Why the popularity of the Chia token, as well as its value, continues to decline, and also assessed the prospects for recovery of the coin
For more than six months, the cost of the Chia token (XCH) has continued to decline. On February 10, the altcoin is trading at $81, which is 95% less than the historical maximum that the coin set at the peak of popularity in May 2021 ($1.64 thousand), why the project still fails to return to the mainstream?.
- What is Chia?
Chia is the Chia Network blockchain token that was created by BitTorrent founder Bram Cohen. He believes that Bitcoin and other Proof-of-Work (PoW) cryptocurrencies use too much electricity. Therefore, Chia works on the Proof-of-Space-and-Time algorithm and uses disk space as a transaction validator. Users who provide their own disk space to support the network are rewarded for this.
- Chia’s popularity
The surge in interest in Chia Coin occurred in mid-April, as indicated by Google Trends data . Probably, users were attracted by an unusual way of mining a Chia. To earn Chia Coin, not computing power is used, but disk space. Thus, anyone with free hard drive space can start mining the chia.
The popularity of Chia Coin led to a shortage of hard drives (HDD) and solid state drives (SSD) in Hong Kong in April. Due to increased demand for devices, their average cost has tripled.
- Expected Result
When the Chia token first appeared, the EXMO crypto exchange considered it for a potential listing, after studying the project, the idea had to be abandoned, since there was no novelty and innovation in the Chia token and the way it was mined.
“We saw that the chia token was definitely pumped, the informational noise was also too positive – expectations are too high, successes are exaggerated,”
The largest number of articles about Chia came out in China and they were commissioned by token holders who wanted it to grow and invested in advertising. This is what became a “red flag” for the trading platform.
“After 9 months, we see that we made the right choice, since we do not see any progress in the work of the project. We do not recommend either buying or mining Chia,”
- Project problems
The collapse of the project is explained by the fact that the Chia token not only did not bring any benefit to the industry, but nothing fundamental from the high-profile statements of the developers was implemented, the developers announced the creation of their own decentralized exchange and many other DeFi projects within the Chia ecosystem, but these promises were never realized.
Chia developers seriously tarnished their reputation by attributing 21 million tokens to themselves, which was about 30 times more tokens mined at that time by ordinary miners.
In the future, the developers decided to sell these tokens on the open market, which only increased the price drop and marked a logical “end” for the project.
“Judging by the available facts, we can assume that the project was originally created for the purpose of making money for the developers,”
- There is a chance for recovery
The Chia project has famous founders, so it was not difficult for them to create a “hype”, after which everyone began to buy a chia and equipment for its mining, it is too early to write off Chia, as its value in the global bull market could go up. This effect may increase if the developers come up with something new for the project and make it popular again.
“There are a lot of projects that started off well and then were in the shadows for a year or two, and then a new round of growth began. Perhaps this will be the case with Chia, ”.
**Why is it too late to start mining Chia Coin?
**Chia Coin has announced the creation of a decentralized exchange