Bitcoin rival Chia ‘destroyed’ hard disc supply chains, says its boss

Chia, a cryptocurrency designed to be a “green” alternative to bitcoin has instead caused a worldwide shortage of hard discs. Gene Hoffman, the president of Chia Network, the business behind the currency, admits that “we’ve sort of destroyed the short-term supply chain”, but he denies it’ll become an environmental drain.

Bitcoin requires so-called miners to accomplish vast amounts of useless calculations to keep up the network, something that is referred to as proof of work. The newest studies also show that bitcoin may currently consume 0.53 % of the world’s electricity supply. Chia instead runs on the proof-of-space approach that ditches these calculations and relies on empty hard disc space. The more space a miner devotes to the task, the higher their possibility of getting new coins.

In theory, this might eat less energy, but there’s been a surge popular for hard discs because the currency launched earlier this season. Around 12 million terabytes of hard disc space happens to be being used to mine Chia, having risen on an exponential curve since its launch in March. When New Scientist first reported on Chia just fourteen days ago, that figure was only at 3 million terabytes.

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These discs still require energy to produce and run, and there are reports that the regular reading and writing involved with mining can wear them out in weeks, rendering them useless. Hoffman says this problem only affects the least expensive discs.

The resulting upsurge in demand has caused significant price rises for hard discs, especially higher-end models. The share price of hard disc maker Western Digital has increased from $52 in the beginning of the year to $73, while competitor Seagate is up from $60 to $94 over the same period.

Hoffman says he is surprised at the speed of which the hard disc capacity specialized in Chia has grown and admits that is likely to cause disruptions to the supply chain for some time.

In the long run, he thinks the increased demand being driven by Chia will lower the price tag on hard discs as manufacturers crank up production. He’s also adamant that despite having continued growth, the network won’t approach bitcoin’s energy consumption.

Read more: ‘Green’ bitcoin alternative Chia is leading to hard disc shortages

Hoffman says that if all hard discs sold in a year – that could hold data totalling roughly 1 zettabyte, or 1 billion terabytes – were used exclusively for mining Chia, it could still use significantly less than 1 per cent of the energy currently utilized by bitcoin. However, the actual energy consumption of the Chia network happens to be unknown, as the cryptocurrency is too new for researchers to have produced reliable estimates.

“I’m pretty sure that if we had all 7 zettabytes of storage [the estimated figure for global hard disc capacity], every little bit of storage out there – you shut down Google, you turn off Amazon, you turn off Facebook – it’d be less annual energy consumption,” says Hoffman.

But he does concede that the growth of Chia will demand significant resources. “Frankly, a Tesla isn’t green in comparison to owning a bicycle, but we all know how those trade-offs work,” he says.

Hoffman argues that bitcoin is unsustainable in its current form, but was “so near being precisely right”. He shows that issues with bitcoin began when specialised hardware originated that could mine coins faster than standard computers. This kick-started an arms race that has led to its vast energy use, he says, but he insists that Chia is impervious to such a development.

Aggelos Kiayias at the University of Edinburgh, UK, says it is vital to analyse new cryptocurrency technologies to see if the resources they might need, such as vast amounts of hard discs, justify the benefit. “Given the current numbers, being merely less resource hungry in comparison to bitcoin is a fairly low bar so far as ‘green’ technology is concerned,” he says.

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Chia, a cryptocurrency designed to be a “green” alternative to bitcoin has instead caused a worldwide shortage of hard discs. Gene Hoffman, the president of Chia Network, the business behind the currency, admits that “we’ve sort of destroyed the short-term supply chain”, but he denies it’ll become an environmental drain. Bitcoin requires so-called miners to…

Chia, a cryptocurrency designed to be a “green” alternative to bitcoin has instead caused a worldwide shortage of hard discs. Gene Hoffman, the president of Chia Network, the business behind the currency, admits that “we’ve sort of destroyed the short-term supply chain”, but he denies it’ll become an environmental drain. Bitcoin requires so-called miners to…

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