So you think you know what smart rewards are? Reality check. No you don't.
The Basics
What i'm about to say in this is part is what you already know and if you are even vaguely familiar with the term smartrewards, skip to the next section.
So basically, if you have at least 1000 smartcash in your wallet (web or desktop) before the monthly snapshot, which usually happens on the 25th of every month, and you do not move any smartcash out of your wallet till the next month's snapshot, you get rewarded with some smartcash. The more you have, the more your rewards. The exact amount can vary from month to month depending on the amount of smartcash mined/total blockrewards for that month.
The SmartRewards will come out of the 15% block reward allocation.
When your basics are horribly wrong!!
Until yesterday, me, like almost every single other smartcash owner/community member etc, was under the illusion that we are actually "staking" our smartcash for smart rewards. This is in fact not the case. We are not really staking our smartcash, because the smartcash blockchain doesn't actually run on a POS (proof of stake) algorithm. Smartcash is still a POW (proof of work) coin. Smart rewards are simply a distribution of block rewards for long term holders.
POW vs POS
Complicated. Extremely complicated.
I can't say I understand these 100%, but I think I understand enough to attempt explaining you guys these terms in a very simple manner (trust me, it's not gonna be too simple!!).
First let us understand how a blockchain works, or more specifically exactly what is mining.
In simplest terms, what a blockchain is, is that it's a database. When it comes to cryptocurrencies, a blockchain is a database of transactions. A block in the blockchain is basically a series of transactions. Consider this block or this series of transactions as a puzzle. What miners do is that they try to solve these puzzles, and the first miner that gets the correct answer is said to have successfully mined the block and is rewarded with the mined coins.
Understand here that miners are actually the computers, or the devices that are being used to mine. We often think of miners as humans, but I think, technically speaking the humans just own the miners. The actual mining is done by the mining devices....your cpu...gpu...etc. The more hashpower your device has, the more chance it has to solve the puzzle faster, and the more chances you have to mine the block and be rewarded with the coin. This is why, the higher your hashpower, the more coins you mine.
This is Proof of Work, POW. You are doing some work (solving the puzzle) and the mined block is the proof that you have successfully completed the task and the series of transactions can go through. The faster a block is mined, the faster those series of transactions in that block will go through.
Proof of Stake, POS on the other hand is when the miners have to actually stake their coins and here these staked coins are somewhat similar to the function of the hashpower we saw for PoW. Here the more coins you have staked, the higher chances you have to mine the block. But in this case you don't call it mining anymore, we say you Validate the block. In the POS algorithm, if you validate a false block, you are actually going to lose money from what you have staked!! Exactly how a false block is validated is super high tech stuff for me at this point in time.
Back to the Smartcash Blockchain
So, because smartcash actually runs on the PoW algorithm, we are not really staking anything. We are not becoming miners/validators of the blocks in the smartcash blockchain just by holding our coins in the web wallet.
So exactly what are smart rewards? It's a brilliant method the smartcash team has undertaken to encourage people to become long term holders which will eventually benefit the price and the value of the coin. In most of all the other currencies that are being mined, 100% of the block rewards or the mined coins go to the miners. Here's where smartcash sets itself apart from everything else in the crypto space today. Only 5% of the block rewards goes to the miners. 70% of the block rewards are dedicated towards funding community projects and developing and promoting smartcash, in other words, towards funding growth of smartcash!! 10% goes to the node rewards.
And the remaining 15% of the block rewards are distributed as a token of appreciation to all those who have decided to become a long term holder of the coin. The don't Have to give us these rewards because smartcash blockchain doesn't run on the PoS algorithm. But smartcash Chose to give us these rewards. Think of this as a way of the team saying thank you for helping smartcash grow by becoming long term holders!!
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If you would like to learn more about SmartCash please visit https://smartcash.cc/
Peace!!