I assume this is a torrent-like scheme where files are broken into independent, verifiable (by hash) pieces, is that correct?
Storing data in nodes seems to assume unbounded storage space. How will you make sure that nodes actually have the requisite storage space? Particularly important for high bandwidth, storage constrained systems (I'm talking about VPSes, of course, which will probably be the source of the majority of the bandwidth).
It seems like this could be used for nefarious purposes (I'm talking about DDoS); will there be measures to control how many coins a potential attacker can get and/or use at the same time?
It also seems like at least in the beginning, the system will not come close to even saturating bandwidth. In that case, what determines who gets block rewards? Random chance? Latency?
No, it is not going to be anything similar to Bittorrent. We don't split files into chunks. In fact, we use tha simple to use and difficult to censor HTTP protocol as a base.
We ensure storage space by the Storage Law (yet to write, but in our minds). Basically means that if a node doesn't have enough space to store the content of the moderators he selected, it is penalized or even banned.
Aboutt the DDOS attacks, we are thinking in the Abuse Law, which will ensure that nobody tries to abuse bandwidth, or make short circuit connections, etc.
We don't use the same system as Bitcoin. Our blockchain is different. All nodes recieve money in proportion to what they have shared and nothing more. There are no chances, it is a simple division.
Please read what we have of the protocol, blank chapters are to be thought:
https://github.com/wetube/bitcloud/blob/master/bitcloud.org