Issues of scalability, volatility, and speed have plagued Bitcoin, slowing the promise it once showed. But, a promising startup called Chia Network aims to capitalize what the flagship cryptocurrency started, minus the mistakes made by the current largest cryptocurrency.
Neither Consuming nor Wasting Electricity: The Promise of Chia
The firm is currently raising funds from Silicon Valley investors to build their own blockchain powered by a new, novel, ‘proof-of-space’ technology, rather than proof of work (PoW) that bitcoin uses.
It does not consume electricity or in the founder Bram Cohen’s words, “waste electricity,” like bitcoin.
My new company: Chia Network https://t.co/VgS7uWV2MJ
— Bram Cohen (@bramcohen) November 3, 2017
With a plan to launch Chia in Q1 of 2019, the company is aggressively raising money from investors which include Naval Ravikant, Andreessen Horowitz, Greylock, among others.
Ravikant recently led a $3.39 million seed round raise for Chia Coin.
In its innovative technology model, Chia ditches PoW and makes use of free storage that a user’s computer possesses. Adding to this is the company’s proof-of-time layer that efficiently minimizes a coordinated attack against its proof-of-space system.
To prevent the formation of mining pools, which can result in abuse of the network, Chia is introducing a “non-outsource ability.”
Simply put, Chia enables any mining participant to leave the system without a trace and with the rewards, thus purposefully creating a sense of distrust among fellow miners.
Due to these features, Cohen believes that his company capitalizes on Bitcoin’s issues and solves both the electricity waste and centralization of Nakamoto’s creation.
Chia to Ditch the ICO Route
In a bold move, Chia shall avoid using the route of Initial Coin Offerings (ICOs), a bubble-like phenomenon that results in product-less companies having outrageous valuations.
Ryan Singer, President of Chia, said:
“It’s avoiding the often-abused ICO process that causes a lot of issues with regulatory uncertainty and investor protection.”
Using this route, a maximum of $50 Million would be raised from the public, including non-accredited amateur investors.
“People who buy in an ICO are uncertain of how the company will spend the money and how they’ll get the things they were promised. We’re going to operate the company with the transparency and accountability expected of a public company, which is very different than most ICOs.”, said Singer, who is the COO of many blockchain companies.
And if this happens, Chia’s IPO shall be the first fully compliant public offering for a crypto company, observes BTCManager.
Chia’s Development On Full Flow
Cohen is no stranger to the world of decentralized technologies. His BitTorrent protocol was once estimated to handle 40 percent of the world’s internet traffic per day.
Before its awaited coin launch, Chia is aggressively hiring engineers who specialize in blockchain, network protocols, advanced mathematics, and cryptography.
Stressing on the kind of work involved, Cohen said:
“There’s been a fair amount of pretty deep algorithmic work and that’s been going quite well, but these are things that have to be taken seriously, you absolutely must worry on a technical level about all the ways something could go wrong because building secure distributed databases is hard.”
How far would this eco-friendly bitcoin go, is all that remains to be seen.