The specs: DNotes are a new scrypt-based cryptocurrency, with a one minute blocktime and total issuance of a half billion. The coin features Kimoto Gravity Well to prevent pool hopping. The initial block reward is 250 coins, set to halve after 500,000 blocks.
The plan: with over 100 existing altcoins and more every week, the altcoin space is increasingly crowded and competitive. Particularly with the price of Bitcoin and major alts (like Litecoin, Peercoin and Namecoin) currently down, the pressure on altcoins to stand out via innovation and savvy marketing is intense.
The DNotes team, who between them have decades of experience in software development, marketing and PR, seem well aware of the challenges facing a new alternative cryptocurrency. For this reason, they’ve chosen to front-load the reward structure to favour early adopters. The goal is to attract a strong community right from the launch by rewarding all early adopters.
The difference: Essentially, the first 250 blocks will be privately mined then allocated as rewards to those who pick up the coin early. Although pre-mining is a much-maligned practice, in this case the profits won’t be funneled to developers and their friends but rather to initial adopters as a way to ensure the coin enjoys strong momentum right from launch.
Quoting the DNotes announcement thread on BitcoinTalk, these early rewards will be structured as follows:
25,000,000 DNotes are allocated to reward early miners as automatic block bonuses in the first month. (Blocks 250 – 33,250 reward an additional 750 coins)
15,000,000 will be issued to individuals and venues that assist to promote the success of DNotes.
10,000,000 DNotes are budgeted for development, marketing and ongoing support.
Bounties and prizes will also be on offer to attract a wider community.
In my opinion, the DNotes’ team’s aggressive approach to building an initial community is justified given the market for new altcoins is reaching saturation. If they can maintain strong initial momentum and community interest, this strategy could work out. The challenge will then be growing the coin beyond early adopters to a broader community, who may feel late to the party. Good services and merchant support will be needed going forward.
DNotes Launching Today at 19:00 EST / Tomorrow at 00:00 GMT
Visit the official DNotes website to download the client for Windows, Linux and Mac.
Mining pools are also listed on their site. Any mining software compatible with Litecoin / scrypt should work fine with DNotes.
If you’re new to mining, pools generally feature a “getting started” guide to help you choose and configure your mining software. I recommend registering with all available pools before the launch; redundancy is helpful should your first choice of pool experience problems. Multiple pools can also be set as failover options in your mining software, making your mining resistant to targeted DDoS attacks.