Chia Network (XCH) combines an advanced cryptocurrency with a smart programmable blockchain. The network leverages a novel consensus mechanism to provide scalability on par with major payment processors using minimal energy requirements. The goal of the project is to provide reliable blockchain software solutions to governments, financial institutions, corporations, and buyers and sellers of storage.
History of Chia Network (XCH)
The Chia Network (XCH) is a for-profit corporation registered in Delaware and headquartered in San Francisco, California. The platform entered the market in August 2017 seeking to combat issues faced by Ethereum users and firms seeking blockchain services. Notably, Chia’s Founder is Bram Cohen, the inventor of the BitTorrent network.
In March 2018, the Chia Network successfully secured $3.3 million in seed funding. This campaign was complemented by a Beta network release that included full wallet functionality, transactions, and smart coins on the testnet blockchain. Since then, Chai has seen considerable adoption due to its many advantages over earlier networks.
What Problems does Chia Network (XCH) Solve?
One of the core goals of Chia (XCH) is to provide users with more transparency and security. The network operates as a P2P payment system that eliminates many of the inefficiencies found in the market today. The network provides a decentralized alternative to the traditional financial system.
Scalability
Scalability concerns continue to be an issue for many blockchain networks. Ethereum, in particular, has seen a hike in gas fees due to congestion. Chia (XCH) relies on a new consensus mechanism to keep the network secure. The Proof-of-Space-Time system requires fewer resources and is more responsive than earlier Proof-of-Work (PoW) and Proof-of-Stake (PoS) systems.
Energy Usage
Reports have shown that blockchain networks such as Bitcoin continue to require more electricity to run than many countries. These statistics have driven investors in search of greener options. The Proof-of-Space (PoSpace) mechanism is more energy-efficient and sustainable than its predecessors. Additionally, the system is reusable which reduces electric power consumption further.
Benefits of Chia Network (XCH)
The Chia Network (XCH) improves on early blockchains by providing a more programmable protocol. The network introduces a new programming language called Chialisp. This custom-designed code simplifies Dapp development and smart contract creation.
The Chia Network integrates high-grade security into the core features of the platform. The community has vetted the network’s open-source code. Additionally, the developers have hosted a Hackathon to further review the system’s defenses. A Hackathon is a contest where hackers earn profits for discovering ways to infiltrate a network.
How Does Chia Network (XCH) Work
The Chia (XCH) blockchain provides the foundation of the network. This smart transaction platform streamlines Dapp creation through the introduction of Chialisp, Smart Coins, Colored Coins, and a new consensus method. Together, these features enable businesses to create and integrate blockchain-based strategies into their business models.
Data Storage
Chai uses a strategy called Plotting. Specifically, a Plot is dedicated disk space on your computer for the storage files of 100 GB+. Chai Nodes can act as Provers or Verifiers. Provers are required to produce a proof of storing tables once receiving a challenge from a Verifier. Proving is a simple table look-up process. Impressively, it doesn’t require an internet connection to function.
Smart Coins
Smart Coins are a crucial feature of the Chia Network (XCH). These tokens provide developers with a flexible digital asset to build upon. Smart Coins support features such as multi-sig, atomic swaps, authorized payee whitelisting, withdrawal escrow, withdrawal rate limits, paper wallets, digital ID wallets, and Colored coins.
Chia Network (XCH) – Colored Coins
The Chia Network (XCH) uses special Colored Coins which have a different set of features. These assets have the full smart transaction capabilities of Chia Network’s blockchain. Colored Coins enable financial institutions, corporations, and governments to issue on-chain assets with ease. Developers can manage subscription ownership as well using these tokens.
Consensus
The Chia Network’s custom-made consensus mechanism is what gives the blockchain its performance. The network’s system is called the Proof-of-Space and Time (PoST). The Proof-of-Space system was designed to leverage non-used disk space that already exists in the world today. The network replaces miners with nodes called farmers.
The fob of farmers is to scan plots to check if they have a number that is accurate to the new block broadcasted. Proof of Time is implemented by a Verifiable Delay Function. This system creates a delay to compute but improves transaction finality. The key factor of a VDF is sequential computation is required which eliminates the need for nodes to scan the entire blockchain.
XCH
The native utility token of the network is XCH. This token is used to incentivize users for their participation. XCH can function as a cryptocurrency with fast transaction times. Additionally, you need to hold XCH to interact with any of the development features of the Chai Network.
NFT Support
Chia Network (XCH) developers announced that the platform will begin supporting NFTs (non-fungible tokens) in the coming weeks. These digital assets are one of the fastest-growing sectors in the market. NFTs differ from traditional cryptocurrencies in that they can represent an individual asset on or off-chain. These tokens have found growing use case scenarios in the art and gaming sectors. Notably, there have been at NFTs sold for over $50 million.
Bottom Line
The Chai Network (XCH) is a prime example of an advanced and open corporate blockchain. The network is registered in the US and offers a host of features to simplify business integration. Additionally, the overall performance and security of the network make it ideal for developers seeking a more efficient and affordable Ethereum alternative. For these reasons, the Chia Network is set to see continued adoption moving forward.
