Episode Summary: Spacemesh: The Proof of Space and Time
Spacemesh is an innovative blockchain startup aiming to solve the problem of running smart contracts at scale. A second generation blockchain startup that aims to learn the lessons of past blockchains, Spacemesh aims to make the blockchain better, more usable, more robust, and of course more popular among users. Current blockchains are not scalable both in terms of transaction volume and also the hardware considerations of the blockchains themselves. Bitcoin and other proof of work cryptocurrencies currently consume around two percent of the world’s energy consumption and that figure is only growing. ASICS and CMP graphics cards are effectively e-waste that only serve one purpose and quickly become obsolete once new versions come out. Spacemesh serves to solve this main problem of scalability both from a consensus level and a blockchain architecture level to make Spacemesh the preeminent blockchain for running smart contracts at scale.
At the core of Spacemesh is a new consensus protocol that aims to solve the problems presented by the two incumbent protocols proof-of-work and proof-of-stake.
Proof-of-work in a nutshell requires individuals to secure the blockchain by guessing random numbers and then performing complex calculations that check whether the number is valid or not. Individuals, or miners, race to find a valid number first and once someone does, the consensus resets making all previous calculations invalid and miners race to find a valid number again. This presents two primary problems. The first is that performing these complex calculations takes a considerable amount of energy and as the blockchain grows this energy cost only grows.
The second is like any computer process, specialized hardware like ASICS or GPUs, can be used to perform these calculations faster. Not only does this create ewaste that’s only use is to perform these basically useless calculations, but also centralizes mining power in the hands of those who can afford to invest money in huge server farms which is the antithesis of blockchain’s mission to create decentralized trust. Proof-of-stake tries to solve the energy consumption aspect of proof-of-stake by removing the requirement to perform calculations and instead using large amounts of cryptocurrencies. Individuals, or stakers, lock up large amounts of cryptocurrencies for a certain amount of time in order to provide security to the network. However this fails to solve the centralization problem of proof-of-work and in some aspects only makes it worse as only individuals with a large amount of crypto can contribute to the security of the network.
Spacemesh introduces a new consensus protocol called proof-of-space-and-time that requires individuals to reserve a certain amount of space on hard drives to secure the blockchain. This requires less energy than proof-of-stake and solves the centralization problem of both proof-of-stake and proof-of-works as storage is cheap and there are various mediums such as hard drives and SSD that can provide storage at differing price points. This protocol even has some advantages of other proof-of-stake protocols like Chia as it only requires data to be written and read occasionally, reducing wear on the storage medium unlike Chia which requires frequent reads and writes.
Spacemesh is also experimenting with a blockweave or blockmesh to solve the scalability issue of blockchains. Traditional blockchains can only add one block of transactions at a time limiting scalability. Scalability solutions, most commonly referred to as Layer 2 solutions, are being developed for traditional blockchains like Etherum and Bitcoin but they are oftentimes complex and are still a while away from mass adoption. Spacemesh builds scalability into the blockchain architecture itself by allowing multiple blocks to be worked on and validated at once.
Even the company itself is built with scalability in mind. Traditional blockchains need to raise funds and bootstrap the network. The most common way for them to do so was an initial coin offering or ICOs. In 2017 and 2018, there was an ICO boom that had the unfortunate side effect of attracting scammers that would take the funds and run. Spacemesh has a contract that distributes the funds over time ensuring that the company has an incentive to continue development and support the network. Also they bootstrap the network with their own servers and plan to slowly wean over their servers as the blockchain gains more and more participants.
Spacemesh does not see their cryptocurrency called Smesh as becoming the dominant blockchain in the future. Rather they see a variety of blockchains that serve different purposes. Of course some current project will die but there is space for multiple blockchains to exist. Some will focus on privacy, some will focus on speed, some will focus on ledger size. However many there are though, Spacemesh will be there powering the smart contracts of the future.
This summary is based on an interview with Anton Learner, Core Team Lead at Spacemesh. To listen to the full interview, click here.