Never mind the GPUs used for process-intensive mining of Bitcoin, new cryptocoin Chia is driving up hard disk drive prices by its own processing needs, which are based on storage capacity. Chia Network Inc., a blockchain and digital currency platform founded by BitTorrent creator Bram Cohen, has more than doubled its valuation after raising $61 million from investors including Richmond Global Ventures and Andreessen Horowitz.
Chia was valued at about $500 million in the funding round, a person with knowledge of the matter said. Breyer Capital, Slow Ventures, True Ventures, Cygni Capital, Naval Ravikant, Collab+Currency and DHVC also participated in round.
Chiacoin was launched this month. It is a bitcoin-like currency, and it needs so-called proof-of-space-time to be mined, or rather farmed, using hard disk drives and SSDs. That requires less processing than bitcoin, positioning Chiacoin as a “greener” cryptocurrency. It was devised by Bram Cohen, the American programmer who came up with the BitTorrent peer-to-peer network protocol. Chia Network is the company backing Chiacoin.
Bitcoins are mined using a so-called proof-of-work that involves vast numbers of CPU cycles and hence electricity. Chiacoin farming requires much less processing. Chia is based on a proof-of-space-time consensus algorithm and a blockchain network. It involves a so-called Chia farmer or “prover” sending such a proof to a verifier. The proof is that some amount of disk or SSD space is actually used to store some specific data.
“We want to make digital currency easier to use than cash,” Gene Hoffman, Chia’s president and chief operating officer, said in an interview. He called the fresh funding “rocket fuel” for hiring and accelerating the company’s ambition to become a trading and payment system used by governments, banks, and other institutions.
Hoffman said the company is looking to a traditional initial public offering as soon as this year, although a merger with the “right” special purpose acquisition company is a possibility. “Our goal has always been to go public relatively quickly as that will significantly clarify our regulatory environment and allow customers to use currency to hedge public market volatility, which is different from other coins,” Hoffman said.
Chia calls itself eco-friendly, saying its operations are less energy-intensive than traditional mining. The firm is is now the largest storage-related blockchain, nearly double Filecoin, Hoffman said.
Richmond Global Ventures managing partner David Frazee said the Chia coin is auditable, secure and regulatorily compliant, making it user-friendly for monetary authorities and multinationals. “Chia is what Bitcoin would look like if it was designed with knowledge from the last 13 years,” he said. Frazee is joining Chia’s board and personally invested in the company in 2018.
