After more than three years, Chia Network’s Chia 1.0 main network finally went live on March 19.
“Got Chia?” “The threshold is super low”, “P-disk before it’s too late”, and other words like that exploded in various crypto communities at one time, and it can be considered as the top netflix project this year. Even though Chia is only open for farming rewards (farming) and the trading function has not yet been launched, the off-site price of XCH has risen wildly from $30 to $150.
Behind the price surge, there are also Chia mining machine prices all the way up, a number of hard drives are hotly speculated by the market ….
On May 4, Beijing time, Chia opened its token interchange and now has its token XCH live on OKEx and other trading platforms.
Chia main online and launch IPO
Chia has gained a high level of market attention since its launch, which is inseparable from the star founding team behind it.
The Chia Network was founded by BitTorrent founder Bram Cohen, and its COO is Ryan Singer, co-founder and COO 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’s hard not to get Chia noticed.
In addition to its renowned founding team, Chia is also backed by an impressive portfolio of investors, including Naval Ravikant, CEO of AngelList, and A16Z and Greylock.
Chia also announced the launch of its IPO process at the same time as its main website. To date, Chia has raised $16 million in funding and has announced that it will go public on NASDAQ in August of this year with a $30 million participation in the form of equity.
Founder Cohen: Making a Better “Bitcoin”
In addition to a strong team of founders and investors, Chia is also known for its “green bitcoin” label.
Green Bitcoin is a more energy-efficient and decentralized cryptocurrency than the “wasteful and scary” Bitcoin that founder Cohen described.
The energy consumption associated with bitcoin mining is undoubtedly huge. The electricity used to produce bitcoin could be used by 20 million people for a year, and less than one ten-thousandth of the electricity is ultimately used to produce the benefits, the rest is wasted. Labels such as high energy consumption and environmental unfriendliness also linger around Bitcoin.
In addition, specialized “mining” hardware is increasingly owned and operated by a few large entities, and the agglomeration of Bitcoin’s arithmetic power is becoming more pronounced, contrary to the decentralized vision that the Bitcoin community has always preached. But an idealized product like a vision is inherently powerless when driven by capital and profit.
Cohen, one of the founders of Chia, has said in previous interviews that he wants to create a “greener” bitcoin that solves the problems of energy waste and centralized computing power. This better “Bitcoin” is Chia, which comes with a number of new concepts.
New Consensus: PoST
Compared to Bitcoin, Chia starts with a change in the underlying consensus mechanism.
Chia’s chosen proof mechanism is PoST (Proof of Space and Time), which means Proof of Space and Time. Unlike Bitcoin and Ether’s previous PoW mechanism (Proof of Work), this proof method belongs to the category of PoC (Proof of Capacity). PoST can be further broken down into two parts – Proof of Space (PoS) and Proof of Time (PoT).
The so-called proof of space, i.e., proof with unused storage space on the hard disk. chia users need to install software that plots out the remaining space on the hard disk, i.e., write full hash data, a process often referred to in the industry as P-disk. The software generates and stores the collection of cryptographic numbers on the disk as blocks, and the users who provide the storage space are called farmers (farmers). The probability of a farmer winning a block is the percentage of the total space on the entire network that is available for each plot. That is, the more space you have left on your hard drive, the more space you have to participate in the P-disk, and the higher your probability of winning a new block. The time it takes to create a proof of space does not take long, which also leaves the potential for attackers to use the large amount of space to create alternate competing transaction histories and futures.
Time proofs are like adding a “wall clock” to blocks, adding security and reducing vulnerabilities to the Chia network. Proof of time determines time by generating sequential proofs of storage, which allows the verifier to check whether the storage provider has stored data for a certain period of time. Time proofs are implemented through the Verifiable Deferred Function (VDF), the key idea of which is sequential computation. This function is implemented by a VDF server (Timelord), which helps to complete a block on the network and move the chain forward.
In summary, the PoST mechanism allows mining using the remaining storage space in the storage device. chia mining requires not the arithmetic power required by PoW, but the storage space.
New blockchain programming language: Chialisp
Chia’s underlying blockchain programming language, Chialisp, is also brand new.
Chialisp is a smart programming language based on the functional language Lisp, which combines smart contract and smart transaction functionality. designed for security and simplicity, Chialisp is powerful, easy to audit, and secure, supporting atomic swaps, authorized payees, recoverable wallets, multi-signature wallets, and limit wallets for smart contract instances.
A second Filecoin?
Chia is not the first to use a hard drive for mining, but the recognized leader in this field is Filecoin, which went live on the main website last October. from Filfox (Filecoin blockchain browser and data service platform), as of May 6, 00:00, Filecoin had 4.94 EB of real storage space across the network. and at the same time, the Chia’s figure was 2.19 EB, less than half of the former. However, the growth slope of Chia’s network storage space is still very high.
Figure: Chia network storage space and its trend
Source: Chia explorer
What are the main differences between the much talked about Chia and Filecoin, which are both in the POC category?
There are no penalties set for Chia participants even if they lose arithmetic power due to dropouts, and there is no need to pledge tokens before participating in mining. To participate in mining, investors only need to configure a simple device and download the mining applet from the official website. Filecoin is designed with three penalty mechanisms – consensus penalty, storage penalty and contract penalty – and requires pledged tokens. Even honest miners may have all their pledged tokens deducted due to hardware or network instability, which makes Filecoin miners relatively risky.
It is for this reason that Chia has been hailed by some as an affordable version of Filecoin: the features of low technical threshold and low equipment configuration requirements have greatly lowered the barrier to entry for Chia. For investors who missed the opportunity to invest in Filecoin, placing a new bet on Chia may not be a bad option.
In terms of application scenarios, Chia focuses on the financial sector, aiming to develop functions suitable for scenarios such as banking, payment and financial applications, such as financial control, payment clearing and settlement, and the issuance of managed assets. And Filecoin’s niche is storage. Unlike Chia, which stores meaningless hash data, Filecoin stores valid files.
Is Chia really “green”?
Chia’s vision is to solve the high energy consumption problem of Bitcoin, and the main concept of Chia is to go green, both in terms of technological innovation and the new words that come with it, such as “farming” and “farmer”. Chia’s efforts in environmental protection.
The gap between vision and reality: waste still exists
There is still a gap between the ideal and the reality. Despite Chia’s many efforts to go green, mining Chia is still wasteful. Only, mining Bitcoin costs electricity, while mining Chia costs hard disk and time.
The P-disk process before farming, where a lot of meaningless data needs to be written to the hard drive, can significantly shorten the life of the hard drive and is just as pointless as Bitcoin’s ASIC chips. In contrast, Chia does consume a lot less resources than Bitcoin, but not as much 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 was to allow users to use their idle hard drives, but when it comes to business interests, the end result is by and large inevitable that capital will be driven by profit. Now there are still a lot of ordinary players involved in mining, but almost no one is really using idle hard drives to participate in mining, so there is no way to avoid the end of wasting high-performance hard drives. With the development of the Chia project, if capital gets involved in a big way, the mining landscape may not be able to avoid specialization, agglomeration, and the departure of ordinary players. The two eternal problems of waste and centralization, Chia will most likely still have to face.
Hard drives are hot: a resource, but also a consumable
In late March, the price of a single TiB of Chia mining machine was generally around $160-170, and the price of 1 TiB in the early days of Chia mining machine was mostly around $200. By now, many Chia miners’ 1 TiB prices have been pushed up to around $600-700 due to the general rise in prices of calculators, storage machines, and hard drives. With this comes hard disk pressure, hoarding, monopoly problems in sales channels, and even various pits such as old disks sold as new disks.
The sky-high hard drive prices bring bubbles, as well as increased barriers to entry, and the ever-increasing cost of participation is daunting to the average gamer.
How much of a bubble does XCH exist? And what is a reasonable range for the price of mining machines?
Prior to the May 4th launch of transfer trading, the value of XCH was only slightly known through the OTC price and related derivatives prices.
From the beginning of March to the end of April, the OTC price of XCH has doubled about five times. Regarding the XCH futures price, the chart below shows that it was on a sharp upward trend before entering May, peaking at 12,884.3 RMB on April 30, but started to fall after May, dropping 54.7% from the previous day on May 2 alone
Similar to the XCH futures price trend, hard drive prices experienced a roller coaster ride in April, going through a wild ride in early and mid-April before taking a sharp turn for the worse in late April.
Whether or not a Chia miner is worth investing in depends not only on the XCH OTC transaction price, but also on the cost of mining XCH.
According to the data provided by Chia explorer, we can see that the single TiB coin production per day is decreasing, and the farming reward has dropped from 0.0367XCH on April 13 to 0.0037XCH on May 6. The decrease in farming reward has led to a longer payback period and increased risk for investors.
Figure: Trend of single TiB coin production in a single day
Source: Chia explorer
Although Chia has been very hot recently with huge traffic, the propaganda efforts of institutions are relatively conservative, and there are not many voices from head capital and media. it is also unknown how much price risk XCH has, and many exchanges are still in a wait-and-see mode. In the long run, Chia’s listing plan brings a lot of transparency, control, and regulatory security to this internet currency, and the expected risk of coin price volatility has been reduced.
Chia’s expected return is not optimistic, judging from the trading situation only three days after its launch. chia coin XCH was launched at 2,500 USDT and started to plummet after the launch, with the coin price at 590.91 UDST as of 7:30 pm GMT on May 6, down over 70%. But the XCH price drop also signals that the hard drive price will return to normal.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/hard-drive-price-roller-coaster-computing-power-straight-after-filecoin-chia-can-fire-for-how-long/
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