“I like hard technical problems,” says BitTorrent creator and Chia cofounder Bram Cohen.

IN 2001, A 25-year-old unemployed  college dropout named Bram Cohen crafted an elegant protocol for moving data around the web. Large numbers of pirated songs and films, and countless lawsuits, later, he’s putting the finishing touches on what he hopes will be another world-changing protocol—this time for moving around money.

Cohen’s earlier invention was BitTorrent, a specification for peer-to-peer file sharing that delighted millions but angered entertainment moguls, and at one point consumed more than a third of global internet traffic. His latest creation is a digital currency and startup known as Chia, aimed at making cryptocurrency acceptable to the financial industry.

“I like hard technical problems,” says Cohen, with a knowing smile. The solidly built 42-year-old met WIRED in a San Francisco skyscraper built as the headquarters for Wells Fargo, which now houses other financial industry tenants. Chia Network, as Cohen’s startup is called, plans to move into its own space in the building soon.

After that move, Chia’s neighbors will embrace the West Coast office of the Securities and Exchange Commission. That may appear bold, as the regulator pressures cryptocurrency startups for flouting securities rules. But Cohen, Chia’s CTO and chairman, is happy to have the SEC looking over his shoulder.

SEC complaints regarding the frothy cryptocurrency market have targeted on ICOs, or initial coin offerings, in which startups sell units of new or planned cryptocurrency as a quick and easy way to raise capital. Cohen says he plans a more distinctive route by filing for a traditional initial public offering before the end of this year, to list shares on a small-cap public stock exchange. Chia’s revenue will come from helping banks build systems to use the cryptocurrency of the same name for functions like international transfers. The company will also own a significant chunk of available Chia coins, which the company hopes will become a valuable commodity over the longer term; but it won’t be selling coins in an ICO.

To pull all that off, Cohen has to repeat his technical success with BitTorrent—and avoid the legal and business challenges that followed. Cohen’s file-sharing protocol was wildly successful , and won interest from companies like Facebook, which has used it to speed the distribution of internal software updates. Yet despite raising over $30 million in funding, BitTorrent inc., the startup Cohen cofounded to keep up and monetize his free-to-use creation struggled to make a business. In 2005 the company agreed to work with the motion picture Association of America to remove links to copyrighted content from its search engine. Cohen left day-to-day operations at BitTorrent to cofound Chia in August 2017, and vacated his seat on the board this past July.

On the technical aspect, the Chia cryptocurrency is the result of Cohen trying hard at the guts of Bitcoin and trying to design substitutes that are less dangerous to the planet, and a lot of palatable to banks. “Satoshi wasn't a really great protocols engineer,” Cohen says, referring to the pseudonymous person or persons who announced bitcoin in 2008 using the name Satoshi Nakamoto.

Bitcoin’s environmental problem is rooted in the way Nakamoto’s design secures digital transactions. It incentivizes people to run “mining” software that races to solve cryptographic puzzles and win transaction fees or newly minted bitcoin. Though the currency continues to be a niche interest, one analysis last year estimated bitcoin mining consumes as much power as Serbia, a country of 7 million people.

Cohen offers his version of mining the more bucolic name “farming.” Similar to bitcoin, participants compete to win Chia cryptocurrency in a race that also processes transactions. Not like in Nakamoto’s system, increasing your probability of winning depends on amassing disk storage space, not running more powerful—and energy-hungry—hardware. Cohen reckons that there are already countless computers with spare storage in the world that might begin farming Chia alongside their existing uses. Anyone motivated to buy a lot of storage simply to earn cryptocurrency wouldn’t have an outsized impact on the world as bitcoin miners do, he says.

Chia’s system depends on two new cryptographic protocols, one that verifies the storage a computer has committed to farming, and the other that guards against fraud while deciding which farmers win rewards for verifying transactions. Anyone curious about the details can read the two peer reviewed papers Cohen has coauthored with academic mathematicians. On Wenesday, he launched a contest that invites the mathematically minded to check the speed or security of the cryptography behind Chia farming. The winners can receive $100,000—denominated in bitcoin because Chia has not yet launched its currency.

When the Chia currency does launch someday next year, Cohen says it'll be attractive to financial institutions because of its larger flexibility than bitcoin. Like Nakamoto’s cryptocurrency, Chia is built around a distributed, unchangeable ledger of past transactions. However it’s also designed to support custom add-ons which will automate contracts, holds funds in escrow, or implement features like chargebacks not supported by bitcoin’s design but central to how the financial system deals with fraud. “The idea is to create Chia the premier cryptocurrency based off of our technology,” Cohen says. “A competitor to bitcoin, but better.”

Unsurprisingly given Cohen’s track record of delivering technology that produces the internet more useful, Chia has attracted leading silicon valley venture capitalists. It raised $3.4 million this spring, as well as from Greylock Partners and Andreessen Horowitz, both of which previously invested in leading cryptocurrency exchange Coinbase. Katie Haun, a partner with Andreessen, says Cohen and his cofounder Ryan Singer’s plan to ipo instead of ICO makes the company a more attractive investment. “The early ICO market is full of abuse,” says Haun, who as an assistant U.S. attorney helped take down corrupt federal agents investigating the digital black market Silk Road. “Chia’s approach provides a roadmap that different crypto projects can follow.”

Chia’s journey to a public listing might not be smooth. Singer, who recently took over as chief executive officer from Cohen, expects some complicated conversations with the SEC. He’s convinced they'll be worth it. “Going public is difficult and expensive but we expect it's a vital way to professionalize the relationship between us and investors,” says Singer. He antecedently cofounded the early bitcoin exchange Tradehill, that pack up in 2012 saying it lacked the cash transmitter license necessary to control.

Professionalism isn’t a term usually associated with the cryptocurrency market, which has become synonymous with hype, fraud, and questionable hijinks such as conference catering spiked with marujuana. “It’s primarily the dot-com frenzy everywhere once more, investors need to try and separate hype from information,” says Atif Ellahie, a professor at the University of Utah business school. “Taking on the value and complication of going public could help make Chia more attractive to investors,” he says.

Ellahie recently showed with colleagues at Columbia University and London business school that some cryptocurrency investors are ready for a lot of disclosure. Analyzing nearly 800 ICOs between 2014 and 2018 that collectively raised over $13 billion disclosed that projects disclosing a lot of technical and financial information were more likely to be successful. It’s beginning to look inevitable that U.S. regulators will place a lot of controls on cryptocurrency projects, Ellahie says.

Chia’s initial public offering strategy can be a savvy way to get ahead for that. Cohen says arguments that forcing {the sector|the world|the arna} into line with standard rules would quench technical innovation are wrong. “If you begin loosening those up you do not get technologists returning in with better things, you get scam artists returning in and stealing things,” he says.

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