Blockchain Startup Chia Network raises US$61-Million for Promoting “Green money for a Digital World”
In a fresh funding round, the blockchain startup “Chia Network” has raised US$61 million. Some of the largest VCs including top venture capital firms Andreessen Horowitz and Richmond Global Ventures made heavy investments. Bloomberg cited an anonymous source to say that the decentralized smart contract platform of the Chia network was valued at around US$500 million in the funding round.
The CEO and co-founder of AngelList Naval Ravikant, Breyer Capital, and True Ventures also backed this funding round of Chia Network. Gene Hoffman, the President and CFO of Chia Network, told Bloomberg in an interview that his firm plans to go public through an IPO (Initial Public Offer) in 2021. He went on to say:
“Our goal has always been to go public relatively quickly as that will significantly clarify our regulatory environment and allow customers to use currency to hedge public market volatility, which is different from other coins.”
Bram Cohen, the creator of BitTorrent, founded the Chia Network back in 2017. During the seed round of funding, over US$3.3 million were raised. The seed funding round was led by Ravikant and Andreessen Horowitz in 2018. The digital token of the company is called Chia token (XCH), which is regarded by the firm as “green money for a digital world.”
The principal value proposition of the Chia Network is the “Proof of Space and Time”, a unique consensus mechanism. The company claims this unique mechanism offers far greater energy efficiency than Proof-of-Work mining. Despite the eco-friendly claims of Chia Network, some have also questioned XCH’s ability to project itself as an alternative to Bitcoin.
David Gerard, the author of Attack of the 50 Foot Blockchain, has claimed in a May 23, 2021, article titled “Attack of the 50 Foot Blockchain” that the mining process of Chia token (XCH) needs heavy electricity and “multiple CPU threads running continuously at close to 100 percent”. Gerard said:
“Instead of carbon dioxide, Chia produces vast quantities of e-waste—rare metals, assembled into expensive computing components, turned into toxic near-unrecyclable landfill within weeks.”