Bitcoin Killer? What’s New And Old With BitTorrent Inventor Bram Cohen’s ‘Chia’
If you ask its official website, Bram Cohen’s Chia project is the first “enterprise” digital currency.
Forget Ripple, Stellar, or the host of stablecoins launched over the past couple years. It’s Chia – the “green” crypto project developed in answer to the question of Bitcoin’s high resource usage, which is the first enterprise-grade cryptocurrency.
“The First Enterprise-Grade Digital Money”
Chia is the first enterprise-grade digital money. We are building the Chia Network to improve the global financial and payments systems. Chia is using a new consensus algorithm for a new blockchain called Proof Of Space and Time being created by Bram Cohen, the best network protocol engineer alive and creator of BitTorrent.
Cohen started Chia after Tron overtook BitTorrent. Cohen is not a fan of Tron, and no longer works for BitTorrent in any fashion. It’s ironic that he chose not to work on any aspect of the Tron-controlled BitTorrent, but took an interest in cryptocurrency following the acquisition. The irony derives from the fact that Cohen is the inventor of one of the most successful decentralized technologies in history: torrenting.
Chia utilizes “proof of space and time” as opposed to proof-of-work. Proof-of-space is not a new concept by any stretch – projects like Filecoin, Storj, Siacoin, and Burst have all used storage farming for consensus. The “proof of time” concept is an additional concept that may require some explaining, though.
The project’s FAQ page says only:
Proof of Space is tied to Proof of Time. This ensures that block times have regular times between them, and increases the overall security of the blockchain. Farming rewards via Proof of Space are directly proportional to the amount of space you have in the Network.
Understanding “Proof of Time”
Proof of time refers to “verifiable delay functions.” These functions are a way of ensuring the time between blocks, a problem that proof-of-work chains deal with poorly. Occasionally you will see two or three Bitcoin blocks in the space of 5 or 6 minutes, followed by which is a 30-minute delay in which unconfirmed transactions stack up.
Delays like these are due to the difficulty and the randomness factor in Bitcoin mining. Bitcoin is far from alone in this respect. The most that proof-of-work chains can promise is a “block target.” Bitcoin’s is 10 minutes, Litecoin’s is 2 minutes, and Ethereum’s is 15 seconds. Through the use of VDFs, Chia aims to be “more reliable.” A paper explains VDFs in great detail:
A VDF is a sequential operation that takes a prescribed amount of time to compute (and which cannot be accelerated by parallelism) and which produces an accompanying proof by which the result may be quickly verified.
Chia: More Decentralized Than Bitcoin?
Chia is pretty serious about improving on what it sees as flaws in the design of Bitcoin. Their FAQ page openly accuses Bitcoin of being overly centralized and says that Chia will solve the problem by enabling virtually anyone to farm on the network.
When Bitcoin was developed it was not foreseen that a new type of chip could vastly outperform the computers everyone owns. What was intended to be decentralized network is now controlled by a small number of actors. The folks who currently control the Bitcoin Network feel they have an advantage as is and can’t change the protocol even when it’s clear that it should be changed. Chia has had ten years to study the new digital money ecosystem and clearly sees how to build it better.
Chia plans to be a public company which develops the token itself. Another difference between Chia and other “enterprise” coins is users will be able to loan tokens to Fortune 5000 companies. It seems the competition for “international money transfers” grows with every new blockchain innovation. IBM, “the leader in blockchain,” is working with Stellar to deliver a similar product. The market is Ripple’s core business, and JP Morgan developed a blockchain all its own specifically for this purpose.
If Chia has any success, it will likely be the first majorly successful “farming” cryptocurrency. Filecoin is still nearing completion, while Oyster Protocol (these days known as Opacity) suffered a newsworthy exit scam at the hands of a founder. Siacoin has never seen a major pump while Storj continues to struggle to catch on. One wonders if such success would lead to the creation of dozens of new “farming” cryptos in the way that Bitcoin’s success spawned thousands of proof-of-work cryptos.