What Is Chia Network (XCH)?

Chia Network (XCH) aims to be a sustainable approach to blockchain technology with a smart transaction platform. Vitally, Chia Network’s blockchain endeavors to be a global open-sourced, decentralized network that operates a payment settlement system using Chia (XCH), their native cryptocurrency. Built to improve the international payment and financial structure, Chia is an enterprise-grade digital currency. According to the Chia Network, use cases include asset tokenization, DEX, DeFi, and personal cross-border payments works efficiently on the Chia blockchain.

According to the whitepaper, the Chia Network’s permissionless and decentralized blockchain aims to improve the infrastructure of governments and financial institutions. The network aims to improve this infrastructure by developing funds transfer mechanisms that are safe, rapid, and independent of any third party, including the Chia Network. As a result, governments and financial institutions conduct business with correspondent institutions and vendors worldwide, independent of the geopolitical environment or other regions’ attempts to prohibit activity.

Further, Chia Network aims to deliver software services and support for its blockchain and smart transaction software to governments, financial institutions, companies, and major traders of storage without the need of middlemen. Chia’s tools seek to enable developers to construct user-friendly applications and wallets.

One of the crucial improvements that Chia seeks to offer is its consensus algorithm. This blockchain modifies the Nakamotoconsensus with an energy-efficient algorithm called proof of space and time (PoST). In simple terms, the intention is to allocate unused hard drive space for storage space. Further to use it as a consensus method, proof of space is tied to proof of time, ensuring consistency in timing between blocks and making it a secure blockchain. These new solutions do not need large quantities of power and single-purpose hardware that proof of work necessitates. Contrarily, instead of “miners” as in aproof-of-work algorithm, they are called “farmers” in the Chia blockchain. In addition, the Chia Network has also developed an innovative programming language called Chialisp. This on-chain smart transaction language is designed to ease the use, security, and transparency of the cryptocurrency.

The native currency of the Chia network is XCH, or chia (in lowercase). This programmable currency aims to empower institutions, governments, and DeFi collectives to utilize XCH to construct new financial innovations, solve cross-border payments, and design a new future without relying on layers of intermediaries.

History of the Chia Network (XCH)

The Chia Network Inc. was founded by Bram Cohen, the creator of BitTorrent, in August 2017. The new consensus algorithm of Chia was released in November 2020 by Chia based on the idea from the paper  “Proof-of-Stake Longest Chain Protocols Revisited.”  According to Chia Network Inc., the company intends to go public and list the equity on a major stock exchange. The team released the V2 of its business whitepaper in February 2022.

How Are New XCH Tokens Created & Earned?

In the Chia Network, mining is called farming. The farmers who are the miners in the Chia blockchain use the unused storage of laptops, desktops, or corporate networks and receive Chia in return as rewards for securing the network. Meanwhile, the Chia node software allows the users to allocate the unused storage into plots. Subsequently, the computer farms on behalf of the user, and the software tracks all the rewards.

Chia’s consensus aims to provide characteristics such as transaction blocks arriving every 52 seconds, resulting in substantially more dependable predicted block timings. There is also a rapid accumulation of confirmations, which adds the assurance that a transaction is complete. Farming is improved by awarding 64 XCH to 32 farmers every ten minutes for the first three years. Furthermore, Chia has four halvings of farming benefits after every three years.

Additionally, the Chia network seeks to issue a colored coin called CAT (Chia Asset Token). Colored coins are well-known for their token issuances of alternative coins, assets, and stablecoins. Chia Asset Tokens (CATs) are fungible tokens produced from XCH that exist on Chia’s blockchain. Fungible tokens can be separated or combined and are used in place of a token of equivalent value like gold, oil, and so on. According to the platform, CATs have the feature of being “marked” in such a way that they cannot be used as standard XCH. However, it is permissible to “retire” CATs, which subsequently “melt” back into XCH.