It’s easy to see from hashrate charts that the Bitcoin network continues to grow stronger from a computational standpoint. However, nodes also play an important role in supporting the blockchain, and they’ve been in steady decline.
Although the technical skills needed to run a Bitcoin node have decreased over the years, the resource requirements and obligation have gone the opposite direction. While the network is still healthy, more nodes would help further decentralize the network, disperse trust, and make it more expensive to mount attacks.
There have been various proposals to combat the problem, including cheap dedicated node-running hardware such as the BitSeed and Bitcoin Mini. There are also several Bitcoin Improvement Proposals and various third-party, free market solutions that attempt to incentivise nodes, like the BitNodes contest.
Originally launched in July 2014, with some fairly typical improvements for an altcoin of that day, Spreadcoin featured a smooth reward halving, instead of bitcoin’s 50% stark drop every fourth year, and it had a one-minute blocktime instead of bitcoin’s ten-minute blocks. The original whitepaper focused on how it was “pool resistant,” in an attempt to ensure mining pools couldn’t reduce the decentralization of the mining network.
After a rough launch the original developer left the project in May, which is when the current developer chose to re-launch it with a new, and very unusual purpose for an alternative cryptocurrency.
A new Spreadcoin 2.0 whitepaper proposes an incentive structure for running Bitcoin nodes, by creating a second type, or layer, of nodes called “ServiceNodes.”
“Instead of attempting to find a mechanism to incentivize Bitcoin nodes directly on the Bitcoin network and therefore find ways to avoid Sybil attacks on the Bitcoin network; the SPR network nodes themselves are incentivised to host full Bitcoin nodes,” states the new Spreadcoin 2.0 whitepaper. “SPR intends to use this second tier node system to process decentralized operations and transactions.”
“Each ServiceNode user is required to host a full Bitcoin node. Without a full bitcoin node operating correctly and serving the Bitcoin network, a ServiceNode is not considered part of the SPR network.”
– Spreadcoin whitepaper
The concept is largely borrowed from project DASH, formerly darkcoin, which implemented a similar two-tier node system. Instead of calling their second independent layer of nodes Masternodes, SPR chose a name that reflects the intention of providing services on top of the SPR block chain.
The paper suggests that once a large number of Bitcoin nodes have been created, it would be easy for Spreadcoin to use its access to the bitcoin blockchain for commercial data mining. This data could then be sold to companies, with the funds put back into the Spreadcoin system, making it more likely to be worthwhile for everyone involved.
The paper goes on to predict that 10,000 of these nodes would yield more valuable data about transactions on the Bitcoin network, “in particular details on key international financial channels and pockets of regional financial activities.” A successful Spreadcoin incentives program could then be used to fund both Bitcoin full nodes and Bitcoin’s miners, which would provide “a barrier to entry to anyone wanting to launch a competing private service where the Bitcoin community would not be able to influence what they did on the Bitcoin network.”
“Data mining and data analytics businesses such as Tradeblock, blockchain.info, Blockstream and those that seek to support Bitcoin through commercial ventures could benefit from data supplied to them and they could help create data specifications for the types of data that would they would like to purchase. However, those businesses and entities focused on uncovering users IP addresses would be at a disadvantage.”
– Spreadcoin whitepaper
Spreadcoin is currently traded on the cryptocurrency exchange Bittrex. The coins peak price appears to be about 68,000 satoshis per Spreadcoin, or 0.00068 BTC, while the current price is only about 8,000 satoshis per Spreadcoin. Although it was considered abandoned after the original developer left the project, there was a smaller spike in price when the new whitepaper was released last month.
There’s also a pretty wallet available, with a few very nice features, including a built-in vanity address generator, faster block times, and the pool-killing feature that makes sure every miner is a solo miner. It may never be able to buy you a cup of coffee, but as an altcoin that could one day be considered necessary for bitcoin to thrive, it’s currency has the potential to be worth a lot more than it is today.
The developers also have plans to become a Bitcoin Sidechain, “once the technology to operate a second tier decentralized node network is established and the side chain technology is implemented.”
However, their current focus in ensuring that Spreadcoin becomes an incentive to create bitcoin full nodes, by delivering an income from data mining, ultimately leading to a far more robust and popular Bitcoin.