The six things to know about green cryptocurrency Chia
There is a perception that Bitcoin consumes as much energy as some nations, but as Bitcoin is not energy-intensive, there exists some degree of criticism. But then, there is Chia, a green or eco-friendly cryptocurrency.
The Chia (XCH) system uses 'proofs of space and time' developed by Bram Cohen, who invented BitTorrent. There is already interest in Chia Price and the company behind Chia. It is backed by names like Andreessen Horowitz, Naval Ravikant, and Cypherpunk Holdings.
If you are keen to invest in this green cryptocurrency, then this article is just for you. Here are six things you need to know about Chia cryptocurrency (XCH).
Space-time model with 'proofs'
Chia's value proposition is based on 'proofs of space and time'. The idea is that someone places cryptographic numbers in specific plots on a hard drive or solid-state drive.
Farmers get XCH for each block of the blockchain, based on how much space they have compared to the network. The 'timelord' verifies each block, allowing the blockchain to continue.
Chia Network believes the new system will provide greater security than Ethereum and reduce the energy expenditures associated with Bitcoin.
High prices for SSDs and no hard drives
It may be an energy-saving method, but Chia's 'proofs of space and time' are already causing problems for hard disk and SSD manufacturers.
It was reported in DigiTimes that SSD orders increased 500 per cent for Taiwanese memory and storage manufacturer Adata since April.
There's also a South China Morning Post report saying e-commerce platforms like Alibaba's Taobao and JD.com sold out of enterprise-grade hard drives.
"We've had lots of inquiries lately about large hard drives for Chia mining," a Taobao customer service representative told the South China Morning Post.
The growing need for storage to 'farm' Chia is driving hard drive and SSD sales up. If the cryptocurrency becomes as popular as other altcoins, the business model could put real pressure on memory and storage manufacturers' supplies and pricing.
Transactional programming language
Chialisp powers smart transaction programming at Chia Network. This language combines the best aspects of Bitcoin's 'UTXO model' and Ethereum's 'Solidity model' to make the technology more secure and efficient.
No hard cap and anti-volatility reserve
Chia Network doesn't have a hard limit on the number of Chia coins it can store on its blockchain, unlike Bitcoin. Inflation should be continuous and predictable for the company. The company's white paper says: "Calculating the total supply directly at any given time gives the same financial and peace of mind benefits."
Chia Network has also created an XCH strategic reserve of 21 million, a nod to Bitcoin, to reduce the volatility of its coin.
Publication and regulation
Chia is unlike many other cryptocurrencies because it is backed by a formal company and intends to go public in the near future. Gene Hoffman, the CEO, and president of Chia Network told Decrypt that they hope to list their equity in the next six to twelve months.
Chia Network has also said it will embrace regulation since management sees 'scams and farces' in the industry hurting investors. In its whitepaper, the company notes that there is no controversy about the need for investors to be protected through public disclosure. However, the public should not be sold investments without the legally required transparency.
Encouragement of at-home farming
The expansion of publicly traded mining companies like Riot Blockchain and Marathon Digital Holdings has made Bitcoin mining harder. The ASIC miners they use are more powerful than the average at-home miner.
Bitcoin mining at home is no longer financially viable for many miners, especially when energy costs are taken into account.
There's a chance Chia's situation will change. The lack of competition will make this more profitable for those at home who seed their hard drives or SSDs. Also, Chia is very accessible. Gene Hoffman, Chia Network's CEO and president, says it was intended that way.
Cryptocurrencies are everywhere, but big-name investors rarely collaborate with top developers to address a common criticism - the high consumption of energy. Even though it can be difficult to predict how long and how high Chia can reach, its "proofs of space and time" model makes it different from most new altcoins.