Chia Network Inc., an energy-efficient blockchain network announced its own digital currency named Chia. The company is trying to overcome the drawbacks of traditional cryptocurrency platforms like Bitcoin. Chia Network will reward its miners with Chia coins for providing their storage disks for financial transactions.
Technically, this process is diagonally different to what other cryptocurrencies like Bitcoin does. Bitcoin mining uses GPUs and CPUs for mining. On the other hand, Chia can also utilize storage space from Solid State Devices (SSDs).
Chia Network believes it will be adopted by governments and financial institutions all over the world. The company released the mainnet for its public blockchain recently. After the release of the mainnet, it froze all transactions on the network as it was testing and validating its systems for network security.
Now, Chia Network has two years before investors in the firm will be able to cash in on their investment. However, this will only happen if the company does not file a registration statement within two years and if it does not become a publicly-traded company within a year of filing the statement. So far, Chia Network has raised around $16 million through investor funding since its inception.
Chia Network’s strategic reserve will consist of 21 million Chia (XCH). It will eventually serve as the primary source of strategic funding till it is listed on NASDAQ or in New York Stock Exchange. As of now, the exact date of the listing is uncertain.
However, if the company fails to list within three years from now, its investors would have to liquidate their Chia reserves to redeem their investments. By 1st May 2021, Chia has used more than 1 Exabyte (one billion gigabytes) of installed storage capacity.
According to Chia Network, other functions of the strategic reserve are:
- Lending: Chia Network might lend XCH to market makers for use in day to day commerce so that it can create enough liquidity in the market.
- Additional Farming Rewards: Chia Network might offer special bonuses to Chia farmers.
- Investing: Chia Network might allow investing in the platform for creating applications and tools for the Chia blockchain.
- Share Buybacks: Chia Network might offer to redeem equity through the payment of XCH to stockholders once it gets listed.
- Dividends: Chia Network might pay dividend XCH directly to its stockholders. This will encourage the use and promotion of Chia Network’s blockchain.
Other companies have started making products designed specifically for Chia farming. Chinese computer storage manufacturer Jiahe Jinwei will produce cryptocurrency farming SSDs. However, analysts are worrying that it might create a scarcity.