The purpose of the 21 million strategic reserves, let you know about Chia's future plans

Lack of identity verification is a major problem for freely accessible public blockchain systems. Adversaries may compromise the security of a system by creating many false identities to become the "majority" in the system. This attack is called a "sybil attack." Bitcoin resists "sybil attacks" through proof of work. Traditional hash-based PoW has some shortcomings, the most obvious of which is that it cannot effectively prevent the use of application-specific integrated circuits (ASICs).

ASIC's hashing integrated unit often provides 100 times speedup over CPU while resulting in 10,000 times energy consumption, which gives opponents equipped with ASIC a huge advantage over users of ordinary devices, but at the same time brings huge energy loss problems.

Proof of Space is considered to be a greener and more economical option than Proof of Work. Unlike Proof of Work, Proof of Space uses storage as an input resource, which effectively avoids the centralization of resources and improves the fairness of mining among different miners.

Chia uses proof of space and proof of time, running proof of space (Pospace) by using the idle disk space on the hard disk, and coordinating with another consensus algorithm - proof of time (Potime) to verify the blockchain. The income of Chia miners is proportional to the amount of resources - storage space; if you have 10 times the space, you will get 10 times the reward. But the Post here is different from Filecoin and Bitcoin's mining mechanism. Chias uses free disk space for seeding, just like Bitcoin miners use computing power for mining, but Chia is more suitable for the participation of ordinary users, reducing additional Asic, computing power, and electricity consumption. Chia's mechanism naturally has an inhibitory effect on centralized seeding.

21 million strategic reserve funds

The Chia white paper describes a 21 million strategic reserve fund, but many people are not very clear about the role of the strategic reserve fund. In fact, the 21 million strategic reserve funds belong to the project party and shareholders, which can be understood as pre-mining. Many people are more worried about the pre-mining of the project party before mining, but there is no need to worry about it, because this part of the strategic reserve fund plays an important role and is strictly regulated. First of all, Chia must make financial disclosures to ensure transparency, and must also publicly declare according to the US 1933 Act and 1394 Act, and is committed to listing on the Nasdaq and accepting the supervision of the US SEC.

At the same time, strategic reserves are conducive to expanding shareholder and market cooperation. In September 2019, Coinbase announced that Chia is one of the 17 assets they are currently considering for inclusion. In September 2020, Bitstamp announced that Chia is one of the digital assets they are exploring to support. At the same time, Binance will also work closely with Chia. These exchanges will provide Chia with a variety of support and participate in joint marketing. Although Chia cannot be traded yet, cooperation with many first-tier exchanges will guarantee Chia's excellent market resources.

1. Lend Chia to governments, financial institutions, market makers and businesses for their Chia-related projects, such as asset issuance, payment of international invoices and providing liquidity on various digital currency exchanges. These loans will be provided to creditworthy entities, generally require interest denominated in Chia, and are repaid in full in Chia. For marketing purposes, the Company may offer negative interest rates from time to time to promote adoption.

2. Chia (needs to be used in all aspects for the market to grow. Therefore, the project party needs to promote it and lend it to the world's top 5000 companies so that they can use it. After the company is listed on Nasdaq, the company's shares purchased on Nasdaq can be exchanged for Chia, and Chia can also be exchanged for company shares. We know that the more people buy Chia, the higher the price will be, so this move not only allows people in the blockchain field to buy Chia, but also allows people in the stock market to buy Chia.

3. After the company is listed on NASDAQ, it will use Chia to invest in promising projects to expand Chia's functions and influence in the currency and financial technology markets. Because Chia is connected to the stock market, if the company's earnings increase, the company's stock will increase, and if the stock increases, Chia will also increase.

4. Use Chia to add additional farming rewards or otherwise incentivize farmers or developers to validate or develop the network or software. Chia will host software enhancement competitions and farming competitions, and plans to use Chia as prizes for such competitions.

Chia aims to be publicly listed on a U.S. stock exchange, where shareholders can share risks and rewards with management in a transparent and open manner, and Chia can use widely known corporate controls to make binding statements on how the Chia Network intends to use strategic reserves. Chia digital currency is a useful payment tool, and Chia intends to complete a fully SEC-compliant SEC-registered stock IPO and will be listed after the mainnet launch due to market timing.