BitTorrent Creator Bram Cohen is Launching a “Proof of Space”-based Cryptocurrency
Bram Cohen, who co-founded BitTorrent back in 2001, is reportedly preparing to launch a new cryptocurrency based on a “proof of space” consensus algorithm.
Cohen claims the proof of space consensus algorithm allows the cryptocurrency to function like a “greener” version of bitcoin. The news is being reported by Wired, which has further details about Cohen’s Chia startup and its proposed Chia coin cryptocurrency secured by proof of space consensus.
That startup aims to make crypto accessible to the financial industry without negatively impacting the planet. To do that, Chia will take advantage of empty space on users’ computers. That’s where the name “proof of space” comes from.
The company is officially organized under the name the Chia Network. Cohen plans to move the company’s offices to San Francisco in the near future. That move is significant because the Chia Network’s planned office headquarters is right next door to the office of the United States Securities and Exchange Commission (SEC).
Bram Cohen, who serves as CTO and Chairman at the Chia Network, is reportedly “happy” to have the SEC right next door to his company because he believes regulations will help fight scammers, advancing the crypto industry as a whole while allowing more legitimate crypto companies to move forward.
Chia Will Hold an IPO in the Near Future
Having the SEC next door will also help Chia solve another problem: launching an IPO.
Cohen and the Chia Network aren’t planning to launch an ICO; instead, the company is planning to go public through a traditional initial public offering (IPO). The Chia Network will file to list shares no a small-cap public stock exchange by the end of 2018.
The Chia Network may not be holding an ICO, but the company is still planning to launch its own native token called Chia Coins.
How Will the Chia Network Make Money?
The Chia Network plans to generate revenue by partnering with banks. Specifically, according to the Wired report, the Chia Network will generate revenue by “helping banks build systems to use the cryptocurrency…for functions like international transfers.”
The Chia Network also plans to hold a “significant chunk” of the total supply of Chia Coins. This might mean that Chia will work in a similar way to Ripple with its XRP digital currency. XRP is officially decentralized, but Ripple holds the majority of the total supply of the currency, and Ripple generates revenue by periodically selling XRP to the market.
How Will Proof of Space Work?
What exactly is a proof of space consensus mechanism? How can the Chia coin cryptocurrency offer secure transactions while remaining environmentally friendly?
It’s not totally clear how proof of space will work. However, we know that it will be a mineable cryptocurrency.
Chia coin can be mined without using enormous amounts of electricity. It appears to work on a system similar to proof of stake: Chia coin miners can maximize their chances of winning a Chia coin block reward by amassing a large amount of disk storage space together.
One of the reasons Chia coin is seen as environmentally friendly is because there’s already a significant amount of empty storage space on computers worldwide. Chia Coin will take advantage of a resource that is not currently being used – unlike proof of work blockchains, which drain electricity at rate similar to the world’s largest countries.
That’s where the “proof of space” comes from: it’s proof that you have space on a hard drive.
Other expected features of the cryptocurrency will reportedly include the ability to hold funds for escrow, automate contracts, and allow for chargebacks. According to Cohen, the goal is to make Chia coin “the premier cryptocurrency based off of our technology.” Cohen wants to make Chia coin “a competitor to bitcoin, but better.”
The Chia coin cryptocurrency is reportedly preparing to launch sometime in 2019. Chia has already raised $3.4 million from investors like Andreesen Horowitz and Greylock Partners. The biggest challenge for Chia, moving forward, will be conducting a regulated IPO after approval from the SEC.
Stay tuned for more information about Bram Cohen’s Chia as it continues to develop its proof of space protocol.