BitTorrent inventor and legendary coder Bram Cohen has launched a new company called Chia Network. That network aims to create a cryptocurrency to compete with bitcoin.
One of the biggest criticisms about bitcoin is its energy consumption: a single block of bitcoin transactions requires as much energy as it takes to power an American home for a week. However, this energy expenditure also helps keep the network secure and active.
Chia aims to solve that problem by launching a cryptocurrency based not on bitcoin’s proof of work (PoW), but on proofs of time and storage.
Chia has been described as an “eco-friendly” cryptocurrency because it will harness cheap and abundant unused storage space on hard drives to verify its blockchain. The resources needed to power the Chia network already exist on a computer – they’re just not being utilized.
How Chia Works
The idea behind Chia is to make a better version of bitcoin while fixing its centralization problems. Chia does more than just avoid bitcoin’s PoW protocol: it also gives “farmers” (Chia’s version of miners) a better stake in the future of the ecosystem.
Here’s the basic idea behind Chia Network:
- There’s a network of full nodes that all keep the full history of the network and a set of pending transactions. These nodes propagate the three weightiest histories they know of to all of their peers. The bitcoin network, in comparison, propagates just the single weightiest history between peers.
- When a new block is minted, it propagates rapidly to all full nodes, at which point “farmers” start working on top of the block.
- When a farmer finds a new block, they publish that block to the network. Farmers all find the best “proof of space” they have. The three best proofs of space rapidly propagate the change through the whole network, then proofs of time servers start working on top of them. When a proof of time server finishes the proof of time for a proof of space, it publishes the whole thing as a fully validated block, then publishes it to the network to built on top of again.
What’s The Difference Between Chia And Bitcoin?
One of the advantages of bitcoin is that it uses proof of work to verify the blockchain. This makes bitcoin ultra secure: it’s prohibitively expensive for anyone to make a fake blockchain because it wouldn’t have as much work demonstrated as the real one. You could try to fake all of the work that’s led to the creation of the current bitcoin blockchain, but it would take a ridiculous amount of computing power to pull that off.
This sounds great – and it certainly has its advantages. However, there’s also a problem: over time, bitcoin’s proof of work protocol gives a massive advantage to those who operate in regions with low-cost electricity and naturally cool air. These people can operate their rigs with lower overhead expenses than those in other parts of the world. This leads to a centralization of mining power – and thus a centralization of control over the bitcoin network.
Chia Network uses a different system, relying on “proofs of space” in file storage. People already often have file storage, which means they can participate in “farming” at no additional cost.
Meanwhile, by combining proofs of space with proofs of time, Chia Network disarms a wide range of attacks to which proofs of space have been previously susceptible.
Who Is Bram Cohen?
Bram Cohen is the legendary inventor of BitTorrent. He invented torrenting in the early 2000s, pioneering the concept of peer to peer transfers over the internet.
Cohen later worked with Valve to develop Steam. He then built a new protocol for peer-to-peer live video transfer, building off his original work with BitTorrent. Management on the business side caused that project to implode, although it’s still in active development to this day. Cohen left the board of that company in early August to start Chia Network.
To bring Chia Network to life, Cohen has partnered with Ryan Singer, best-known for being the COO of early bitcoin exchange Tradehill.
Chia Network Conclusion
In terms of funding, the company claims to have gone through “a very hot round” according to TechCrunch, although they declined to say how much money they’ve raised. The company wants to do early sales of Chia in Q2 2018, with the ICO full launch occurring by the end of 2018.
Chia Network announced itself to the internet on November 8, 2017. To learn more about the platform and how it works, visit Chia.network today. It’s still in the early stages of development, but news about Chia Network should start ramping up as we get closer to 2018.