Bitcoin gained an insane amount of popularity back in the days and it has resulted in shortages of graphics cards since cryptocurrency miners purchase them in bulk. Bitcoin is still worth a lot nowadays, but a new cryptocurrency is set to create another shortage. Instead of graphic cards, the new cryptocurrency can possibly cause a global hard drive and SSD shortage.


Chia: A New Cryptocurrency

CHIA Cryptocurrency

If Helen of Troy is the face that launched a thousand ships, Chia will be the cryptocurrency that launches a thousand digital currency miners at the unsuspecting HDD and SSD manufacturers.


This new cryptocurrency was created by Bram Cohen, the developer of the peer-to-peer BitTorrent protocol. Chia uses a proof of space-time model rather than a proof of work model which Bitcoin uses. 


The proof of the space-time model means that Chia relies on storage rather than processing performance to mine. This model can save a lot of electricity in the mining process.


Chia and the Storage Device Shortage

Chia and the Storage Device Shortage

Chia is not yet available for trading, but prospective miners are preparing by purchasing as many HDDs and SSDs as they can possibly afford. This situation created high demands for 4TB to 18TB drives.


Unless manufacturers can address the situation quickly enough to keep up with the demands-- pricing for these storage devices is already expected to increase due to the current high demands and the foreseen shortage.


Solutions to the shortage include restricting sales to cryptocurrency miners and increasing production.


Chia raised $3.395 million in seed funding back in 2018 which shows how much interest there is in this new cryptocurrency. All this interest is most likely from investors who missed out on the potential of Bitcoin and ended up with regrets when its value skyrocketed. 


Due to the proof of space and time model, cryptocurrency miners are targeting high-end enterprise drives since they are the best way to mine Chia-- this will make it difficult for businesses to find a vital component in their corporate network.


Understanding Proof of Space and Time Model


How does Chia work? And what does the proof of space and time model mean?


Chia runs on a proof of space and time basis which means relying on storage capacity for space with time added as an additional factor.


The Chia FAQ states that:


"Proof of Space is a cryptographic technique where provers show that they allocate unused hard drive space for storage space. To be used as a consensus method, Proof of Space must be tied to Proof of Time. PoT ensures that block times have consistency in the time between them and increases the overall security of the blockchain."


Basically, instead of wasting electricity on mining efforts-- miners can farm Chia instead. They just need to allocate sections or plots of their drives dedicated to the cryptocurrency.


Chia farming relies on empty hard disk space and anyone with a device such as a mobile phone, laptop, or corporate network can use their extra space for farming this cryptocurrency.


The best part about this model is that once you are done farming, you can repurpose the section for other things like files, documents, and media files.


Cryptocurrency farmers can use the Chia blockchain to “seed” unused space on the HDD or SSD by installing software that stores a collection of cryptographic numbers on the disk as “plots”. 


Chia puts your surplus storage space to work, unlike Bitcoin which uses the GPU. 


Chia farmers need to prioritize both storage size and storage speed which just says that this new cryptocurrency will prioritize the largest, fastest SSDs.


Chia prioritizes storage and the reference Chia hardware posted on Github supports this fact as it showcases racks of traditional hard drives or SSDs stored in a NAS or other arrangement. It further encourages cryptocurrency miners to get all hard drives and SSDs they can possibly get.


The proof of space and time model aims to maximize the number of terabytes with minimal power consumption. You may be wondering when the price spike or the shortage will begin, but all this may have already begun at this point as more and more cryptocurrency miners buy enterprise-grade hardware in bulk.


Bottomline


Although NAS racks are getting the appreciation they deserve, the shortage of HDD and SSD will significantly affect any efforts to upgrade their corporate network or even any attempts to set up a new one. Especially because cryptocurrency miners are specifically eyeing enterprise-grade storage devices over consumer-grade HDDs and SDDs.


Need HDDs? Check out our products at SimplyNAS before they're all gone.

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