Did you get the 5 key points of the Chia Network white paper?

Chia was founded by Bram Cohen, the original founder of BitTorrent (one of the most influential protocols on the Internet). Chia originally intended to achieve the so-called mini-IPO through the popular ITO in 2018, that is, to accept the compliance review of the US SEC. However, the decentralized network startup Blockstack raised $23 million through the Regulation A+ clause in the US crowdfunding bill in 2019, gaining the upper hand. Chia subsequently received a new round of $5 million in financing led by Slow Ventures in 2020.

After obtaining financing in 2020, Chia changed its strategy and began to seek a larger-scale listing plan than the ITO that adopted the US crowdfunding law, that is, a real large-scale IPO. This will achieve more open public transactions than Regulation A+ similar to private placements, and will also conduct more rigorous and transparent information disclosure.

Chia's COO Gene Hoffman said that the public will control more XCH than the Chia project, and XCH is not a key component in determining the Chia ecosystem. Unlike most projects, Chia seeks a real IPO in compliance with regulations, and XCH tokens are not proof of Chia's equity. Gene Hoffman believes that it is a bad practice to directly display the token distribution ratio in the traditional project white paper, and the development of XCH will be determined by shareholders and farmers, and the whole process is more flexible and sustainable.

Chia uses the existing free hard disk space distributed on nodes around the world through farms. The larger the space, the greater the benefits. Gene Hoffman said, "It's very simple. Just download the Mac or Windows version and double-click. I'm pretty sure this will be the easiest cryptocurrency ever for ordinary people to mine." Users can farm on idle storage space on mobile phones, laptops or corporate networks, and in return, users can get Chia rewards. Farming requires downloading the Chia node software. The entire process uses very little network bandwidth and consumes almost no other resources except storage, and does not require a lot of electricity.

The biggest feature of Bitcoin is its 21 million hard cap. Chia has no cap, but it will not cause uncontrollable inflation to holders, but a predictable amount.

The Chia white paper states: "It is critical to be able to give the public a direct estimate of the total supply at any given point in time." Chia will launch the mainnet with 21 million XCH, a tribute to Bitcoin, and farmers can start mining immediately after the mainnet is launched. Currently, Chia can mine 64 tokens every 10 minutes, because the halving occurs every 3 years and stops after 12 years. It will take 21 years of farm mining to double the current total amount of XCH of 21 million, but in just 6 years, the farm will mine 15,137,280 XCH, and the mining growth in the later period will be very slow. Although there is no hard cap on the total amount of XCH, the total amount in the later period is predictable and is benign inflation.

“We have seen numerous scams and farces in the blockchain space, and we will accept compliance reviews from regulators,” the Chia white paper states. “Investors should be protected through public disclosure, there is no doubt about that, and we will not raise funds from the public without legal permission.”

The 21 million XCH strategic reserve is the main asset of the project (pre-mining), which is quite considerable. Chia will use this part of the strategic reserve to promote the development and ecological construction of Chianetwork. Through public listing, Chia will allow investors to convert their holdings into XCH cryptocurrency for trading.

Gene Hoffman said: "The 21 million strategic reserves belong to the company. We promise that this part of XCH will only be used for token holders and will be strictly controlled by the company. The control will be stricter when we go public. This part of the strategic reserve will only dilute the interests of our pre-IPO financing shareholders, but not the interests of farmers."

Chialisp is the Chia network's smart coin language based on the functional language Lisp. Almost everything on the Chia blockchain is a coin. Smart coins combine smart contracts and smart transactions. Chilalisp is designed to be secure and simple while allowing for powerful and extensive functionality. Applications running on the Chia network's blockchain are designed to have functionality suitable for banking, payment, and financial applications. The main focus of our launch will be core functionality such as financial control, payment clearing and settlement, and managing the issuance of assets.

The Chia white paper talks about proof of stake (PoS) and says that this model will lead to centralization, especially under the current international geopolitical pressure, it is not as stable as the POW consensus. Chia believes that the problem with proof of work (PoW) is that it consumes too much energy. Chia's space-time consensus is a complement to the largest PoW network. But Ethereum is moving towards PoS, which is another matter. Chia believes that this model is not secure enough. PoS will cause tokens to tend to be concentrated in a few large holders, and PoS networks will be more difficult to resist 51% attacks. In the future, Chia aims to expand current encryption technology and build it in a way that everyone can access.