The new cryptocurrency Chia from the inventor of Bittorrent, Bram Cohen, does not rely on the computing power of graphics cards or specialized ASICs for generation, so-called farming (mining in the case of Bitcoins), but on the availability of free (and preferably fast) hard disk space. The new principle is intended to avoid the high energy consumption involved in creating new virtual currency units, but it logically leads to an increased demand for storage space in the form of SSDs and also HDDs.
How farming Chia Coins / XCHs works
Chia is based on a cryptographic technique called "Proof of Space and Time", unlike Bitcoin which uses what is called a "Proof of Work" model. "Proof of Space," according to the Chia FAQ, can be thought of simply as a method of proving that a user is leaving some of their disk space unused. Users of the Chia blockchain "seed" the unused disk space with a collection of cryptographic numbers in the form of so-called "plots", which take a relatively long time to generate and can therefore be queried more quickly if they are already pre-generated on disk. Thus, the Chia algorithm prefers the size of the storage space instead of the computational power as with Bitcoins.
These users are called "farmers." When the blockchain sends over the network a challenge for the next block, farmers can scan their plots to see if they have a hash value stored on their disk that is closest to the challenge. The probability of a farmer winning such a block is the percentage of the total space that a farmer has compared to the entire network.
The first phase of plotting requires a lot of computing power and the highest possible sustained data throughput, which is why enterprise data center SSDs (e.g. RAID 0) are used for this purpose, as they can withstand these requirements for a longer period of time. For "farming", the size of the storage space is important, and the largest and cheapest HDDs possible are used to optimize the ratio of costs and block gain probability, sometimes even only in combination with an energy-saving Raspberry Pi computer. Thus, both fast large SSDs and HDDs are used for the effective generation of XCHs.
Are rising SSD prices in China a harbinger?
And the concern that Chia could lead to a shortage of HDDs and SSDs is not made up out of thin air. Chia Coins (XCH) can already be generated since March, and trading in them started on May 3. In China, the mining of Chia Coins seems to have already led to bottlenecks in the availability of SSDs. For example, Adata reports an increased demand of 400-500% for its large SSDs in April compared to the previous month, and the fourth-largest Chinese manufacturer of storage Jiahe Jinwei reports a sell-out of its Gloway and Asgard 1TB and 2TB NVMe SSDs.
Only large models are affected (for now), which are rather aimed at the enterprise market and have a particularly large capacity and speed, but depending on how successful Chia is and the more users enter, more and more HDD/SSD models could also be affected. According to Referernz Setup zum Farming, corresponding hardware for farming consists of 32 HDDs/SSDs, for example.
The hoarding of SSDs alone probably had a strengthening effect in China due to the speculation of SSD middlemen on an increasing demand through Chia and thus increasing prices and profit margins.
Chia storage space currently: 3,691,825 TB
Since launch, the storage space (netspace) used by Chia farmers has grown relatively steadily and is currently 3.2 EiB (exbibytes / 2 to the power of 60 bytes), which is equivalent to about 3,691,825 TB. One Chia Coin is currently worth 1,050, approximately 64 of these XCHs are generated every 10 minutes.
Chia Storage / Netspace
With the help of Chiacalculator you can calculate how many dollars you can theoretically earn per day with how much storage space. For example, with a 12TB HDD and 2TB NVMe SSD worth around , you could theoretically earn (assuming, unrealistically, that total Chia storage space doesn&t continue to grow rapidly).
If this trend continues, then there are likely to be effects from the Chia boom on prices in the West as well. This would hit video editing as well as - via the increase in price of enterprise drives - all sorts of cloud (storage) services.
HDD/SSD shortage also in Germany?
So if you need more SSDs or HDDs to store your videos in the near future, you should take a close look at the market - the prices of some large-volume HDDs have jumped in recent days even in this country for some models, such as the Toshiba Enterprise 12TB or the Seagate IronWolf 12TB.
Toshiba Enterprise 12 TB price
Whether this increase is influenced by Chia or not is not clear, but as long as farming is profitable, there will always be an additional demand for SSDs and HDDs according to market logic, which could be large enough to significantly influence prices. An interesting question if Chia is successful will be whether the "consumption" of HDDs to create a cryptocurrency is really better than that of energy.