What is the Chia Network (XCH)?

Chia (XCH) is a relatively new cryptocurrency that was introduced in May 2021. Chia claims to be the world's first environmentally friendly blockchain currency. What exactly is Chia Cryptocurrency, and how does it function? Is the Chia Crypto Network a reliable investment or a scam?

Chia, an emerging cryptocurrency on the market, has generated plenty of interest among investors, cryptographers and casual crypto users since its launch in 2018.

The coin was created by BitTorrent creator Bram Cohen. The currency is meant to be a reasonable alternative to fiat money.

Chia is a cryptocurrency that runs on its programming language, ChiaLisp. It is called an enterprise-level language, making it more secure than other cryptocurrencies currently available.

Chia was created as a “green” cryptocurrency, which is notable because bitcoin and other cryptocurrencies are generally regarded as environmentally harmful. Chia is quite comparable to Bitcoin in that it employs the original Nakamoto consensus algorithm, just like Bitcoin does. Well, only these two coins accomplish this. As a result, you might predict them to have a lot of the same features.

Bitcoin employs a proof-of-work system while Chia opts for something distinct – the Proof of Space and Time. This delineation between these two technologies is particularly evident.

Chia's Proof of Space algorithm works on a different principle than Bitcoin's Proof-of-Work mechanism. The Proof of Space method requires available storage space. This implies that individuals do not need to invest in expensive mining equipment. Instead, they may participate in the cryptocurrency community by utilizing accessible resources.

Chia utilizes the unused space in a file to create “farming,” which is similar to bitcoin mining. To farm the coin, the program generates a “tale” – a massive collection of cryptographic data – on disk. Every 18 seconds, the Chia network broadcasts a challenge. You win Chia (XCH) if you can complete this task. The sum of coins you collect is relative to the amount of storage capacity you possess.

Chia has some distinct characteristics from traditional blockchains such as bitcoin.

Chialisp is a smart contract programming language that runs the ChiaLisp virtual machine, which is similar to the Ethereum Virtual Machine ( EVM ). Chialisp uses a so-called coin set model, similar to Bitcoin's unspent transaction mechanism, to keep track of the blockchain state and prevent double-spending. Chia claims that their system is more secure, however, due to the use of cryptographic accumulators.

Security

The security of the Chia network is based on cryptographic hash functions and digital signatures. By utilizing hash functions, it is possible to map data of any size – no matter how large or small – onto fixed-size datasets. The output of a hash function is called a message digest or a fingerprint. A digital signature is a mathematical scheme for demonstrating the authenticity of digital messages or documents.

Chia Network's proof-of-time and proof-of-space consensus are more energy efficient than PoW. Chia claims that its vast number of nodes participating in its security makes it the most decentralized network on the planet. Proof chia also eliminates 51% of attacks that have become rampant among other blockchains recently.

Chia pools prevent miners from colluding by removing their ability to modify the blockchain. Because pool operators do not have authority over rewards distribution, they are unable to collude with miners. A farmer is entitled to 12.5% of the reward for a successful block, whereas the pool operator keeps the rest; hence pool operators cannot harm competitors by mining empty blocks.

Although Chia did not have an ICO, it still needed money to finance the development of its product. While investors do not earn tokens, they can exchange some of the network's reserve for short-term profits. This pre-processed 21 million XCH is being invested into long-term network development. Chia plans to use the strategic reserve in three ways:

• Lending: Lending XCH to customers and creating liquidity for XCH.
• There are additional agricultural bonuses as well. Investment: These are the credentials and permissions granted to developers and projects that help to expand the network.
• Stock repurchase: Chia wants to go public in addition to its strategic reserve, and it may do so by selling these tokens.
• Dividends: XCH is the new cryptocurrency that was created by Cardano, and it has a lot of potentials. XCH can be used as a dividend when the network goes commercial.

The Chia network uses a halving of block rewards to thank nodes for keeping it secure.

• 2021-2024: 2 XCH per block.
• 2025-2027: 1 XCH per block.
• 2028-2030: 0.5 XCH per block.

From 2021 to 2023, 0.25 XCH per block will be generated.

In the year 2034, 0.125 XCH is generated in perpetuity.

In addition to the usual formula, farmers may earn XCH on a rotating basis if they are selected for any of these criteria:

• generating a block;
• joining and rejoining pools to receive rewards;
• or completing one's bonus conditions.

Mining rewards are shared between the farmer and the pool. The first part is kept by the farmer.

The Chia Network ( XCH ) is currently chia coin value at about $66, down from its all-time high of $1,934.51 set in May 2021. Its 24-hour trading volume on the exchanges totals approximately $8.3 million and its market capitalization has been entirely diluted. roughly less than $1.5 billion

The Chia Network is a DAO that plans to build the foundation for next-gen internet apps. Its layout mirrors Solana's, and it has an innovative new consent algorithm in development.

• It could be very useful for business clients if the architecture is shown to function at scale;
• Chia Network, according to its website, is “targeting business clients who want to use blockchain without the need for a centralized party.”

This project is brimming with possibilities and its value is likely to go up as more people become aware of it.

In contrast, XCH token from Chia has dropped 95% of its maximum value indicating that investors are not confident in the promise offered by Chia. Furthermore, the network has been trading below $200 for more than six months, suggesting that this is not a market-driven fall but rather the consequence of poor project fundamentals.

Chia's approach to leaving management in the hands of its executive board and holding a public offering, as well as tokenization, might lead investors to believe that XCH mining is not worth it. Traditionally, cryptocurrency investors have been wary of corporate entities.

If Chia Network can more evidently show how its usage scenario is linked to community support for the project, by potentially changing its governance, the price of XCH could change. Additionally, Chia Network has created its first P2P exchange (P2P) that is only accessible through the Chia wallet. It teamed up with Stable to launch the first stable dollar-denominated coin online, and it began a partnership with Tether to bring the Chia network's native currency online. Even though the cryptocurrency market is volatile, these partnerships could help increase the price of XCH in the long term.

Although both currencies use the same Nakamoto consensus mechanism, they are significantly different. The main distinctions between Bitcoin and ChiaBitcoin, the most popular and expensive cryptocurrency, include a weighty drawback. Mining is an intensive process that puts a large strain on our environment, spewing substantial amounts of carbon emissions into the air. We cannot claim that Bitcoin is environmentally friendly in the least.

Chia is a cryptocurrency that has no mining involved. It's not mined; it's just processed. To produce chia, you'll need free disk space on your computer. Chia founder Cohen felt that Chia could take advantage of any computer's available storage space. As a result, the currency had to be environmentally beneficial.

Although Bitcoin was supposed to be centralized, a few large mining pools control the majority of the mining power instead of it being evenly distributed among miners. The Chia coin aims to address this issue. However, we may already speak about the failure of this objective. Nowadays, more than 36% of all Chia rewards are paid out to HPool, the largest chia farming pool. Its capacity is also growing.

We mentioned that it takes a lot of electricity to mine bitcoins. It was thought that the Chia coin would solve the problem and become the first sustainable coin. Indeed, the only thing needed to farm the coin was hard-to-drive space.

Though some people believe Chia to be a more environmentally friendly mining alternative, many others are against its adoption because of the large number of hard disk drives required for farming. If this process became widespread, electronic waste would soaringly increase due to emissions from increased hardware manufacturing. For example, if 512-GB hard drives were used forChia farming, their lifespan would decrease dramatically from ten years to two months or less.

manufacturing companies like Western Digital and Seagate have noted a heightened demand for hard disk drives and graphic cards,2 causing a financial burden on HDD consumers. For example, Hetzner Online Gmbh, a German cloud storage company, halted Chia farming due to the excessive server load it was incurring.3 Consequently, as more side effects from Chia farming arise, so do higher prices for technological devices and increased regulation against cryptocurrency mining.