Storage-based mining blockchain and smart currency platform Chia Network has raised $61 million in its funding round and is now valued at $500 million.
Notable investors in the capital raise include Andreesen Horowitz, Breyer Capital, Slow Ventures, True Ventures, Cygni Capital, Naval Ravikant, Collab+Currency and DHVC.
Chia President and Chief Operating Officer Gene Hoffman said the funding will be a huge catalyst for the platform’s fast growth, aiming to “make digital currency easier to use than cash.” The network official also shared a possible special purpose acquisition company (SPAC) or traditional initial public offering (IPO) as part of their immediate goals.
Chia 101
As opposed to Bitcoin and Ethereum that depend on Proof-of-Work to validate its network transactions, Chia leverages the Proof-of-Space-Time consensus algorithm.
Under the system, a chia farmer (similar to bitcoin or ethereum miner) is responsible for sending proof to a verifier of a transaction, with solid-state drives (SSD) or hard-drive disks (HDD) utilized in storing data. Due to being a storage-based network, Chia claims to be environmental-friendly and less energy-intensive than traditional GPU miners.
After the network’s main net launch on March 19, storage device demands have surged and some regions reported shortages in supply. Chia farmers have also pushed prices, with manufacturers Seagate and Western Digital increasing 31.52% and 12.91% respectively.
A possible opportunity for Chia
Towards the latter part of 2021, Ethereum’s EIP-1559 is expected to come and may result in the network’s mining profits plunge to historical lows. The upgrade is expected to significantly lower transaction fees, rendering ethereum mining completely unprofitable.
With such development and relative consequences looming around, some players look at chia to be the next cash crop for miners. While this still remains to be seen, keeping up the exponential network space growth puts chia in a very good position to make this a reality.
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