Cryptocurrency Chia: The sustainably new rival to Bitcoin

Introduction

This article will talk in detail about the newest rival to Bitcoin — Cryptocurrency Chia. A cryptocurrency is a digital currency that is protected by encryption, making it difficult to counterfeit or double-spend. Many low-level cryptocurrency networks are based on distributed blockchain-led technology forcing a separate computer network. The defining feature of cryptocurrencies is that they are decentralized. This gives them the power to protect themselves from government interference and/or any form of malpractice, fraud.

Cryptocurrencies are fundamentally designed to be uncontrollable by government administration. Although as they grow older, the government is bound to introduce some regulatory laws around them. The oldest and the most popular Cryptocurrency is none other than Bitcoin. Bitcoin introduced the world to Blockchain technology. The BTC transactions are fast and they keep the anonymity of the users intact. Despite Bitcoin being the most popular cryptocurrency, it has one major disadvantage, the enormous amount of energy consumed to mine a Bitcoin.

Bitcoin’s Energy Usage

Bitcoin uses around 110 terawatt-hours of energy (TWh) in a year which is absolutely huge. In perspective, this is equivalent to the energy consumption of a country like Malaysia. Here the question is whether the energy is finite or renewable. Is it really worth it to consume so much energy for mining Bitcoin?

Mining Bitcoins require rigs which are basically computers with GPUs or multiple graphic cards. These rigs are extremely powerful and require a high-watt power supply. These graphic cards run 24/7. These rigs also generate a lot of heat which requires cooling. Mining centers run huge cooling systems as well which require high wattage energy. One Bitcoin transaction can generate more than a $200 electricity bill. This is a huge amount of money and non-renewable energy spent.

These mining rigs use energy from the nearby power plants which in turn get their energy from fossil fuels. This is bad for the environment for obvious reasons as fossil fuels are a limited resource. Because of this environmental backlash, many investors are skeptical about investing in Bitcoin, the most recent being Elon Musk.

The energy-efficient ‘Chia Coin’

This is where the energy-efficient cryptocurrency Chia comes into the scene. The name of the cryptocurrency Chia is derived from a seed named chia. These are small seeds that are found in Mexico and used for medicinal purposes. These are nutritious seeds containing omega-3 fatty acids, iron, calcium and rich in antioxidants.

Chia Network is a blockchain that supports the creation and implementation of smart contracts written in a custom programming language called Chialisp. The Chialisp programming language is easy to audit and secure.

Chialisp is used to build smart transactions. The Smart Coins bring together the smart-contract power and transaction power in a single pack. The smart transaction environment approach of Bitcoin is referred to as “the UTXO model” and that of Ethereum is called “the Solidity model”. Chialisp combines the power of both ‘the UTXO model’ and ‘the Solidity model’. Chialisp is designed for safety and convenience while allowing for powerful and comprehensive operation. Applications running on the Chia Network blockchain are intended to be useful for banking, payment, asset transfer, land exchange, and other financial applications.

The Chia Network blockchain enables users to create and customize storage and clean-up. Chialisp will allow Chia’s controls to match and pass internal controls of accounting and protect funds from accidental loss, theft, or burglary at various risk tolerance levels through a simple audit.

The company states that its language combines the finest aspects of Bitcoin’s “UTXO model” and Ethereum’s “Solidity model” to let for more protected, less energy-intensive functionality.

The cryptocurrency Chia does not consume enormous amounts of electricity like Bitcoin and other popular cryptocurrencies. Here, the miners are called the farmers, and the process of chia cryptocurrency mining is termed farming.

Nowadays the market is booming with different new cryptocurrencies regardless of their behavior in sustainability terms. In recent times, Dogecoin has grabbed the spotlight due to its sudden rise in value and making some people wealthy overnight. Slowly but surely, the new cryptocurrency Chia is making a buzz in the cryptocurrency world.

Individuals of private financial institutions and crypto sites are heavily tagging the cryptocurrency Chia. Chia Network could rise by more than 55 percent before the end of 2021, and then cross the $5,000 mark over a six-year period. Personal financial market researcher Mark Realist thinks Chia could be “better than Bitcoin”. Chia is one of the new cryptocurrencies which is continuously upgrading its standard.

Origin and Working of the Cryptocurrency Chia

The Chia coin was created by Bram Cohen, the founder of the famous torrent download application, BitTorrent. The company is sponsored by leading business capitalists including Slow Ventures, a16z, Naval Ravikant, Galaxy Digital, Greylock, True Ventures, MetaStable, Stillmark, DCM, and others. Company advisors include Dr. Dan Boneh, Research Partner at a16z and Applied Cryptography Professor at Stanford University, and Ms. Katie Haun, General Partner at Andreessen Horowitz.

The currency is designed to address some of the main criticisms of Bitcoin, which are related to the environmental aspect of mining. What makes cryptocurrency Chia different from other major cryptocurrencies is protecting the network and encouraging participation.

Since its inception, the company has focused on developing the Chia Network blockchain. The blockchain will be a global, open, computer-enabled payment system that uses a native cryptocurrency known as Chia or XCH. This series aims to be a more efficient money transfer network than Proof-of-Work (PoW) networks like Bitcoin or Ethereum.

The most important reason for Chia’s growing popularity is the unique way it works which makes it quite different from Bitcoin and Ethereum. The builders of the Chia network have opted for a completely different system, called space and time-proof, which relies on storage capacity instead of computer power. Here, so-called farmers (analogous term to miners) set aside a storage area to hold cryptographic numbers, called plots.

The chia mining process, called Chia Network “farming,” relies on the use of empty computer storage space. These plots need to be filled with the appropriate data. First, the farmer needs to clear any data already present in the device, prepare a plot for Chia and wait for it to grow. The odds of solving a Chia block are directly proportional to the total network space for Chia.

Chia Network has a blockchain trading platform called Mainnet, which can be downloaded from the network’s website, ichia.net. To start farming, you must download the program to your computer and allocate a certain amount of space to the network using the user interface.

Comparison with Bitcoin

Given that Bitcoin mining alone uses more electricity than the electricity use of Argentina each year, this could open the way to a new, environment-friendly crypto mining system where less electricity is ground-breaking, and where players no longer have to deal with bots.

“Chia Farming” doesn’t use a ton of energy. The farmer can switch on the laptop and start working. Other cryptocurrency-mining processes, however, require sophisticated equipment and will send your electricity bill to the roof.

Unlike Chia coins, Bitcoin miners usually have to operate their equipment 24/7 in order to have the best chance of getting a return on investment and increasing profits. Given the type of hype that Chia has already created in the cryptocurrency space, it is more likely that consumers will bet more on this than other cryptocurrencies.

Bitcoin mining is becoming increasingly difficult for domestic miners due to the proliferation of publicly-traded mining companies such as Riot Blockchain and Marathon Digital Holdings. These companies employ ASIC miners who have more computing power than low-level home miners. The benefits of Bitcoin mining at home are no longer financially sound to many miners, especially when it comes to energy costs. With Chia, that could change.

Also, the Chia Network does not have a specific upper cap on the total number of Chia coins to be farmed as Bitcoin has. Instead, the company chooses parameters like predictable inflation, which continues.

The sustainability factor of Cryptocurrency Chia

The sustainability factor of the Chia coin is its major advantage. Easy operation, cost reduction, and not using heavy energy-consuming software make Chia one of the most sustainable digital currencies right now.

Chia uses only a small fraction of all the power being used to mine Bitcoin or Ethereum. With Chia, power consumption is very small and can be farmed using as little as few SSDs, HDDs, and PCs. Chia has the potential to be called ‘the green alternative to Bitcoin’. The current biggest (and most obvious) problem for the Chia Network is the demand for disk space. The biggest problem of Chia farming is the shortage of HDDs and SSDs in the market. So, it is too early to decide whether Chia will disclose these resources, but at least in theory, storage is at risk.

Conclusion

Nowadays, even though Bitcoin is trying to define its legacy, in terms of spike of growth and defined stability, it surely has certain shortcomings. One of the biggest shortcomings is the excessive use of electricity sources which is discussed in this article earlier. On the other hand, Chia claims that the chia cryptocurrency mining, i.e., so-called ‘farming’, is done with comparatively very low electricity and storage use. Unlike chia coins, many researchers claim that Bitcoin generates excessive CO2 which is very harmful to the environment. Chia coin, so far, is the most environment-friendly cryptocurrency. In the near future, if the Chia coin maintains its stability and growth, it could possibly give tough competition to more mainstream cryptocurrencies like Bitcoin and Ethereum.