One of BitTorrent's creators plans to launch a new cryptocurrency in 2019 with better features than bitcoin. In this photo illustrati...
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| One of BitTorrent's creators plans to launch a new cryptocurrency in 2019 with better features than bitcoin. In this photo illustration, a visual representation of the digital currency bitcoin sinks into water in London, Aug. 15, 2018. Photo: Dan Kitwood/Getty Images |
By Ranjitha Shastry, International Business Times
BitTorrent's protocol designer Bram Cohen said in a recent interview he aims to make his cryptocurrency — set to launch in 2019 — a competitor to bitcoin, but with better features. Also, his cryptocurrency, called Chia, would be eco-friendly.
Cohen had made an announcement about launching his own cryptocurrency in November 2017 when Chia Network was launched. The network develops blockchain based on energy efficient proofs of space and time where miners allocate unused disk space to the network. This process is unlike bitcoin’s proof of work where electricity is used in abundance for mining the coins.
The main issues with the bitcoin network, according to Cohen, is its environmental impact and the instability that arises from the few bitcoin miners who have access to cheap electricity. “Anyone motivated to buy more storage just to earn cryptocurrency wouldn’t have an outsized effect on the world as bitcoin miners do,” he said.
He explained how his cryptocurrency would be different from bitcoin. Bitcoin’s environmental problem, highlighted by Cohen, is rooted in the way Satoshi Nakamoto’s — creator of bitcoin — design secures digital transactions where the system incentivizes people to run “mining” software that “races to solve cryptographic puzzles and win transaction fees or newly minted bitcoin.”
Cohen’s called his version of mining “farming”. Similar to bitcoin, the “participants” (miners) would compete to win Chia — Cohen’s cryptocurrency — in a race that also processes transactions, but what maximizes the chance of winning is “amassing disk storage space, not running more powerful and energy-hungry hardware.”
Another feature that Cohen highlighted was that Chia would be built around a distributed, unchangeable ledger of “past transactions” that would also support custom add-ons that can automate contracts, holds funds in escrow, or implement features such as chargebacks which not supported in bitcoin’s network.
“The idea is to make Chia the premier cryptocurrency based off of our technology,” Cohen said. “A competitor to bitcoin, but better.”
Chia would depend on two new cryptographic protocols, one that verifies the amount of storage a computer has and the other to protect it against fraud while it determines the rewards for each farmer (miner).
Chia started a competition Wednesday that invited miners to test the speed and security — both of which are important features for “farming” Chia — of the cryptography employed in the network. The winners will receive $100,000 worth of bitcoin because Chia has not yet launched its currency.
Cohen said the launch of new cryptocurrency would attract financial institutions because of “its greater flexibility than bitcoin.”
Cohen wasn’t planning an initial coin offering to raise funds for the currency. Instead, he would file for “initial public offering” before the end of 2018. The company would list shares on a small-cap public stock exchange and would also raise funds from banks, by helping build systems to use the cryptocurrency for functions like international transfers.
Cohan’s vision is similar to that of Ripple. The product from Ripple, xRapid, has integrated with traditional banks to facilitate cross-border transaction transactions
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