A new cryptocurrency that claims to be more fair, safe and long-term debuted in trading recently. The virtual coin, called Silicoin(SIT) and forked from the Chia Network, advertises itself as “a fair and safe alternative” to Chia.
Despite their astronomical recent performance, cryptocurrencies are lately coming under fire for their massive carbon footprints. Mining coins such as Bitcoin and Ethereum uses tons of energy as the machines behind these networks churn away at solving equations. For miners’ efforts—that is, paying bills to operate powerful computers that confirm transactions on the blockchain, the distributed ledger technology underpinning cryptocurrencies—they receive coins as a reward (The process is called “Proof Of Work”). Thus, Chia presents an alternative to the status quo, relying on a process that it claims is far less energy-intensive than mining.
What is the Silicoin Network
Although Chia seems to provide a lot of benefits, the price of XCH still crashed and many miners have to sell SSDs and HDDs. On the other hand, we knew that there are monopolies by HPool and some big miners in Chia Network.
Therefore, we urgently need a more fair, timeproof and safe decentralized network ecosystem. As the best supplement of Chia Network, Silicoin came into being.
Silicoin combines a solution to the flaws of traditional mining, by forming a new and unique mining logic. It aims to truly balance PoW and PoS and meets the original intention of Bitcoin and Chia: to make mining with ordinary equipment happen and to have the blockchain truly decentralized. Simply understanding, Silicoin added the staking function based on the Chia network. Silicoin is an upgrade of Chia that have staking.
How does Silicoin work?
In the traditional process of producing blocks, the more plots miners have, the greater the probability that they will be selected to produce blocks. However, there is a big difference in Silicoin Network. In Silicoin consensus system, the Individual Difficulty of every miner could be lower by staking SIT. As we all know, the lower the difficulty coefficient, the greater the probability of being selected to produce the block. That is to say, the miners who stake SIT tokens are easier to win the blocks.
The improvements of Silicoin work
Compare to Chia network, the miners is going to buy or keep more SIT for staking so that their mining income will be higher if they want to obtain higher returns. Then the staking will stimulate the demand for SIT tokens and we can forecast the price and value of SIT will keep rising in a long term period. It solves the Chia’s embarrassment – Price of XCH keep dumping.
What’s more, the more plots Chia miners have, the greater the probability that they will be selected to produce blocks in the past. But in Silicoin network, the profit of the big miner who mines Silicoin without staking SIT is possible to be lower than the smaller miners who stake SIT more than the size of its plot. It helps to prevent the monopoly in mining and make a more miner-friendly environment for all Chia miners.
In the Silicoin’s economic logic, it not only find the use case of its token – SIT, but also avoids the monopoly of giants and helps many miners increase their profits. In other words, Silicoin solves two big challenges of Chia and found a new way for mining industry.
The idea of Silicoin has the potential to reduce the egregious electricity costs that traditional protocols otherwise procure and makes SIT tokens integrate into its long-term ecosystem and form a complete economic circle. It is definitely far more attractive to miners than similar projects.