Hard disk price roller coaster, how long can the computing power catch up with FileCoin Chia?

After more than three years, Chia Network's Chia 1.0 mainnet was finally launched on March 19. "Have you engaged in Chia?" "The threshold is extremely low", "P disk should be early", and other words such as these have exploded various encrypted communities in a short time, which can be described as the top Internet celebrity project this year. Even though Chia currently only opens up farming rewards (farming) and the trading function has not yet been launched, the off-market price of XCH has skyrocketed from $30 to $150. Behind the skyrocketing price, the price of Chia mining machines has been rising all the way, and a variety of hard disks have been hyped by the market... On May 4th, Beijing time, Chia opened the exchange of tokens, and its token XCH has been listed on trading platforms such as OKEx. The launch of Chia mainnet and launch of IPChia has attracted great attention from the market since its launch, which is inseparable from the star founding team behind it. The founder of Chia Network is Bram Cohen, the founder of BitTorrent, and the chief operating officer is Ryan Singer, the co-founder and chief operating officer of Tradehill Inc. The founding team also includes Gene Hoffman, former founder and CEO of eMusic.com and Vindicia, and Mitch Edwards, former acting CEO of Overstock.com. With such a star-studded founding team, it is difficult for Chia not to attract attention. British man to find his hard drive containing $378 million in bitcoin in landfill: Golden Finance reports that British man James Howells is conducting a year-long landfill search-zce to find his lost hard drive, which contained Bitcoins worth about $378 million. Howells hopes to deploy artificial intelligence scanners, X-ray scanners and other high-tech tools. His plan has the financial backing of a hedge fund that will get a share of the huge sum. [2021/7/9 0:38:12] Bram Cohen In addition to the well-known founding team, the investment institutions behind Chia are also well-known. Chia Network has received investment from many well-known investment institutions. The leading investor is AngelList CEO Naval Ravikant, and the participating investors include A16Z and Greylock. Chia also announced the launch of the IPO process when the mainnet was launched. So far, Chia has received US$16 million in financing. Chia also officially announced that it will be listed on Nasdaq in August this year. The participation method is in the form of equity, with a total amount of US$30 million. Founder Cohen: To create a better "Bitcoin" In addition to a strong team of founders and investment institutions, when it comes to Chia, the label "Green Bitcoin" is also indispensable. The so-called "Green Bitcoin" is a more energy-efficient and decentralized cryptocurrency than the "huge and terrible waste" Bitcoin described by founder Cohen. Chia mining 1TB hard drive only earns 1 yuan a day: on the one hand, the price of Chia coins has plummeted, on the other hand, too many people have poured into Chia mining in the past few months, and the capacity of the entire mine has reached 24EiB, plus Recently, the algorithm has been adjusted, and the difficulty of the P disk has also increased. According to the latest situation, it takes almost 2,700 days to mine 1 Chia coin from a 1TB hard drive, which is 7 and a half years. For rich miners, the mining capacity starts from PB, 1PB is 1000TB, and it takes almost 3 days to mine one. However, if calculated in this way, the period for mining to pay back is too far away. The daily income of a 1TB hard drive is about 0.15 US dollars, and the monthly income is 4.5 US dollars. Calculated to earn 1 yuan a day. (Tencent News) [2021/6/27 0:08:50] The energy consumption brought about by Bitcoin mining is undoubtedly huge. The electricity consumed by the current production of Bitcoin for one year can be used by 20 million people for one year, and the amount of electricity that ultimately produces benefits is less than one ten thousandth, and the rest is wasted. Labels such as high energy consumption and unfriendly environment have always lingered around Bitcoin. In addition, professional "mining" hardware is increasingly owned and operated by a few large entities, and the characteristics of Bitcoin's computing power concentration are becoming more and more obvious, which is contrary to the decentralized vision that the Bitcoin community has always advocated. But driven by capital and interests, the idealized product of vision is already weak. Cohen, one of the founders of Chia, said in previous interviews that he wanted to create a more "green" Bitcoin to solve the problems of energy waste and centralization of computing power. This better "Bitcoin" is Chia with many new concepts. Compared with Bitcoin, Chia starts to change from the underlying consensus mechanism. The proof mechanism chosen by Chia is PoST (Proof of Space and Time), which is proof of space. Unlike the previous PoW mechanism (workload proof mechanism) of Bitcoin and Ethereum, this proof method belongs to the category of PoC (capacity proof). PoST can be further disassembled into two parts - Proof of Space (PoS) and Proof of Time (PoT). Securities Daily: The mining boom is on the rise, and the prices of graphics cards and hard disks remain high: Driven by the skyrocketing price of Bitcoin, all kinds of cryptocurrencies are crazy again. Xiaoming, a well-known blogger in the electronics industry, said in an interview with a reporter from the "Securities Daily". Taking the cryptocurrency chia as an example, there are now about 900PB hard drives used for mining, and the normal hard drive size is 1TB-18TB. According to estimates, each hard drive 6TB computing, more than 150,000 hard drives are participating in chia mining. Due to the upsurge of mining, the prices of graphics cards and hard drives remain high. (Securities Daily Securities Daily) [2021/4/30 21:12:24] The so-called proof of space means using the unused storage space on the hard disk to prove it. Chia users need to install the software to plot the remaining space of the hard disk, that is, fill it with hash data. This process is often referred to as a P disk in the industry. The software generates and stores a collection of cryptographic numbers on disk into plots, and the users who provide the storage space are called farmers. The probability of a farmer winning a block is the percentage of the space of each plot in the total space of the entire network. That is to say, the larger the remaining space on your hard disk, the larger the space on the participating P disk, and the higher the probability of you winning a new block. The time required to create proofs of space is not long, which leaves the potential for attackers to exploit large amounts of space to create alternate competing transaction histories and futures. Proof of time is like adding a "wall clock" to the block, which can increase security and reduce hidden dangers for the Chia network. Proof of time determines time by generating sequential proofs of storage, which allow verifiers to check whether a storage provider has stored data for a certain period of time. Proof-of-Time is implemented through Verifiable Delay Functions (VDF), the key idea of which is sequential computation. This function is implemented by the VDF server (Timelord), which helps to complete a block on the network and move the chain forward. Sun Renjun: Hard disk mining lowers the mining threshold and is more suitable for ordinary users to join: On April 18, the fourth episode of ZB Hot Chat Big Show, LTG Mining Pool Development Director Sun Renjun was a guest in ZB Ten Thousand Hot Chat's official live broadcast room, Sun Renjun said that compared with PoW mining, hard disk mining has the following six advantages: 1) No need to buy expensive motherboards with a large number of PCI slots; 2) No need for advanced GPUs; 3) Software installation for hard disk mining And the configuration is generally relatively simple; 4) The hard disk does not need to perform a lot of graphics processing, so the energy consumption is very small, saving electricity costs; 5) The heat of the hard disk is small when it is running, and there is no need to use a fan to reduce the temperature of the device; 6) The whole process of hard disk mining Simple, easy for novices to use. Overall, hard disk mining reduces configuration costs, saves electricity costs, and lowers the threshold for mining. [2020/4/18] To sum up, the PoST mechanism can use the remaining storage space in the storage device for mining. What Chia mining requires is not the computing power required by PoW, but storage space. Chia’s underlying blockchain programming language, Chialisp, is also brand new. Chialisp is an intelligent programming language based on the functional language Lisp, which integrates the functions of smart contracts and smart transactions. Chialisp pursues security and simplicity in design, is powerful, easy to audit, and secure, and supports smart contract instances for atomic swaps, authorized payees, recoverable wallets, multi-signature wallets, and limit price wallets. Chia is not the first to use hard disks for mining. At present, the recognized leader in this field is Filecoin, whose mainnet was launched in October last year. From the Feihu browser Filfox (Filecoin blockchain browser and data service platform), as of 0:00 on May 6, the real storage space of the entire Filecoin network is 4.94 EB. At the same time, Chia's data was 2.19EB, less than half of the former. However, the growth rate of Chia's network storage space is still very high. IPFS hard disk mining machine "Maya Technology" received RMB 50 million in A-round financing from Jidou Capital: Recently, IPFS hard disk mining machine manufacturer "Maya Technology" announced that it has received 50 million yuan in A funding led by Jidou Capital and followed by Byte Capital. round of financing. The business of "Maya Technology" includes Maya mining machines, basic hosting, and cloud mining. Among them, the machines sold by Maya mining machine mainly include two parts: one is a mature GPU mining machine, and the other is IPFS, brust, storj and other hard disk mining machines. [2018/5/21] Figure: Chia network storage space and its trend Source: Chia explorer belongs to the category of POC, where is the difference between Chia and Filecoin that has attracted much attention? Chia participants have no penalty settings even if they lose computing power due to disconnection, and there is no need to mortgage tokens before participating in mining. Investors who want to participate in mining only need to configure simple equipment and download the mining applet on the official website. Filecoin has designed three punishment mechanisms—consensus penalty, storage penalty, and contract penalty, and requires mortgage tokens. Even honest miners may be deducted from all mortgage tokens due to unstable hardware or network status. This leads to relatively high risks for Filecoin miners. Because of this, Chia is hailed by some as the cheap version of Filecoin: the characteristics of low technical threshold and low equipment configuration requirements greatly reduce the entry barrier of Chia. For those investors who missed the opportunity to invest in Filecoin, placing a new bet on Chia may be another option. In terms of application scenarios, Chia focuses on the financial field, aiming to develop functions suitable for banking, payment and financial application scenarios, such as financial control, payment clearing and settlement, and asset management issuance. The positioning of Filecoin is storage. Unlike Chia, which stores meaningless hash data, Filecoin stores valid files. Table: Comparison of the differences between Filecoin and Chia Is Chia really "green"? One of Chia's visions is to solve Bitcoin's high energy consumption problem. Chia advocates the main concept of green environmental protection. Whether it is from the direction of technological innovation or from the new words such as "cultivation" and "farmer" that follow, you can feel Chia's efforts in environmental protection. . There is still a certain gap between ideal and reality. Despite Chia's efforts to go green, digging Chia is still a waste. However, mining Bitcoin costs electricity, while mining Chia costs hard disk and time. In the P disk process before farming, a large amount of meaningless data needs to be written to the hard disk, which will greatly shorten the life of the hard disk, and is as meaningless as the Bitcoin ASIC chip. In comparison, Chia's resource consumption is indeed much less than that of Bitcoin, but it is not as economical as the PoS mechanism adopted by ETH 2.0, and its meaningless hash data storage is not as meaningful as Filecoin's file storage. Chia's original intention is to hope that users can use idle hard drives, which may involve commercial interests, and the final result is generally unavoidable for capital to pursue profits. There are still many ordinary players participating in mining, but almost no one really uses idle hard drives to participate in mining, so it is inevitable to waste high-performance hard drives. With the development of the Chia project, if capital is heavily involved, the mining structure may not be able to avoid the situation of specialization, agglomeration, and the departure of ordinary players. Chia still has to face the two eternal problems of waste and centralization. With the explosion of Chia, the price of hard drives has also been fired up. In late March, the cost per TiB of the hard disk price of Chia mining machines was generally around 160-170 yuan, and the price of 1 TiB of Chia mining machines in the early days was mostly around 200 yuan. Up to now, due to the general increase in the prices of computing power machines, storage machines, and hard drives, the price of 1 TiB of many Chia mining machines has been pushed up to around 600-700 yuan. What followed were hard disk overstocking and hoarding, monopoly problems in sales channels, and even various pitfalls such as selling old disks as new ones. The sky-high price of hard drives brings bubbles, as well as the increase in entry barriers, and the ever-increasing participation costs also make ordinary players daunting. How much bubble exists in XCH? What is the reasonable range of mining machine prices? Before the opening of transfer transactions on May 4, the value of XCH can only be known a little bit through the off-market price and the price of related derivatives. From the beginning of March to the end of April, the off-market price of XCH has increased by about five times. Regarding the price of XCH futures, it can be seen from the figure below that it showed a sharp rise before entering May, and reached a peak of 12,884.3 RMB on April 30, but it began to fall continuously after entering May. It fell 54.7% the day before Figure: Comparison of XCH and BTC futures price trends Source: Mytoken and XCH futures prices have similar trends and hard disk prices, which experienced a roller coaster in April. After experiencing a wave of skyrocketing in early and mid-April, it began to decline sharply in the second half of April. Whether the Chia mining machine is worth investing in depends not only on the off-market transaction price of XCH, but also on the cost of mining XCH. According to the data provided by Chia explorer, it can be seen that the single-day single TiB currency production is showing a downward trend, and the farming reward has dropped from 0.0367XCH on April 13 to 0.0037XCH on May 6. The decline in farming rewards has lengthened the return period for investors and increased risks.

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