Crypto chia

Cryptocurrency is the biggest hype in the modern market. Everyone is jumping towards cryptocurrencies and is looking to make huge profits. A cryptocurrency is a form of encrypted currency that keeps the identity of the users, as well as the transactions safe. In the simplest terms, it can be considered as a digital currency. It functions on a blockchain. A blockchain can be understood to simply mean an electronic ledger that records every single detail which has a value. This ledger cannot be corrupted. The blockchain is part of a database and it is not just limited to transactions only.

 It is mostly a decentralised form of currency, away and free from the control of the government. The creator of Bitcoin, Satoshi Nakamato, created the currency and the concept of blockchain. Today, the cryptocurrency market follows this model only. Now, before starting to invest in a cryptocurrency, we need to understand the meaning of a few terms. We have already covered blockchain in brief. The other terms we need to understand are coin, token, exchange, wallet, and finally, mining.

Coin is a cryptocurrency that is based on its own blockchain database. The most popular cryptocurrencies are in the form of coins. Bitcoin, Dogecoin, Litecoin, etc., are all forms of coin.

On the other hand, Token is a cryptocurrency that uses an already existing blockchain database. It is wider than normal currency. The most popular token is Ethereum. Railbase is another example of a token.

Wallets can simply be understood as a secure and digital form of wallet for cryptocurrency. It can be used to store, send and receive a cryptocurrency. It works just like a real-life wallet. Most of the cryptocurrencies have their own wallets. 

Exchange can be understood to be a market for cryptocurrency. It is where you fiat your crypto or trade for altcoins. It is where you exchange your cryptocurrency. Hence, it is basically a digital market for crypto where the usual transactions occur. 

Crypto means a hidden code. Cryptocurrencies work on the concept of these complex chains of codes which are in the form of crypto. Mining, which is a really popular term, is related to this concept of cryptocurrency only. Mining is the digital addition of transactions to the blockchain by verifying the hashcash. In short, the miners lend their processing power to audit the cryptocurrency. They get rewarded with the currency in exchange. So, it is a form of getting cryptocurrency without purchasing it. However, it needs to be kept in mind that mining is a complex process that requires huge amounts of power and a very advanced and high-end computer system. Mining is not profitable unless it is done with a very advance and fast computer system. 

FOUNDATION:

Now, we come to the topic of this article. Chia is one of the latest cryptocurrencies in the market. The Chia Network is founded by Bram Cohen. Bram was one of the pioneers of the modern-day network technology we use. He is most famous as the creator of Bit Torrent. Without his work, things like torrents, or peer-to-peer sharing would probably not be possible. The team consists of many other prominent figures like Gene Hoffman and Mitch Edwards. Both of them are former CEOs of popular companies like eMusic, Vindica, and Overstock respectively. Many open-source developers contributed to the Chia blockchain. 

It is not just popular because of the founding team. Many investors have also decided to back this cryptocurrency. Greylock Partners, True Ventures, Slow Ventures, Galaxy Investment Group, Andreesen Horowitz, StillMark, Meta Stable, etc. are a few investors which have heavily invested in Chia. 

WORKING:

Chia claims to be a sustainable decentralised cryptocurrency. There is no denying that the most popular cryptocurrencies like Bitcoin, Dogecoin, etc., use up a lot of energy. Mining these cryptocurrencies requires high computational power. This causes a lot of load and requires lots of electricity. In a report, it was found out that miners mining Bitcoin consume and use more electricity than the entire nation of Argentina. This is a mind-blowing and unbelievable fact. This causes a lot of harm to the environment and is not sustainable at all. Bitcoin has a huge carbon footprint. Although investors and companies claim that they are working towards climate sustainability, the facts say something else entirely. 

The Proof of work, the system used by the most popular cryptocurrencies, relies on raw computing power. This causes many big issues. As discussed above, it creates a highly unsustainable environment. Secondly, the proof of work system created a lot of disparity. Initially, Bitcoin was supposed to tap into the potential of the millions of CPUs around the world. It wasn't supposed to be mined on ASICS, which is the case now. The mining on ASICS caused a huge disparity as only a handful of rich manufacturers have this powerful technology. This went against the basic principle of a decentralised currency, as it made Bitcoin more and more centralised. The same is the case with many other currencies.

The Chia network on the other hand works on a mechanism of proof of space and time. Rather than relying on computational power, it relies on the storage space offered by the people. This means creating coins doesn’t require energy. Miners allocate unused space to the network. The probability of farming a coin goes higher with the amount of storage you share. It is against and resistant to centralization. It is therefore a truly decentralized cryptocurrency.

The way it works is something like a bingo. You write possible combinations of the bingo cards on your storage drive. When the transaction needs to be validated, it comes up with the bingo number. The bingo cards or combinations are called the plots. The number is presented and whoever has that particular bingo combination validates the transaction and earns rewards. 

This is very similar to Burst Coin, another cryptocurrency. However, Burst Coin had an issue called grinding. It referred to the sound the hard drive made while spinning while reading and writing. The plots would be written and rewritten over and over again to take over the network at a faster speed and manipulate the whole system and it led to monopolization and centralization as there was no time bar or a system to keep it in check. Chia fixes this by adding the concept of proof of time. Proof of time adds a time barrier between writes. This means that the users will have to wait for a certain amount of time before they are able to write another plot. Since it takes a long time to write plots, people won’t misuse and try to rewrite the plots again. 

The Chia crypto is programmed on Chialisp, a language based on Lisp. So, the interface might be very similar to that of Ethereum in the decentralised finance. The execution environment is currently unknown. 

GOVERNANCE:

The Chia governance will be a joint stock governance. The network claims they will follow the best corporate practices. They plan to divide the strategic reserve between the U.S. Paring Company and the Swiss subsidiary at mainnet launch. There are plans to move out to UK and China in the upcoming part too. The programmers, farmers, and investors will hold a portion of strategic reserves as well, giving them some power over the decision-making in the company, as shareholders. However, how big their influence will be is yet to be seen. The U.S. Public Equity markets protection will apply and protect the rights of these equity holders.

The XCH with the company will be used to work for the benefit of the XCH shareholders to advance the network.

FINANCE AND NUMBERS:

Chia coin is possibly the next big crypto. The main net launch was on 19th March. It isn’t currently listed in any exchange here. May 3 is the date when it is expected to be launched on exchanges. Chia plans to launch the mainnet with 21 million XCH. Unlike Bitcoin, which derives its value from the hard market cap, Chia believes that going for a predictable cap will be a better idea. Currently, Chia has no cap in mind. Chia believes that the hard fixed cap is not the best way to go forward for everyone. They believe working with continuous inflation will be better in the long run. 

Out of the 21 million XCH, it is predicted that it will take farmers 21 years to double it. The CEO, Hoffman in an interview while discussing the whitepaper said that the farmer market is very competitive and it will be very close in around 6 years. There is also a high possibility that there will be more liquidation and airdrops in the coming years. 

The value cannot be predicted currently in exact numbers. However, the hype behind it makes us think that the valuation will be high. And if Chia lives up to the hype, it will be well worth it.

CHIA FARMING:

The Chia Farming experience is very similar on all platforms. However, there have been reports that the Linux version is a little better and faster when compared to the other two versions. The requirements for the Chia Blockchain are:

  • Quad-core 1.5GHz CPU
  • 2 GB of RAM
  • Python 3.7 or above

The other most important requirement is free space on your storage, whether it be an HDD or an SSD. It is recommended to at least have 100 GB of free space to farm Chia. Also, since SSDs are much faster than HDDs, farming on SSDs will be much faster. However, a downside to this is that SSDs have a much shorter lifespan when compared to HDDs. So, you should keep these things in mind while setting up your system to farm Chia. A mix of both HDD and SSD in the system is the best combination. The plotting should be done on the SSD, and the plots should be stored on the HDD. An NVMe SSD will be the preferred choice for the SSD. You can check the list of the best SSDs for your laptop on the website if you are looking to farm Chia on your laptop.

In this article, we will talk about farming Chia on Windows, since it is the most popular and most common operating system in use. Go to the Chia Blockchain download page and select which operating system you want to download the blockchain on. After clicking it, the download will finish. After the download is completed, you can click on it and it will launch the start page.

Now, the next step is to create a private key. This essentially creates a wallet for Chia. You will be redirected and will see a 24-word long key. You need to very carefully note the key down and keep it stored somewhere safe as it is the only way to access your wallet. If the firewall asks for permission, allow it.

On the left side of the screen, you will see many options. Click on Plots. Then you will find an option to add a plot. But before adding the plot, just check how much free space you have and how much of it you are willing to allocate for farming. Once everything is done, just click on add a plot and you will see a drop-down menu with multiple options.

First, you select the plot size. Keep in mind, the bigger the plot, the faster your farming will be done. Therefore, if you have a 1 TB hard disk and allocate 500 GB of space to the plot, the plot will take a longer time than if you had allocated the entire 1 TB free space for the plotting. The next option you have to select is the number of plots. Remember, the more the plots you select, the slower the plotting will be. Higher storage devices even support parallel plotting, which simultaneously can farm multiple plots and it saves time. Plotting in the queue has a limit of 29 plots in a single queue. In the advanced options, you can also allocate unused RAM storage and unused CPU threads to the farming. Finally, you have to select a temporary directory where the plots are temporarily stored. A fast SSD is recommended as this temporary storage. 

After doing this, you just have to wait for the plotting to complete in order for you to get Chia. You get 2 Chia for every number in your plot closest to the challenge value. Keep in mind that farming Chia is a slow process. Even if you have multiple TB of storage space, you will take a long time to get Chia. 

ADVANTAGES OF CHIA:

Chia as a cryptocurrency has many advantages. These advantages are not only for those who want to farm Chia, but also people who want to simply invest in it. 

Sustainability- Unlike mining of other cryptocurrencies, Chia farming uses very little network bandwidth and the only resource it uses is the storage. Hence, there is not a lot of power usage. The halving schedule of Chia makes the farming even more environmental friendly in every 3 years. This will help reduce the emissions further.

Stable inflation- Chia farming will reward a certain amount of chia every 10 minutes. The current rewards after launch are 64 chia per 10 minutes. Using the halving schedule, the rewards will be halved every 3 years. This will go on till 12 years. After this period, there will be 4 chia every 10 minutes rewarded for farming. According to the Chia website, this will make the inflation rate fall through 0.50% rate 22 years later. This makes the inflation much more predictable and doesn’t cause huge panic amongst the investors.

Non-volatility – Firstly, before putting Chia up for exchange, Chia launched a 6-week pre-farming period so that the farming doesn't overwhelm and cause huge fluctuations in the value of the currency. This planned approach maintains a balance. Another part is that since the company is publicly listed, everyone is able to go for equity in the company. Chia Network believes the value of the currency will mirror the price of their stock. Also, since Chia offers more options than other cryptocurrencies, it will not be exploited easily. Also, there are countermeasures to battle centralization. Finally, the Chia Strategic Reserve can be used to balance the volatility by the company.

Decentralization- Chia Network is a sustainable cryptocurrency as we already know. Another big part of the hype around Chia is that it uses proof of space and time to prevent centralization and it doesn’t have a fixed market cap. Bitcoin had a fixed market cap and exploitation by ASICS miners led to a centralization of the currency, which was totally opposite of the initial goal of the currency. However, Chia has a time barrier placed on farming, which prevents exploitation like that with Burst Coin. Also, since it uses storage for mining, it can be easily farmed by a large number of people. Hence, there is a very small chance of it becoming centralized. 

DISADVANTAGES:

Just like everything has both pros and cons, Chia also has a few cons of its own.

Speculative value- The value of Chia is based around the hype. The hype is created because the founding team and investors are big names in the industry. However, hype can die down really quickly. So, investing in a cryptocurrency purely based on the hype is not recommended. It might lead you to losing your money real fast. If Chia isn’t accepted by a lot of people, it is bound to fail. Every cryptocurrency wants to beat Bitcoin, but that isn’t something easily achievable.

Limited uses- Since it is a new cryptocurrency, there are limited usages. It hasn’t even been listed on an exchange till date. There is a very limited use of it. However, this is mostly due to the reason that it is a new currency. With time, there will be more features added. Hence, this is an issue that will most probably resolve itself with time. 

Hike in prices storage device prices and shortage- Just like Bitcoin mining caused a shortage and high pricing of GPUs, Chia will most probably cause a shortage of HDDs and SSDs. This will lead to highly inflated-priced storage devices. People and companies in China have already begun stocking up SSDs, thus causing a shortage of storage devices. Similar patterns can be expected all over the world. Therefore, if you don’t already have an SSD, or were looking to purchase an SSD in the near future, you will face a tough time ahead. 

These are the pros and cons which Chia has. We have to keep in mind that Chia is a currency for the future. You cannot expect it to give instantaneous high returns. If you keep your expectations realistic, this is a really great option to invest in. 

CONCLUSION:

Chia Network is an interesting choice in cryptocurrency. It works very differently when compared to a lot of other cryptocurrencies. It has much lower barriers to entry and is a much more stable and sustainable option. It will not give crazy high returns, but the returns will be pretty stable. Also, if Chia Network sets off, there will be a lot of profit to the investors since the potential of this type of cryptocurrency is still untapped. Also, since people are going for more sustainable and environment friendly options in every market, this cryptocurrency is a really great option. It will get support from those conscious people, and hopefully, even the governments will not act as a barrier to this cryptocurrency since it is a much better option for the environment. 

Even if you do not want to directly invest in Chia, you can always go for farming. Another option is hoping for airdrops, which is mostly dependent on luck, but does provide a risk-free option. Therefore, you need to do your own thorough research before investing in Chia. Personally, we suggest that you do put in a small amount of money in Chia. Even if you lose it, just think of it as a bold risk. We must remember that fortune favours the brave, and if we don’t take bold steps, we will never be able to profit.