About

Chia Network is a blockchain-focused company and platform that supports the creation and execution of smart contracts written in a custom-designed programming language called Chialisp. It seeks to build upon Nakamoto's consensus principles established in Bitcoin, relying on a consensus mechanism known as Proof of Space and Time. Chia specializes in decentralized data management, enhancing security, regulatory compliance, and eco-friendly practices across several sectors.

History

Project Origins

Chia Network was incorporated in the State of Delaware in August 2017 and founded by Bram Cohen, the inventor of the BitTorrent network. Since its inception, the company has focused primarily on developing Chia Network’s blockchain. This blockchain will be a global, open-source, decentralized network of computers that operates a payment settlement system and uses a native cryptocurrency known as Chia or XCH. This chain aims to be a more efficient cryptocurrency settlement network than Proof-of-Work (PoW) networks like Bitcoin or Ethereum.

New Technology

Chia aims to address Proof of Stake (PoS) and PoW's shortcomings around centralization and electricity consumption by using a novel consensus mechanism called “Proof of Space and Time” (PoST). PoST intends to use less energy without compromising network security. This mechanism is a combination of two separate proofs. Proofs of Space harnesses unused disk space and rewards owners of empty space for “farming” new blocks. Proof of Time adds security and time predictability to the network. The addition of this Proof of Time mitigates the attack vectors associated with Proof of Space.

Chia Network also features a new smart transaction programming language and on-chain development environment called Chialisp. The team claims that Chialisp is powerful (flexible) yet easy to audit. The project expects Chialisp will enable developers to build a wide range of network capabilities and services on Chia, including cross-border payments and the issuance of financial assets like stablecoins.

Funding Approach

Chia Network has taken a different approach for funding and supporting the network's long-term development. The company plans to be a public, for-profit, open-source development company that holds a "pre-farm" allocation of XCH tokens. Chia Network then intends to list shares of its company on the NYSE or NASDAQ to improve the credibility of its open-source software support business. The company believes that its enterprise value will be driven by the value of the XCH held on its balance sheet, its software service, and supporting business ventures. According to the team, the Chia Network's balance sheet, which will have a large portion of initial XCH, will also allow its publicly traded equity to function like an ETF for chia coins. Since a large amount of the early XCH will be an asset on Chia Network's balance sheet, the company expects its equity valuation to correlate to XCH’s price on crypto exchanges.

Path to Mainnet

In August 2018, Chia released its first open-source library to the public. It later open-sourced its Verifiable Delay Function (VDF), a Proof of Time primitive for cryptographic protocols, in January 2019. To optimize the implementation and attract developers, Chia announced a pair of implementation competitions for the VDF. In the two challenges so far, contestants competed to create faster implementations of the Company’s VDF or submit proof of security breaks. These competitions helped the company test and improve upon its VDF algorithm in a more practical environment.

Several months later (July 2019), the company released its Proof of Space software, its Green Paper, filed its first provisional patents, and announced a Proof of Space competition to optimize the algorithm. Chia closed out 2019 by releasing an alpha wallet simulator and scripting language documentation for Chialisp and an alpha implementation of Chia Network’s blockchain testnet.

In April 2020, Chia released a beta version of its blockchain that introduced full wallet functionality, transactions, and smart transactions transferring on the testnet blockchain. Later that year, the Company released its new consensus algorithm based on an idea from the paper Proof-of-Stake Longest Chain Protocols Revisited. This consensus mechanism made Chia’s block times more reliable.

Mainnet Launch

Chia Network in March 2021 started the public availability of the blockchain, though originally with restrictions on transactional capabilities. These restrictions did not persist for long, with the mainnet operating completely by May 2021. While originally slated for launch by January, Chia deferred this milestone and instead focused on technical upgrades, such as an update to the consensus mechanism (see here), and testnet-based testing. Since launching the mainnet, the network has grown with a wide distribution of participating "farmers" (miners) and a steadily growing netspace (the size of the Chia blockchain). Building on the momentum of public awareness rising alongside network activity, Chia Network launched its grants program August 2021 and has since funded multiple Chia ecosystem projects.

Looking Ahead

The project team at Chia Network Inc presented in February 2022 an updated business whitepaper which provides updated forecasts and roadmap items; many are included herein, for more details refer to the source document. Changes are ongoing in the Chia ecosystem with development pressing ahead on a roadmap of objectives, technical and commercial. Features such as automated market makers, enterprise Chia Asset Token (CAT) issuance, and NFT protocol extensions appear on the horizon in this coming year. Commercially, Chia Network has seen success as of late with multiple high-profile commercial agreements, and thus the primary focus will be reaching the company's Initial Public Offering (IPO).