Chiacoin claims to be an eco-friendly cryptocurrency — here's how it works

• Chiacoin’s unique selling point is farming, a substitute for mining that does not pollute the environment.
• Miners use hard drives to allocate as much space as possible for farming.
• The idea is to reduce electricity consumption as much as possible and lower inequality in mining.
  

The cryptocurrency world has been highly turbulent last week as Tesla’s chief executive Elon Musk announced Bitcoin payments were being stopped. Bitcoin instantaneously fell in value by almost 20%. While the ripples were felt on other cryptocurrencies, enthusiasts were extremely concerned about bitcoin's short-term future.

Environmental concerns have always haunted bitcoin, and Musk, being a green-energy champion, was open about his reservations about the cryptocurrency. But here's a new concept in town, and it promises to be environmentally friendly.

Chia is a blockchain and intelligent transaction platform that aims to provide all the benefits of a standard cryptocurrency -- decentralisation, efficiency, and security. But its unique selling point is farming -- a substitute for mining that does not pollute the environment. It was launched in 2017, but was relatively low-key in the mainstream media. The Chia Network was founded by US-based computer programmer Bram Cohen who also invented the peer-to-peer file-sharing system BitTorrent.

On May 3, it announced the launch of Chiacoin (XCH), which uses storage on your hard drive to "farm" new coins. All it needs is 100GB of clusters on a drive called plots. Imagine it to be a block of data that’s taking up 100GB of space, each consisting of one cluster. The more plots you have, the higher is the chance of cultivating a Chiacoin. According to Tom's Hardware, 10TB of storage gives the farmer a winning odds of 0.000257%. In total, 4,608 XCH blocks are generated per day, worldwide.

Miners use the hard drives to allocate as much space as possible to the lucrative, low-cost mining or farming of the crypto. To start farming, you have to download the program to your computer and allocate a certain amount of space to the network through the user interface. Since farming doesn't need a beefed-up processor to compute complex mathematical algorithms to mine coins, it consumes significantly less energy. Chiacoin has released a white paper that claims it uses up to 10,000 times less energy than bitcoin’s mining.

The Chia Network also consists of a “smart coin," which is used for transactions that include multiple contracts and capabilities. Chialisp is an application within the network capable of performing banking processes, payments, asset disbursement, and exchanges.

The network's "proof of space and time" is the first of its kind. It makes it easier for the average Joe to take part in the process without requiring massive investments. The idea is to reduce electricity consumption as much as possible and to lower inequality in mining.

Like other cryptocurrencies, Chiacoin has gained a lot of attention, and many have turned to full-time farming. While Bitcoin and other coins fuelled intense demand for central processing units (CPUs) and graphics processing units (GPUs), Chia has kicked off a race for the best-in-class storage equipment, globally. Shares of disk-drive makers have soared after Chiacoin was launched, giving both Seagate and Western Digital at least a 15% push within two days.

As of May 18, 4:30 p.m., one Chiacoin is worth $1366 (₹99,761) against an all-time high of $1645 (₹120136).


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