Chia, a new crypto rewarding hard drive space over electricity consumption, suffered a nightmarish launch this week after its price plummeted over 50% as it opened trade.
Chia is the native cryptocurrency of Bram Cohen’s Chia Network. The BitTorrent creator pitches it as an eco-friendly alternative to Bitcoin.
- Chia listed Monday on OKEx at a price of $1,600.
- It spiked 50% to $2,400 moments after.
- The token then nosedived — hard — to around $900.
All this happened in under 15 minutes. The crypto fell 40% more (to $500) over the next two hours.
Unlike Bitcoin, Cohen’s new network achieves consensus with so-called “Proof-of-Space and Time.”
This novel approach replaces Bitcoin miners (ASICs) with unused hard drive space in the crypto distribution and validation process.
Basically, rather than leveraging mining rigs to uncover Bitcoin, Chia “farmers” will instead show they’ve reserved disk space at a specific time.
Bram’s theory is this will make processing crypto transactions (and distributing new coins) more accessible.
However, whether Chia achieves the same level of censorship resistance as Bitcoin remains to be seen.
So far, it seems crypto investors need more convincing.
Chia ‘farmers’ bought up hard disks
Existing projects (particularly Ethereum) are usually blamed for GPU shortages, as high-powered gaming chipsets can be efficient at mining certain cryptocurrencies.
Chia wants to solve that particular problem by drawing crypto miners away from hoarding GPUs to amassing hard drives.
It’s unclear whether that’s working, but storage supplies have suffered from much the same issues as GPUs in the run-up to Chia’s launch.
Chia was trading at $632 at time of writing — 60% below its opening price.