What is Chia Network (CHIA)?
Chia Network (CHIA) Is a blockchain platform for creating and executing smart contracts written in a programming language Chialisp…
What problems does Chia Network solve?
According to the creators of the Chia Network, bitcoin mining is harmful to the environment and requires powerful computing resources that are inaccessible to most users (we have analyzed the environmental problem in detail in an exclusive article).
Chia seeks to address these challenges by leveraging some of the key parameters of PoW blockchains in tandem with new technological solutions.
What does the name “Chia” mean?
Chia is marketed as a “green” cryptocurrency because it uses energy-efficient hard drives and efficient solid-state drives in its mining process.
Emphasizing its “green” character, the creators named the cryptocurrency in honor of chia white (Spanish sage) – plants originally from Central America, which was the most important culture of the Aztecs. Chia seeds are superior to milk in terms of calcium content. In recent years, they have gained popularity among vegetarians in the US, and the EU has officially recognized chia as a “promising food”.
Who created Chia and when?
The creator of Chia is Bram Cohen, an American programmer and founder of the BitTorrent network. In August 2017, he registered a company in San Francisco Chia networkwhich is developing the Chia blockchain. The president of the company is the former head of Nasdaq Jean Hoffman, the chief financial officer is the former head of Overstock Mitch Edwards.
Since March 2018, the company has raised about $ 77 million in financing through agreements SAFE… The last round for $ 61 million ended in May 2021. The company was supported by venture funds Andreessen Horowitz, Galaxy Investment Group, DCM Ventures, True Ventures, Richmond Global Ventures and others. The company was valued at $ 500 million during the funding round.
Chia mainnet launch took place March 19, 2021.
On May 3, 2021, the developers activated transactions on the network. Chia started trading on a number of exchanges.
How does Chia Network work?
The Chia blockchain uses a Proof-of-Space (proof space) and Proof-of-Time (proof of time).
Concept presented in September 2017 by Bram Cohen and other researchers in a paper “Beyond Hellman’s Time-Memory Trade-Offs with Applications to Proofs of Space”…
They proposed a mining process using the computer’s disk space, rather than its computing power. With this approach, the probability of mining a block is proportional to the amount of allocated space divided by the total network bandwidth. This method, according to the authors, is more environmentally friendly than Proof-of-Work, and more cost-effective.
The process of mining coins in Chia is called farming, and mining users are called farmers…
Farming consists of two stages: plotting and harvesting…
Plotting
With Proof-of-Space, the user confirms that there is free space on the computer’s hard disk. Plotting requires a high-performance storage device – it is used as a buffer for temporary storage of information. The smallest buffer is an SSD over 356.5 GB. It is enough to “seed” the site [плота] the size of 108.8 GB. The plotting time for one site takes from 4 to 12 hours.
The plotting process does not require an internet connection and consists of the following phases:
- seeding – generation of seven tables of cryptographic hashes and storing them on a temporary disk;
- calculating the gradient [backpropagation] hashes;
- sorting and algorithmic compression of the hashes in the temporary folder and starting the creation of the final file raft;
- completing the creation of the raft file and transferring it to the disk raft for further harvesting.
Harvesting
During the creation of the next block, the system announces a challenge (task), and the farmer scans his site, finding a hash that is as close as possible to the task parameters. The chances of getting a block depend on the farmer’s share in the total network space.
This process is similar to a lottery – the block reward (within three years after the launch of the blockchain is 64 XCH) is received by the first 32 farmers who have provided a solution to the cryptographic problem.
The Proof-of-Time algorithm ensures the frequency of block creation and increases the security of the blockchain.
Proof of time is implemented by verification nodes, the so-called time lords [timelords], using the test delay function [Verifiable Delay Function, VDF]… This function takes a certain amount of time to compute, but it can be tested very quickly. Verifiable latency minimizes power waste and also eliminates the opportunity to benefit from concurrent use of multiple devices.
There will probably be relatively few “time lords”. The fastest finishes first, and only one fast and fair timelord is required to complete the block and move the chain forward.
Chialisp programming language
Chia Network uses programming language Chialisp… The first version of Chialisp was released in 2019 and received high praise from the DeFi industry and developers.
Chialisp combines key elements of the Ethereum and Solidity codebase with Bitcoin Core and model UTXO bitcoin. This approach allows transactions to be carried out in parallel rather than sequentially.
Chialisp recognizes coin IDs, which can also verify their IDs. This allows clear self-addressing and eliminates the need for self-replicating programs.
According to the creators, the language is efficient, flexible and easy to audit. Chialisp is expected to enable developers to build a wide range of services on the Chia platform, including cross-border payments and stablecoin issuance. Atomic swaps, multi-signature wallets and “colored coins” are already available on the platform [colored coins]…
Chia Token (XCH)
Chia (XCH) is a Chia Network utility token that uses Bitcoin’s customized UTXO model and is used to financially reward network members.
The first three years the block reward is 64 XCH for 32 farmers. Every three years the award is halved. This scheme is valid for four three-year periods, after which the halving is terminated.
In the first three years, farmers will generate about 3.4 million XCH per year, the next three years – half that, etc.
By the end of the sixth year after the mainnet launch, users will have 42% of the coins in their hands. It will take 21 years of farming for the number of coins on hand to equal the number of tokens in the strategic reserve.
Strategic reserve
When launching the main network, the company created a strategic reserve (prefarm) in 21 million XCH. The vesting program will be implemented with the help of smart contracts.
In the future, the company plans to go public on the NYSE and NASDAQ. The shares will be used as ETFs pegged to the token price.
The distribution of funds among investors and users will be controlled by the governing council. The community will be notified of the sale of coins from the strategic reserve 90 days in advance. Company employees and contractors will not be able to receive payments in XCH tokens.
How is Chia developing?
The development of the project entailed a number of problems:
- Deficit: Back in April 2021, before trading began, Chia farmers created a local HDD and SSD shortage in the PRC.
- Rising hardware prices: In May 2021, Taiwanese company Phison Electronics warned of an impending increase in SSD prices due to the hype around Chia mining. In May of that year, due to increased demand for hard drives from Chia farmers, prices for models with more memory from American retailers rose by several hundred dollars.
- Restrictions on the sale and operation of equipment: In April 2021, the Chinese company Galax warned users that it would refuse warranty service for SSDs if they were used to mine Chia. At the same time, several Chinese manufacturers of solid state drives announced the release of specialized storage devices for mining cryptocurrency. The warranty period for them will be significantly shorter than usual. Chia’s pharming cuts the lifespan of a 512GB SSD from five years to two months, experts estimate.
By the end of 2021, the company intends to conduct an initial public offering (IPO) that meets the requirements of the SEC, but also does not exclude the option of a merger with another firm – SPAC.
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Related articles
What is Chia Network (CHIA)?
Chia Network (CHIA) Is a blockchain platform for creating and executing smart contracts written in a programming language Chialisp…
What problems does Chia Network solve?
According to the creators of the Chia Network, bitcoin mining is harmful to the environment and requires powerful computing resources that are inaccessible to most users (we have analyzed the environmental problem in detail in an exclusive article).
Chia seeks to address these challenges by leveraging some of the key parameters of PoW blockchains in tandem with new technological solutions.
What does the name “Chia” mean?
Chia is marketed as a “green” cryptocurrency because it uses energy-efficient hard drives and efficient solid-state drives in its mining process.
Emphasizing its “green” character, the creators named the cryptocurrency in honor of chia white (Spanish sage) – plants originally from Central America, which was the most important culture of the Aztecs. Chia seeds are superior to milk in terms of calcium content. In recent years, they have gained popularity among vegetarians in the US, and the EU has officially recognized chia as a “promising food”.
Who created Chia and when?
The creator of Chia is Bram Cohen, an American programmer and founder of the BitTorrent network. In August 2017, he registered a company in San Francisco Chia networkwhich is developing the Chia blockchain. The president of the company is the former head of Nasdaq Jean Hoffman, the chief financial officer is the former head of Overstock Mitch Edwards.
Since March 2018, the company has raised about $ 77 million in financing through agreements SAFE… The last round for $ 61 million ended in May 2021. The company was supported by venture funds Andreessen Horowitz, Galaxy Investment Group, DCM Ventures, True Ventures, Richmond Global Ventures and others. The company was valued at $ 500 million during the funding round.
Chia mainnet launch took place March 19, 2021.
On May 3, 2021, the developers activated transactions on the network. Chia started trading on a number of exchanges.
How does Chia Network work?
The Chia blockchain uses a Proof-of-Space (proof space) and Proof-of-Time (proof of time).
Concept presented in September 2017 by Bram Cohen and other researchers in a paper “Beyond Hellman’s Time-Memory Trade-Offs with Applications to Proofs of Space”…
They proposed a mining process using the computer’s disk space, rather than its computing power. With this approach, the probability of mining a block is proportional to the amount of allocated space divided by the total network bandwidth. This method, according to the authors, is more environmentally friendly than Proof-of-Work, and more cost-effective.
The process of mining coins in Chia is called farming, and mining users are called farmers…
Farming consists of two stages: plotting and harvesting…
Plotting
With Proof-of-Space, the user confirms that there is free space on the computer’s hard disk. Plotting requires a high-performance storage device – it is used as a buffer for temporary storage of information. The smallest buffer is an SSD over 356.5 GB. It is enough to “seed” the site [плота] the size of 108.8 GB. The plotting time for one site takes from 4 to 12 hours.
The plotting process does not require an internet connection and consists of the following phases:
- seeding – generation of seven tables of cryptographic hashes and storing them on a temporary disk;
- calculating the gradient [backpropagation] hashes;
- sorting and algorithmic compression of the hashes in the temporary folder and starting the creation of the final file raft;
- completing the creation of the raft file and transferring it to the disk raft for further harvesting.
Harvesting
During the creation of the next block, the system announces a challenge (task), and the farmer scans his site, finding a hash that is as close as possible to the task parameters. The chances of getting a block depend on the farmer’s share in the total network space.
This process is similar to a lottery – the block reward (within three years after the launch of the blockchain is 64 XCH) is received by the first 32 farmers who have provided a solution to the cryptographic problem.
The Proof-of-Time algorithm ensures the frequency of block creation and increases the security of the blockchain.
Proof of time is implemented by verification nodes, the so-called time lords [timelords], using the test delay function [Verifiable Delay Function, VDF]… This function takes a certain amount of time to compute, but it can be tested very quickly. Verifiable latency minimizes power waste and also eliminates the opportunity to benefit from concurrent use of multiple devices.
There will probably be relatively few “time lords”. The fastest finishes first, and only one fast and fair timelord is required to complete the block and move the chain forward.
Chialisp programming language
Chia Network uses programming language Chialisp… The first version of Chialisp was released in 2019 and received high praise from the DeFi industry and developers.
Chialisp combines key elements of the Ethereum and Solidity codebase with Bitcoin Core and model UTXO bitcoin. This approach allows transactions to be carried out in parallel rather than sequentially.
Chialisp recognizes coin IDs, which can also verify their IDs. This allows clear self-addressing and eliminates the need for self-replicating programs.
According to the creators, the language is efficient, flexible and easy to audit. Chialisp is expected to enable developers to build a wide range of services on the Chia platform, including cross-border payments and stablecoin issuance. Atomic swaps, multi-signature wallets and “colored coins” are already available on the platform [colored coins]…
Chia Token (XCH)
Chia (XCH) is a Chia Network utility token that uses Bitcoin’s customized UTXO model and is used to financially reward network members.
The first three years the block reward is 64 XCH for 32 farmers. Every three years the award is halved. This scheme is valid for four three-year periods, after which the halving is terminated.
In the first three years, farmers will generate about 3.4 million XCH per year, the next three years – half that, etc.
By the end of the sixth year after the mainnet launch, users will have 42% of the coins in their hands. It will take 21 years of farming for the number of coins on hand to equal the number of tokens in the strategic reserve.
Strategic reserve
When launching the main network, the company created a strategic reserve (prefarm) in 21 million XCH. The vesting program will be implemented with the help of smart contracts.
In the future, the company plans to go public on the NYSE and NASDAQ. The shares will be used as ETFs pegged to the token price.
The distribution of funds among investors and users will be controlled by the governing council. The community will be notified of the sale of coins from the strategic reserve 90 days in advance. Company employees and contractors will not be able to receive payments in XCH tokens.
How is Chia developing?
The development of the project entailed a number of problems:
- Deficit: Back in April 2021, before trading began, Chia farmers created a local HDD and SSD shortage in the PRC.
- Rising hardware prices: In May 2021, Taiwanese company Phison Electronics warned of an impending increase in SSD prices due to the hype around Chia mining. In May of that year, due to increased demand for hard drives from Chia farmers, prices for models with more memory from American retailers rose by several hundred dollars.
- Restrictions on the sale and operation of equipment: In April 2021, the Chinese company Galax warned users that it would refuse warranty service for SSDs if they were used to mine Chia. At the same time, several Chinese manufacturers of solid state drives announced the release of specialized storage devices for mining cryptocurrency. The warranty period for them will be significantly shorter than usual. Chia’s pharming cuts the lifespan of a 512GB SSD from five years to two months, experts estimate.
By the end of 2021, the company intends to conduct an initial public offering (IPO) that meets the requirements of the SEC, but also does not exclude the option of a merger with another firm – SPAC.
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