free hard drive space that the user already has.

• renew

Users can expect semi-automatic or fully automatic updates. Please update to the latest version when notified.

• NETWORK HEALTH

Users can check the health status of the network by consulting the network status page of the project party.

• POSSIBLE QUESTIONS

Bandwidth Limitation: In the early stages, Spacemesh may require more network bandwidth than expected, a stable network connection and 10Mbps bandwidth is enough to be an active participant in the network.

Internet Service Providers (ISPs): Some Internet Service Providers are not very friendly to peer-to-peer (p2p) traffic, users who encounter such problems use the “disable-reuseport” option in the configuration.

3.4 Industry Space and Potential

3.4.1 Classification

Blockchain consensus refers to the process of achieving consensus on the state and order of transactions in a distributed network. Different blockchain projects use different consensus algorithms to achieve network security and credibility. Here are a few common types of blockchain consensus:

1. Proof of Work (PoW): PoW is the consensus mechanism used by early blockchain projects such as Bitcoin. In PoW, miners need to solve a difficult problem and create new blocks by constantly trying to find the correct solution. This requires a lot of computing power, and whoever solves the problem first will get the right to create a block and receive corresponding rewards.

2. Proof of Stake (PoS): PoS is a consensus mechanism that replaces PoW. In PoS, those who hold tokens can participate in the creation and confirmation of blocks as “validators”. The chance of a validator being selected is proportional to the amount of tokens they hold, meaning the more tokens the more likely they are to be selected.

3. Delegated Proof of Stake (DPoS): DPoS is a variant of PoS, which participates in verification by electing some nodes as “representatives”. Representative nodes are responsible for generating blocks and confirming transactions, and other token holders can vote for representatives. The DPoS mechanism can improve transaction speed and scalability, but it may also cause centralization problems.

4. Proof of Authority (PoA): PoA is a centralized consensus mechanism in which specific authoritative nodes verify transactions and create blocks. This mechanism is suitable for some private chains and alliance chains, but it may lack decentralization and security in public chains.

5. Proof of Space-Time (PoST): PoST is a consensus mechanism based on storage space and time, as used in the Spacemesh project. Instead of computing, participants prove their participation in the network by storing data. This mechanism is more environmentally friendly and suitable for projects that utilize space resources.

6. Proof of Burn (PoB): In PoB, users need to “burn” (destroy) a certain number of tokens to gain the right to participate. This mechanism is used to measure user input and interest, but is rarely used.

3.4.2 Market Size

Although Spacemesh belongs to the field of PoST consensus, it is difficult to accurately calculate the size of this market segment because PoST is not yet widely adopted in the cryptocurrency world. However, in general, Spacemesh is closer to the field of computing power competition, and the research report will present some data related to computing power competition.

 Background

In December 2010, Czech programmer Marek created the world’s first mining pool “slushpool”. This large-scale collective mining farm has gradually become the main mode of industry development. Developments such as the listing of mining companies, and the financialization of computing power have brought continuous impetus to the mining industry, and have also allowed this new track to gradually develop a large-scale commercial landscape. As of April 2022, the total market value of 21 listed Bitcoin mining companies exceeded US$15 billion. Before the merger of Ethereum, the market value of Ethereum mining machines alone was as high as US$5 billion.

 From the perspective of time dimension

Taking Bitcoin as an example, let’s look at the growth of Bitcoin’s total network computing power in a three-year cycle:

From 2009 to 2011, the computing power of Bitcoin’s entire network increased from 10 GH/s to 10 TH/s, an increase of about 1000 times;

From 2012 to 2014, the computing power increased from 20 TH/s to 300 PH/s, an increase of 15,000 times;

From 2015 to 2017, the computing power increased from 1 EH/s to 14 EH/s, an increase of 14 times;

From 2018 to 2020, the computing power will increase from 40 EH/s to 160 EH/s, an increase of about 4 times;

From 2021 to January 2023, the computing power will increase from 200 EH/s to 255 EH/s, an increase of about 1.3 times;

From the comparison, it can be found that since the birth of Bitcoin, the computing power of the network has been increasing. Although there will be a short-term decline in computing power due to market changes, policy regulation and other reasons, the long-term trend of growth has always been there.

 From the perspective of space dimension

In 2013, after the domestic mining industry experienced the contention of a hundred schools of thought on mining machines, the entire Bitcoin network exceeded 70%. Until October 2020, China’s share of computing power began to decline all the way. According to statistics from the Cambridge Alternative Finance Research Center, from October 2020 to May 2021, the proportion of computing power in China dropped from over 70% to 44%. In contrast, the bitcoin computing power in the United States has risen sharply, from 17% in April 2021 to 35% in August. After that, the United States also surpassed China to become the world’s largest source of bitcoin computing power.

From October 2020 to May 2021, the decline in the proportion of China’s computing power is mainly due to the crowding out effect caused by the large-scale expansion of overseas mining companies. 30,000 and 17,000 S 19 series mining machines have been ordered respectively, and a large number of mining farms have been built in batches in many places in the United States.

On May 24, 2021, Bit Mining announced that it will cooperate with a Kazakhstan company to invest 60 million yuan in the construction and operation of a new mine.

On July 27, 2021, Bitmain announced that it would spin off its mining pool brand AntPool, saying that it would carry out this part of the business overseas. It also cooperated with Enegix to equip more than 50,000 Antminer S 19 Pro mining machines in Kazakhstan mines. In addition, many large and medium-sized mining companies such as Huobi, Binance Mining Pool, and Canaan Technology have transferred their business overseas.

Until the beginning of 2022, the migration of miners was basically completed. Countries such as the United States, Russia, and Kazakhstan became the countries with the largest computing power. The computing power migration once caused the computing power of Bitcoin’s entire network to drop by more than 43%. After the migration was completed, the computing power of mining pools with Chinese backgrounds such as AntPool, F2 Pool, and ViaBTC also quickly recovered.

After the wind of regulation slowed down, the domestic bitcoin computing power began to recover partly again. According to the statistics of chainbulletin, the current bitcoin computing power in China accounts for about 21.1%, second only to the United States. The reason is that according to the industry People speculate that some miners will use foreign proxy servers to evade domestic monitoring, small-scale scattered in remote areas to secretly mine, and even use off-grid power generation to avoid power monitoring.

Post-PoW Era

In 2022, the total electricity consumption of the Bitcoin network is about 107 TWH, which is equivalent to the annual electricity consumption of the Netherlands with a population of 17 million. If you want to talk about the global ranking, it can be ranked 33rd. The carbon footprint generated throughout the year is about 43.28 metric tons, which is equivalent to the carbon footprint generated in Hong Kong throughout the year. In addition, the electronic waste generated by Bitcoin throughout the year is as high as 43,000 tons.

Under the general trend of green and environmental protection, it has become an inevitable choice for Bitcoin mining to turn to clean energy. More and more mining farms are choosing renewable clean energy such as solar energy and wind power for mining. According to a report released by the Bitcoin Mining Council (BMC) last year, as of June 2022, clean energy accounted for 66.8% of the energy consumption of Bitcoin mining. Although the authenticity of this proportion has yet to be confirmed, the trend of Bitcoin mining using clean energy has gradually become a widely accepted view in the industry. This shift can effectively reduce the policy and public opinion pressure faced by the mining industry.

Mining energy consumption and environmental protection issues are not only malicious mining and high energy consumption accusations, but also rooted in the PoW mechanism itself. However, in the rise of a new round of public chains, the PoS (Proof of Stake) consensus mechanism has begun to dominate, successfully avoiding the energy consumption and environmental protection problems faced by Bitcoin. The PoS consensus mechanism not only brings development advantages such as scalability to the public chain, but also enables Ethereum to successfully transform from PoW to PoS, and is also in line with the current environmental protection trend.

Additionally, the shift from PoW to PoS also introduces new areas of mining. Whether it is liquidity mining or the ZK mining machine under the trend of Zero-Knowledge Proofs, it has opened up a new frontier for the mining industry. In this context, Spacemesh’s PoST consensus mechanism is more environmentally friendly and sustainable. Through technologies such as space-time proof and Proof of Elapsed Time, it reduces energy waste and realizes an efficient blockchain ecology, which is an important step for the green development of the industry. step.

3.5 Business data

 Social media data

Twitter: Has 13,142 followers

Discord: On the Discord platform, Spacemesh has 16863 members, and the daily active members are between 1500 and 2000. This shows that the interactions and discussions among community members are quite active, and Discord is a platform that helps to build close connections and community sharing.

YouTube: Although the number of subscribers is around 1000, the view volume of each video is between 500 and 1000, which shows a certain degree of attention and the attractiveness of the video content.

 Operation Data

As of August 13, 2023, the Spacemesh network has entered its second era, successfully minted and confirmed 8876 blocks, and the current number of active miners has reached 2383. But on August 11, when the project party was responding to the vulnerability, only one account received 477 $SMH tokens. However, the bug has now been fixed and 1486 accounts have received rewards totaling 348150 $SMH tokens.

3.6 Project Competition Landscape

In today’s blockchain field, the PoST (Proof of Space and Time) consensus algorithm leads a new wave of technology. Under this upsurge, the Chia project, as a classic PoST consensus mechanism, and the Kaspa project, which has attracted much attention in the current computing power track, cannot be ignored. Although these two projects pursue different goals and characteristics, their core concepts revolve around the computing power track. In this project introduction and comparison, the consensus mechanism, technical architecture and Performance in terms of scalability, decentralization, etc.

3.6.1 Project Introduction

• When

Kaspa is a decentralized and fully scalable Layer-1 based on the GHOSTDAG protocol. Unlike traditional blockchains, GHOSTDAG is not isolated blocks created in parallel, but allows them to coexist and be ordered in a consensus manner. Kaspa maintains the level of security offered by the most secure proof-of-work environments while supporting high block rates. Its design is faithful to the principles that Satoshi embedded in Bitcoin - proof-of-work mining, isolated state of UTXO formation, deflationary monetary policy, no pre-mining, and no central governance.

• Divide

Chia Network is a cryptocurrency project founded by BitTorrent founder Bram Cohen in 2017. It aims to build a green and environmentally friendly cryptocurrency, and plans to develop an improved blockchain and smart transaction platform, as well as lay out enterprise-level applications. Chia Network has developed its own smart contract programming language Chialisp, which retains the advantages of the “UTXO model” and introduces the general functions of the “Ethereum Solidity model”, thus realizing more powerful functions, such as multi-signature, atomic swap, Authorized recipient wallets, transfer withdrawals, limit wallets, paper wallets with delayed recovery, digital identity wallets, and chia tokens (similar to ERC20 tokens). On March 18, 2021, Chia officially released the Chia 1.0 mainnet, with the token named XCH.

3.6.2 Item Comparison

Chia, Kaspa, and Spacemesh are three different blockchain projects. They have some similarities in consensus mechanism, technical implementation, mining methods, and other aspects, but there are also obvious differences.

Consensus mechanism:

Chia: Chia Network employs a novel Satoshi Nakamoto consensus algorithm called “Proof of Space” and “Proof of Time” (PoST). This consensus mechanism is designed to utilize disk space and computation time for blockchain security and verification.

Kaspa: Kaspa uses the GhostDAG/PHANTOM protocol (equivalent to the consensus mechanism based on PoW and DAG), which is a consensus mechanism based on proof of work, which can achieve high throughput and low latency transaction confirmation.

Spacemesh: Spacemesh uses its own unique consensus protocol, based on Proof-of-Spacetime (PoST) and grid technology, aiming to achieve a highly decentralized, high-throughput and high-security blockchain network.

Technical realization:

Chia: Chia technically implements a unique proof-of-space and proof-of-time mechanism to achieve consensus and mining by using unused hard disk space and verifying a verifiable delay function.

Kaspa: Kaspa uses the GhostDAG/PHANTOM protocol to achieve fast confirmation and high-throughput transaction processing by building a block DAG structure.

Spacemesh: The technical implementation of Spacemesh includes grid technology and space-time proof, as well as a unique consensus protocol, aiming to create a decentralized, high-throughput and high-security network.

Mining method:

Chia: Chia’s mining process involves creating “plots” that take up hard disk space and participate in block generation through proof-of-space and proof-of-time.

Kaspa: Kaspa’s mining process involves using proof-of-work mining, using the GhostDAG/PHANTOM protocol to generate a block DAG to quickly confirm transactions.

Spacemesh: The mining process of Spacemesh involves the use of space-time proof and grid technology, as well as a unique consensus protocol to verify transactions and generate blocks.

other aspects:

All three projects focus on providing higher throughput and faster transaction confirmation speeds to meet different application needs.

Their consensus mechanisms and mining methods are similar in some respects, such as using hard disk space, computing power, or proof-of-work to achieve consensus.

In terms of technical realization and project goals, Chia focuses on environmental protection and green mining, Kaspa focuses on providing high-throughput transaction processing, and Spacemesh focuses on decentralization and security.

Although these projects have some commonalities, their unique characteristics and technical implementations make them each have their own positioning and advantages in the blockchain field.

3.7 Token Model Analysis

3.7.1 Total amount and distribution of tokens

Token abbreviation: $SMH

Total tokens: 2.4 billion

Token distribution:

 93.75% (2.25 billion pieces) are gradually generated as block rewards, and block rewards are distributed in each block according to the reward distribution plan

 6.25% (150 million pieces) are reserved as team rewards, no initial release, gradually released according to the unlocking plan, starting one year after creation.

Looking at it more broadly, reward distribution follows an exponential decay function for nearly 2,000 years. Team rewards will be unlocked one year after creation and will be unlocked within three years.

Token Release Chart

At year 277 after Genesis, the tier reward was reduced to below 1 SMH, so the total circulating supply did not change much after the time period shown in the graph, although this process continued until 1893 before stopping completely Year.

Reward Distribution

Smeshers who participate in block generation are rewarded with block rewards. These rewards come from two sources: newly minted coins (called block rewards) and fees collected by the transactions included in the block.

The number of new coins generated in each block gradually decreases according to an exponential decay function until it finally drops to zero. After that, smashers will only receive as rewards the fees collected in each block.

The cumulative total reward amount for each tier is governed by the following formula:

To calculate the number of new coins in a given tier, the project calculates the cumulative rewards of the current tier and the previous tier, and subtracts the latter from the former.

BONUS UNLOCKING PROGRAM

At genesis, rewards distributed to development team members, Spacemesh companies, and investors in protocol development and implementation will be minted and distributed into a special type of vault account, but cannot be transferred until unlocked.

During the first year after Genesis, no reward funds are available yet. Only after a period of one year will 25% of the reward coins be unlocked from the vault and available for withdrawal. After that, the rewards will be unlocked layer by layer in a linearly increasing manner until the fourth year after the creation of the world.

This scheme is designed to ensure that at any given moment, the total unlocked team rewards remain below the cumulative block reward

analyze

The following table shows the transaction volume of $SMH after each round of decrement

3.7.2 Token Value Capture

1. Block rewards and miner incentives: $SMH tokens are the basis for block rewards in the Spacemesh network. This reward mechanism encourages miners to participate in block generation to ensure the security and reliability of the network. Each block will generate new $SMH tokens as a reward for miners’ contributions, and it is also the source of energy for the operation of the Spacemesh network.

2. Team Reward Unlock: 6.25% of $SMH tokens are reserved as team rewards. These rewards are gradually released according to the unlocking plan within a certain period of time. Development team members, Spacemesh Corporation, and investors who support protocol development will gradually receive their rewards for the successful development of the ecosystem, thereby providing impetus for the long-term healthy development of the project.

3. The scarcity and supply of tokens are gradually decreasing: the total amount of $SMH tokens is 2.4 billion, and as time goes by, the generation of new tokens will gradually decrease. This is achieved through an exponential decay function to ensure token scarcity. This scarcity has the potential to create more demand in the market, so the supply of the token dwindles, possibly creating investor interest in the token.

4. Network usage and transaction fees: In the Spacemesh network, tokens may be used to pay transaction fees and service fees. Users need to use $SMH tokens to participate in various activities in the network, thereby promoting the use and demand of tokens.

3.7.3 Token core demand side

1. Miners and verifiers: Block rewards and miner incentives attract miners and verifiers to actively participate in the Spacemesh network. By contributing computing power and validating transactions, they earn newly minted $SMH tokens.

2. Development team and investors: The team reward unlocking plan provides long-term incentives for development team members, Spacemesh companies and investors. The gradual release mechanism of these rewards promotes them to maintain a long-term cooperative relationship with the project, ensuring the continuous development and optimization of the protocol.

4. Preliminary value assessment

4.1 Core Issues

**Does the project have a solid competitive advantage? Where does this competitive advantage come from? **

1. Highly decentralized: Spacemesh is designed as a highly decentralized system. Each individual miner is rewarded frequently, eliminating the need for collective mining. At the same time, home users can provide space resources, increasing the possibility of many individual miners participating in the system.

2. Competition-free protocol: Spacemesh is designed as a contention-free protocol, which means honestly generated blocks are always recognized as valid. This prevents powerful miners from receiving disproportionately high rewards, making the protocol more in line with incentives.

3. Self-healing: Spacemesh is capable of self-healing even in the face of arbitrary attacks that violate security assumptions. Even if the system is constantly under attack from a constant fraction of the space resources controlled by the attacker, honest parties will reach consensus when the security assumptions are satisfied again.

4. Security guarantee: As long as the space resources controlled by the opponent do not exceed a certain part of the system, the Spacemesh protocol is safe. At the same time, the protocol is also self-healing when the network synchronization assumption is temporarily violated.

5. Permissionless consensus: Spacemesh is a permissionless consensus mechanism that allows new participants to join the network without the approval of current coin holders. This increases accessibility and lowers the barrier to participation.

6. Environmentally friendly and efficient: Spacemesh uses Proof of Space-Time (PoST) as its underlying consensus mechanism, which is more energy-efficient and efficient than the traditional Proof of Work (PoW) protocol. At the same time, it makes use of existing and often inefficiently utilized storage devices, making it easier for home users to participate in mining.

These advantages are through the design and implementation of protocols and mechanisms, not just based on other factors

**What are the main variables in the operation of the project? Is this factor easy to quantify and measure? **

1. Spacetime resources: This refers to the amount of storage space allocated by miners to participate in the mining process within a certain period of time. It is measured as the product of allocated space and elapsed time.

2. The timing of receiving messages: In the Spacemesh system, the state of the system is a deterministic function of the grid content, independent of the timing of receiving messages. This property ensures that new users can reach consensus on the correct state as long as they can communicate with an honest miner.

3. Network synchronization: The Spacemesh protocol assumes reasonable network synchronization, that is, every message seen by an honest party at time t will be seen by all honest parties at time t + δ. The specific value of δ depends on empirically measured network delays.

These factors can be quantified and measured to some extent. For example, the amount of spacetime resources allocated by miners can be measured in terms of storage capacity and time. Network synchronization can be measured by analyzing the timing of message propagation in the network. Adversarial control can be estimated by monitoring miner behavior and analyzing its spacetime resource allocation. However, precise quantification and measurement of these factors may require further research and analysis.

4.2 Main Risks

1. Mining efficiency and verification delay: the current software version does not support multiple hard disks and multiple folders, so if you want to use multiple hard disks, you need to use a single machine to mount multiple disks, and use command line software for mining (called “P drive”). Once the initial P disk setting is made, it is necessary to wait for the verification to be completed during the mining process until entering the next epoch. In addition, the mining efficiency is related to the speed of the hard disk, the data size of the P disk, and the initially set nonce value. Therefore, in some cases, mining may be limited by factors such as hard drive speed, resulting in lower efficiency.

2. Risk of future computing power growth: As more and more mining participants join the Spacemesh network, computing power may increase rapidly, especially in the presence of other large-scale mining activities. This can cause the mining difficulty to rise rapidly, making subsequent mining more difficult. In addition, there may be situations where the first mining (initial mining) is relatively fast, while the output of subsequent mining is relatively slow.

3. Communication overhead problem: The Spacemesh protocol requires miners to issue proofs at certain intervals, which may increase communication and storage costs. Although the protocol has solved this problem, there is still a need to ensure that the communication overhead remains within a practical range

Please note that these risks may affect the efficiency and profit potential of Spacemesh mining, and it is necessary to carefully consider the investment and expected benefits in the mining process.

5. References

1. Spacemesh official website

2. Project White Paper

3. Testnet Tutorial

4. Kaspa official website

5. Chia official website

6. In The Beginning: Spacemesh Genesis Special Edition

7. A brief history of the evolution of the encryption mining industry: mining machine upgrades and computing power changes

8. blog/requirements-for-Spacemesh-rewards/ Proof of space-time background

9. start/#costs-and-warnings Start Smeshing

10. Update information every month

11. Spacemesh data panel