5 Implications Of The New White Paper From Chia Network
The creator of BitTorrent, Bram Cohen, has come out with a new coin, Chia, which was designed as an improvement over other cryptocurrencies. It was created to eliminate some of the biggest problems facing mining today by making use of storage space instead of processing power during the mining process.
This means users are rewarded for giving up their storage to the Chia network, which is certainly a different approach to the mining process. So what is Chia and how does the newly released whitepaper affect the crypto world? Let's find out...
What is Chia?
Chia is the first enterprise-grade money that was incorporated by China in August 2017 to build and design an improved blockchain and a smart transaction platform. The Chia network was developed to enhance the payment and financial systems on a global scale with the help of new technology, 'Proof of Space and Time'.
Bram Cohen - the inventor of BitTorrent and arguably the best network protocol engineer in the world presently - is the creator of this cryptographic technique which allocates unused hard drive space for storage space. After going public with the coin in 2018, Chia recently released their 'first "new business" white paper', and below are the key takeaways from the launch of Chia's new roadmap;
5 Implications Of The New Chia White Paper
1. Home mining is feasible again with the new blockchain design
PoST (Proof of Space and Time) is highly reliant on taking advantage of the unused storage space left in the computer that farmers (blockchain validators in Chain network) allow to be loaded onto their computers. The more the space allocated, the higher the strings which increase the chance of winning a block.
Other blockchains take an approach similar to this like Filecoin and Spacemesh which seek to capitalize on unused storage space. According to the developers, starting up requires only a few clicks after downloading either the Mac or Windows version calling it "the easiest cryptocurrency ever for normal people to validate".
Chia reached as many as 1,700 nodes in its test net phases which serves as an indicator of massive interest in the coin as the public chat channel on Keybase boasts over 10,000 members.
2. Plans are set to embrace centralized regulation
The white paper clearly states that the Chia network is not against submitting to a regulatory body. After observing the crypto platform for a while, the developers have decided that they don't mind having their project monitored and supervised by an external organization as long as it saves them the headache of dealing with the plethora of scams rampant. According to the white paper, this decision was made with the security of their users' investments because " investors deserve protection through public disclosure", stating that investments shouldn't be sold to the public without exhibiting the legal transparency required.
As the Chia network is now listed publicly, this essentially allows equity to be treated as an ETF (Exchange Traded Fund) for the XCH coin by the backers of the platform. The developers of the coin intend to use the 'pre-farm' protocol to raise capital dilutes only the shareholders and not the farmers of the cryptocurrency.
3. The Chia Network Favors Predictable And Continuous Inflation Over a Hard Cap
Chia argues that it is not the fixed amount set by the coin that matters, but instead the predictability of said amount. They oppose the premise set by cryptocurrencies like Bitcoin which fixates on a hard cap positing that backers and farmers are more interested in knowing exactly how much the total supply is.
However, Chia doesn't plan on leaving it to chance and then end up surprising holders with unanticipated emissions, the company started with over 21 million XCH on the main net which farmers have already begun to earn.
The white paper states that it will take over 21 years for the quantity of supply to double via farming although it will get very close in the next 6 years, the emission will slow down considerably and gradually taper off under the halving schedule. At this time, the Chia network will either have sold or airdropped a substantial amount of XCH.
4. Chia Blockchain Feature Could Potentially Make Building Crypto Software Easier
Chia came out of the blocks with several native built-in features which may increase user safety and boost trust in the platform. The key standout ones described in the white paper include;
• Slowpaper wallet: These slow paper wallets allow you to store and safeguard a smart transaction that can start a time-delayed process that can let you recover funds in your hot wallet. However, it should be noted that it is not a copy of your private key.
• Colored coins: The Etherium ERC-20 coins are an example of the conceptual form of colored coins during the development stages. They can be used to create ephemeral value which means applications won't need flash loans which have been the key to attacks on several projects including; Yearn finance and bZx.
5. Chia Is Highly Concerned With The Security Using Of 'Proof-Of-Stake'
Chia dismisses the premise of private permissioned blockchains saying that they were weak-boned and will crumble to centralization under international geopolitical pressure. The white paper states that the safety of the PoS system is not adequate for it to become an alternate strategy to consume less energy when securing public blockchain as it has three fundamental issues. They are; the tokens are concentrated on a few holders, it is vulnerable to long-range attacks and it cannot recover from a 51% attack.
The Chia network hopes to be able to lower the energy footprint of "magic internet money" without having to sacrifice the decentralization and censorship resistance that gives cryptocurrency its edge. There are a lot of long-term plans laid out but for now, Chia aims to take from what has worked for crypto and build on that to help make it more accessible to the average person. With the start it already has made, there's no telling how far they'll go.
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