Chia is a cryptocurrency based on blockchain database technology that uses a “proof of space and time” protocol to verify transactions on the blockchain, unlike other cryptocurrencies like Bitcoin and Ethereum that use “proof of work” to verify their transactions.
Proof of space and time uses large files stored on hard drives connected to a harvester, a farming application computer, instead of vast arrays of specializing computing hardware in order to secure the blockchain. These files, called “plots”, contain cells of equations used to prove the challenges produced by the network. A farmer that holds the plot containing the proof for each challenge will be awarded 2 Chia, or XCH. These challenges are produced fast enough that there are roughly 4608 chances per day to farm a block.
The theory, and you can read the Chia Network business whitepaper here, is that moving cryptocurrency away from the computationally expensive proof of work models towards something more static will radically reduce the energy used by the network. This is something being hotly debated right now because the answer is not quite as simple as the Chia whitepaper would have you believe.
The main criticism of Chia is that it will prove to be extremely wasteful, both in the space and energy used by keeping all this storage running and online doing effectively nothing as well as the solid state disks that will be used up, or burned out, by the Chia plotting process – a very intensive IO process that puts strain on SSDs and their finite write capacity.
Because Chia is so new, time will only tell if it makes a splash in the financial markets, or the cryptocurrency world. It is possible that the proof of space and time model does not scale, and is not suitable for long time usage. But it has been making waves, and as of this writing it is very difficult to buy storage of any capacity through commercial channels.