Following the announcement that the anticipated BitCoin fork Segwit2X was being canceled, BitTorrent founder Bram Cohen has said that he is launching his own competitor called Chia. The ecofriendly cryptocurrency is set to use a block chain mining system that won’t use the electricity of other options on the digital market.
Proof Of Storage, Not of Work
BitCoin works by providing proofs of the work done in the mining process, which is used to determine market value. This process takes a great deal of resources to run, as it has to use electricity to maintain it and run its block chain.
Chia, Cohen has said, has circumvented that process by instead offering proof of storage and time used to mine, instead of proof of the work itself. This makes it a more environmentally conscious currency that leaves less of a footprint behind.
In addition, Chia will be more decentralized, so those who worry about the increased centralization of crytocurrencies will have an alternative that bucks that trend.
The Unknown Future of Crypto
This news comes just after word that the Segwit2X BitCoin fork, which would branch the currency into two parallel versions with their own value, had been cancelled. Investors had been anxiously waiting to see what would happen to the market when the fork, projected to begin on November 16, hit. Services like Coinbase were set to provide users with BitCoin in their wallets an automatic matching of 2X.
Experts have been arguing whether it would devalue or increase the value of BitCoin for weeks and the mood was uncertain the closer we came to the fork drop. Due to this uncertainty – and thanks to a lack of overall consensus – the idea has been dropped by backers.
The move won’t come as much of a surprise to the crypto community, who have largely railed against the fork since it was announced back in August. As of this writing BitCoin remains in the green at $7,420, with Ethereum up to $308.45 and Litecoin $62.54.
Welcoming Chia to the Competitor Ring
Anyone who invests in cryptocurrency is sure to have some mixed feelings about the introduction of this new currency, particularly with a new model of proof. But with the market heavily dominated by BitCoin and no sign of current competitors making more than a very modest dent, it will be interesting to see what Chia is able to produce.