In most early cryptocurrencies like Bitcoin, miners secure the network by verifying transactions and adding new blocks to the blockchain. The miners are rewarded with newly created bitcoins, which provides them the incentive to ensure they keep working. It was an elegant solution to the problem of securing a decentralized network.
But directing all financial incentives to the miners leaves nothing to incentivize the community, the group that is most needed to grow adoption of the cryptocurrency.
In recent years, some cryptocurrencies have introduced the idea of a community fund, usually in the form of a treasury upon which community-approved projects can draw, or developers can be paid. Dash and PIVX allocate 10% of all newly mined coins to their treasury, while Nav Coin allocates 20%. The remaining 80 to 90% of newly created coins still go to either the miners or to the coin stakers, depending on the type of consensus algorithm the cryptocurrency uses.
SmartCash’s Community Focus
SmartCash is a relatively new cryptocurrency that flips that ratio around – miners receive only 5% of newly created coins, while those staking coins get 15%, and users running SmartNodes receive 10%. The remaining 70% go into a fund the community controls.
Anyone willing to put up 100 Smarts can start a proposal for the community. Anyone with at least one Smart is able to vote on proposals at the SmartHive Governance Portal (the SmartCash community uses a beehive as an analogy to their decentralized governance model). Voting is recorded on the SmartCash blockchain, and a person’s vote is weighted by how many Smarts are in their wallet.
So far the community has funded proposals to donate food in Venezuela (over $150,000 worth), outreach programs in Europe and Africa, and funds to pay for online marketing campaigns.
But the community fund is actually growing faster than it’s being spent – much faster. It’s currently worth over $270 million. Proposals have started being submitted for far larger marketing spends, which should cause the coin to pop up on more people’s radars.
SmartCash started out as a fork of Zcoin, and supports the ability to “Renew” coins, which breaks the chain of transactions using the same zerocoin protocol. At any point, a user can Renew their coins, and the wallet will user zero-knowledge cryptography to prove that it has the right to mint new coins, while burning the old ones, and maintaining no identifiable link between the sets of coins.
SmartCash is about to introduce SmartNodes, their take on Masternodes, which will enable a feature called InstantPay – the ability to send transactions instantly without having to wait for transactions to be verified on the blockchain. Users running a SmartNode will be required to stake 10,000 Smarts, and will be rewarded by sharing 10% of all newly minted Smart. The SmartNode feature should also significantly grow the SmartCash network, making it more decentralized.
SmartCash also has a way to reward users for staking coins called SmartRewards. 15% of all newly minted Smarts are distributed to the community on a monthly basis, and the more Smart that you have in your account, the more SmartRewards you receive. You’ll need to have at least 1,000 Smarts to participate in SmartRewards.
SmartCash’s key differentiator is it’s Community Fund, whose value is growing at over $1 million per day. While SmartCash has a lot of competition, its war chest is so large it’s hard to see how it won’t soon be much better known. It remains to be seen if a decentralized community will be able to effectively direct such a powerful weapon.
How to Buy SmartCash
Unfortunately, SmartCash isn’t as easy to purchase as Bitcoin. You can’t buy Smarts with a credit card, so you’ll have to use one of the cryptocurrency exchanges to buy Smarts.
Buy Bitcoin at Coinbase
To start, if you haven’t already, head over to Coinbase and sign up. Coinbase will let you use a credit card to buy Litecoin, which is what you’ll send to an exchange to purchase SmartCash.
Sell Bitcoin for SmartCash at Cryptopia exchange
After you’ve purchased Bitcoin, you’ll need to sign up for a cryptocurrency exchange – we recommend Cryptopia. It’s fairly easy to use, has a large selection of coins, and is responsive to customer issues. After you’ve signed up, you’ll send the Litecoin from Coinbase to Cryptopia. Head to the Cryptopia deposit page, find LTC in the list and click on the Deposit button to get your deposit address. Put that address into the field on Coinbase that lets you send Litecoin.
After your deposit arrives on Cryptopia, you’ll be able to head to the Cryptopia SMART/LTC market where you can Buy Smarts using the Litecoin you deposited. Alternately, you could sell your Litecoin for Bitcoin and then use the Bitcoin to buy SmartCash. That may work out better, as the market for BTC/SMART is larger than the one for LTC/SMART.