In recent years, we have seen a massive improvement in the market for cryptocurrency like Bitcoin, the joke currency Dogecoin. In particular, NFTs are now widely accepted as a legitimate payment mode, and the growth is as rapid as it gets.
Just when we thought nothing could be new in this booming market, a new cryptocurrency called Chia is hitting the shelves with the promise of being a greener, eco-friendly and more efficient alternative than the others.
This new crypto-currency sets out to be a solution for the flaws of Bitcoin and while upholding its decentralized payment mode. Chia (XCH) is created by BitTorrent founder Bram Cohen. It commenced trading on May 3rd and has already seized the market by storm.
WHAT EXACTLY IS CRYPTO-CURRENCY?
Unlike your physical currency, cryptocurrency is an online virtual currency based on the non-fungible decentralized blockchain, making it impossible to counterfeit.
The first cryptocurrency was Bitcoin, released in 2009, but many common people are still unaware of it despite the huge demand. Plus, retail payments in crypto are still some time away.
WHAT IS THE ACTUAL WORTH OF THE CHIA CURRENCY?
Cryptocurrencies are generally mined using computer programs and mathematical puzzles, which takes a lot of energy and hardware. But unlike other cryptos, Chia uses less energy and doesn’t have a hard cap on but instead uses a specific amount of hard drive space.
Like Bitcoin, Chia Network currently holds 21 million XCH (1 XCH worth $AU832.32, with the value down 66.62% year-to-date) in reserve as a security measure against future crashes.
HOW IS IT GREENER THAN BITCOIN?
As explained, Regular cryptocurrencies are usually mined. In contrast, Chia is farmed using “proofs of space and time”, which means less energy-intensive than Bitcoin that has been accused of using much electricity in some countries.
Simply put, let person “A” be the farmer who will seed their hard drive or solid-state drive with the Chia software. In simple terms, ‘A’ needs to show how much specific amount of hard drive space has he saved in time, just like how the regular farmer plants his crops. From there, person A is rewarded as per the amount of space available he has. The server then verifies the whole and provides the farmer with the appropriate amount of XCH.
CAN ANY INDIVIDUAL MINE CHIA?
As far as we understand, Chia is designed to be mined at home with the available software, which can be easily installed on your desktop with just a single tap.
If you want to farm XCH, you have to invest in a solid external hard drive and SSD. But do not jump in without due diligence.
The only complication is that space and time system requires a huge amount of SSD’s and hard drive space, so they don’t have to waste much energy and electricity.
Even before its official launch, the Chia network’s storage space used 1.14 Exabytes, which is equal to 1,140,000 TB. It is more than 1 million times the storage which we commonly see on typical computers.
Nowadays, finding a quick way to make money is possible, but it includes a substantial risk factor from a person’s perspective and a global perspective. Soon after the coin was launched, global shortages in storage production were witnessed.
The cost of hard drives in China has already climbed up exponentially. Now, a 12 TB hard drive is 59% more expensive. Furthermore, shoppers in Vietnam have seen shortages following the launch of Chia.
Even though the initiative of the Chia crypto-currency is more promising and available to everyone who wants to mine, it could eventually cause scarcity and a rise in the prices of HDs and SSDs.
IS THERE A SOLUTION TO PREVENT THIS?
Even if Chia as a company manages to catch up on other thriving cryptocurrencies in the market, it could still put a substantial burden on the hard drive and SSD market because users already view Chia as a less expensive alternative when compared to other cryptos. It’s already evolving to be another looming hardware shortage problem.
As of now, there isn’t a rapid solution available, but the better side of this is there might be a drastic fall in the price aspect of graphic cards and graphical processors.