BitTorrent Inventor Introduces Chia, a Greener Bitcoin

BitTorrent Inventor Bram Cohen has currently turned his attention to blockchain technology and building Chia, a greener bitcoin.

In 2004, Cohen released BitTorrent to the world but soon stepped away from the company he built to focus on blockchain technology in 2017. ”Beyond Hellman’s Time-Memory Trade-Offs with Applications to Proofs of Space,” a technical paper co-authored by Cohen and released in September 2017, covered “Proofs of Space” as a method of blockchain consensus. In November 2017, Chia was announced to the world together with a presentation and slides covering the concepts they will develop.

The goal, as the Chia team puts it, is to make a cryptocurrency which is less wasteful, more decentralized, and more secure.

The engineering work on the resurrected Proof of Space (PoSpace) protocol has started. It makes use of the empty space on your hard drive and adding Proof of Time (PoT), another consensus algorithm, to get around problems with using a pure PoSpace protocol and the energy-consuming, heat-producing Proof of Work (PoW) done by Bitcoin.

Visa processes 150 million transactions per day. Meanwhile, Bitcoin processes only about 300,000 transactions, and those transactions come at a cost. It is estimated that Bitcoin energy consumption is at around 30 terawatt-hours a year, while the average home in the U.S. consumes about 11 megawatt-hours a year – meaning that Bitcoin consumes about 3 million homes’ worth of electricity. Cohen says he plans on changing this by replacing proof-of-work miners with “farmers.”

Making it work

The goal is for Chia to become a better bitcoin to fix centralization problems, reduce the environmental impact, and remove the instability that may happen when miners have great influence on mining operations from cheap electricity and massive operations.

Chia calls their operations “farming” rather than “mining” as it is more environmentally friendly – there is no massive energy consumption or wasted heat. This opens up farming to anyone who has free disk space. In the PoSpace system, farmers will set aside unused disk space to the network.

Chances of successfully farming a block will be proportional to the amount of space set aside by the network’s total capacity. It will be even simple and inexpensive to create a dedicated Chia farm as one can now get a 4TB hard drive for $100.

Cohen’s presentation on Chia shows they have solved various problems with using PoSpace. These include grinding attacks by adding PoT and alternating between them. In his presentation, he stated that “When a new block is minted, it propagates rapidly to all full nodes and farmers start working on top of it. When a farmer finds a new block, they publish it to the network.”

“Farmers all find the best proof of space they have and the three best proofs of space propagate through the whole network, and proofs-of-time servers start working on top of them. When a proof-of-time server finishes the proof of time for a proof of space, it publishes the whole thing as a fully validated block and publishes it to the network to be built on top of again. Each block starts with a proof of space and is finalized with a proof of time.”

As of now, there is only a small number of PoT servers running. If two people run the same PoT on something, they will get the same answer. As there is no direct incentive for doing proofs of time and as the only way to process more PoSpace transactions is to coordinate with farmers, the system is less prone to problems such as abuse and power centralization.

PoSpace is made to be non-outsourceable, so when one tries to run a mining pool and if a device in that pool wins the block, the device or owner can only keep it for themselves. They cannot give it to the pool. Currently, this still remains unclear at this stage.

PoSpace has cheap and prevalent disc space and is ASIC-resistant. However, PoT can be optimized in hardware with specialized chips but unlike PoW, PoT chips have many potential uses beyond farming cryptocurrency. Even if PoT servers are scarce and centralized to always win the block, they act as part of the entire ecosystem – not controlling it, which brings democracy back to the generation of blockchain blocks.

So far, Chia has raised an undisclosed amount of money to get started. They are looking to hire software developers to accelerate its development as they plan to release it in 2018. After releasing Chia, they will eventually implement the Lighting Network for more efficient transactions.