I’m standing in the lobby of a skyscraper in the heart of the financial district of San Francisco. Here I meet with a man who believes that he can solve the problem of Bitcoin, even though it seems from the outside that Bitcoin is fine. For the period from January to December 2017, its price soared by 1500 percent, the biggest jump was at the end of November. Fans of Bitcoin on Reddit explained this with a pre-holiday period (before Thanksgiving). Techies left for the weekend, and the botanists shouted about Bitcoin at every corner – they say, he is able to make a revolution, depriving the centralized governments of a monopoly on the right to issue money.
Suddenly, the largest US stock exchange Coinbase, where you can buy cryptocurrency for dollars, faced an influx of 100,000 new users per day. A week later, the number of Coinbase users exceeded 13 million – more than the online broker Charles Schwab. In early December, the start of trading in cryptocurrency futures took place, and the price of Bitcoin at the moment reached $ 19,783, and its market value exceeded $ 300 billion, which exceeds the market value of Bank of America or Wells Fargo.
But the 42-year-old creator of the BitTorrent network Bram Cohen (Bram Cohen) believes that the rapid growth of cryptocurrency carries a potential threat to the planet. I saw him near the elevators – he was wearing a black AC / DC T-shirt and did not reach out at the meeting (he later explained: “I have sensory problems, so any touch causes discomfort”). We went up to the eighth floor, and from there we went downstairs to the seventh floor – so he did not have to pull out his pass. Cohen is obsessed with the search for life hacking, and when it came to the fact that we both had a cold, he immediately told me about the benefits of mouth rinses with zinc content.
Cohen rents one of the WeWork cells of about 14 square meters. It costs him $ 5,000 a month and barely accommodates a few tables, a small refrigerator and a gray sofa. On it, Cohen periodically dormant in front of all co-working neighbors. Sitting at one of these tables, Cohen told me about his plans for developing improved cryptocurrency. He speaks quickly and smoothly, interspersing professional jargon with smiles. And he says that you need to eliminate the “Proof-of-Work” module and rеplace it with the “Proof-of-Space and Proof-of-Time” module. Only once did I manage to ask my question, but just at that time Cohen blew his nose and did not hear the question. However, he explains quite clearly what is wrong with Bitcoin and other cryptocurrencies: “Costs are terrible and are constantly growing.” Bitcoin requires huge processing power. In a decentralized currency, the register of payment transaction records — or, alternatively, the “blockchain” —is maintained and distributed by users called “miners”. They confirm transactions and network status. New Bitcoins appear about every 10 minutes, and this will continue until 2140. Miners compete with each other in performing complex calculations, which are put before them by the Bitcoin algorithm. The competition is so high that miners use specialized computers with high energy consumption, which are able to sort out more than 10 trillion answer choices per second. All these costs of computing power are due to the requirements of the Proof-of-Work algorithm.
As a result, mining has concentrated in those parts of the world where there is cheap electricity. For example, in China, where people gather tens of thousands of computers into one pool in order to mine more coins, and then divide the profits among themselves. “I can’t bring myself to buy Bitcoins,” says Cohen, “the more you have, the more you make to increase their value, the more the miners earn, the more energy they spend on mining.” According to the Bitcoin network’s energy consumption index, which is released by the Digiconomist Internet portal, Bitcoin already consumes more electricity than Denmark, and in the near future the level of energy consumption will not decrease. In addition, Bitcoin provoked the emergence of an extensive ecosystem with many competing cryptocurrencies (some of which are extremely energy-intensive), crypto startups, cryptocurrency venture funds and millions of investors.
The Bitcoin network has no owner – its code is publicly available – and therefore Cohen can develop his own version of cryptocurrency, Chia Network. In Chia, Cohen wants to rеplace the Bitcoin code that requires the most energy, forcing miners to generate trillions of numbers per second. Instead, miners (or “farmers” (farmers) in Chia terminology) will make a profit based on the free hard disk space available to the network and the time it is available. When connected, Chia Network will gradually fill this unused amount of hard disk with bingo cards. Then, if the Chia algorithm chooses the numbers that are on your card, you will receive the newly released chia tokens.
Cohen specializes in creating decentralized networks based on which cryptocurrencies operate. In such networks, information is not distributed through a central server, but through computers directly connected to each other. In 2001, a graduate of the University of New York at Buffalo, who wrote computer programs from the age of 6, developed the BitTorrent protocol that allows you to efficiently share files over the Internet, distributing the data transfer load among all network participants. He drew attention to his new network, filling it with free pornography. Today, the number of BitTorrent users is more than 170 million people per month, and, according to data published by the company, this network generates up to 40 percent of world traffic, most of which is pirated movies and television shows.
Bitcoin now consumes more electricity than Denmark, and in the near future the level of energy consumption will not decrease.
Bitcoin resembles BitTorrent for money. “This name has already become a cult,” says Cohen. Cohen did not like Bitcoin during its launch in 2009 due to the large number of people who want to get rich quick on it. This continued until last year, until he studied more closely the “badly written Bitcoin software code base” and decided to create a cleaner code for cryptocurrency.
Today, the Chia Network team consists of 6 people. Cohen takes office in WeWork co-working with co-founder Ryan Singer, serial Bitcoin entrepreneur and currently CEO of three other companies: Blockchain Clearing Corporation, Blockchain Health Co. and Neighborly. The company also has several remote developers from different parts of the world, from Las Vegas to Thailand.
While it is difficult to imagine that Chia will surpass Bitcoin in popularity. This is one of 1300 cryptocurrencies that are designed to satisfy various needs (for example, there is a cryptocurrency that is pegged to the dollar and used on eBay, as well as cryptocurrency to buy virtual items in computer games). Some experts in the field of cryptocurrency, in particular, Eric Voskuil, a former chief architect at Microsoft, are wondering what could prevent Chia farmers from buying thousands of cheap hard drives and driving them around the clock, just burning electricity, like miners Bitcoins? Cohen replies that this problem will arise only if Chia’s capitalization exceeds a trillion dollars. “And, you know, this is rather strange – to express criticism because of a problem that will arise only if the cost increases to more than a trillion dollars,” he says.
Cohen and Singer plan to launch Chia Network by the end of 2018. Also, they plan to sell some chia tokens in the second quarter through ICO, where everyone can buy tokens at a fixed price in dollars. “Bitcoin barely works, and causes a huge amount of problems,” says Cohen. “From an engineer’s point of view, that’s fine.” There is something to fix. As long as there are broken things on Earth, there will be no shortage of work”.
Source: chby.io
