Traditionally, cryptocurrencies have been mined on graphics cards and to an extent, on CPUs. This has usually resulted in inflated prices and shortages of these products during mining booms or during periods of increased activity. Now, the founder of BitTorrent (Bram Cohen) has introduced a new form of currency called ChiaCoin, that uses HDDs and SSDs instead of GPUs/CPUs, and it might turn out to be the next big thing after Bitcoin, just might.
With Bitcoin, the network sends out complex equations for miners to solve and whoever does it first gets a reward in the form of Bitcoin which can be then sold or traded. Since these calculations are complex and require a fair bit of compute, they generally run better on GPUs that are more suited for parallel compute. This model is known as proof of work and forms the basis of most blockchain networks.
With ChiaCoin, instead of solving equations, miners are required to store data on their storage devices. This is referred to as farming, rather than mining. The faster someone can store files, and how much they can store, the higher the chance of getting the network reward. This is the so-called time/space proof.
ChiaCoin has some key advantages over Bitcoin, the primary being with respect to the environment (it’s more eco-friendly as drives consume much less power). It’s also supposed to be more secure, stable, and viable than Bitcoin and Ether, both of which tend to be highly volatile.
The initial response to ChiaCoin has been positive with the network raising over $5 million during initial rounds of funding and is expected to raise a fair bit more considering the popularity of many digital currencies such as Dogecoin and many other altcoins.
