A new cryptocurrency could make hard drives and SSDs both difficult to find in the coming weeks, courtesy of its “innovative” new mining model. I want to stress that I’m not sure these reports aren’t themselves part of an effort to draw attention to a new cryptocurrency at a time when crypto is trending in general. The Chia cryptocurrency appears to be real, inasmuch as there’s a 10,000-foot overview whitepaper you can download that describes the company’s idea for “proof of space” as opposed to “proof of work.”
Most cryptocurrencies require you to perform work and reward you with an amount of cryptocurrency proportionate to the amount of work you contributed. Chia rewards miners who dedicate huge amounts of storage space to the network. As the whitepaper states:
A farmer’s [analogous to miner] probability of winning a block is the percentage of the total space the farmer has compared to the entire network for each challenge and there are 4,608 chances to win a challenge per day on average.
The same whitepaper claims “farmers are known to farm a petabyte on a Raspberry Pi.” From what I can gather, there’s a 1:1 ratio between the data capacity you set aside for “farming” and the amount of data actually being farmed. This implies somebody somewhere is running petabyte-class storage arrays off a single Raspberry Pi. I can’t say for certain anyone is doing this, but I can’t find any record of it. It’s possible to build your own petabyte-class storage arrays — Backblaze has done it and released their own plans for doing so — but I can’t find any record of a person wiring a petabyte worth of storage into a Raspberry Pi.
I am not a cryptocurrency expert, but from what I can tell the basic business concept behind Chia is “What if we found a way to target one of the few parts of the PC market not currently under price pressure?” High-performance SSDs are not required; hard drives appear to work just as well. The authors of the Chia business whitepaper have the audacity to refer to it as “green money for a digital world,” as though wasting power on enormous storage arrays represents a better or more noble cause than wasting power on thousands of GPUs. There would be an estimated 4,608 challenges that could be won per day.
This kind of story seems as if it could be written by a cryptocurrency company desperately hoping to start rumors of new shortages. According to Tom’s Hardware, there are reports of such shortages and panic buying in China, courtesy of HKEPC. We’re not in a position to speculate on the degree of truth in such claims. To date, the storage market has been one of the only places where availability has been good and prices reasonable. Any surge in NAND or HDD demand is going to be picked up by companies like Trendforce, and until we hear proof of these trends, we’d take any rumors of a new shortage with a hefty piece of salt. If the shortages are genuine, demand will remain elevated for longer than panic-buying alone could account for.
There is no genuine or honest metric by which Chia could claim to be “green money.” One can rank the various currencies on Earth by any number of metrics, but “electrical efficiency” isn’t one of them. The idea of “green money” (keeping in mind that we’re discussing power efficiency, not color) assumes that we ought to be concerned with how efficiently the local electrical grid turns imaginary internet points into dollars, as if that’s the way money normally gets made.
If storage arrays become another way in which people “farm” cryptocurrency, we can expect similar shortages and problems to what we’re seeing now in GPUs. ET is not willing to sign on to the idea that this is automatically going to happen (or is even happening now), but there are some reports of it. It may be worth keeping an eye on if you’re planning out some upgrades in the near future. There is little chance that a storage-fueled cryptographic boom would be a positive development.
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