Chia (XCH) is a cryptocurrency based on Proof of Space-and-Time rather than the much more familiar Proof of Work that plagues our efforts to decarbonise our energy grid. Chia was initially developed by @BramCohen, known for developing the BitTorrent protocol.
Proof of Space-and-Time requires a you to commit a resource to the network, in this case storage space, and to mathematically prove that your commitment continues to be available to the network. Practically speaking this means some initially semi-intensive CPU work and very intensive I/O work to generate a Plot of space, once created the Chia client will continuously attempt to match your Plot against the current block in the blockchain in an attempt to solve it and reap the rewards for doing so. So the Proof of Space is the storage, and the Proof of Time is remaining connected to the network with your Plots to remain available to solve the next block.
Pools are a familiar concept to cryptocurrency miners, instead of attempt to solve the blockchain by yourself you join your resources with hundreds or thousands of others in a single mining entity known as a Pool. Now if any attempt by any member of the Pool is successful, the rewards are split amongst all participants, this vastly increases the probability you will receive a reward but reduces each reward proportionally to the number of Pool members. This is somewhat analogous to investing into Stock Portfolios rather than individual companies, the income you see over time will be more stable as you are not betting on any single entity to generate income.
Chia introduced an official Pooling protocol in version 1.6.0 (2021-07-07) and I want to explain how to use it and generally how it works.
Chia 1.6.0 also introduced a new type of Plot called “NFT Plots” which exist alongside the original format, which are now know as “OG Plots”. NFT Plots can be assigned to an NFT, a type of token that has its own cryptographic keys and acts as the middleman between your compatible NFT Plots and the Pools.
Join a Pool
When generating new Plots you have the option to “Join a Pool”, this is required for the plot to be capable of joining a Pool. The NFT is a private token, generating a Plot with an NFT binds the new Plots with that single NFT token.
Now every Plot you generate can be assigned to your private NFT, which has been linked to your Pool of choice and the Proof of Space-and-Time challenges will come from the Pool, and any rewards for having the solved the block will be distributed amongst the Pool members.
It is important to understand that every Pool is a privately operated entity on the open Internet, this inherently involves the risk they are a bad actor, or are attacked and compromised. I won’t go into the security implications of this happening here, as this is a risk assessment you should make yourself.
Payments are typically coded into the Pool, most Pools use the PPLNS payment scheme, but this can be changed. PPLNS, or Pay Per Last N-Shares, which pays proportional to the number of valid attempts to solve the block against the number of attempts submitted by the rest of the Pool. This means payments flucuate depending on the size of the network and size of the reward for solving a block.
You should always do your own research when investigating cryptocurrency, there are risks to your data security, hardware, and your money. This blog post is my way of helping people understand the change in Plotting on the Chia Network, not a recommendation to do so or an instruction guide on how to start with crytocurrency.
- Chia.net is the official website for the Chia Network
- TomsHardware.com - How to Farm Chia Coin, the New Storage-Based Cryptocurrency provides a comprehensive overview of the hardware considerations for Farming Chia