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Introducing a new green cryptocurrency


(Steffen Rattay) #1

I would like to introduce you to a cryptocurrency called SM² Coin we are developing.

We are a team of three computer science students studying at TU Darmstadt with a passion for cryptography and cryptocurrencies. The project is still in the design phase and we are still working on our papers, however, most of the specification is already finished and we are mostly working on details. We will soon attend the Internet of People (IoP) “People first” conference in Berlin (which is on June 16/17), where we will have a speech slot to present our project. We will release our whitepaper before or at the conference, depending on whether we manage to finish it beforehand. Since not everything is finalised yet, I can only give a general overview of the project. We would appreciate it if you spread the word and followed us on Twitter and/or Telegram.

About the project

File hosting

SM² Coin is a state of the art cryptocurrency that supports decentralised file hosting. The built-in storage market adapts to supply and demand, which should lead to competitive prices. Users can use the cryptocurrency to rent storage from the miners. We estimate to achieve storage prices comparable to Google Cloud because we are so energy efficient.

Energy efficiency

We learned from the problems of other cryptocurrencies, that waste ridiculous amounts of energy and other resources to maintain the blockchain. We came up with the following solutions:

Novel consensus (mining) mechanism

We use a novel consensus mechanism which uses rented storage space for mining instead of wasted computation power (as is the case for Proof of Work (PoW) based mining). Miners use a proof of storage (PoS) to generate mining power, which is then used to mine new blocks. This way, offering storage for rent to the system is the way to mine, which directly supports the system.

Low power devices

We designed the algorithms to be as computationally inexpensive as possible, while retaining security, to allow low power devices, such as Raspberry Pis and Cubietrucks as mining rigs. We intend for mining rigs to consist of a Raspberry Pi or Cubietruck connected to as many HDDs as possible, to reduce the energy consumption per TB of storage space as much as possible. This will make our cryptocurrency one of the greenest to day, while also making the financial entry barrier to becoming a miner low.

Security

All files are encrypted so that no one can analyse the user’s data. Since the system is decentralised, there is also no authority that can censor or remove data, which could be useful for privacy enthusiasts or individuals that are targeted by authoritarian regimes to securely store and pass on data.

Scalability

We natively feature payment channels, which allow instantaneous and fee-less P2P transactions. Furthermore, we try to put as little data as possible on the blockchain, and have most smart contracts executed off-chain as well, where the blockchain is only used to settle disputes.


(Michael Hrenka) #2

Proof of storage sounds like a fascinating idea. Could you please contrast that with the other more popular PoS, namely proof of stake? Why would proof of storage be better than proof of stake including all of the variants of the latter?

How would your project compare to platforms such as Ethereum or EOS?


(Steffen Rattay) #3

That’s a good question. Proof of Stake uses the funds of participants to either vote, or create a PoW that gets easier the more funds you have (double the funds = half the difficulty). Because miners without funds cannot solve the Proof of Stake, the funds are often gravitating towards initial investors that acquire a large portion of the currency when it is still cheap (during the ICO), and further cements their share in the currency. This means, the richer you are in the beginning, the richer you get, and this approach, while being more energy-efficient than PoW favors centralisation, which is contraproductive.
Proof of Storage mining is a system where miners rent their storage. They have to regularly prove that they are still in possession of the file, and didn’t simply delete it. This is done via the Proof of Storage. This proof is also used to generate voting power over time, so technically, we do not vote with storage, but with storage-time. Because the voting power comes from the Proof of Storage that has to be calculated anyway to keep the system reliable and is recycled for mining, we have minimised the amount of “wasted” computation and resources in the mining process. We use simple vote casting based on accumulated storage-time to determine which block got the most votes. Also, other currencies have a system where only one miner wins a block, and gets all the reward, but with us, blocks are not personalised, so it is intended that multiple people vote for the same block by coincidence (because they have the same view of the system at the time of voting), and then share the block reward based on how much of the votes that were cast for that block came from them. This is a high-level description and the actual protocol is more complicated, and not 100% specified yet, so I can’t get too technical without stating uncertain information.

I don’t know what aspect you exactly mean, so I will give a general answer. Ethereum is a smart contract machine, which could, in theory, be used to host our blockchain, but Ethereum is near Bitcoin in energy consumption, which was the major fact that lead us to the decision of creating our own blockchain. Another drawback would be that Ethereum would cost money to host the smart contract that would manage our blockchain. I don’t really know much about EOS, but EOS also seems like a more generalised platform like Ethereum, but since we have the know-how to create our currency from scratch ourselves, we can achieve a more specific system, where smart contracts are predefined and thus executed in native code. This has performance benefits.
We have to create a custom miner and server software anyway, because file storage is not realisable with smart contracts alone. This means, we do not have that much programming overhead by creating our own system that stands alone, and can reap the benefits of not utilising any energy-hungry external systems.


(Michael Hrenka) #4

Thank you for that reply. So, my impression is that you are primarily aiming to solve the problem of energy inefficiency of cryptocurrencies. Your proof of storage concept sounds like it might be the best approach for doing that. It also doubles as file hosting platform, so that’s cool.

My question regarding Ethereum and EOS was more about the feature set of SM² coin. Do you plan expanding the coin itself into a more general platform for all kinds of decentralized applications? I mean, if proof of storage turns out to be the next big thing, this would seem to be the next big logical step.


(Steffen Rattay) #5

Well, we plan on introducing smart contracts some time in the future, but it’s not the immediate priority. We would like to also add a computation rental system in the future. This is different from smart contracts, as smart contracts have very low and expensive computation power, and are designed to automate payments, not to do computations. But first we will focus on storage rental, then computation rental, maybe we’ll even find a neat way to combine both into one, but it’s all uncertain at the moment.


(Steffen Rattay) #6

We just released our initial whitepaper! The whitepaper contains a high level overview of our system, which will be supplemented by a very technical yellowpaper, as soon as we finish specifying the whole system. Please note that the whitepaper will be superseded by a new version as we continue to work out details.


(Michael Hrenka) #7

Ok, I’ve finally found some time to read the whitepaper. There are certainly some interesting ideas in there. Have you gotten any feedback from other blockchain developers, yet? How’s the work on the yellowpaper going?

If you decide not to choose the ICO route, what kind of business model do you have in mind as alternative?

Is there a mailing list that I could subscribe to, in order to get timely information on the progress of your project?


(Steffen Rattay) #8

Yes, at the IoP meetup, we met with developers from a few cryptocurrencies. We received very much praise for our ideas. Our approach seems to be the first of its kind.

We are still working on details, especially how we will design our PoC to be secure while still easy enough to generate and verify, and then we will also figure out how exactly the distributed storage market protocol will work and eliminate some potential attacks.

We would probably do it like Bitcoin, where you cannot buy into it, but have to mine to get coins (or later buy at exchanges). We would of course create some rewards for ourselves, i.e. pregenerated coins or something like a developer fee on the block reward. This approach frees us from regulations of the German BaFin, which would otherwise make things like anonymous transactions problematic.

You can follow our twitter or telegram (on the web page). As of right now, there is no mailing list yet. We also have the news section on our website where we keep a journal of important events. When we have a bigger community, we will probably reorganise our PR to a more professional level.