XCH is a utility token of the DeFi blockchain Chia that was created to fuel a more sustainable cryptocurrency network based on the enhanced global payment system. The network runs on a breakthrough innovative blockchain employing the Proof of Space and Time consensus algorithm that encourages node operators to contribute their free disk space to the network. On its website, Chia claims to be the largest and most decentralized blockchains by node count ever.
Chia offers a new vision of a blockchain implementing a proper Nakamoto-style consensus algorithm, the first one after the release of BTC that took place in 2009. The brand was named after the green plant, thus emphasizing the environmental friendliness of the platform.
In an effort to create a better blockchain, the team of the Chia project focuses primarily on such aspects as transparency, security, and sustainability of the network. By doing it, the company tries to set the standard for the digital currency infrastructure and provide inclusive access to the world of decentralized finance.
In various articles and interviews, the platform’s founder often criticized the ineffective and energy-consuming PoW-consensus mechanism. Therefore, the team of the project has come up with an innovative solution based on enhanced cryptographic tools that established the “green-oriented” system. In addition, the platform supports the Paris Agreement addressing the climate crisis. It was selected by the World Bank as the efficient blockchain technology to connect carbon registries, reflect data and track data changes for the Climate Warehouse. Chia also participates in the e-waste mitigation initiative known as the Circular Drive Initiative, promoting the secure reuse of storage hardware.
Chia network and technologies
The Chia network operates through a series of smart transactions designed to improve the system of finances and the method of financial interaction between the parties. As mentioned earlier, the platform employs an innovative Proof Of Space and Time consensus that helps the company to use only 0.36% of the energy consumed by the Ethereum network annually. With Bitcoin, this index is even lower as it makes up 0.18%.
With Chia, Proof of Space shows that farmers have provided a portion of their storage in such a way that can hardly be implemented in real-time. At the same time, it is easier and more efficient to perform with the help of pre-computation. On its website, the Chia protocol provides deep math computations to explain how the system works. It explains that farming is energy-efficient on the network in comparison with other protocols, for instance, Proof-of-Work systems.
The platform also employs a Verifiable Delay Function (VDF) known as a core of the proof-of-time mechanism. It can’t increase its speed as a certain amount of time is necessary for computation to be completed. The proof of time should also provide accompanying proof that includes the capability to verify the result fast. The task can be fulfilled in a group when three VDFs run three internal blockchains.
In July 2019, the Chia Network released the “green paper” which is a technical whitepaper explaining the aspects of the system which is based on dual proof of space and proof of time consensus mechanism. Along with a new approach to network distribution and mining, Chia developers introduced a new programming language Chialisp aimed to facilitate the development of smart contracts and seriously compete with the Ethereum network. Additionally, the team of the platform decided to address the needs of the NFT segment to create a reliable and secure standard.
Chia employs over 200,000 nodes that utilize the first new Nakamoto Consensus. Thanks to full transparency, the programming environment of the blockchain is easily audited. In addition, the system is designed to make the hacking attack economically unfeasible. The network is secured by over 40 EB of space.
The Proof-of-time consensus ensures that larger computational resources are devoid of the capability to manipulate the outcome of the PoSpace (a partially ordered space) process since it requires a time gap between successive blocks. The time gap is occupied by farmers’ resources that allocate their computing power to implement a VFD. The procedure gives time to the network that is required to finalize proof-of-space inputs. The results are verified fast by other members of the community. The efficacy of the mechanism is evident since it reduces the necessity of numerous processors farming simultaneously.
The Chia tokens
When the Chia testnet was launched, the team created an additional token TXCH to run along with the original XCH. Devoid of value, TXCH was made specifically for a testnet and used to test the asset properties. At the same time, the Chia token XCH increased in value in spring 2021, when the team released the testnet.
In the opinion of its founder, Chia is a cleaner, faster, and, consequently, more efficient version of Bitcoin. Besides, it is more decentralized in comparison with BTC. The cryptocurrency has 12 decimal places, with the smallest unit of chia known as mojo. The native currency has never been sold by the company for money. The founders of the facility believe in its regulation as a commodity by the CFTC.
Also, it’s worth adding that farmers are rewarded for the allocation of their disk space with Chia while the token generation process resembles the procedure employed by other cryptocurrencies. Users need to have the following minimum system requirements to mine Chia: Quad-core 1.5GHz CPU, 2 GB of RAM, and Python 3.7+.
Chia Network team
Chia Network was created by Bram Cohem, a founder of BitTorrent, the peer-to-peer file-sharing protocol that was later purchased by TRON. As an inventor of the most successful decentralized technology in history, he came up with an innovative solution to shape the landscape of the cryptocurrency industry. Gene Hoffman, the CEO, previously co-founded Vindicia, a consumer subscription infrastructure company, and served there as CEO from 2003 to 2016. In 2017, he became an advisor to the board of the Chia Network, and later, in 2019, he was invited to the position of COO in Chia Network.
Since the blockchain is fueled by an open-source community, numerous developers contribute to its codebase. Joint efforts are also applied in such spheres as translation, documentation, testing, research, reviews, and other aspects.