As explained in About Hyperspace, Hyperspace is built to be trustless and decentralized. In order to accomplish these goals, a break from traditional payment methods and fiat currency is necessary. For that reason, Space Cash (SPACE) was created. It would not be possible for Hyperspace to be truly decentralized if there was a party involved in processing fiat payments, even if that party were Hyperspace's developers - though plans to offer fiat payments for storage as an option to users on top of using Space Cash are in the works.
Space Cash is a cryptocurrency with the function of buying and selling storage on the Hyperspace network. When you purchase or sell storage, it will be priced in Space Cash. Like many other cryptocurrencies, it is based on Proof of Work (PoW) and can be mined. Hyperspace uses the Blake2b algorithm for Proof of Work functions, which is not commonly used.
Benefits to Using a Cryptocurrency
- Facilitates decentralization
- Facilitates anonymity
- Facilitates small/micro transactions
- No exchange rates between users/countries
Drawbacks to Using a Cryptocurrency
- Can be difficult to acquire
- Not much practical use outside Hyperspace platform
- Price fluctuations are common
Why not use another existing coin?
- Hyperspace's blockchain also handles storage contracts
- Better control over transaction fees
- Sia (Hyperspace's source) development predates most other coins, including Ethereum
Buying Coins versus Mining Coins
Space Cash can be purchased on a cryptocurrency exchange, or it can be mined. Currently, Space Cash is not listed on any exchange and is only available OTC (Over-The-Counter, or directly from user to user). Mining coins requires you to purchase specialized mining hardware, which is not cheap but will continue to generate Space Cash over time. To further compare:
- Pros: Easier to get coins compared to mining; lower cost of entry; access to coins relatively quickly
- Cons: Currently not available on an exchange; prices must be negotiated directly with each user
- Pros: Can be profitable to mine if selling excess coins; basically free money after ROI on hardware investment
- Cons: Takes time; requires a large investment in and knowledge of mining hardware and electricity costs; competition with other miners decreases returns over time; mining hardware becomes obsolete as new versions released
Hyperspace has elected to implement a Development Fund for funding future development operations. This fund collects 10% of all the block rewards of the network in order to support further development and other ecosystem necessities like community projects. This is in contrast to Sia, which implements Siafunds, a limited type of token which provides a small return on each hosting transaction. The development fund has been chosen in lieu of Siafunds, and so Siafunds have been removed from Hyperspace.