Bram Cohen as a 25-year-old started a project that was able to move data around the World Wide Web. From pirated songs to movies, these are some of the things that made BitTorrent popular. For a time, BitTorrent consumed more than one-third of the global internet traffic. But this time around, it seems that he is ready to jump into a different type of innovation. He is now ready to make his own cryptocurrency. It is going to be called Chia.
According to Cohen, he likes “hard technical problems”. Cohen built his office in a building which was built as Wells Fargo’s headquarters. The startup is now neighbors with the Securities and Exchange Commission.
Today, the SEC is putting pressure on initial coin offerings (ICO). Though the agency has considered Bitcoin and Ethereum as commodities, the SEC also clarified that most ICOs fall under the category of securities.
But for Cohen, he doesn’t plan to have an ICO to raise funds for his project. Instead, he is going to file for a conventional initial public offering before the end of 2018. It is going to list shares on a small-cap public stock exchange and the revenue will be coming from banks. Ultimately, Cohen designed Chia in order to help banks make use of cryptocurrencies in processing international transfers.
Cohan’s vision isn’t the first of its kind. Ripple has already done its part in helping banks. With its xRapid, many are looking forward to seeing faster and a more efficient cross-border transaction process. Also, xRapid is now being utilized by three companies.
However, one of the things that make Ripple different is the fact that it is still dealing with a number of lawsuits that claim that XRP is actually a security.
Repeating Technical Success
In order for Cohen to become successful in his project, it is imperative that he avoids both legal and business challenges. BitTorrent despite being successful as a technology and was even able to raise $30 million in funding, struggled as a business.
Chia is a product of Cohen looking hard at Bitcoin. He is looking to design a cryptocurrency that is less dangerous to the planet. It is no secret that Bitcoin mining needs a great amount of energy. For this reason, different countries have become watchful when it comes to allowing crypto mining companies operate in their area. There are countries that even asked crypto mining companies to pay higher fees for using their electricity. There are estimates that mining worldwide uses the same amount of energy as some countries.
Cohen thinks that “Satoshi was not really a great protocols engineer”. He pointed out that the problem with Bitcoin using so much energy is due to its design how it secures digital transactions.
Cohen plans to give a different approach and he plans to call it “farming”. Unlike Bitcoin mining wherein you need to have a powerful computer, Cohen plans to amass disk storage space. This means that you buy more storage to get more cryptocurrency rewards in the process. Can this be a solution that decreases the amount of energy used by cryptocurrencies?
Chia is going to be dependent on two new cryptographic protocols in order to get this done. One is that it verifies the storage of a computer has. And the other is to protect it against fraud while it determines the rewards for each farmer.