Chia

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Discover Chia's fundamentals and latest news.

This content was generated by Whalee (BETA), an AI crypto assitant that analyses cryptocurrencies. Informations can be incomplete and/or erroneous. Please always double check and DYOR.

What is Chia?

Chia (XCH) is a cryptocurrency and blockchain designed to be more environmentally friendly and decentralized. It uses a Proof of Space and Time consensus algorithm, which allows anyone with internet and free disk space to participate in securing the network. Chia aims to improve the carbon footprint of the blockchain industry and has features such as smart transactions, decentralized pooling, and support for NFTs and other digital assets.

How is Chia used?

Chia (XCH) is primarily used for mining and farming, where users allocate hard drive space to support the network's proof-of-space and time consensus mechanism. This process rewards miners with XCH coins. The token is also used to incentivize users for their participation in the network. Additionally, XCH can function as a cryptocurrency with fast transaction times, allowing for peer-to-peer payments and other financial transactions.

How do I store Chia?

To store Chia (XCH) tokens securely, consider the following options:

  1. Cold Wallet: A cold wallet is a wallet that is not connected to the internet. It is created, used to store keys and addresses, and then deleted. This method is highly secure but requires manual management. You can create a cold wallet using the official Chia Blockchain software.

  2. Evergreen App: This is a non-custodial software wallet available for both iOS and Android. It allows you to manage your XCH and keep your keys secure. For added security, use it on a spare phone that is kept offline most of the time.

  3. Paper Wallet: A paper wallet is a physical copy of your keys. It is highly secure but less convenient for frequent transactions. You can use it for long-term bulk storage of XCH.

  1. Official Chia Wallet: The official Chia wallet is part of the full node software and uses an Electrum-style protocol. It is considered the safest wallet to use and can also be used to create a cold wallet.

  2. Other Wallet Options: There are various other wallets available, including Frodo Wallet, Goby, Green Wallet, Hoogii, and Ozone Wallet. Each has its own features and security levels.

Remember to always prioritize security and avoid storing XCH on exchanges unless absolutely necessary.

How to buy Chia?

To buy Chia (XCH) tokens, follow these steps:

  1. Choose an Exchange: Select a reputable exchange that supports Chia Network (XCH) trading. Popular options include Uphold, KuCoin, Gate.io, and Crypto.com Exchange.

  2. Create an Account: Register on the chosen exchange's website or app. Verify your identity and secure your account with two-step verification.

  3. Add Funds: Deposit funds using a bank transfer, credit/debit card, or other supported methods. You may need to purchase a cryptocurrency like USDT, ETH, or BNB first if the exchange does not support direct fiat purchases.

  1. Buy XCH: Use your deposited funds to buy XCH. You can do this by selecting the XCH trading pair (e.g., XCH/USDT) and placing a buy order.

  2. Store Your XCH: Once purchased, store your XCH in a secure wallet. You can use the official Chia wallet or other community-built wallets.

Remember to exercise caution when transacting through third-party services and ensure you understand the fees and risks involved.

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History of Chia

Chia (XCH) is a cryptocurrency that was first released on March 17, 2021. It was created by Chia Network Inc., a California-based company founded in 2017 by Bram Cohen, the author of the BitTorrent protocol. The company raised $61 million in investment in May 2021, valuing it at around $500 million. Chia Network Inc. also announced plans to conduct an initial public offering (IPO) before the end of 2021, although as of 2023, the company had only filed a draft registration with the Securities and Exchange Commission towards an IPO.

Chia is notable for its unique consensus mechanism, known as Proof of Space and Time (PoST). This mechanism is based on the amount of hard disk storage space devoted to it rather than processing power, unlike traditional proof of work cryptocurrencies like Bitcoin. The platform uses a combination of Proof of Space, which proves that users have unused hard drive space, and Proof of Time, which ensures consistent block times and increases security. This approach is designed to be more energy-efficient and environmentally friendly compared to traditional mining methods.

The launch of Chia in May 2021 led to shortages and price increases of hard disk drives (HDD) and solid-state drives (SSD) in countries like China and Vietnam, as users stockpiled storage devices to participate in the network. Despite these challenges, Chia has continued to develop and improve its technology, including the creation of new inventions like BLS Signatures and Verifiable Delay Functions.

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How Chia works

Chia (XCH) is a cryptocurrency that operates on the Chia Network, a blockchain platform designed for real-world utility. Here is a detailed overview of how Chia works:

Chia Farming

Chia farming is the process of allocating unused storage space on your hard drive to participate in the Chia blockchain network. This is done by generating and storing unique cryptographic data files called "plots." These plots are used to solve challenges and validate blocks in the Chia blockchain, earning the farmer rewards in the form of Chia tokens (XCH).

Proof of Space and Time (PoST)

Chia uses a unique consensus algorithm called Proof of Space and Time (PoST). This algorithm combines two techniques:

  1. Proof of Space: This involves proving that you have unused storage space on your hard drive. Users, known as "farmers," store cryptographic numbers on their disk into plots. When the blockchain broadcasts a challenge for the next block, farmers scan their plots to see if they have the hash closest to the challenge. The probability of winning a block is directly proportional to the percentage of total space a farmer has compared to the entire network.

  2. Proof of Time: This ensures consistency in the time between blocks and increases the overall security of the blockchain. It is implemented using a Verifiable Delay Function (VDF), which takes a certain amount of time to compute but is fast to verify. This mechanism minimizes electricity waste by making parallel computation unbeneficial.

Block Rewards

Block producers on the Chia blockchain are rewarded with XCH tokens for their contribution to securing the network. The block rewards are designed to decrease over time:

  • 2021 to 2024: 2 XCH per block
  • 2025 to 2027: 1 XCH per block
  • 2028 to 2030: 0.5 XCH per block
  • 2031 to 2033: 0.25 XCH per block
  • 2034 and afterward: 0.125 XCH per block in perpetuity.
Chia Tokenomics

The Chia team pre-farmed 21 million XCH, which they invest in the network’s long-term development. The strategic reserves can be used for various purposes, including lending, distributing additional farming rewards, investments, buybacks, and dividends.

Chia Network

The Chia Network is designed to be more secure, sustainable, and compliant compared to traditional blockchain technologies. It supports the creation and execution of smart contracts written in a custom-designed programming language called Chialisp. The network aims to transform various industries, including carbon markets, digital identity, custody, and payments.

Buying and Selling Chia

Chia tokens (XCH) are available on multiple centralized and decentralized crypto exchanges. Users can buy and sell XCH using these exchanges.

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Chia's strengths

Chia (XCH) has several strengths that make it a promising cryptocurrency:

  1. Security: Chia is designed to be highly secure, with features similar to those of Bitcoin (BTC), ensuring the integrity of transactions and the network.

  2. Eco-Friendliness: Chia is known for its significantly lower energy consumption compared to other cryptocurrencies, making it a more environmentally friendly option.

  3. Smart Contract Capabilities: Chia incorporates "smart contract" features similar to those of Ethereum (ETH), allowing for more complex and automated transactions.

  1. Regulatory Compliance: Chia is built to comply with regulations, which can help increase adoption and trust among governments and enterprises.

  2. Scalability: Chia's architecture is designed to be highly scalable, making it suitable for a wide range of applications and industries.

  3. Decentralized Data Management: Chia's DataLayer technology provides a decentralized data store resistant to fraud and interference, useful in consortiums and for secure data management.

  1. ChiaLisp: ChiaLisp is a strength of the Chia network, offering a robust programming language for building decentralized applications and smart contracts.

These strengths position Chia as a robust and versatile blockchain technology with a strong potential for real-world adoption.

Chia's risks

Chia (XCH) faces several risks that investors and users should be aware of. These risks include:

  1. Susceptibility to Attacks: As a Proof of Stake (PoS) project, Chia is vulnerable to attacks and can create an environment where majority rule prevails, potentially leading to manipulation by large stakeholders.

  2. Pre-mine and Developer Control: The developers hold a significant amount of pre-mined coins (21 million XCH), which could be gradually sold, potentially causing price drops. This raises concerns about the fairness of the coin's launch and the developers' influence over the market.

  3. Scalability Issues: The network's growth may discourage new farmers from entering, leading to centralization and scaling problems as the network expands.

  1. Security Risks: Users who farm on Chia NFT plots are at risk of having their main Chia farm compromised if they start farming a malicious fork. This could result in the theft of their XCH rewards.

  2. Market Volatility: Chia's price has experienced significant plunges, which could lead to a loss of investor confidence and potentially cause the project to fail if the price continues to drop.

  3. Vulnerabilities and Bugs: Like any software, Chia is not immune to vulnerabilities and bugs. While these can be addressed, they can still cause issues and undermine trust in the project.

These risks highlight the need for careful consideration and thorough research before investing in or using Chia.

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Did Chia raise funds?

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Chia’s team

  • Bram Cohen: Chairman of the Board, Founder, and Chief Technology Officer.
  • Gene Hoffman: Chief Executive Officer and President.
  • Misha Graboi: Chief Financial Officer.
  • Vishal Kapoor: Chief Strategy & Business Development Officer.
  • Dr. William Blanke: VP of Engineering.
  • Thomas Chow: Chief Legal Officer.
  • Steve Booth: SVP, Solutions.
  • Justin England: VP of Platform and Security.
  • Ken Griggs: VP of Customer Success.
  • Russell Saito: VP of Business Development.
  • Ali Shadle: VP of Operations.
  • Richard Tsao: Chief Metaverse Officer.

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