Chia’s plan and US regulation: Will this be a reference sample for the advanced Chinese blockchain industry?

The listing of Coinbase on the Nasdaq exchange did not arouse the attention it deserved in the country. Only some currency media media chatted about the stimulus to our perception of wealth, especially on the day of listing. US$112 billion-an emerging exchange with a history of only 8 years can compete with the established banking giant Morgan Stanley in its performance in the capital market.

I believe that Chia, which is preparing to be listed on the Nasdaq exchange, will not attract much attention. The currency circle is now most concerned about the purchase of mining machines for mining and the listing of Chia token XCH on the exchange. The editor believes that if the “green bitcoin” Chia, which has the unfulfilled mission of bitcoin payment functions and claims to optimize and iterate bitcoin, can land on the Nasdaq, it will be meaningful-China’s renminbi internationalization will face a greater challenge. The complex international currency environment, an opponent blessed by the cryptocurrency system, is worthy of our analysis and discussion.

Listing plan: Can Chia connect with the stock market?

Unlike other projects, Chia is behind Chia Network, a company operating in a traditional model. Chia Network created the open source Chia blockchain software and launched the network based on this software. It should be noted that this is an open source software product developed by a centralized company, but the network is not controlled by the company, but operates in a decentralized manner. Otherwise, there is no need for us to discuss it today.

The soul of Chia is undoubtedly Bram Cohen. The team introduced Gene Hoffman, who was once the CEO of a NASDAQ listed company, and is a senior business person. The main work of Gene is currently focusing on the company’s listing, governance, and subsequent Wall Street relations.

Chia Network may be listed as soon as a few months, and its main asset is the pre-mined 21 million Chia tokens XCH. The Chia white paper describes a 21 million strategic reserve fund, which can be understood as pre-mining for the project party and shareholders.

This part of the strategic reserve has an important role and is strictly regulated. First of all, Chia must make financial disclosures, ensure transparency, and declare publicly in accordance with the 1933 Act and the 1394 Act of the United States, and is committed to the NASDAQ Listed and accepted the supervision of the US SEC. In Chia’s plan, the strategic reserve fund is an important bargaining chip for the future operation of listed companies.

1. Lend Chia to governments, financial institutions, market makers and companies for use in Chia-related projects, such as asset issuance, payment of international invoices and provision of various digital currency exchanges fluidity. These loans will be provided to creditworthy entities, and generally require interest denominated in Chia and repaid in full by Chia. For marketing purposes, the company may offer negative interest rates from time to time to promote adoption.

2. Chia needs to be used in all aspects to get bigger and bigger market. Therefore, it needs to be promoted by the project party and loaned to the Fortune 5000 companies so that they can use it. After the company is listed on NASDAQ, the company’s shares bought on NASDAQ can be exchanged for Chia, and Chia can also be exchanged for company shares. We know that the more people buying Chia, the higher the price will increase, so this move not only allows people in the blockchain field to buy Chia, but also allows people in the stock market to buy Chia.

3. After the company is listed on NASDAQ, it uses Chia to invest in promising projects to expand Chia’s functions and influence in the currency and financial technology markets. Because Chia and the stock market are connected, the company’s earnings will rise, and the company’s stock will rise, and Chia will rise as the stock rises.

4. Use Chia to add additional farming rewards (farming) or to encourage farmers or developers to verify or develop networks or software in other ways. Chia will hold software enhancement competitions and farming competitions, and plans to use Chia as prizes for such competitions.

If the listing is successful, this will be a deep integration of the two worlds.

“Green Bitcoin”: Is Chia an optimized and upgraded version of Bitcoin?

Bitcoin was invented and founded by Satoshi Nakamoto based on a borderless peer-to-peer network and consensus initiative open source software. Bitcoin can be used as a digital signature through a private key, allowing individuals to pay directly to others without going through banks, clearing centers, Third-party institutions such as securities firms have avoided high handling fees, cumbersome procedures, and regulatory issues.

In order to prevent inflation and ensure the stable operation of the system, the upper limit of the number of bitcoin protocols is 21 million. Anyone can participate in bitcoin activities, which is issued through computer operations called mining. In the Bitcoin world, a data block is recorded approximately every 10 minutes. All mining computers are trying to pack this data block while completing the submission task. In the end, the person who successfully generates this data block can get a bitcoin reward.

In this system, the stronger the computing power of the mining machine, the faster the “mining” speed, and the higher the probability of mining Bitcoin. But when Bitcoin was developed, it was not foreseen that the computing power of dedicated mining hardware equipment would greatly exceed the performance of ordinary computers, resulting in the decentralized network that was originally hoped to be formed by a few miners. This is obviously contrary to Satoshi Nakamoto’s original intention to a certain extent, contrary to the original desire of 1 CPU 1 Vote. It not only reduces the degree of decentralization to a considerable extent, but also causes a huge waste of resources.

Chia hopes to reconstruct this original intention through an innovative space-time proof consensus mechanism. Chia calls this consensus an improved Nakamoto consensus — Chia is a public chain with a strong flavor of the early encryption community. He hopes to save energy as much as possible. The way to create a green digital currency suitable for the digital society; Chia uses the space + time proof mechanism, so that ordinary computers can also use the remaining space of the hard disk to mine and participate in the production of blocks; at the same time support smart contracts, a smart contract language called Chialisp Allow users to issue their own assets and design the corresponding contract logic.

This is also an iterative upgrade of Bitcoin in the eyes of Chia’s designers-Bitcoin itself does not support smart contracts, so organizations that need more complex business logic can only choose Ethereum. Chia’s evaluation of Ethereum is that the design has flaws and the security is worrying, which greatly restricts enterprises, especially financial institutions, from large-scale on-chain application expansion.

Chia provides its own solutions to these problems. Chia uses the new Satoshi Nakamoto consensus algorithm. Chialisp is a new smart transaction programming language for the Chia blockchain. It is easy to review and can better release the security promised by cryptocurrencies. Sex, transparency and ease of use. Judging from the various functions that Chialisp has natively supported (multi-signature, transaction withdrawal, receiving address restrictions, identity wallets, etc.), these logics are indeed very suitable for financial institutions to use.

Chia’s mining is also different from BTC and ETH using Proof of Work (POW). Chia uses “Proof of Space and Time” (PoST). PoST can use storage devices (computers, servers, NAS). , Raspberry Pi, etc.) for mining. What Chia mining requires is not computing power, but storage space. That is to say, when mining in Chia, the larger the hard disk space, the higher the efficiency.

1. Proof of space: You can think of proof of space as a way to prove that you have not used some storage on your hard drive. Users of the Chia blockchain will “plot” the unused space on their hard drives by installing software that stores a set of encrypted numbers on the disk as a “password.” These users are called “farmers”. When the blockchain broadcasts the challenge of the next block, farmers can scan their plots to see if they have the hash value closest to the challenge. The probability of a farmer winning a plot is the percentage of the farmer’s total space in the entire network.

2. Time proof: Time proof is realized by a verifiable delay function, which takes a certain amount of time to calculate, but the verification speed is very fast. The key idea of ​​VDF is that they require sequential calculations, and because having many parallel machines does not produce any revenue, it can minimize power waste. There may be relatively few VDF servers (“Timelords”) because the fastest VDF server will always be ranked first, and only a fast and fair Timelord is required to complete a block on the network and move the chain forward.

Like Bitcoin, the difficulty of work on the blockchain of the Chia network is also dynamically adjusted, so the target time for completion of 32 blocks is an average of 10 minutes. Not every block is a transaction block. It is estimated that there will be 9 to 14 transaction blocks every 10 minutes, and transaction blocks will also have fee income.

In summary, Chia and Bitcoin are inherited and succeeded in the crypto world. Whether it can complete the mission of optimizing iterative, it must be verified by time.

Chia meaning: link two parallel worlds!

Chia itself is defined as a public chain. They judge that the current blockchain industry is still led by developers, so they hope that Chia is the preferred blockchain for these developers when deploying new applications and services; Chia also hopes to become linked to the sovereign currency The first choice for the security of applications such as stablecoins, Chia can provide support and training when sovereign countries, financial institutions, and companies begin to use cryptocurrencies in their daily transactions.

Let’s summarize the main ideas put forward by Chia, and it will be obvious that this is dedicated to linking the encrypted world and the real world.

1. Enterprise-level currency: sell software services to governments, financial institutions, enterprises, and large storage buyers and sellers, support open source blockchain, and intelligent transaction software.

2. Promote the development of DeFi, DEX, and cross-border payment.

3. Allow individuals, financial institutions, enterprises, and governments to issue assets on the chain. These assets inherit the smart transaction capabilities of the Chia Network blockchain and rely on the global decentralized security verification provided by the time and space certification.

4. Solve the problem that mining consumes a lot of resources: reduce the negative effects and impacts of Asic, computing power, and power consumption.

Chia’s vision can be summarized in one sentence in the white paper: “One day we can use Chia to buy coffee in California. At present, banks, governments, and DeFi organizations will use it to build new financial technology to solve cross-border problems and make it unnecessary in the future. None of these require too many middlemen.”

The enlightenment of listing: can China’s blockchain be referenced?

Is Chia an authentic blockchain project? Excluding the design of centralized company operations for listing, we can judge that Chia is an authentic decentralized blockchain project based on the foregoing description. What is more interesting is that this authentic blockchain project is positioned for the use of the government and financial institutions for the payment function of tokens.

Therefore, the listing of Chia is more epoch-making than the listing of Coinbase. The listing of Coinbase on Nasdaq has demonstrated the enlightened policy of the U.S. government on cryptocurrency investment transactions, and the listing of Chia means the recognition, acceptance and active integration of cryptocurrencies in the U.S. economic system.

Looking back at the attitudes of various countries towards cryptocurrencies in the past few years, the US government is clearly superior. In September 2018, the U.S. government approved two stable currencies, Gemini Dollar and Paxos Standard, with each token being exchanged for 1 U.S. dollar. This is actually the undercurrent of the cryptocurrency chess game in the current era of the US dollar pattern. This is an attitude of temptation and experimentation. This also shows the response of the US government to the supervision and acquiescence and support of USDT, Ripple and Libra. As a powerful government in the sovereign era and the strongest dollar in the existing monetary system, it is normal for the US government to show doubts and hesitation, but its active and proactive promotion, exploration and experimentation are admirable. When stablecoins are anchored to the U.S. dollar, the United States is not only receiving leeks in the digital currency market. They can squeeze the leek wool as they like, and they can squeeze the wool of the governments of various countries as they like. In the blockchain world, those who get Token have the world. Through this technology, the United States no longer needs to use violent military means to open the door of foreign exchange control for the transportation of US dollars.

Up to now, we should observe the listing of Chia in a more positive attitude-when the decentralized cryptocurrency Chia token XCH successfully serves SWIFT, DTCC, Western Union and other services, it can be used by the government, banks and DeFi. The establishment of new financial technology to solve cross-border payments is no longer a matter in the cryptocurrency circle. Chia token XCH will be successfully out of the circle and be active between traditional financial institutions and national governments, gaining a leading position in the competition among sovereign nations in the world for the development of its digital economy and encrypted economy.

China is one of the most stringent countries in the world in terms of cryptocurrency regulations. In the past few years, fraud crimes involving cryptocurrencies have been rampant in China and globally, and China’s governance of cryptocurrency fraud has achieved remarkable results. . On this basis, since 2016, the Chinese government’s investment in basic blockchain technology has continued to increase. Although China has not yet shown a clear and positive cryptocurrency policy attitude, DCEP has given China’s blockchain industry and the crypto economy some hope. In response to the emergence of Libra to stimulate the Chinese government to work overtime to accelerate the development progress and begin to release the digital RMB DCEP into the public space, the “International Finance News” published an article “The legal digital currency will reconstruct the world’s finance.”

However, in the era of encrypted economy driven by blockchain technology, DCEP’s opponent may not be digital beautification, but the cryptocurrency system that the U.S. government actively responds to-including stablecoins anchored to the US dollar, including decentralized ones accepted by government supervision Digital currency and compliant trading system…

The good news is that under the strict government supervision and the continuous improvement of the currency circle, private investment and technological entrepreneurship have never been left behind. Taking Chia’s participation as an example, China also has many early mining investors participating. While these early participants obtained wealth investment opportunities, they can also be said to be witnesses and participants of China’s early participation in the iterative evolution of the crypto economy.