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BitTorrent Creator Dives Into Crypto Space With Ambitious Project That Could Potentially Replace Bitcoin

  • Alex Morris
    📰 News

    Bram Cohen strives to make crypto more palatable for banks and eliminate environmental damage caused by mining


BitTorrent Creator Dives Into Crypto Space With Ambitious Project That Could Potentially Replace Bitcoin
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Back in 2001, Bram Cohen disrupted the Internet with his BitTorrent protocol, which allowed seamlessly sharing files between individuals. Now, Cohen wants to spark a revolution in the financial industry with his new crypto startup Chia.

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Having the SEC among its neighbors

During the interview, Cohen revealed that his startup is soon moving to a San Francisco skyscraper, which is already a mainstay for many bigwigs in finance. Another peculiar fact is that Ciha will reside near the SEC’s west coast office. Despite the fact that the SEC has been showing its hawkish attitude towards cryptocurrencies and ICOs (its attorney has recently compared crypto to cannabis stocks), Cohen is clearly not deterred by its influential neighbor.

He states that the startup will hold a traditional IPO instead of an ICO. It is worth mentioning that the company has already secured $3.4 mln in venture funding, attracting such big-name investors in the likes as Andreessen Horowitz.


“Farming” replaces cryptocurrency mining

The BitTorrent creator also touches the issues of environmental problems caused by Bitcoin. Bitcoin uses the original Proof-of-Work (PoW) consensus algorithm, which often criticized because of its excessive energy consumption. This study, for instance, shows that Bitcoin mining consumes more energy than Ireland in a year.

Cohen wants to completely rebrand the term “cryptocurrency mining” by giving it the name “farming”. Cryptocurrency farming also presupposes competition, but there is no need to run powerful mining equipment since it is all about amassing disk storage. Expanding your storage won’t produce a negative impact on the environment, unlike Bitcoin mining.

Its modus operandi is extremely simple: one protocol is designed to check the amount of storage used for cryptocurrency mining while another one safeguards community members from potential fraudulent activities.

The startup has also launched a completion among mathematicians to determine the efficiency of the new farming technology. The winner would get $100,000 in BTC (the Chia currency is expected to be launched later this year).

Bitcoin is not suitable for banks

The Chia currency is expected to be adopted by banks as a means of conducting international transfers.  According to Cohen, Bitcoin is not suitable for banking institutions, so he has applied his extensive experience in engineering protocols in order to tackle this problem. The new currency will allow automating contracts and holding funds in escrow.

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It Could Take Bitcoin 22 Years to Retest Its ATH: UBS Analyst


It Could Take Bitcoin 22 Years to Retest Its ATH: UBS Analyst
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The fact that Bitcoin saw its price breaking above $5,000 at the beginning of April made everyone highly optimistic about the prospects of a full-fledged bull run. However, crypto bulls shouldn’t hold their breath since it could take decades for the number one currency to recover from its epic downfall.

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Bitcoin compared to other bubbles  

After comparing Bitcoin to other bubbles, UBS analyst Kevin Dennean came to a conclusion that BTC will most likely follow their lead, Business Insider reports.
However, here’s a catch – Bitcoin will have to undergo a long-lasting recovery, so it is not reasonable to expect another bull run in the nearest future. For comparison, it took the Dow Jones Industrials 22 years to reach its previous peak.   


‘We're struck by how long it took other asset bubbles to recover their peak levels (as long as 22 years for the Dow Jones Industrials) and how pedestrian the annualized returns from trough to the recovery often are,’ Dennean claims.

Bitcoin compared to other bubbles  

Picture: ©FactSet

With that being said, it is still not guaranteed that a certain bubble retests its ATH even after decades since a big burst. Nikkei, despite reaching its 20-year highs in October 2017, was still 50 percent lower than its ATH that was recorded in 1989.

Nikkei

Picture: ©ATLAS

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When you lose, you win

During the peak of the crypto market, Bitcoin was frequently compared to the infamous tulip mania, but these two barely had anything in common (except for the horrible stability of value). Hence, it hardly makes sense to apply a certain pattern and expect Bitcoin to behave in a similar fashion to other bubbles.

Historically, enormous price crashes actually benefited Bitcoin. As reported by U.Today, Bitcoin trader recently noticed that the BTC price rise 5.1-16.89 times every 70+ percent plunge. Crypto bulls have every reason to expect a similar outcome this time around.

'Shadow of bull statue on texture tiles floor metaphor of bull market is coming for stock market or investment asset' image by 123rf.

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