![]() It raised $3.4 million this spring, including from Greylock Partners and Andreessen Horowitz, both of which previously invested in leading cryptocurrency exchange Coinbase. Unsurprisingly given Cohen’s track record of delivering technology that makes the internet more useful, Chia has attracted leading Silicon Valley venture capitalists. “The idea is to make Chia the premier cryptocurrency based off of our technology,” Cohen says. But it’s also designed to support custom add-ons that can automate contracts, holds funds in escrow, or implement features such as chargebacks not supported by bitcoin’s design but central to how the financial system deals with fraud. Like Nakamoto’s cryptocurrency, Chia is built around a distributed, unchangeable ledger of past transactions. When the Chia currency does launch sometime next year, Cohen says it will be attractive to financial institutions because of its greater flexibility than bitcoin. The winners will receive $100,000-denominated in bitcoin because Chia has not yet launched its currency. On Wenesday, he launched a competition that invites the mathematically minded to test the speed or security of the cryptography behind Chia farming. ![]() Anyone curious about the details can read the two peer reviewed papers Cohen has coauthored with academic mathematicians. Anyone motivated to buy more storage just to earn cryptocurrency wouldn’t have an outsized effect on the world as bitcoin miners do, he says.Ĭhia’s system depends on two new cryptographic protocols, one that verifies the storage a computer has committed to farming, and the other that guards against fraud while determining which farmers win rewards for verifying transactions. Cohen reckons that there are already countless computers with spare storage in the world that could start farming Chia alongside their existing uses. Unlike in Nakamoto’s system, maximizing your chance of winning depends on amassing disk storage space, not running more powerful-and energy-hungry-hardware. Although the currency is still a niche interest, one analysis last year estimated bitcoin mining consumes as much power as Serbia, a country of 7 million people.Ĭohen gives his version of mining the more bucolic name “farming.” Similar to bitcoin, participants compete to win Chia cryptocurrency in a race that also processes transactions. It incentivizes people to run “mining” software that races to solve cryptographic puzzles and win transaction fees or newly minted bitcoin. The company will also own a significant chunk of available Chia coins, which the company hopes will become a valuable commodity over the longer term but it won’t be selling coins in an ICO.īitcoin’s environmental problem is rooted in the way Nakamoto’s design secures digital transactions. Chia’s revenue will come from helping banks build systems to use the cryptocurrency of the same name for functions like international transfers. Cohen says he plans a more distinctive route by filing for a conventional initial public offering before the end of this year, to list shares on a small-cap public stock exchange. SEC complaints about the frothy cryptocurrency market have focused on ICOs, or initial coin offerings, in which startups sell units of new or planned cryptocurrency as a quick and easy way to raise capital. But Cohen, Chia’s CTO and chairman, is happy to have the SEC looking over his shoulder. That may seem bold, as the regulator pressures cryptocurrency startups for flouting securities rules. Chia Network, as Cohen’s startup is called, plans to move into its own space in the building soon.Īfter that move, Chia’s neighbors will include the west coast office of the Securities and Exchange Commission. The solidly built 42-year-old met WIRED in a San Francisco skyscraper built as the headquarters for Wells Fargo, which now houses other financial industry tenants. “I like hard technical problems,” says Cohen, with a knowing smile. ![]() His latest creation is a digital currency and startup called Chia, aimed at making cryptocurrency acceptable to the financial industry. Titanic numbers of pirated songs and movies, and countless lawsuits, later, he’s putting the finishing touches on what he hopes will be another world-changing protocol-this time for moving around money.Ĭohen’s earlier invention was BitTorrent, a specification for peer-to-peer file sharing that delighted millions but angered entertainment moguls, and at one point consumed more than a third of global internet traffic. In 2001, a 25-year-old unemployed college dropout named Bram Cohen crafted an elegant protocol for moving data around the internet.
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