The Chia network, which focuses on an energy-efficient blockchain, launched its new digital currency, Chia (XCH). It aims to make mining accessible to everyone and significantly less damaging to the environment.
A network with green goals
Chia was founded in 2017 by the inventor of the BitTorrent network, Bram Cohen. Its primary function in the crypto space is as a blockchain and smart transaction platform with a twist. The network aims to take an environmentally friendly approach to blockchain functionality while touting steadfast decentralization, efficiency, and security for its users.
This year is pivotal for the network to start delivering on its green ideals.
In March, Chia launched its mainnet for “farming,” which is Chia’s analog, more eco-friendly version of mining.
On May 3, the network hit another major milestone. It enabled the possibility for “smart coin” transactions with the release of their green digital currency, Chia (XCH), alongside their programming language Chialisp.
Chia is dishing new takes on old ideas, as it implements “the first new Nakamoto consensus algorithm since bitcoin in 2008.”
XCH and Chialisp
The Chia network created their native currency from the belief that “cryptocurrency should be easier to use than cash, harder to lose, and nearly impossible to steal.”
Practically, the green digital currency was developed to reward farmers on the Chia blockchain.
Chia’s protocol is an enhanced yet less complicated use of bitcoin’s unspent transaction output system (UTXO). This provides for increased capabilities of the coins. As a farmer, one can earn 2 XCH per block during these first three years.
According to the network, in the days leading up to the launch of the Chia coin, the network came in as the “largest and most decentralized blockchain by full node count – usually exceeding 100,000 full nodes.”
The network operates off its new “smart coin” language called Chialisp. Unlike other blockchains before it, everything on the Chia blockchain is a coin.
Enter the “smart coin,” which delivers an attractive package of smart contracts and smart transaction capabilities all in one. Through Chialisp, applications on the network can function for banking, payments, asset disbursement, and exchanges. Chialisp’s major features include:
- Colored coins
- Digital identity wallets
- Rate limited wallets
- Authorized payee wallets
- Multi-signature wallets
- Recoverable wallets
- Atomic swaps
The crypto derivatives exchange ACDX is the first to launch a leveraged Bull Bear Strike Token (BBS) trading option for these new Chia Tokens (XCH).
Environment at stake
The crypto space never takes a day off. Things constantly evolve and do so at a rapid pace. Legacy networks in the space now see issues that stem from how they’ve always known how to operate.
The primary one is the environmental impact relating to energy efficiency and single-use hardware products in the mining process.
Bitcoin’s current energy consumption is at 95.45 TWh, while the annual CO2 impact is 45.34 metric tons (mt). These numbers are comparable to those of major global cities such as Hong Kong.
This past week news broke that Tesla has halted payments in bitcoin. Musk cited the cause of this development as the environmental costs of bitcoin, namely its high energy consumption.
He remarked that bitcoin would continue to be accepted once it functions on renewable energy. Otherwise, the company is seeking out cryptocurrencies that operate on less than <1% of bitcoin’s transaction energy.
On the other hand, the bitcoin mining operations of the Greenidge power plant, run by Atlas Holdings, are raising serious environmental concerns over the amount of energy it consumes.
The proof of work(POW) model appears not to work for the environment. Some are trying to navigate that by migrating to a proof of stake model (POS) such as Ripple and Cardano. Others are barreling forward at astronomical, unsustainable rates for climate change. That’s where Chia comes in.
Proof of space and time
Chia can potentially set the stage for a new wave of developmental change within the crypto space with their new consensus protocol. The network’s “proof of space and time” is the first of its kind. It reduces inequality in farming (mining), energy inefficiency and tackles the centralization of the traditional POW protocol.
For proof of space and time to function, it depends on a combination of storage space and time, a “verifiable delay function” (VDF) to fulfill its promises of security and efficiency.
According to Chia, those farming on the blockchain will need to “expend some CPU cycles to create ‘plots’ on hard drives, but will then utilize the energy-efficient resource of drive space over the following years to participate in the consensus mechanism that verifies new blocks on the Chia blockchain.”
This idea has the potential to reduce the egregious electricity costs that traditional protocols otherwise procure. With the storage aspect of proof of space and time, it would also allow farmers to validate transactions without single-use hardware.
Chia’s eco-friendly developments are new to the crypto and blockchain space, though much needed. It remains to be seen if their protocol can be implemented in the way they intend while enticing future farmers and developers.