CHIA — Auto-Plotting and Farming Blockchain Crypto
Making it Done Right

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 consensus algorithm that removes the energy demands of Proof of Work from the system. Compared to other cryptocurrencies, Chia has 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.

The company believes that the blockchain industry is still led by developers. They 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 they intend to be the first publicly tradable “near ETF” cryptocurrency. They believe that - as Redhat and MySQL AB were necessary to drive corporate adoption of linux and mysql - they will be the source for support and training as sovereigns, financial institutions, and corporations look to use cryptocurrency in daily commerce. Finally, they believe that they 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. Chia is 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 its 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 of your laptop, desktop, or corporate network and, in return, you have the chance to receive rewards in chia for helping secure the blockchain. The software allows 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, they are moving towards their 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.

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 their stock with chia coins, they hope to lower the quarter to quarter volatility of the coin. To drive adoption, they intend to loan Chia to Global 5000 companies who will use it to pay their international vendors quickly, less expensively, and more securely. They also intend to use the strategic reserve to aid development and adoption. They 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, their 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 they 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.

After transactions begin on the mainnet, Chia will be available for buying, selling, and trading on most global exchanges from other chia owners.

After the Chia pre-farm, Chia offers farming rewards of 64 chia every 10 minutes. Over the first 12 years the farming rewards will be halved at the end of each 3rd year. From year 13 to infinity, the rewards will remain constant at 4 chia every 10 minutes leading to ever decreasing inflation rates. Chia’s inflation falls through the 0.50% rate 22 years after mainnet launch.

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 Chia has a better solution to mitigate these problems.

At Chia, they believe that Chia coins will be less volatile than other cryptocurrencies due to the planned nature of their planned public company status which will allow financial institutions to hedge and leverage coins and equity. Initially, they 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 their 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 their stock to be used as something like a synthetic derivative for the price of chia coins. Additionally, their ability to use the Chia Strategic Reserve may reduce some volatility of chia in the market.

It is green money! The 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 the company to look for a grain that had the properties they wanted to embody with their 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.