What Is Chia Network (XCH)?
XCH is the native token of the Chia network, which is an open-source Layer-1 blockchain. The network was named after a grain since the whole concept of the network is bringing green money to the crypto industry. Make sure to check the Chia price chart that is placed above if you want to know the current XCH price.
Chia employs its own programming language called Chiaslip. It’s a robust and secure language similar to LISP. The language has the ability to employ smart contract capabilities to hold and release funds. Basically, it creates simultaneous transactions that are completed instantly instead of sequential ones.
The consensus mechanism employed by Chia is called the Proof-of-Space-and-Time (PoST). It was developed by Bram Cohen, and it is a combination of Proof-of-Space (PoS) and Proof-of-Time (PoT) consensus mechanisms.
Considering the Proof-of-Space consensus mechanism, in order to confirm transactions, miners have to install specialized software that maintains free space on their computers, which is needed for solving the challenge numbers. The process of transaction validation is called farming, while the places on the computer to which free space is allocated are referred to as plots.
What are the challenge numbers? Every time a block is created, it gets a random challenge number assigned to it from the preceding block. Each miner has a library of cryptographic numbers that is held on their hard disks. In order to solve the challenge and be able to create the following block, miners have to scan their libraries to find a number that is very close to the challenge number. Overall, miners have a higher probability of solving the challenge number first if they have more hard drive capacity, which results in more random numbers.
Moving on to the Proof-of-Time consensus mechanism, it requires miners to wait for a small amount of time before creating a new block. To achieve that, PoT utilizes the Verifiable Delay Function (VDF). The fundamental notion behind a VDF is that sequential computation is required, which takes up a certain amount of time to complete. The nodes in the PoT consensus mechanisms are referred to as Timelords. In essence, they have to monitor time and guarantee that the time spent on the PoS functions is accurately recorded.
All in all, without sacrificing network security, Chia can conduct transactions quickly while consuming less energy, thanks to the integration of Chiaslip and PoST.
The Founder of the Chia Network
The Chia crypto project was founded in 2017 by Bram Cohen. Bram Cohen is a computer programmer who is mostly known for the development of the peer-to-peer BitTorrent protocol and the BitTorrent platform itself. However, he is no longer working on that project. Besides that, Cohen is also the co-founder of CodeCon and Codeville.
The Purpose of XCH Coins
XCH is the utility token of the Chia network. It’s mostly utilized as a reward for the users of the Chia network. Though Chia coins can also be used for making transactions since they have very fast transaction speeds. Besides, in order to be involved in the development of the Chia Network, XCH tokens are also required.
Again, if you're curious about the XCH price, take a look at the aforementioned Chia price chart.
Tokenomics of XCH Coins
The supply of Chia tokens is unlimited. 21 million tokens were pre-farmed and released with the genesis block of Chia. Additional Chia coins are created through block rewards that are given to miners for their services.
After Chia tokens were issued, the network set the miner rewards at 64 Chia tokens every 10 minutes. For the first 12 years after the creation of the Chia network, farming rewards are planned to be cut in half every three years. However, after 12 year passes, the farming rewards will remain at 4 Chia coins every 10 minutes. This will result in ever-declining Chia inflation rates. It’s predicted that Chia's inflation rate will drop below 0.50% by 2043.
Finally, if you've made the decision to purchase XCH coins, I'd advise you to study the Chia price chart above. Why? Because there are many reasons that can cause the XCH price to fluctuate and you might see the main trends in its price fluctuations in the graph.
