Bram Cohen, the creator of BitTorrent, the world largest file-sharing platform, has recently set his sights on a new mission; creating an improved version of decentralized currency.
BitTorrent is known for hosting millions of pirated songs, movies, and unlicensed content. The peer- to peer file-sharing platform was built on a sophisticated protocol designed to move data around the Internet efficiently. Unsurprisingly, it has also been subject to multiple lawsuits filed by record labels and entertainment moguls.
In the same way, Bram disrupted the file sharing and entertainment industry with BitTorrent; he now plans to disturb the finance industry with his new digital currency, Chia.
Chia’s goal is to help Banks use cryptocurrencies as a tool for international money transfers. Unlike most blockchain companies, Chia will not be launching an ICO, but instead be raising funds through an IPO, listing shares on a small-cap public stock exchange. Bram believes the more regulatory friendly approach will help the company establish legitimacy amongst Bank partners and with the SEC.
Bram also believes that he can create a cryptocurrency that is much more eco-friendly than Bitcoin. Bitcoin’s proof of work consensus protocol requires vast amounts of energy to be consumed in the mining process, which only further compounds the environmental problems we face today. Last year it was estimated that bitcoin mining consumes as much power as Serbia, a country of 7 million people.
Under Bram’s new model, participants will compete to win Chai’s cryptocurrencies and process transactions through a process called ‘farming.’ Farming only requires consuming large amounts of disks space, as opposed to accumulating large pieces of mining hardware. Because of the abundance of storage space on computers today, Bram believes the farming model will be much more accessible and efficient for people to participate in all over the world.
Another advantage Bram believes Chai has over Bitcoin is its flexibility. Chai is designed to support financial systems in ways that Bitcoin is not. These designs include custom add-ons that can automate contracts, holds funds in escrow, or implement features such as charge-backs. With these features, it’s clear that Chai is aiming to provide an additional layer of support to the current financial system, rather than exist outside of it in the way that Bitcoin currently does.
So far, Chai has raised $3.4 million from venture funds like Greylock Partners and Andreessen Horowitz, both of whom have cited the company’s goal to pursue an IPO instead of ICO as a critical factor that made them an attractive investment.
Ultimately, like Ripple, Chai is aiming to create a bridge between the traditional financial world and the crypto space. Whether or not this bridge will be more successful than the standalone solutions offered by Bitcoin and other cryptocurrencies will remain to be seen. However, with Bram’s track record of success in the tech space, Chai looks to have a promising future ahead of it.