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The Chia Network is a project developed with an environmentally friendly mechanism that aims to improve transaction speeds, create secure and low-cost networks, and revolutionize payment and financial systems.
Chia Network was upgraded in August 2017 to create a blockchain and smart transaction platform to upgrade global financial and payment systems. Chia is the first corporate digital currency to use Nakamoto’s first new Bitcoin consensus algorithm called Proof of Space and Time.
The best network protocol engineer today and the inventor of BitTorrent, Bram Cohen, has created this model. Chia’s smart transaction programming language is Chialisp, which is very powerful and secure.
Chia Network is a decentralized-blockchain-based platform for developing and executing smart contracts. Its custom-designed and implemented its internal programming language (Chialisp) and launched in 2017 to replace traditional networks. Chia aims to improve transaction speeds, create secure and low-cost networks, and revolutionize payment and financial systems.
From Bitcoin to Chia
Bitcoin (BTC) paved the way for Defi by cleverly implementing Peer-to-Peer (P2P) technology, but not everything was perfect. BTC mining requires high-powered computing resources that only a limited number of people have access to. As a result, it creates centralism as well as environmental pollution, which ultimately raises a lot of concerns.
Chia plans to address these issues and improve some of its essential aspects by adapting to Bitcoin blockchain and proof of work (PoW) and implementing state-of technology of the day.
Bitcoin inspired Chia to work on a global open-source network that works with the settlement system; unlike Bitcoin, Chia uses the space-time proof mechanism (POST) with Chialisp specific programming language instead of the proof-of-work mechanism(PoW).
Chia Network team
Bram Cohen created Chia in 2017, the founder of the BitTorrent peer-to-peer transfer software protocol. The current directors of the project are Gene Hoffman (current CEO of Chia) and Mitch Edwards (former CEO of Overstock.com (current CEO of Chia)).
The protocol welcomes a wide community of developers to assist in areas such as research, development, testing, documentation, and more. Many major investment companies, including Andreessen Horowitz, MetaStable, and Galaxy Investment Group, support the Chia Protocol.
Chia protocol has an innovative approach and uses the Nakamoto consensus method. This algorithm eliminates power consumption from the system and provides a much more decentralized platform, ensuring that the platform is more secure than other projects. This new algorithm is a combination of space-proof and time-proof.
Proof of Space is a type of cryptographic technique for proving that miners (actually called farmers) have unused storage space on their hard disks. Meanwhile, the consensus algorithm proves that time is constant between blocks. (Chia) Ensures network security by combining two mechanisms, Proof of Space and Proof of Time.
In the first step, farmers have to install private software on their computers to allocate their free hard disk space. Then use this memory to solve the challenges provided by the protocol.
This software stores a set of encrypted numbers as a “plot” on a disk. When creating a block in the blockchain, we will have a random number based on the previous block.
Farmers scan their plots to identify numbers close to the random number and receive rewards for creating new blocks.
The Important point is the POST mechanism does not require the amount of power and hardware used in the PoW mechanism; and in addition, it does not require mining ASICs and has nothing to do with the price of electricity; thus, Chia blockchain commits to an option. Be green and environmentally friendly.
In addition, Chia uses its blockchain programming language called Chialisp, which enables the development and implementation of cryptocurrencies with smart contract capabilities. The first version of Chialisp was released in 2019, which was well-received by the Defi community and developers at the time.
The main aspects of Chialisp
- The language adapts the most significant elements of the Atrium Codex (ETH), Solidity, and Bitcoin core while maintaining the UTXO bitcoin model and maintaining the unparalleled power of Solidity.
- Instead of consecutive transactions, this programming language allows simultaneous transactions without side effects; Which also provides Delegation in a more powerful way than BTC Core.
- Each coin has its unique identifier, and this language also identifies coin Ids. This allows for explicit self-reference and eliminates the need for quines (a specific type of meta-program that generates its source code as output), which in computational theory and computer science are self-replicating programs., prevents.
Chia Network Token
The network’s proprietary token is XCH, which uses a customized version of the UTXO bitcoin, and is the main incentive mechanism to support the Nakamoto algorithm.
About 21 million units of the XCH token were created on May 3, 2021, after the launch of Minute (main network). This protocol rewards block manufacturers to ensure the financial security of the protocol. Farmers can dedicate their resources to the network and obtain newly created XCHs. For the first three years, two new XCHs are produced per block.
Chia will manage its treasury according to its strategic reserve. The network also allocated 21 million XCH units to a pre farm process to fund the development of blockchain and expand its acceptance.
Chia Network Domination
Future changes to the Chia protocol will be under the control of ninety operators. If most users agree with these changes, the protocol changes will be approved. Chia nodes can adopt new rules depending on how the network works.
Unlike other protocols with a stock-proof consensus model, user-owned XCH does not affect protocol governance; Instead, only standalone nodes can upgrade the blockchain to a newer version.
Advantages of Chia over other blockchains
Compared to other blockchains, Chia significantly reduces energy consumption and environmental pollution through the Nakamoto Consensus. This is the POST consensus algorithm, which is a hybrid model of the most important features of Atrium and Bitcoin.
Instead of using high-power computing resources, which may lead to network centralization, farmers can allocate computing power to the network and prove that they are wasting their hard disk storage space.
By adopting the basic principles of bitcoin and implementing new technology, Chia offers a more powerful network than bitcoin. Chia is also trying to improve its PoW-based blockchain with the new Nakamoto Consensus. The Chia network proves to be an environmentally friendly platform without significant consumption of power and useless, single-purpose hardware to verify transactions.
The protocol expects to expand a global open-source system to support businesses, institutions, companies, and governments around the world. The company is also trying to bring liquidity pools into the system, lend XCH tokens and use them for trading.