Since Bitcoin, it seems like a new cryptocurrency comes out every year. Bitcoin and Ethereum started to take off in 2017, and there has been speculation about Dogecoin “going to the moon” in 2021. Cryptocurrency is supposed to be safer and more secure than cash, but it is also generally recognized as a risky investment. But what about Chia, the new, “greener” cryptocurrency?
What Is Chia Cryptocurrency?
Chia was developed by Bram Cohen, the founder of BitTorrent, in 2017. In 2018, Chia raised $3.395 million in startup funds. Like other cryptos, Chia is designed to be an international, digital currency that is harder to steal than cash. Chia says that its programming language, ChiaLisp, is enterprise-level, making it the most secure and transparent cryptocurrency available right now.
How Is It Different From Bitcoin?
Chia and Bitcoin have a lot in common. They both use the original Nakamoto Consensus algorithm. They are the only two cryptos that use this algorithm. The main difference is the way the coins are created. Where Bitcoin uses Proof of Work, Chia uses Proof of Space and Time.
Rather than having large, expensive units solve puzzles to earn coins, like in Bitcoin’s Proof of Work, Proof of Space and Time uses excess storage. This will not only make Chia more accessible to people who are just entering the cryptocurrency community, but Proof of Space and Time also makes Chia more sustainable. This means Chia has a good chance of being viable for a long time.
Why Is Chia a Green Cryptocurrency?
Chia is the greenest cryptocurrency because Proof of Space and Time replaces Proof of Work.
Proof of Work
In the Proof of Work model, people used powerful computers to solve difficult puzzles. This is called “mining” and is very energy-intensive.
Proof of Time and Space
Chia’s Proof of Space and Time uses the bits of unused storage on almost any computer as a “plot” and calls this process “farming.”
Chia isn’t perfect, though. Many supply chains were impacted by COVID-19 and have yet to recover. Chia went public in May of 2021. Already, excitement over farming Chia has caused shortages in hard drives and solid-state drive, or SSD, supply chains. This is expected to be a temporary issue during the life of Chia, but currently, it’s undermining Chia’s green status.
Good To Know
Despite the hiccup with the hard drives, Chia intends to be the digital currency for the everyman. It doesn’t require extensive processing power or one-time-use hardware. Chia claims that it will maintain transparency while offering higher levels of security and viability than Bitcoin is capable of with its Proof of Work model.
How Do You Get Chia?
Still thinking about investing in Chia? There are two ways you can go about getting your hands on some.
Chia released its initial public offering in early May and reached a high of $1,612 per coin on May 16. The price has been bouncing around wildly, as with most cryptocurrencies, but you can purchase someone anywhere you can get most cryptocurrencies, like Binance or Kraken. You will have to first buy Tether Coin, where each coin equals very close to $1 USD, but then you can use those to buy Chia.
Farming Chia is cheaper but a bit more involved. Chia coins are won. The more storage space you have available for Chia, the more likely you are to win a blockchain. If you have 10 TB dedicated to farming Chia, your chance of winning one is only 0.000052%. This sounds low, but if you aren’t using the space, you may as well put it to use.
If you win, the current reward is 2 XCH, which is Chia’s coin abbreviation. This reward will decrease over the next three years and then stabilize at that level.
Chia may not take extensive processing power, but it does still take time. The plots have to be plowed. For larger storage spaces, that can take days.
Is It Worth Buying Chia?
Chia hasn’t been around long enough to really prove itself, especially with the big claims made by its founder and president. If you believe in the idea of cryptocurrency as a whole and have an environmental mindset, Chia might be the right coin for you. Be sure to educate yourself on investing in crypto before you get started.
Cryptocurrency is volatile and may not be the right choice for you, but a diversified portfolio that includes Chia might be appropriate for you if you are interested in it.
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- CoinDesk. "Bitcoin Price | BTC Price Index and Live Chart."
- The New York Times. 2021. "The Assorted Teachings of Dogecoin."
- The Guardian. 2021. "New Cryptocurrency Chia Blamed for Hard Drive Shortages."
- CoinMarketCap. "Chia Network Price Today, XCH Live."
- Tom's Hardware. 2021. "How to Farm Chia Coin, the New Storage-Based Cryptocurrency."
- Chia. "FAQ - Chia Network."