Chia Trading
Chia is an eco-friendly alternative to major cryptocurrencies like Bitcoin and Ethereum. Traditional coins have faced an environmental backlash for the amount of energy required for mining, but the Chia network takes a more sustainable approach. Our review explains how the emerging crypto achieves this and why it’s growing in popularity. We also explain how to start trading Chia, from the best exchanges to farming strategies.
You can trade and buy Chia at some crypto exchanges like OKEx. When selecting an exchange to day-trade Chia, it’s a good idea to review the platform’s reputation and whether it is covered by any regulatory framework. For instance, US traders might check it is registered with FinCEN as a Money Services Business (MSB) and complies with anti-money laundering (AML) requirements, as outlined in federal guidance.
Chia Brokers
What Is Chia?
Chia was designed to address the environmental failings of traditional Proof of Work (PoW) coins such as Bitcoin. The premise of PoW coins is that miners compete against each other which uses a vast amount of energy that negatively impacts the environment. A recent study found that the annual energy usage required for Bitcoin was greater than the total output of nations like Sweden and Argentina.
The Chia network runs off a Proof of Space system which relies on storage space rather than computing power, offering a less energy-intensive way of verifying transactions. Instead of mining, Chia uses farmers who retain storage capacity called farming plots which are available on hard drives.
The process of farming requires less technical knowledge than mining and all that’s needed is sufficient storage space and software provided by the XCH network. The greater the farmer’s space on the network the greater the chance of winning a block. Once sufficient space has been obtained, users employ a farming rig or pool such as Raspberry Pi to help plot the coin.
History Of Chia
The Chia Network was founded in August 2017, and the Chia Coin (XCH) was developed in the following years. Its creator Bram Cohen also developed the popular file-sharing system BitTorrent.
In early 2018, Chia released its primitive crypto protocols for public download. Later, they launched a competition to catch the attention of developers and to help test the algorithms they had built.
In 2019, the Chia exchange released its Proof of Space Green Paper and in 2020, released a beta version of its blockchain and wallet. The coin was first available for trading on the 3rd May 2021 and traded at around $1,600 per unit shortly after its launch. Although this initial public reaction was strong, Chia Coin’s value has plummeted since then, with the price falling below $30 within two years and continuing to slide since then.
Pros Of Trading Chia
- Accessibility – Chia, like all cryptocurrencies, is available to trade 24/7 whereas traditional asset classes like forex and shares are subject to the closing time of the exchange they trade on.
- Straightforward – New traders may come into difficulty when trying to understand how cryptocurrencies work. However, since Chia uses a farming system rather than a mining rig, the process of validating transactions is arguably easier to understand.
- Volatility – Despite the mining/farming differences with traditional coins, XCH is still volatile and can experience large intra-day swings.
Cons Of Trading Chia
- Lack of adoption – Before the coin’s release Chia was highly regarded and tipped for success in 2021. However, because it has not been widely adopted since its release, its value has dropped significantly, as have trading volumes and liquidity. This makes it difficult and unpredictable as a day-trading instrument.
- Security risk – Although the network makes use of blockchain technology, it is one of few coins which runs on a Proof of Space concept supported by hardware. This presents some security concerns and means investors should be careful when buying and selling XCH.
- Difficult to acquire – The concept of farming for coins rather than mining is an exciting prospect to some crypto fans. However, traders who don’t want to pursue the farming route will find it difficult to acquire coins traditionally if they don’t already hold the cryptos needed to trade-in for Chia. This is explored in more detail below.
- Capacity – Chia’s Proof of Space approach relies heavily on users having sufficient hard drives and SSDs to farm. This demand for computer storage could drive up the price of hardware. For example, before Chia’s release, hard drive prices in Southeast Asia soared. As a result, users may struggle to obtain the space required to farm with some traders already pointing out that their wallet has not synced when computer capacity is low.
How To Acquire Chia (XCH)
There are two ways to acquire XCH, either by farming or buying the coins through an exchange. We have explained how Proof of Space works and how to earn coins through farming above. The section below covers how to buy Chia.
- Choose an exchange – Since XCH is relatively new, it is not available for trading on regular cryptocurrency exchanges. However, prospective traders can start trading the coin on OKEx.
- Choose your deposit currency – At present, XCH can only be purchased using other cryptocurrencies like Tether and Bitcoin. Purchasing coins using traditional fiat money like USD or EUR is not possible.
- Know your price – Once you have purchased the deposit currency, you are ready to start buying and selling Chia. You will need to know what XCH price you are targeting to maximise your returns. Ensure you are aware of any transaction fees charged by the exchange.
Trading Strategies
Below are a few strategies you can use to start trading Chia.
Farming
Those with a large amount of computer storage space and knowledge of cryptocurrencies may want to start farming Chia. Traders can acquire XCH at a relatively low cost through farming and then sell coins at exchanges to generate gains.
Traders can make use of online coin calculators to estimate how much they can earn from farming.
Day Trading
Chia can attract day traders due to its volatile price swings. Investors can capitalise on intra-day movements to generate profits. However, when day trading any volatile asset, it is important to integrate risk management techniques. Prices of cryptocurrencies (especially new ones) can fluctuate quickly so ensure you use stop losses and price alerts. However, note that trading volumes are far lower than the more popular crypto tokens, and with low liquidity you may find it difficult to open and close trades.
Position Trading
The popularity of cryptos has boomed over the last couple of years with new coins hitting the market daily. The success of individual coins is very difficult to predict. For example, Dogecoin, which was initially set up as a joke, ended up becoming one of the leading crypto tokens after gaining mainstream attention around 2021.
If you believe the Chia network’s sustainable approach could set it on the path towards high growth, it might be worth holding the coin for the future.
News Trading
Cryptocurrencies and new stories are interlinked. Before it was issued, Chia was tipped by many market experts for immediate success. Although XCH hasn’t lived up to expectations thus far, prospective traders can formulate a strategy that responds to news-driven market shifts.
Final Word On Trading Chia
Chia made headlines for its innovative approach to validating transactions through a Proof of Space consensus. As environmentally responsible trading continues to take focus, some forecast a positive outlook for this emerging token. However, the Chia value and trading volumes dropped dramatically after its launch, and it remains a risky crypto token to trade.
FAQ
When Was Chia Founded?
Chia was founded in 2017 by Bram Cohen, who also invented the file-sharing system BitTorrent. The idea was to build an enhanced blockchain system with a focus on the environment, which other major cryptos have failed to incorporate into their working model.
What Is Proof Of Space And Time?
Other cryptocurrencies typically take a Proof of Work approach which requires significant energy resources to continually mine blockchains. Proof of Space makes use of any unused storage space on hardware devices and ties to Proof of Time which aligns the time of blocks to increase security.
Where Can I Buy Chia?
Chia is not currently available on major crypto exchanges like Coinbase. Instead, the coin can be purchased from exchanges such as OKEx.
Do I Have To Trade Other Cryptocurrency To Buy Chia?
Yes, at present you can only buy XCH by trading in other cryptocurrencies. Currently, only Tether, Bitcoin, and Ethereum can be traded in for the new token.
How Do I Farm Chia?
There are two requirements for farming Chia; sufficient storage space and farming software such as a rig, which can be downloaded from the network’s website. Investors can also make use of online coin calculators which tell you how much XCH you could farm based on your plot.