A Beginners Guide to Chia — the Green Bitcoin
By now, every hardcore crypto enthusiast has probably stumbled across Chia at some point. Among crypto beginners and people looking to become a part of the blockchain scene, it may still be flying under the radar. In recent weeks, a lot has happened in the Chia sphere and this article serves as a jumpstart to understanding Chia. We will give you an overview on the Chia Project by explaining its underlying concepts and covering important aspects such as the history of the project, the founding team and recent developments.
What exactly is Chia?
Let’s first cover a basic question we are asked on a frequent basis: What exactly is Chia?
Even if you were into other cryptocurrencies before, Chia is a very different beast.
The Chia Network is a decentralized peer-to-peer blockchain protocol, relying on the revolutionary proof of space and time concept for achieving consensus.
An interesting fact: Chia is now the largest storage-related blockchain.
Rather than mining coins by dedicating large amounts of processing power to the task, Chia simply requires storing so-called plots on empty storage space.
The Chia network utilizes a blockchain in which the network is secured by individuals called farmers — as opposed to the “Miner” terminology commonly used among other cryptocurrencies — who harvest Chia Coins through the allocation of memory of disk space.
Since the proof of space and time approach does not use computing power, it does not require a lot of energy to create coins, in fact Chia’s system requires far less energy than Bitcoin and is more democratic than proof of work.
Let me explain: Mining Bitcoin has eliminated the ordinary person from participation, as the required computing power to mine a bitcoin exceeds the possibilities of regular, built-at-home set-ups. With Chia, every plot — no matter if it is stored on your left-over hard drive at home or in a large data center — has the same chance of winning in the so-called raffle.
The raffle is a process happening every 18.75 seconds and in this process, every active plot has the chance of winning two Chia coins as a reward for providing space to the network.
To be fair, the bigger the network gets, the smaller the chances of winning for one single plot, but pooling can be a solution to keep small farmers in the game.
You may ask yourself what exactly farming is and how it works. Don’t worry, we already published another article introducing you to the concept of farming.
Let’s continue this introduction with the revolutionary underlying consensus — a core piece to understanding Chia.
What is Proof of Space and Time?
In short, Proof of Space and Time means that someone can guarantee that they are providing a certain amount of storage for a period of time to the Chia network. Proving the allocation of storage space requires far less energy than solving the bitcoin challenges within the proof of work concept, making Chia one of the greenest cryptocurrencies out there.
Next up, I will tell you about the people behind this ambitious company and blockchain.
Who is behind Chia?
The Chia project was incorporated in August of 2017 to develop an improved blockchain and smart transaction platform.
The whole Chia Network protocol is being developed by a team led by Bram Cohen, the creator of BitTorrent and a luminary in the tech-scene.
Besides Bram, other executive leaders include Gene Hoffman, the former founder and CEO of eMusic.com and subscription management firm Vindicia, and Mitch Edwards, the former acting-CEO of online retailer Overstock.com.
New additions to the team include the VP Product, Paul Hainsworth and the newest member of the board is Jill Carlson — a renowned figure in the crypto-scene.
Now that you have gained a decent overview of the Chia project, let’s mention some recent news around the company.
Recent News around Chia
The company behind Chia recently completed a major funding round, raising $61 million at a $500 million valuation and even Silicon Valley’s star-investors from Andreessen Horowitz participated in the round.
Another interesting fact to keep your eyes on in the coming weeks and months: The company behind Chia has plans to go public as early as this year — their IPO would make Chia stand out even more, as no other crypto project has taken this course of action before.
This all sounds exciting but there are so many coins out there right now and you might ask yourself: What makes Chia a good investment opportunity? Or is it a good opportunity at all? Let me round this article up by giving you my personal opinion on this question.
Is Chia the next big thing in Crypto?
As mentioned before, Chia has a new and innovative Nakamoto consensus algorithm that removes the energy demands of Proof of Work from the system, making it part of the much needed solutions to drive down energy consumption of cryptocurrencies and blockchains such as Bitcoin.
Therefore, Chia is also called “green money” and the nickname makes sense, as Chia consumes between 300 to 10,000 times less electricity to provide the same level of security as proof of work.
According to its founders this project “eliminates the unfairness, energy inefficiency, and centralization of proof of work” and compared to other cryptocurrencies, Chia has significantly better security due to its more decentralized blockchain.
Overall, only time will tell how Chia will develop, but we see some strong indicators pointing towards a bright future for this project.
To stay updated on the Chia project, make sure to follow us on YouTube, Twitter and also join our expert community on Discord, where members of our team as well as other Chia experts will answer all your questions concerning the Chia blockchain.
