Chia was incorporated in August of 2017 to develop an improved blockchain and smart transaction platform. We are building the Chia Network to improve the global financial and payments systems. Chia will be the first enterprise-grade digital money. Chia is using the first new blockchain consensus algorithm since Bitcoin. Called Proof of Space and Time, it was created by Bram Cohen, the best network protocol engineer alive and the inventor of BitTorrent. Chialisp is Chia’s new smart transaction programming language that is powerful, easy to audit, and secure. Reference smart transactions currently available are: atomic swaps, authorized payees, recoverable wallets, multisig wallets, and rate-limited wallets.
Proof of Space is a cryptographic technique where provers show that they allocate unused hard drive space for storage space. In order to be used as a consensus method, Proof of Space must be tied to Proof of Time. PoT ensures that block times have consistency in the time between them and increases the overall security of the blockchain.
Proof of space can be thought of as a way to prove that you are keeping some storage unused on your hard-disk drive. Users of the Chia blockchain will “seed” unused space on their hard-disk drive by installing software which stores a collection of cryptographic numbers on the disk into “plots.” These users are called “farmers.” When the blockchain broadcasts a challenge for the next block, farmers can scan their plots to see if they have the hash that is closest to the challenge. A farmer’s probability of winning a block is the percentage of the total space that a farmer has compared to the entire network.
Proof of time requires a small period of time to pass between blocks. Proof of time is implemented by a Verifiable Delay Function that takes a certain amount of time to compute, but is very fast to verify. The key idea of a VDF is that they require sequential computation, and since having many parallel machines does not yield any benefit, electricity waste is minimized. There will likely be relatively few VDF servers (“Timelords”), as the fastest one will always finish first and it takes only one fast and fair Timelord on the network to complete a block and move the chain forward.
Chia has a newly developed, innovative blockchain programming language called Chialisp, which is powerful, easy to audit, and secure. Chialisp is a superior on-chain smart transaction development environment that will unlock the security, transparency, and ease of use that cryptocurrencies promise.
Chia has a new innovative Nakamoto style consensus algorithm that removes the energy demands of Proof of Work from the system. Compared to other cryptocurrencies, Chia will have significantly better security due to its more decentralized blockchain. Chialisp is Chia’s new smart transaction programming language that is powerful, easy to audit, and secure and will unlock the security, transparency, and ease of use that cryptocurrencies promise. Chia is also adopting more modern cryptographic tools to enable richer smart transaction capabilities. Chia is taking a new and superior approach to funding, building, and supporting a blockchain via an eventually public, for-profit, open source development company that holds a pre-farm. Chia will use its pre-farm (“Strategic Reserve”) to ease the volatility of the coin to mitigate bubbles and crashes and to drive adoption of chia.
We have academic papers and presentations that give detail about our new consensus algorithm and blockchain software. In 2019 we revealed our Green Paper outlining the construction of Proofs of Space and Time and illustrating many of the design choices of Chia. There is also a 2019 talk from Mariano Sorgente at MIT on how to achieve Nakamoto consensus with Proof of Space and VDFs.
Bram Cohen presented at Stanford on February 2018 on Proofs of Space. Our advisors, Dan Boneh, Benedikt Bünz, and Ben Fisch published a survey of VDFs which are the underlying technology of Proof of Time. Lipa Long published an explanation of class groups that our Proofs of Time is based on. Bram presented Beyond Hellman’s Time-Memory Trade-Offs with Applications to Proofs of Space at BPASE ‘18 in January 2018 based on the academic paper and these slides by Hamza Abusalah. Ben Fisch gave a talk at BPASE 2018 in January 2018 on Verifiable Delay Functions. Bram spoke at Blockchain at Berkeley (which starts about 20:00) in March 2018 with slides. Bram gave a talk at BPASE 2017 in January 2017 on removing waste with Proofs of Space and Time (slides).
Bram gave a talk at SF Bitcoin Devs Seminar about data structures for scaling Bitcoin with slides and Merkle Set code. Bram gave a talk at SF Bitcoin Devs Seminar about removing waste from cryptocurrencies.
It is our belief that the blockchain industry is still led by developers. We intend to be the superior chain for deploying new applications and services as well as being the only serious and secure choice for applications like sovereign backed stable coins. The Chia Network business will be the first for profit company that manages a pre-farm and we intend to be the first publicly tradable “near ETF” cryptocurrency. We believe that - as Redhat and MySQL AB were necessary to drive corporate adoption of linux and mysql - we will be the source for support and training as sovereigns, financial institutions, and corporations look to use cryptocurrency in daily commerce. Finally, we believe that we will be able to leverage the storage ecosystem to drive adoption at corporations and end users as harddrive manufacturers and storage server sellers are likely to bundle space farming into their offerings.
Mining requires expensive single use hardware that consumes exorbitant amounts of electricity. We are mitigating this problem through a fair, eco-friendly, and better blockchain that uses farming to leverage existing empty hard disk space distributed on nodes around the globe. Farming remains decentralized because anyone that has installed our software and has plots can win the next block. Mining requires expensive custom single use hardware and access to electricity at wholesale or better prices which only purpose built corporations can afford to mine. Farming is more decentralized because it relies on empty hard disk space and anyone with a mobile phone, laptop, or corporate network tends to have extra space not currently being used. Unlike mining, once you’re done farming your storage you can repurpose it to, for example, store your family photos.
You can farm Chia on the unused storage space of your mobile phone, laptop, or corporate network and, in return, you have the chance to receive rewards in chia for helping secure the blockchain. Our software will allow you to allocate a certain amount of unused disk space to create plots. Since the only resource intensive step is the initial plotting, once you download the Chia node software, your drives will be plotted in the background. Once plotting is complete, your computer will begin farming on your behalf and the software does all the work and tracks your rewards for you. Ongoing farming uses very little network bandwidth and almost no resources other than storage. By making the farming process available to anyone with unused disk space, we are moving towards our goal of a truly decentralized blockchain that will also serve as a cross subsidy to the storage and cloud industry.
Chia will pre-farm a large supply of coins at network launch to help stabilize and grow the Chia economy through Chia’s novel business plan of lending Chia.
We will announce the specific size of the pre-farm along with audited financial statements and corporate controls around the pre-farm shortly before mainnet launch.
Chia has a novel business model to both, lower volatility of the coin and increase adoption. By loaning Chia and managing the interest rates of those loans as well as other tools like buying our stock with chia coins, we hope to lower the quarter to quarter volatility of the coin. To drive adoption, we intend to loan Chia to Global 5000 companies who will use it to pay their international vendors quickly, less expensively, and more securely. We also intend to use the strategic reserve to aid development and adoption. We plan to do things like invest in promising startups in the Chia ecosystem, potentially increase farming rewards during limited periods of time to spur additional farming, and fund corporations paying 105% of the value of their international payables in Chia instead of fiat currency.
No. Chia is not planning an ICO. Instead, our goal is to take the company’s equity public on an American stock exchange. This way, shareholders can share risk and return with management with transparency and disclosure and we can use well understood corporate controls to make binding statements about how Chia Network intends to use the Strategic Reserve. The Chia digital money is meant to be a useful payment instrument and not an investment opportunity. Chia intends to complete a fully compliant SEC registered equity IPO and will come to market as market-timing is amenable after the launch of mainnet.
No. Once mainnet launches, we anticipate a multi-week period where only farming rewards are distributed by the network and transactions will not yet be allowed. This is to provide for a period to help stabilize the amount of space allocated to the Chia blockchain and to prioritize our space farmers. Additionally, release candidate farming software will be able to generate plots that will be immediately farmable on both testnet and mainnet at launch. Chia is likely to be available on most global exchanges shortly after transactions begin on the mainnet.
Shortly after transactions begin on the mainnet, Chia will be available for buying, selling, and trading on most global exchanges from other chia owners.
We hope to launch Mainnet as soon as it’s done and we are currently targeting to finish at the end of 2020. Software development is notoriously difficult to predict and the Chia blockchain and Chialisp are the first applied versions of a number of new discoveries in cryptography and computer science. Keep up to date here on our website, on Keybase, on Github, on Trello, and on our mailing list as we continue to release open source software and updates regarding our release plans.
After the Chia pre-farm, Chia will offer farming rewards of 16 chia every 5 minutes. Over the first 15 years the farming rewards will be halved at the end of each 5th year. From year 16 to infinity, the rewards will remain constant at 2 chia every 5 minutes leading to ever decreasing inflation rates. Chia’s inflation falls through the 0.50% rate 42 years after mainnet launch.
Yes, while we are making a huge effort to architect the blockchain securely, we have already released a BLS Signature library, a VDF/Proof of Time implementation, and a Proof of Space implementation. BLS Signatures allow for better custody and control of transactions on the blockchain, and POT and POS are both critical to our consensus algorithm. We’ve launched both our Beta testnet and Chialisp with a wallet simulator to build Chia smart transactions.
No. Around the world, governments and banks cause problematic interactions that make banks difficult to trust, especially in volatile regions like Hong Kong, Venezuela Argentina or Lebanon. International payments, when they are available and work, are slow, expensive and insecure. International SWIFT wires often take 1-5 days. Correspondent banks often charge up to 3% and since the changes to banking since 9/11 and 2008, many countries have limited correspondent banks. International wire fraud losses are very large, and we have a better solution to mitigate these problems.
No. Chia is written entirely from scratch.
When Bitcoin was developed, it was not foreseen that specialized hardware could vastly outperform the computers that everyone owns. What was intended to be a decentralized network is now controlled by a small number of miners with access to chip fabrication plants and wholesale electricity purchasing (or worse). The miners who currently control the Bitcoin Network feel they have a competitive advantage as is and oppose changing the protocol even when it’s clear that it should be changed. Chia has had ten years to study the new digital money ecosystem and believes we can make cryptocurrency more decentralized, more secure, and easier to use.
We believe that Chia coins will be less volatile than other cryptocurrencies due to the planned nature of our planned public company status which will allow financial institutions to hedge and leverage coins and equity. Initially, we expect Chia Network to largely be valued based upon the valuation of the chia that the Company will hold on its balance sheet. Movements in the price of chia on digital exchanges are likely to be mirrored by price movements in the price of our stock on a stock exchange. There will be more ways to get exposure to the success of chia than traditional blockchain projects. This will also allow the usual options and derivatives to our stock to be used as something like a synthetic derivative for the price of chia coins. Additionally, our ability to use the Chia Strategic Reserve may reduce some volatility of chia in the market.
We believe that more eyes on our code will only make it better. For example, the results of our VDF Competition produced a VDF implementation whose runtime was 80% faster than our original implementation.
Chia has created three new core inventions and advanced the interest in, and adoption of, a fourth. Firstly, Chia created the first intended for production BLS Signatures library. Second, Chia will be the first production use of Verifiable Delay Functions, or VDFs. Third, Chia created Proof of Space and Time for Nakamoto consensus.
Finally, Chia will be the first production use of class groups of unknown order which has spawned significant new research into their applicability to cryptography.
Our hope is that, over time, Chia will be supported by point of sale systems and consumer payment apps all over the world. For example, if you pay for a coffee at Tully’s in England with your GrabPay app from Thailand, it should “just work” without you needing to know it was paid in Chia.
Or, for example, if services like Venmo or Cash App aren’t available where you live, using Chia will be far less of a hassle than executing a slow and expensive wire transfer. Using legacy banking to send and convert cash across borders is cumbersome, slow and expensive, and while alternative money transfer services might be faster, they’re not cheap: Western Union can charge upwards of 10% in transfer fees.
The technology will be completely open source and accessible, and anyone will be able to build a new wallet without our permission or assistance. However, we intend to help wallet, exchange, and merchant processing partners with support and integration services, joint marketing and lending for liquidity.
We’re green money! Our founder Bram Cohen started the company knowing he wanted to reduce the energy dependence of blockchains through a “green” option. The concept of farming seemed to be the best metaphor for filling unused disk space and monitoring it for winning sprouts. This led us to look for a grain that had the properties we wanted to embody with our new Network. The team wanted a name that would be short and impactful. Everyone was amused that it was also a grain associated with a whimsical meme. Chia Network was born.