What Is Chia? How To Buy the New Green Cryptocurrency

mining chia crypto on hard drive
Andrey Zhuravlev / iStock.com

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.

Building Wealth

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.

Buying Chia

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.

Building Wealth

Farming 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.

Takeaway

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.

Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.

About the Author

Diane Fogle is the owner and sole freelance writer at The Little Green Bird. She received her Masters of Library and Information Science from the University of Denver.  The research skills gained through that program, combined with a love of learning and intellectual freedom, have led her to a passion for helping businesses communicate with their customers. She lives in Colorado where she hikes with her husband, two young daughters and an old greyhound.

Untitled design (1)
Close popup The GBR Closer icon

Sending you timely financial stories that you can bank on.

Sign up for our daily newsletter for the latest financial news and trending topics.

Loading...
Please enter an email.
Please enter a valid email address.
There was an unknown error. Please try again later.

For our full Privacy Policy, click here.