Chia is one of the newest cryptocurrencies on the internet. While this itself probably wouldn’t warrant your attention, what would draw you to it is that Chia is already hyped up to be the next big thing in the cryptocurrency space. In fact, watchers of the personal finance and crypto spaces are already marking up Chia quite heavily – reliable crypto tracker DigitalCoin expects the price of Chia Network, assigned with the XCH signage, to rise by over 55 percent before the end of 2021, and cross the $5,000 mark in about six years’ time. Others are noting it for a ‘hot’ market debut – personal finance market researcher Market Realist speculates that XCH can be “better than Bitcoin”. What, though, is fuelling the big hype behind this seemingly early-stage cryptocurrency?
Viability and cloud integration
Created by Bram Cohen, the founder of BitTorrent, the biggest onus of the Chia network is in how it operates. At the heart of it is the cryptocurrency being much more viable than more established crypto coins such as Bitcoin and Ethereum. The latter two, for instance, use a process called ‘proof of work’, which requires users to own high performance computing components and keep them running for long hours in order to ‘mine’ these cryptocurrencies. With Chia, technically any user with a fairly average PC can get down to mining the currency.
Cohen’s Chia Network calls this process “farming” instead of mining, and states that the model it uses instead is ‘proof of space and time’, instead of energy. In simpler terms, the Chia Network states that instead of high performance graphics cards and processors, Chia will use available empty disc space for farming of the currency. As a result, users need to show that they are assigning chunks of their storage space over a continued span of time, which can be done even with a fairly regular computer configuration. Given that this would cost any average crypto enthusiast much lesser, Chia is simply a more viable currency in comparison to Bitcoin and Ethereum.
To make things more exciting, Amazon has now announced that Chia can be mined directly on the Amazon Web Services (AWS) cloud servers. According to reports that archived a now-deleted AWS China explainer page, integrating the Chia Network architecture on AWS reportedly takes “as little as five minutes”, following which users can generate their crypto wallet address where the mined or “farmed” Chia coins are to be credited, and start with it. Such flexibility also means that not only is Chia locked to a particular device, but is also largely flexible and possible to mine without lots of hardware resources at hand.
Such a move can go quite some way to address the ongoing global chipset supply shortage, a large part of which is to be blamed on the crypto mining community. A sustained craze for mining components led to gamers failing to get their hands on graphics cards launched recently, thereby pushing up market prices of graphics cards drastically. Given that Chia replaces the entire need for graphics cards and processors, and puts the focus on storage, ironing out disproportionate market influences is yet another fringe benefit that Chia brings over established crypto coins.
The sustainability edge
All of this channels into making Chia one of the most sustainable cryptocurrencies right now. While this is creating a somewhat strong demand for storage media in China already, Chia uses only a fraction of the overall energy that Bitcoin or Ethereum do. The latter two uses the proof of energy model, leading to miners keeping high throughput GPUs running at peak performance for unending hours. Not only is this limiting the crypto mining process to a select location, but it also leads to massively increased energy consumption and emissions.
With Chia, which is also being advertised basis its greener approach and greater sustainability, users can continue to mine the coin using as much power as a PC would typically do in idle state. Those who manage to integrate Chia into an AWS cloud platform will not even need that, but still get to commit space and time to the coin’s decentralised distributed ledger technology. While some have already argued (such as in this CNN Business report) that whether Chia can be termed ‘green’ or not is really in relativity to other cryptocurrencies, there is no denying that Chia does have a far more sustainable model – both in terms of energy consumption and the kind of PC components that a user would require to have for it.
The biggest (and the most obvious) catch for the Chia Network right now is the disc space requirement. Chia’s biggest resource pull would be hard drives and solid-state drives, and if XCH shoots up the popularity ladder the way Bitcoin (and, thanks to Elon Musk, Dogecoin) have, a key market crisis that can arise out of all this is a scarcity of HDDs and SSDs the way we lack graphics cards at the moment. Hence, it’s too early to call if Chia would go light on these resources too, but at least in theory, storage will be at a crunch.
Nevertheless, Chia is off to one cracker of a start. The cryptocurrency is already up to over $1,375 (~Rs 1.01 lakh) in the early days of its trading, with an almost 6x growth expected over the next six years. As we have seen with Bitcoin, cryptocurrencies can potentially surge in value beyond market forecasts as well, and if Chia can offer all the things that it has promised, XCH will likely be the most exciting cryptocurrency to have been released since Bitcoin itself.