The past decade was the decade of Chia. Chia got the status off superfood. Now there is a cryptocurrency named after the well-known super seed. Chia (the cryptocurrency) wants to be an eco-friendly competitor to bitcoin and other currencies that rely on the proof of work consensus model.
Proof of work consensus model is a way for cryptocurrencies like bitcoin to validate transactions on their network. However, it requires a lot of computing power from graphic cards that require a lot of energy.
According to the Cambridge Center for Alternative Finance (CCAF), Bitcoin currently consumes around 110 Terawatt Hours per year — 0.55% of global electricity production, or roughly equivalent to the annual energy draw of small countries like Malaysia or Sweden.
Chia uses a different consensus model to validate its transaction based on proof of space and time, which relies on storage capacity instead of computing power. Chia farmers (people that help validate transactions) set aside storage space to hold cryptographic numbers, called plots.
“When the network 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,” according to their website.
While this system does away with the need for energy-intensive validation, it comes at a cost. To farm Chia you need storage capacity. Because it is quite lucrative to farm Chia, farmers are pushing up the price of storage.
The same supply issues other cryptocurrencies face with energy-intensive graphic cards. Only storage is better for the environment than energy-intensive graphic cards.
So, for now, Chia seems not only to be a super seed but also an eco-friendly way to decentralize finance.