Chia: New eco-coin as bitcoin replacement

The developer of BitTorrent wants to develop an environmentally friendly cryptocurrency named Chia. He wants to counter the increasing power consumption when mining bitcoins with a mixture of proof of time and proof of space.

The mining of cryptocurrencies, especially Bitcoin, is repeatedly criticized for its high energy consumption. The bill is easy to break down: More energy, more computing power, more Bitcoin. This leads to an increased environmental impact. Chia should counteract the whole as a replacement for Bitcoin & Co.

Bitcoin, the power-hungry

Bitcoin is not exactly the star of the eco-sky. It is estimated that the current course for miners would make it profitable to consume over 24 terawatt hours of electricity a year - about as much as Nigeria consumes in a year with its 186 million inhabitants a year.

Current electricity prices also mean that, understandably, mining takes place in regions where costs are low. For example, there is a coal-fired mine in Mongolia, which consumes a lot of electricity.

In addition, it produces at least up to 24,000 kilograms of CO2 per hour. That's about as much as driving 203,000 kilometres by car. Adding all this down to the "end product", the actual Bitcoin transaction, ends up with 215-kilowatt hours of electricity per transaction.

That's about as much as you spend in a year when a flat-screen TV runs for four hours a day, or you dry your hair with 3.7 hair dryers for 5 minutes a day.

Chia is said to be the better Bitcoin

Now the inventor of BitTorrent, Bram Cohen, has founded a company that wants to approach this problem, the Chia Network.

Instead of using Bitcoin's proven proof-of-work method to validate the computational blocks, Chia uses the Proof of Time and Proof of Space methods in mining (now called Farms!). Farming then offloads data to miners' computers.

The unused space on the computers of the farmers then makes it possible to verify the respective processes. The farmers of the new cryptocurrency must then prove that they have used the space to coin new blocks.

In exchange, the farmers will then receive rewards and transaction fees for all transactions in which they participate. By using storage space instead of computing power for validation, massive power savings are made - an undeniable advantage over Bitcoin.

Chia lost in Time & Space

The proof of space is very similar to the proof of work. Only in the proof-of-space process, not the CPU performance, but the storage capacities of the users are claimed.

The proof-of-time proof, or "Verifiable Delay Algorithm," is a modification of the proof of work, in which a certain number of runs are fixed from the outset. Finally, the verification runs that every two farmers who perform the calculation, come to the same result. The verification process finally assures that the output has not been modified.

The merger of the two methods should be used at Chia. For each new block, Full Nodes distribute the three heaviest data blocks to the farmers, using the proof-of-space method. After that, the servers start validating and creating the new block. Each of these blocks starts with a proof of space and ends with a proof of time. The storage capacities are then released after the block has been created, can be formatted and used again. This fact makes the whole thing more economical and ecological.

The first coupons of Chia can be bought in the second quarter of 2018. The final launch of eco-coins is scheduled for the end of 2018.