Chia Network (XCH) offers an alternative to proof-of-work (PoW) and proof-of-stake (PoS) by employing a consensus model that consumes less electricity. It reaches Nakamoto consensus by merging two separate mechanisms: proof-of-space (PoS) and proof-of-time (PoT).
Proof-of-space asks miners to dedicate unused hard disk drive storage. Miners run specific software to assign this free space, which is then utilized to address challenges, much like the puzzle-solving aspect of PoW. This software saves a set of cryptographic numbers on the miner's drive. When a new block is created, a challenge number from the prior block is selected, and miners search their stored numbers to find one that closely matches the required challenge value.
Proof-of-time verifies the passing of time using Verifiable Delay Functions, a method resembling that of the Solana (SOL) blockchain. Specialized nodes known as Timelords record time to guarantee it is accurately logged for resolving proof-of-space tasks.
The Chia Network developed its own on-chain programming language, Chialisp, which supports smart contracts. It incorporates key elements from Bitcoin Core, Ethereum (ETH), and Solidity while maintaining Bitcoin's UTXO model. This structure enables simultaneous rather than sequential transactions, positioning Chia Network as a quicker and more energy-efficient option than its competitors.