A new cryptocurrency that aims to fix the environmental problems of the more well-known Bitcoin has officially launched—and you can mine the coins at home. The creators of Chia Network hope that Chia will solve the problem of Bitcoin’s massive energy consumption, which is the equivalent of the annual electricity consumption of the nation of Iceland. Chia uses a new proof-of-stake algorithm that the creators say is more energy-efficient, and transactions are verified by nodes on the network, not by mining.
Starting today, users can trade in Chia (XCH), a new cryptocurrency that touts itself as an environmentally friendly and easy-to-manage digital asset, according to the project’s website.
Developed by BitTorrent inventor Bram Cohen, Chia is based on so-called space-time proofs, a consensus algorithm that is an alternative to the widely used proofs of work (PoW) and proofs of acceptance (PoS).
Unlike the latter two, chia does not require large amounts of electricity, high-tech equipment, or large storage facilities (for extraction) for users to operate.
– Chia Project (@chia_project) 3. May 2021
We are very excited to launch Chia, a new blockchain and smart transaction platform that is easier to use, more energy efficient and more secure than existing digital currency alternatives. By improving proof-of-work’s shortcomings of centralization, energy consumption and poor programmability, Chia’s blockchain has the potential to become the core of a new monetary architecture, Cohen said in a statement.
Instead, Chia’s extraction algorithm (called farming) uses solid-state or high-capacity hard drives (SSD or HDD, respectively). According to the developers, Chia was created to become the most user-friendly crypto-currency capable of reviving home mining after large industrial mining facilities made it unprofitable.
How does it work?
To grow Chia, users just need to download and run a special application on the player.
It’s very simple. Just download the Mac or Windows version and double-click on it. I’m convinced it will become the easiest crypto currency for ordinary people to use, Gene Hoffman, CEO of Chia Network, previously told CoinDesk.
The application then fills users’ hard drives with software that distributes the cryptographic data to specific locations on the SSDs and hard drives. These parcels will then receive new blocks according to the space allocated by the farmer to the network. The server (called Timelord) then checks these blocks and assigns XCH users. In fact, the more users drive, the more profit they can make.
In theory, this system should allow ordinary users to earn cryptocurrencies at home by helping support the Chia network, which is probably not possible today with giants like Bitcoin or Ethereum.
Another impending equipment shortage
However, Chia has already caused hardware shortages in some countries, but this time it’s about hard drives, not video cards. Hard drives and SSDs are already hard to find in Vietnam, for example, and prices are rising due to the popularity of chia mining in China, reports Forkast.
Meanwhile, Taiwanese storage manufacturer Adata has received 500% more orders for SSDs since early April, DigiTimes notes.
At the moment, we can only guess whether Chia will eventually get off the ground and compete with established, mainstream cryptocurrencies, but this change in the pace of mining is clearly welcomed by domestic farmers.
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