Chia Coin: What Is It and How Does Chia Cryptocurrency Work?
One of the newest cryptocurrencies, Chia (XCH) was launched in early May 2021. Chia claims to be building an eco-friendly cryptocurrency ⚡ on an environmentally sustainable blockchain ? What is Chia crypto and how does it work? Is Chia Crypto Network a scam or legit project?
What Is the Chia Cryptocurrency?
Chia cryptocurrency is one of the newest crypto projects in the market. It was launched in 2018 and has already attracted the attention of both investors, crypto-traders, and people interested in crypto.
The coin was founded by Bram Cohen, the BitTorrent founder. The coin is supposed to be a viable alternative to fiat money.
Chia runs on its proprietary programming language ChiaLisp. It is believed to be an enterprise-level language that makes Chia the most secure cryptocurrency available in the market.
How Does Chia (XCH) Crypto Work?
Chia was launched to be a “green” cryptocurrency. We all know that Bitcoin, for example, uses a lot of energy for mining. Chia is very similar to Bitcoin in the regard that it also uses the original Nakamoto consensus algorithm. Well, just these two coins do it. So, you could expect them to be too similar, and they are, indeed.
However, there is one big difference between the two. Bitcoin uses the so-called proof-of-work algorithm that makes mining so energy-consuming. Chia uses a different algorithm called Proof of Space and Time.
The Chia Network's Proof of Space and Time (PoST) Algorithm
The Proof of Space algorithm used by Chia works based on a completely different principle than the Proof-of-Work algorithm used by Bitcoin. The Proof of Space algorithm uses excess storage space. It means that users don`t have to buy expensive mining equipment. Instead, they can use the available resources to enter the cryptocurrency community.
The Proof of Stake and Time algorithm uses unused storage space for so-called “farming” that can be compared to Bitcoin mining. To farm the coin, the software writes a “plot” - a large set of cryptographic data - on the disk. Every 18 seconds, the Chia network broadcasts a challenge. If you handle it, you win Chia coins. When more disk space is added, the challenges become more complicated.
Differences from Bitcoin
While both coins run on the same Nakamoto consensus algorithm, they are very different. The main differences between Bitcoin and ChiaBitcoin, the most popular and the most expensive cryptocurrency, has a significant problem. It uses a lot of energy for mining and thus, generates huge volumes of carbon emissions. We cannot call Bitcoin environmentally friendly at all.
Chia coin isn`t mined but farmed. To farm Chia, you need hard disc space. The Chia founder Cohen believed that Chia can just use the available space on any ordinary computer. Thus, the coin should have been environmentally friendly.
Bitcoin was supposed to be centralized. But we all know that the main mining power belongs to several major mining pools instead of being distributed among miners.
The Chia coin intended to address this issue, too. However, now, we can talk about the failure of this mission. Now, more than 36% of all the Chia rewards go to HPool, the largest Chia farming pool. Its capacity is increasing.
Can the Chia Network Reduce the Environmental Cost of Cryptocurrencies?
We have mentioned that it required a lot of electricity to mine Bitcoin. It was believed that the Chia coin was going to solve the issue and become the first sustainable coin. And indeed, only hard disk space was needed to farm the coin.
However, with time, it appeared that Chia is almost literally “eating” hard disks. While normally, you would expect an SSD to last at least a decade, if you use it for Chia farming, the disk may die within a couple of weeks.
Some hard disc manufacturers refused to honor warranties if their discs were used for Chia mining. Others banned Chia farming on their discs.
Yep, Chia doesn`t produce carbon dioxide, at least directly. However, due to the high SSD consumption, it produces a different waste type that is not less dangerous and harmful - rare metals from which some components in hard discs are made. This waste practically cannot be recycled and is highly toxic.
Chia farming is also pretty energy-consuming. To win challenges, you need a lot of computing power, and it means you will spend a lot of energy.
Therefore, while at the time of its launch, Chia was believed to be a “green” coin, now, we see that the coin has failed with this mission.
How to Get Chia Coin?
We have mentioned farming already. You can farm coins by winning challenges.
Another option is to buy your Chia coins on an instant exchange service such as LetsExchange. Here, on our platform, you can do it without registration and with the best rates.
Conclusion
Chia was an ambitious project. The coin was regarded as a perfect long-term investment. But now, we can see that the main mission of the coin - being environmentally friendly - has failed. In the long run, we can still expect many changes and improvements that can lead the coin to a new level.
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