Bram Cohen has confirmed that he will be unveiling a new cryptocurrency which, according to him, will be more or less a “better” version of Bitcoin.
He intends to achieve this by basing the digital currency on a proof of space consensus algorithm, which will consume far less energy than Bitcoin’s current protocol proof-of-work (PoW) algorithm.
If the name sounds familiar, that’s because Cohen is more famously known as the co-founder of popular p2p (peer-to-peer) file-sharing platform BitTorrent, which he helped form about 17 years ago.
He spoke to Wired recently on his ambition to create a cryptocurrency that is not only widely accepted in the financial industry, but that will also focus on conserving the environment by reducing the amount of electrical energy needed to mine the currency.
His startup, Chia Network, will be based in San Francisco right next to the west coast office of the U.S. Securities and Exchange Commission (SEC).
Speaking on this subject, Cohen said he couldn’t be happier about being based next to the regulating body.
Bitcoin’s Power Issues
Cohen is confident in his startup’s ability to reduce the amount of power necessary for mining digital currency.
Bitcoin’s PoW protocol may not be sustainable for long, especially since miners have already put Iceland under threat of national energy shortages.
Chia is hoping to give Bitcoin a run for its popularity, particularly for miners who would appreciate the lower power requirements of mining the digital currency.
However, unlike Bitcoin, Chia will be launching as an IPO (Initial Public Offering), not an ICO, and aside from staying away from the SEC’s radar, this will eliminate the mistrust that’s growing between investors and ICOs, many of which have turned out to be scams.
The Chia Network hopes to have its shares listed on a small-cap public stock exchange as early as the end of the year.
This means that Chia coins will not be the company’s main source of revenue.
Instead, Cohen is banking on generating revenue from helping mainstream financial institutions to establish an infrastructure that would aid in functions such as international cryptocurrency transfer among others.
They are expected to hold on to a large percentage of the available Chia coins.
Cohen and BitTorrent
Up until August 2017, Cohen was involved in the day-to-day running of his file-sharing platform BitTorrent which, at its peak, had attracted the attention of Mark Zuckerberg at Facebook among other Silicon Valley titans.
The social media company ended up utilizing the protocol to speed up software update distribution internally.
BitTorrent was later acquired by Tron this year. After the deal, Cohen went on to pursue other projects.
When Cohen considered his decision to venture into digital currency, he said that he was looking to develop a coin that would be more acceptable to banks and less damaging to the environment.
The Chia system is set to be based on two cryptographic protocols—one to confirm the storage space available for mining, and the other to help on the verification process for proper reward allocation.
As it stands, the company has managed to raise $3.4 million from notable investors including Andreessen Horowitz and Greylock Partners.