Meet Chia: China’s new Bitcoin
- China has launched a new digital currency, Chia, being hailed as a direct competitor, only that it offers energy-saving rewards from home farms.
- To achieve higher energy efficiency, Chia Network reintroduced a consensus model called Space and Time Proof (PoST).
- Cryptocurrencies launch with a cap of 21 million tokens – a direct nod to Bitcoin.
- “Farmers” (miners) started making cryptocurrency shortly after launch.
Since Bitcoin’s launch in 2009, countless other crypto projects have competed with it, with much of it failing to the test of time. Now, we have Chia, hailed as the Green Bitcoin and the next Filecoin. Within a month of its launch, the hard drive was sold out in China. Here’s what you should know about China’s new cryptocurrency.
What is a Split Network?
Split Network Inc. is a China-based blockchain startup looking to reinvent digital currency. Chia was founded by Bram Cohen, the inventor of BitTorrent. On March 24, Chia Network Inc. introduced the revolutionary environmentally friendly blockchain and its new digital currency called “Split” (XCH).
Chia stated, “We believe that cryptocurrencies should be easier to use than cash, harder to lose, and almost impossible to steal.” The company hopes that their blockchain and the Chia currency will be used to complete cross-border payments and issue financial assets and stablecoins.
On a larger scale, Chia plans to sell software services and support for its smart trading software and open source blockchain to governments, financial institutions, corporations, and buyers. and sell large storage capacity.
A key feature of the Chia blockchain is the new consensus model it proposes called Space and Time Proof (PoST). The Business White Paper of Chia Network clearly states its goal to be the goal for sustainability.
The Next Filecoin – Just a competitor of Bitcoin
Chia has been called the Next Filecoin because it works in a similar way. To earn Split, miners – or as they are known as Chia Network farmers – allocate free storage space on their devices and are rewarded for their participation.
The Proof of Space and Time (PoST) divided model applied was generated by Cohen. Unlike other consensus models that consume large amounts of power to run mining rigs and single-purpose ASIC hardware to validate transactions, PoST utilizes “exabytes of provided disk space. Excessive has existed in today’s world ”.
Chia is trying to make home mining work again by allowing farmers to donate their unused computer storage space. To mine or farm, whatever you choose to call it, “just download the Mac or Windows version and double click.”
On the Flipside
- While the Proof of Space and Time (PoST) consensus model has been hailed as consuming less energy than Proof-of-Work, it is not without its downsides.
- One obvious downside is the ability of the malware to be downloaded onto one’s hard drive.
- While not as big of an issue as energy consumption, malware could be used to attack computers like 50 million affected devices by 2020.
Constant, predictable inflation and the way to go?
Another key point from Chia’s whitepaper is the roadmap towards token offering. While most other cryptocurrencies have hard limits, Chia argued that:
“The general expectation for total supply can be directly calculated at any given point in time for the same financial benefits and reassurance.”
Chia Network’s mainnet launches with 21 million XCH in circulation. According to the official report, it will take another 21 years for the current supply of tokens to double.
The white paper also acknowledges the importance of regulators in the crypto space, and Chia will adopt the regulations instead of trying to go against them. Chia Network has made it clear that it will choose to list publicly in the future.
By opting for a public listing, the Chia Network will essentially allow its proponents to treat its equity as an exchange-traded fund (ETF) for the XCH cryptocurrency.
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