Bram Cohen, the creator of the popular peer to peer torrenting software BitTorrent, is creating a cryptocurrency called Chia. This new cryptocurrency will use Proof of Capacity (PoC), an algorithm perfected by Burstcoin (BURST).
Breaker incorrectly reports that PoC, which Cohen is calling Proof of Space, is a new algorithm developed by Cohen. Further, Breaker writes that Chia could kill Bitcoin. It is unlikely that Chia will even be competitive with Burstcoin(BURST), which has a $9 million market cap, let alone Bitcoin, as we’ll now explain.
The crypto space is unfortunately filled with copycat devs who make copycat cryptocurrencies, and this Chia situation appears to be a good example. Burstcoin(BURST)has a strong community of Cypherpunks and has been using PoC since 2014. If Cohen truly cared about the adoption of PoC crypto, he should have jumped on the Burstcoin(BURST) boat instead of trying to create a different cryptocurrency that would compete with it.
Chia is advertised as being a “green cryptocurrency,” similar to how stores often have an organic foods section. Green goods and services are big money in the current economy because slapping a green brand on something means environmental and health enthusiasts automatically flock to it. The greenness of Chia is entirely derived from PoC, which Burstcoin (BURST) has already been doing since 2014. Perhaps the Burstcoin (BURST) community should one-up Cohen and do a green advertising campaign before Chia launches since the method of branding is the only advantage that Chia has.
Indeed, PoC is environmentally friendly and uses practically no electricity, which also makes Burstcoin (BURST) one of the only profitable cryptocurrencies to mine on personal computers. PoC cryptocurrencies read cryptographic hashes from a plot in a hard drive, rather than calculating new cryptographic hashes all the time like with Proof of Work (PoW). The miner who finds the answer the quickest in their hard drive gets the block reward. Since more hard drive space equals more answers, more hard drive space leads to more block rewards. The Burstcoin(BURST) mining network has 230,000 TB (230 PB) of hard drive space at this time, driven by a strong community. It seems unlikely Chia would ever exceed that number since people interested in PoC already mine Burstcoin (BURST), and would not abandon Burstcoin (BURST) for a copycat.
Cohen incorrectly argues that miners would not continuously expand their mining operations with PoC.
“The idea is that you’re leveraging this resource of storage capacity, and people already have ludicrous amounts of excess storage on their laptops, and other places, which is just not being utilized,” he said. “There is so much of that already that it should eventually reach the point where if you were buying new hard drives for the purpose of farming, it would lose you money”.
The fact is that serious Burstcoin(BURST) miners regularly buy petabytesPB of new hard drive space to maximize revenue, and Chia miners would act no differently if Chia catches on.
The one possible difference between Burstcoin (BURST) and Chia is that Cohen is trying to prevent a “re-mining from genesis” attack, where a miner could create an entirely new chain starting at the genesis block. If they had enough hard drive power to do this, perhaps they would fork the blockchain. To avoid this attack Cohen says Chia will also integrate “Proof of Time” (PoT).
First off, Burstcoin (BURST) has never had issues with this sort of attack in its five years of existence. If someone has a tremendous amount of hard drive space and does PoC mining, it would be absolutely senseless to do this sort of attack since their entire mining farm would become worthless.
If the point of the attack was to do a double spend, the coins gained in the double spend would become worthless too. Cohen is trying to prevent an attack that is extremely unlikely since attackers have no incentive to do it.
The details about PoT are vague, with it being a parallel process to mining that takes the same amount of time no matter how much hard drive space is used. This would make Chia less efficient than Burstcoin (BURST) and therefore less competitive. Cohen is offering $100,000 to anyone who can develop PoT, making it clear it does not exist yet. Since PoT would probably make Chia less efficient, and it has not been developed yet, and it solves a non-existent problem, the PoT acronym is appropriate.
Ultimately, Chia is branded as green money for a digital world, when the reality is Burstcoin (BURST) already is green money for a digital world. Burstcoin (BURST) has a strong reputation, has been continuously running for five 5 years, and has an extremely strong community. It seems unlikely Chia will ever become more popular than Burstcoin (BURST), and unlike the title of the Breaker article indicates, Chia certainly has no chance of killing Bitcoin.